the near-term that comes back down, but that doesn't mean that there aren't going to be effects that bake through into inflation, that cause shallow recessions in some regions. >> all right, liz, thank you thanks for being on this morning. at least when you look at fed stuff, six of them -- >> six baked in. >> six are now -- >> fed survey tomorrow make sure you join us tomorrow, "squawk on the street" right now. thanks, steve. >> pleasure. good monday morning, and welcome to "squawk on the street." i'm david faker along with jim cramer, carl quintanilla has the morning off. let's get a look at futures as we start another trading week. we appear to be ready to do that on an up note, something that would be a change from the recent moves we've seen in the market, and we do start there with our road map this morning it is an important week for

investors, of course, as sl diplomatic efforts resume to end the russian/ukraine war. the federal reserve could hike rates, will most likely hike rates. be a big surprise if they didn't hike rates for the first time since 2018 we're also going to talk chinese e-commerce stocks. they are getting crushed for new concerns about usd listings. we talked about that last week we've also got an impact of a covid outbreak there, not to mention the possibility of sanctions. we'll get into all of it as well and affirm, that company raising its first quarter and full-year guidance the shares are down 70%. that's year-to-date. the company's ceo is going to join us in a few minutes to discuss. we begin with a new market week, more volatility does appear to be ahead of today's trading session. right now, jim, that looks like it means an up open. that's not saying much these days things can reverse very quickly. >> i'm so glad you said that i'm so tired of being ruled by

the futures. tell me when the futures have been right i think a lot of people come in with a lot of hope, and they come in with hope because there are western sources, particularly western sources that are, let's just say, more dovish seem to predict every time that something good is going to happen michael hamlin this morning, i thought he was very good what he said is the russians are trapped in a 2003 american scenario in iraq, hoping to find a way out. i think they haven't taken a major city we know from two different instances putin comes in that grozny was leveled, the capital of chechnya, and then aleppo more recently, 2016, syria, half demolished the man doesn't leave until

there's maximum mayhem and reckless disregard for human life has there been enough? let's not underestimate this man's ability to create havoc. and i have to tell you 35 people at a military base is nothing for this guy. >> meaning that you believe there's continued escalation. >> he's not where he wants to be yet. when you go over what he did in grozny, what he did in chechnya. i got to tell you, this is fabulous, put up by the army, it doesn't take long to read, chechen wars what you see is putin comes in, and he says, what the heck are we doing here? let's level the city with artillery because our soldiers won't get hurt i think what people are forgetting is you can level a city with artillery. this is the threat i don't understand why people aren't talking about it. it's been the pattern. it was the pattern in syria, and it was the pattern in chechnya so what the heck are we

thinking we think that, you know what, he's just going to like say that was it. >> all right, well, unlike our country in 2003 where there's actual pressure that can be brought to bear because we're a democracy, it's unclear where the pressure will come from. >> one of the things that his -- there was reckless disregard for killing civilians in syria and in chechnya. by the way, a lot of russians died in chechnya. >> a lot of russians are dying here as well a lot of soldiers are dying, well into the thousands. >> we know that in the last opinion poll, he's gone up he went up in syria and he went up after they closed down the liberal press. >> foreign journalists have also left, many have left the country as well because of the fear of a crackdown. they report what is deemed fake news there's really no reliable outlets. >> how about western news

yesterday, russian coming hat in hand to china. >> listen, as always, as much as we have to focus on the war and the humanitarian disaster that has been created as a result of pun putin's decisions, we come to back to the markets as well. >> i'm glad you did. >> you seem to be indicating that this is not going to change anytime soon. >> no. and look, i think it's an overhang the market reacts to what's happening in china in terms of return sadly of covid because the futures were up in the nasdaq. >> china's getting hit from all sorts of different reasons it's unclear what's taking precedent. they have a covid outbreak they shut down shenzhen. that's 18 million people, not to mention a key business hub for the country as well. so that's shut down, i mean, subways, everything shut down. nobody's going to work. >> for one week, though. >> they still had their zero covid policy that can have a potential

impact then you also have the overhang from last week, this is an issue that i discussed, jim, and i know you're always watching and aware. >> you were great. you were great you were strong. >> we told people, but i think it was thursday morning when that first surfaced, this concern of the delisting process that is beginning, holding foreigncompanies accountable that's the s.e.c. act, but it did have the effect of chilling investors, and perhaps starting to just get some of them to say i've had enough. then you mentioned the other one, which is if the chinese as the u.s. seems to be indicating, this is base ond reports from "the wall street journal", "the washington post," others, the chinese have been asked by the russians to potentially provide arms, which if in fact were the case, we might have to move into a sanctions protocol with the chinese.

all three of those are having an impact on the chinese market, and that last one would have a chilling impact broadly speaking. >> the reason i don't believe this is because, remember, they're using artillery. look, i'm no -- i kind of am a military -- i've written a lot about the military, and the russians use artillery because that saves lives you can't fight -- there's 285,000 -- >> soldiers lives. >> there's 285,000 buildings in kyiv you want to like go house to house. there were 10% of those in fallujah, and think about what it was like if you were americans who really know how to fight in let's just say urban environments so, look, david, artillery is what they have -- their strength they've never run out. they didn't run out in '43 they're not going to run out now. i don't want to get too far ahead. >> you didn't make your point, which is you don't believe that the chinese will actually

provide arms to the russians >> no. i think the chinese do not like us, and the russians do not like us, so they have commonality, but that doesn't mean there will be troops. i'm looking at things like alibaba and jd jd is -- to sell over jpmorgan alibaba, david these were the blue chips. >> it's the name we focused on the most obviously i spent some time there many years ago at this point already on the campus there with its founder jack ma jpmorgan saying it feels to us like a number of global investors are in the process of reducing their exposure to china in the internet sector there that could lead to significant fund out close from the sector that's the type of insightful analysis we should be bringing our viewers at 9:00 a.m., right jim? >> i think it would have helped to get that alibaba call out at

200 but who am i >> no kidding. thank you so much for that. >> no kidding is the research this morning i like david costen, he gives you a no kidding but he also gives you earnings per share will only rise in oils. >> right he still gives you a 10% target in cut going to 4,700. you know, that's still hopeful it's hopeful. >> i don't know, listen, there are a lot of large hedge funds that have enormous amounts of significant exposure to some of these chinese, what were the growth names there >> and they're oligaoligarchs, have oligarch money and have chinese exposure what do you think of that? >> yeah, it's not a great combination. can we also get back to the broader economy of the world as well and the concern about energy and inflation you don't want to do that? >> no, no, i mean, look, energy's actually coming in a little look, that's -- you know the forward curve is signaling that

oil is going to go down. >> goldman put out an interesting chart that i'm using this morning, and i hope it's correct. russia 11% oil, is th19% of gas this is worldwide of % of aluminum, 4% of cobalt s 16% of titanium others say more than that. palladium 43%, diamonds 29%, platinum 14% those are not insignificant percentages of worldwide production potash not an unimportant thing when it comes to growing stuff >> and ukraine -- >> 20% what's the impact going to be with this country completely cut off from the world economy >> well, i think that i know i spoke about the idea that russia -- what we're discovering is russia is ground zero for a

lot of metals that we can't get. once again, though, let's not forget that it isn't like the war's going to go on forever, and there are stockpiles like boeing told me they had a lot of stockpiles of titanium. i read over and over they're out of titanium. i believe boeing over the people who spread rumors. you think apple just sits there and says darn it all no, like they have -- apple doesn't comment. tim cook is not putting out a statement. >> your point here is shenzhen, the closure for a week there could have an impact on apple. there's a lot of supplies that come out of that area for iphones. >> well, yes, but i also think that we are ill-equipped to be able to say that the supply chain is hurt because historically we don't know anything about the supply chain. >> we do know our companies have become a lot more nimble when it comes to figuring out how to

that' navigate their supply chain needs. >> europe is most impacted because they've got huge costs of energy. everything that happens, whatever's bad in europe, boom, hits us. whatever's bad in china, boom, hits us. how about us >> our economy is still hanging in there. >> thank you, thank you. >> you're welcome. >> i am glad when i was away -- >> drove a lot of inflation. what were you glad about while you were away? tell me. >> that i missed you >> i missed you too. >> all right we'll end on that nice note. when we come back max levchin is going to join us he's from ukraine as well, the city of kyiv we'll talk a bit about that, not to mention, of course, his company, which did raise its outlook this morning let's give you another look at futures as we get started with trading here in about 17.5 minutes or so. rahthere" wk on the stet stig aad

♪ ♪ ♪ ♪ do you think any of us will look back in our lives, and regret the things we didn't buy? (camera shutters) or the places we didn't go. ♪ ♪

. new diplomatic talks to end russia's war in ukraine are underway once again this morning. our next guest has a somewhat unique perspective on the current situation. he was born in the capital of ukraine, kyiv. joining us is the firm's ceo and paypal cofounder as well, max levchin. let's start on ukraine before we obviously get into affirm and your business and where things stand right now. just give me your reflection as somebody obviously you say was born in kyiv you've been in this country for

quite some time, but certainly have a connection to that. what is your sense of things right now, and just give me your sort of feel >> zoom problem today. thank you for having me. really appreciate the callout on kyiv, of course, it is my city of birth, and it's a humanitarian catastrophe, and i absolutely hope that diplomatic talks prevail, ultimately price of war is human lives, and so for the moment i am entirely focused my charitable efforts on helping the refugee crisis it's absolutely horrifying what's happened there. >> have you had any outreach from the business community as well an important component of the story overall from our perspective has been the number of western businesses that have pulled out of russia, for example, have ceased doing business there i don't know if you had any business there at all that you have -- that you are no longer pur pursuing, but are you aware of and/or connecting with other

business leaders as well who might have had business in russia >> we did not, and therefore i didn't have to make a hard choice i think that is another side of the humanitarian crisis, frankly, these are folks on the other side of the border who are probably well meaning, and have nothing to do -- in fact, have protested the war. cutting them off from their western companies is probably the necessary and the right decision, but boy, it just hurts everyone all around. i really do hope the war ends, the shooting stops and diplomacy prevails >> max, shim humanitarian crisis, i've been trying to figure out as many whether you want to try to help -- you want to try to help everybody -- the refugees by giving to poland, moldova, the people who are there, humanitarian crisis. could you just help us as you give, who do we give

>> it's, you know, probably a choice everyone has to make themselves we've spent a lot of time researching charities on the ground, helping refugees get settled and donate to those, there's lots i don't want to advertise any particular one they're plentiful and they're doing god's work, and i'm certainly spending pscycles helping them. >> when the russians decided to level grozny, people ran out of food it was part of the strategy. let's talk a little bit about affirm there were a host of what i call let's say sketchy negatives about how you were able to raise money in this asset-backed world, but this morning you raised money, which makes me feel like anyone who is saying you're having trouble coming up with money is rumor mongering.

if you're coming up with money difficulty, how would you report better than expected numbers today? >> that's exactly right. so let me speak to both of the topics separately. so first of all, as you know, i'm an engineer, and we built this company, we have ample redundancy in all aspects of our business, just like we have lots of servers on the load from partners like walmart and amazon we also have many very diverse sources of funding and asset-baked security market is very volatile right now. we decided a few days ago to postpone a refinance of another deal we have in the market because we didn't like the way that particular market was treating it. fortunately and by design we have many other sources of funding and we were able to reroute this particular one, one with much better economics and we'll continue to do so. the whole point of having lots

of diverse sources is at no time do you have to feel pressured to take endless capital so on that sense, i'm very glad you asked because i would love to dispel that now, the reason we came out and said, hey, we're going to update guidance is because fundamentally, i have lots of shareholders while i am very, very focused on a ten-year vision, 20-year vision and trying to build a great company heere, i have responsibility to the shareholders, and it's important to know if they are holding firm, if they're doing the right thing, we have not just no real headwinds but ample tailwinds. we're doing really well and we're executing on a strategy. it made sense to come out and say, hey, we're doing pretty great. thank you. >> and you know, but max, there's a concern that particularly given this environment now, inflationary environment, people what they

pay for gas is going up. what they pay for energy in their home is going up what are you seeing in terms of delinquencies amongst your users at this point given this inflationary environment >> i think you said it right before the break this economy, at least for the moment is still quite strong we are seeing exactly the repayment and the defaults, all the metrics were track very, very carefully perform to our models as predicted. i said it before, and i'll say it again because we have so many have small separate obligations, what really happens is we can choose a delinquency default number, a setting into our business as opposed to an outcome we have to deal with as a result we've been able to manage the business really, really tightly the interesting thing is that the reason we're able to raise guidance a little bit is because what we're really saying here is not only has affirm done great,

the demand for our service is going up because consumers are trying to ration their money a little bit more carefully. because they're trying to smooth out their cash flow. to date the economy has been very strong. our consumers have been paying us as we have predicted they would, and the demand is increasing >> max, i agree, so let's just go right to amazon so people understand if you have a relationship with amazon and the level of defaults for amazon i think are almost nil, why are people so worried about the so-called little joes like buy now not pay i find these to be something you would say if you were short the stock down here within $8.7 billion market. >> yeah, i can't speculate as to what the shorts are really saying, and the rumor mongering. they're engaged in for what it's worth, we're doing really,

really well, the amazon pilot as referred launched last year, and it's only been a couple of months but the results we're seeing are really excellent. there is just unbelievable demand for this product. that's what we do, inflation robs you of your spending power literally, and we bring you back. >> max, finally, you know, you guys say you're doing well you have a long-term vision. the stock price is down 63% over the last year. that can have an impact on morale it can even impact your ability to pay your employees to the extent that some of them are earning a significant sum or had been previously through stock-based compensation is that an issue for you >> i think just like myself, we try to run a very, very transparent company. of course no one loves being beaten down in the markets you know, but yet we are very, very focused on long-term. in terms of economic strength of the company, we have plenty of

access to capital in terms of our ability to fund loans. we have $9 billion of capacity we have north of $3 billion of cash and investmentsment the company's very, very strong. the stock price will eventually take care of itself, i'm very confident. as long as we keep on delivering in our numbers we'll be just fine and i make it a point of telling every one of our employees that >> you told our viewers as well, and we'll be keeping an eye on it appreciate your taking time with us thank you, max >> thank you. >> coming up, we're going to have jim's mad dash. we'll also be counting down to an opening bell that's less than six minutes away one more look at futures before we do get started with trading at the new york stock exchange we are still looking for an up open, at least on the dow and the s&p. we're back right after this.

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let's get to a mad dash with

sk jim. we've talked a decent amount about china. let's talk about jd as well, a horrible week for that company's stock as well, last week doesn't appear to be any better as we start trading. >> just going to realign for the jpmorgan piece china investment strategy is they price in china's geopolitical risk, review china internet as uninvestable on a six-month basis. they love jd now they downgrade it to -- they don't know how to value it >> uninvestable? why? >> high holdings by investors, a curse on the way down. what we have, david, i don't think people remember this, but when you had that 2008 to 2010, you were always looking at is the holders, are the holders going to keep holding. >> that's why i mentioned some of the hedge fund. tiger global, these numbers are based on previous -- they own 7

plus percent of jd and china is the second largest -- was the second largest exposure in their portfolio at almost 13%. it's huge funds like that that may finally be like we're done they're already down significantly for the year result of obviously owning so many growth names and now tiger may be saying -- and i don't know i'm just using it as an example of a firm that may say we're done, we're out. and that seems to be what jpmorgan's referring to as well. >> yeah, and by the way, of course, when they downgraded alibaba, david, these were loved stocks these were the safe havens of china. lots of funds felt they had to own china, so if they had to, they own jd and they own alibaba. i think you're right when i ran hedge fund what would happen if you had shareholders, you had people who needed to get out. what would happen is you get to the end of the month, they need the money, do you force an

opening if you can, you own chelsey, all right well, how do you know that -- how does anyone know that that person is a stable -- a stable fund to be able to stay in so tough sell now, raise cash now so at the end of the month you have that cash, and so that explains a lot of the weakness >> there you have it, the opening bell here at the new york stock exchange. you can take a look as well at our cnbc realtime exchange i think you'll see generally more green here at the big board, ireland inc. selling its tenth annual ireland day at the nasdaq, funder of childhood cancer research grants. didn't get a look at the old realtime exchange. hope everything's operating properly. >> yeah. >> yeah. assume it is >> it's interesting, there are a lot of companies that are -- all right.

let's talk about max levchin. >> okay. you want to talk about affirm? okay >> in november i told club members unless you buy the stocks of things, of companies that make things or sell things, add profit and then return capital to shareholders your stock's pretty much doomed well, here we go affirm, the issue is not buy now p pay later, it's that it doesn't fit the profile of what you want to own it's losing a ton of money now, it doesn't matter, david, that you've got a stayle which says you can lose a lot of money. that worked for a long time. go back to '98 to 2000, first mover advantage. lots of people who liked you, sense of growth -- >> it worked well for years, then it stopped working. >> bankrupt in the next two years. i'm not saying these companies actually have real revenue there were a lot of companies that had no real revenue but david, if you're losing yourself and you're asking

yourself why your stock's going down, you're an idiot. i think max is really smart. notice he didn't talk about why his stock was going down he just said business is good. that's not enough. why did kostin, i think max is an amazing businessman, but you know, the company doesn't make money. you know who makes money >> who >> oil companies >> yes, lots of it >> but you know what, you also see companies in health care now, people say i'm -- from kostin no i can think like him too. >> or he can think like you. before you move on from that -- >> what i'm saying is wrong stocks. >> i do want to come back to this last question, which is about stock-based comp in this environment something for investors to keep in mind. >> thank you, david. >> the last time we revisited it was 20 years ago where you had these companies that were able to keep their employees and keep them quite happy by giving them

copious amounts of stock, but that doesn't work when your stock's down 60 plus percent or it doesn't work as well. it doesn't add up to as big a number and hence you may need to call on cash to pay your people. >> i am looking at something called gap earnings, they are so different from the companies whose stocks -- >> it gets us back to something we don't talk about enough, the use of adjusted earnings, adjusted ebitda by so many companies and the analysts who follow them, willing to take it. they adjust for these things, but sometimes then we got to adjust back to paying people in cash it can actually get expensive. >> right now versus faang they make stuff. people are using -- why are faang going down, they make stuff, do stuff for profit, return capital simple, sources of liquidity >> yes. >> if you want to sell a firm here, you don't raise much money, but you raise a lot of money if you sell amazon. >> you do.

>> that's -- because amazon business is great. >> or microsoft or apple. >> those are companies that will come through because they make a lot of money but they are also the way that you can raise money because as much as max raised his estimates for affirm, people don't care. david, this is a brutal majrket okay it's a brutal bear market. >> it is, although we've got plenty up, to your point, broadly speaking health care, i've got many of the big pharma companies are up this morning. >> what goes up in a recession what goes up in a recession? >> j&j. >> yeah. >> wait, recession what >> david -- >> we're having a recession? >> david, there are people in the heavy recession camp, there are people in the once we finish the raise after the first raise, the market goes up camp. there are people who think that putin won't stop until a major

city is leveled camp there are people who think that china is falling apart, and alone are people who think, you know what? this is the time this is the time to buy. now, when i gave you all those negatives -- >> maybe it's -- >> very counterintuitive. >> pile on all the negatives >> so you look at non-gaap, and a lot of companies are making money. when you put in the stock positions and the stocks are going down, by the way, and you're looking at gaap, and they're not making any money in times of bad, people look to gaap, in times of good, people getnon-gaap. >> yes, they do. they get carried away with that. everybody's happy to have 40 times multiples on sales, and impossible to imagine adjusted ebitda multiples because if you didn't have adjusted, you wouldn't have any. >> if you're in that camp -- >> the first two months of this year were about adjusting for that >> david, it's changed. >> the market was down sharply

before russia invaded ukraine. >> right right. >> s&p's down 12. >> for the fact that your buddy jay as you like to call him is going to start raising rates aggressively and is going to start with 25 basis points this week. >> we see all these people come on air, ooh, he's behind the curve. wait a second? he's behind the curve. it's entirely possible that the economy is slowing so dramatically it's just that we have inflation. shenzhen, what do we say about shenzhen supply chain supply chain, supply chain, what does jay have to do with supply ch chain? >> jay's going to have to figure out how many raises he wants to subject the market to and/or the economy to we're entering a slowdown. >> yeah, i mean, but jay has been -- since november, he's been talking slowdown. well, you know, can he make it happen with this talk? >> yeah, kind of before -- you want to buy a house right now?

>> no, i'm not in the market for a house, but thank you. >> you might to want before the rates go up. >> did you sell any of your houses or no >> lisa's in the market again. >> to buy? >> thinks there's some bargains here >> all right >> i know, i told her i thought it was a good time to spend a lot of time -- >> you can't really -- you run -- you only have so much time, you know that. you can't really be in all of them >> no. >> you can only be in one of them at the same time. >> i think that she is thinking because we can't own stocks, it might be a good on houses. ireland, ireland, she's an irish citizen. the heck >> i got to start availing myself of these many properties. >> i've asked you multiple times, multiple times. >> the germans using the one in italy, though. i can't get in there stw. >> the germans are packed in italy, they love it. they're travelers. david, how about the -- we

didn't talk about the fourth shot, bourla, good for cvs, walmart, good for your health. since i'm a dollar sign -- >> that may be one reason fiez shares are leading mrna up sharply, moderna up sharply as well. >> david, i am kind of surf are prized that you have companies like apple down dramatically, and they just are getting cheaper. they are that's a real company that makes real things, buys back stock, good dividend. >> what do you do with yum china? >> um -- let me see how that's doing yumc they say that -- they say our operations are significantly impacted by the latest outbreaks and the tighter public health measures, which resulted in a further reduction of social activities they go on to say the situation

entering march has rapidly deteriorated with the highly transmissible omicron variant causing outbreaks across china including economically important regions of guangdong, shanghai as well. that doesn't -- young china was one of the names on that three-year delisting process, although, again, we all knew that was coming or at least we should have. >> i might take a hard pass on that one. >> and they've got a separate listing. >> look, one of the things i thought was very interesting was the amount of exposure that yum has, and i would prefer to actually own yum, kfc. >> yum has also been in the news in terms of what are they doing in russia, they have a lot of franchise restaurants. unlike mcdonald's that owned them, they're able to a -- today 852 mcdonald's are no longer operating. there is this threat from the

russian government it seems that they may nationalize them. i'm not sure what you nationalize or how you nationalize mcdonald's. >> stock's down a lot. you know what, david, it sells for 23 times earnings. why shouldn't it sell at a discount >> you think it should sell at a discount to the s&p? >> in this environment, it's got 2.45 yield i'm looking at the yield as a way to stop the decline. they do have a lot of cash the stock's down 15%, the s&p's down 12% do you think that that's that much of a discount for the s&p's decline given the fact that they're a worldwide organization i mean, wone of the things we have to reckon with -- >> russia's not a big part of their business. >> no, there's a level >> you think the energy price increase overall is going to have an impact on people's ability to eat at mcdonald's >> no. >> so is wendy's, you know, with john oliver's.

i hope my wife doesn't watch that that's a bad one. >> that is a bad one that didn't come out well. >> no, was it okay that i laughed? >> john talked about my wife's proclivity for a particular type of burger. >> he didn't, he had you do it. >> he did run some of my -- some clips. let's talk advance micro i want to get away from that bacon ator as fast as i can. lisa su buying back stocks worried about neon, not yet. this is very, very strong. >> yes. >> so there's one where as it goes down -- is going to be interested in it. >> ucsk interest you have been . >> shoot, we sold some at the -- whoa >> it's cable. it's cable with a ticker >> don't worry aboutit. >> say whatever you want >> people say the charts bad

that's another thing i keep hearing. i know you're not a chartist. >> no, i'm not, i'm the opposite of chartest. >> you don't even play one on tv. >> all my chartist friends and i have a substantial number of chartist friends that say the same hithing. get out now. i'm not buying that. i think that's ridiculous. i think we should be bullish on the things that do have a profile of not having a lot of russia, being able to handle china, and terrific in america you know what that sounds like to me? >> exxon and chevron. >> those are great >> chevron is downgraded again you can't stop that horse. but i will go back and say very simply, david, retail in the united states, the spending that's going on, why are we selling that do you think that this is the exodus to poland by millions of people is tragic, but it's not going to stop people from going

to costco. >> okay. i want to own costco >> there's two chinese costcos, just two i think that when you listen to the conference call, you don't get a sense that it depends on china or russia, like not. >> no. >> no. >> there are a lot of worrisome friends out there when it comes to the unraveling of globalization. some might say that might not be a bad thing. the chinese are going to have their orbit. we've been separating from them for some period of time, but man, we still are dependent on each other. >> look at jpmorgan -- >> unlike the russian economy. >> there's an incredible hunch to find who's got -- who's on the hook. >> who's on the hook for? oligarch debt? for what >> oligarch debt is jpmorgan -- >> i don't know that they are. >> no, i'm saying, but this is one where -- jamie -- you can't do, remember when the great --

you look at some of the great titans of the industry at jpmorgan, name sake bank remember, he never talked about whether he was in trouble. if you have to deny that you're in trouble, then you're in trouble. i want jamie dimon to just say nothing because he's probably -- he is, david, what i call for for fortress there's no custer in a fort. >> it still means the stock is down more than the s&p this year >> well, okay. yeah i mean, no kidding some oil stocks are down. >> yes, occidentals down 6.8%. >> that's been the strongest stock. >> we've got pharma up, energy down, banks are up, and let's -- >> but ulta beauty, okay, ulta beauty >> let you do ulta, then we've got to get to bob. >> i'm just saying these are companies -- pinduoduo has

nothing to do with ulta. >> keys to this market. >> you said we'd be safe in pinduoduo. >> that's four years ago, jim. >> all right, let's get to pisani, get more on what's going on in this market this morning good morning, bob. >> these chinese stocks. jim's all over this and he's right, they're just a mess right now. let me show you the overall market today if there's any good news, banks are ralliy ing, but it's not fo a good reason. rates are up we're at three-year highs. industrials up a little bit. tech's a little problematic, and i'll tell you what's an issue here is very top pi action in the market leaders in the commodities sector so energy and metals, i said this monday last week, they topped out monday last week with all that action really didn't move too much overall. let me just show you some of these commodities stocks devon, occidental, occi got a rating cut at morgan stanley, schlumberger, mosaic was $64 a

few days ago look, it's $58 right now, nucor, same situation topped out over a week ago there's only so far even with the uncertainty in the commodities situation you can push these stocks where investors are willing to go out on a limb with them. the big wild card is the inflation story, the ukraine, excuse me plays into the overall inflation story. that's still the big wild card we are waiting for reductions. the whole street is holding its breath this week we're going to get lennar, fedex later in the week. these are the early reporters. everyone's waiting for earnings estimates reductions to start. it already started happening in europe, but not here we're not getting any help from rates chts three-year highs and yields for the ten-year right now, and there's a serious slowdown in china. you can name a half a dozen problems that china's got here i think the concern over the weekend is odds of recession later in the year going up that was the big discussion over the weekend with no -- all over the place.

david kostin's trying to get out ahead of this. he was a little bullish, remember, on the markets he cut his numbers to 4,700 from 4,900. more importantly, he's one of the first people out to cut earnings estimates now, before the analysts do that, which is a good idea if you want to be ahead of this 5% growth for the s&p. he had 8%, the street's at 6% right now, so he was bullish now he's a little below the street he puts recession odds at 20 to 35%, and the downside risk if we had that in the downside in the worst-case scenario at 3,600, that's down 15% from where we are now. that would take you down peak to trough about 25%, maybe fairly typical of recessionary odds past that the china stocks are all down today, and my heavens, china's acting like a recession with their stocks. trade wars, regulatory battles, delisting worries. ukraine. now the covid and shenzhen, and look at these stocks that are down here. i'm using some u.s. listed names here for china stocks, but

that's not a typo. 85% from their highs, pinduoduo, alibaba 66%, that's the biggest market cap china stock that's out there, and even yum china which is just a consumer name. forget technology, down 46%. but jim had a good point there about some of these stocks jd com is a china internet being potentially uninvestable what would it take at this point to get a sustained rally in the market this has an awful lot to deal with we need to see some signs of inflation peaking. we don't have that data. it's not there nobody can make that comment right now. we need something on ukraine, we need a fed absolutely maintaining a gradual rate hike position that is one of these that may actually happen, and finally, david, we need corporate earnings holding up. i am telling you there is expectations that the minute we start getting into the second quarter here, we're going to

hear corporate kmebts and analysts are going to start cutting their estimates in the united states, and they've already been doing that in europe david, back to you. >> all good points, bob. it's down to levels we haven't seen since 2018. it's quite a round trip there. bob pisani as a reminder, you can also get in on the cnbc club with jim, sign up, find out more, cnbc.com/jointheclub or point your phone at the qr code on the screen. before we head to break, a quick look at the bond market. you heard bob mentioning yields on the ten-year, 2.096, the 30-year 2.44 we're back right after this. competition beat us again.

how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute. hello! hey, rob, there he is. workday. the finance, hr and planning system for a changing world.

to have a new lineup for you in the afternoon at cnbc. sara eisen is anchoring closing bell at 3:00 p.m. eastern, talking to business leaders, tracking that final hour of trading. at 4:00 the premier of closing bell overtime. actionable ideas from big investors. wel inyoalofhe market moving news after hours at 3:00 p.m. today eastern we'll be right back.

all right. let's get to "stop trading." what do you got? >> companies that make people do things, have a buyback american express not that much connected to russia not that much connected to china. steve is to go a fantastic job stock holds up that's not so bad. >> there you go. >> just a good company am american good company why not buy it it's not in the crosshairs of anything you can't be a russian oligarch and go to american express. >> buy now, pay later? >> that's what they're doing. >> no, they're not. >> you're funny. a program i am looking at, world

central kitchen. everyone should do the same. i think food is the most important when the russians destroyed chechnya it was important when they destroyed aleppo may i say this >> it is, it is. >> it's people dutch bros. is on tonight. marvel tech we'll find out about how bad semis are. and honeywell, they have a great story. david. >> keep your head up i want you to remember russia's chechen borders, how they killed millions for no reason whatsoever. >> thank you okay thanks, jim. when we come back, former goldman sachs asset manner jim o'neill. the political sks rihe sees out there. keep it here

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♪ good monday morning. welcome to another hour of "squawk on the street." >> i'm david faber with morgan brennan and mike santoli let's give you a look at the markets as they stand right now.

the s&p still up ever so slightly the nasdaq falling deeper into negative territory >> 30 minutes into the trading session and here are three big movers that we are watching this morning. chevron falling after morgan stanley downgrades the oil major to equal weight. the analysts make the call saying valuation has run up. shares of chevron are down about 2.5% right now but still up more than 40% in 2022 so far. chinese names still on the ropes meantime alibaba a six-year low falling with the hesrest of chinese teca a spike in covid cases is leading to lockdowns broader geopolitical risks so jpmorgan downgrading to underweight there. we will have that and the other names in the sector later this hour shares down 9% finally, lockheed martin is on the move as well we've seen a lot from the defense contractors as of late

shares up 1.5% right now reuters reported germany plans to buy up to 35 -35 fighter jets to replace the country's aging tornado aircraft after germany pledged a few weeks ago to sharply boost defense spending and with it analysts expectations that jumped that the nato member could finally buy that lockheed-made stealth fighter. shares up 25% to start the year. mike >> well, we want to start in europe diplomatic efforts resuming between russia and ukraine the russian offensive continues. we are in lviv >> that's right. so there was some more talks between the russians and the ukrainians earlier on this morning as you mentioned it was via video link and the ukrainians laid out the outline of their position and it was very clear they are demanding that there is an immediate end

to the war they want the fighting to stop right now. they are also demanding that all russian forces leave ukraine immediately. so those are their positions they are very clear about them they said that kyiv is not in a position to capitulate on anything and they are going to hold very strong on these positions. there was no troom manroom to maneuver the ukrainian negotiate he is said that the russians are being more sensitive to the ukrainian position, that they are listening, that they are talking more constructively with the ukrainians so these are small glimmers of hope but i have to tell you guys, on the ground here it doesn't seem that constructive. the russians have broadened their campaign we are here in lviv in the west of the country and in the early hours of this morning the russians bombed the military base just about 30 moils away from us. they hit it with 30 missiles they killed 34 people.

they injured another 135 people. so that doesn't look very constructive from where we are of course, lviv is a safety hub. this is where most of the displaced people in ukraine have been flood to go and it shook people here that the russians struck so close to the polish border which is nato territory people feel very nervous the fear here is that the fighting may come here and because there are so many displaced people here, they don't know where to go from here so the talks may be a positive sign right now, but there is still a long way to go the main objective from these talks at least in the immediate time is to establish humanitarian corridors because they just haven't been working as of yet. and especially in the very hard-hit port city of mariupol they have been waiting for days to get a humanitarian aid in there, to get people on buses out of there we have been told that there is a convoy about 50 miles outside

of mariupol. i it still hasn't been able to get in there that city is besieged. ukrainian authorities are saying that basically 400,000 people there are being kept hostage in apocalyptic conditions they have no water, no electricity, no food and we have seen some very it distressing images coming out of mariupol you guys, we'll remember that only a few days ago a children's hospital and maternity hospital was bombed there the ukrainian foreign minister put out some pictures of a woman being led out of a stretcher, heavily pregnant woman led out on a stretcher we learned this morning that she and her unborn child have died you can't but think if those humanitarian corridors this been opened up, she may be alive today. so i think the key thing out of those talks is to establish humanitarian corridors before getting the russian troops to evacuate ukraine in the immediate future dave >> ali, thank you for that

wide-ranging report. hard to listen to. want to turn to the markets. for that we'll turn to mr. an santoli. curious as to who you are focused on >> this exact level where we ended last week and trading now, 4,200 on the s&p 500 it's worth keeping in mind, we got up to this level early may of last year so we are talking about ten months, no net progress. we have also bottomed with a few rally attempts 4,200 plus or minus a little bit, january 24, february 24, march 7. so there is this vague idea that the market is attempting to say maybe there is a fundamental support here investors sentiment extremely sour at this point people are fearful if you look at the volatility index, it's not making new highs because people have gotten resigned to the grind. hedge funds have pulled off a lot of risk. those are the makings of why you might not see incremental

selling. the issue is every rally has a high burden of proof i think you have to get up in the s&p 3, 6% and have credit marks not get worse and, hopefully, better because with the fed tightening, that's the question right now are we going to have to be on guard for some kind of erosion of credit quality and solvency we looked at the bank even etfs. they don't have interest rate risk it's about the economy and the macro and solvency you see a two-year chart of that etf. it's rolled a bit, obviously, nothing close to what we saw in the covid crash. to me that's dicey but interesting moment final point. march tends to see inflection points in markets. when the year started bad, especially you have seen lot of reversals higher, you talk about 2009, 2020, 2003, the second iraq war, all happened in march. >> mike, that's where i was going to go with you, was credit

and what the credit markets are signaling heerm. you have the fed meeting tomorrow it's baked in we are going to get a 25 basis point increase in rates come wednesday but how crucial is that forward-looking outlook or commentary, however veiled it may be, from chair powell given the fact that inflation seems to be getting worse in the middle of the geopolitical strive and you have covid lockdowns in china that could add to the situation even more. we haven't even start today talk about that yet. >> the market always wants to hear that there is flexibility from the fed in other words, that they are not going to be strident about get to go any number of rate hikes no matter what that's usually what powell wants to convey. i think even in the market pricing in six, serve hikes this year, anything lighter than that in he is terms of the official projections maybe will be taken as a net positive. of course, the fed is merely one of the many issues that we're

contending with here and have been creating pressure on these markets. morgan >> yeah. well, as we head to a quick break, our mode map for the rest of the hour. it is a big hour, including selling in chinese tech. stocks drop as rising covid cases lead to lockdowns. >> energy prices are falling wti crude is at below 105. more on the potential headwinds for u.s. banks. and then exclusive sound from the u.s. deputy treasury secretary leading the white ncuse, his efforts with sations against russia "squawk on the street" is just getting started. h movi es through your phone? and y'all got electric cars? yeah. the future is crunk! (laughs) anything else you wanna know? is the hype too much? am i ready? i can't tell you everything. but if you want to make history, you gotta call your own shots.

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volatility continuing across the markets, including commodities. leslie picker has a look at how that is impacting some of the big u.s. banks. >> we are starting to see the fallout of the voracious moves in certain commodities over the last few weeks peabody cole had to raise a credit facility from goldman sachs with 10% interest rate thanks to a half a billion dollars margin call. they had a hedge contract at the average price of $84 per metric ton but high demand for coal was exacerbated by the russian/ukraine conflict causing relevant coal prices to surge 250% between the end of 2021 and march. and the price of nickel surging

before it was halted causing chinese nickel producers to face losses reportedly in the billions of dollars. a source close to the matter told me jpmorgan and several other banks are working on terms to extend a line ever credit to help it post collateral and meet margin bloomberg had reported last week that jpmorgan was the biggest counterparty to the nickel trades at the moment these appear to be unlevered, isolated incidents, but the key concern among investors is that there are possibly other pain points out there that haven't yet risen to the surface. this morning kbw out with a note about how volatility in both equities and commodities could create challenges for the trading divisions within the large u.s. banks the firm highlighting the jpmorgan nickel situation and noting that trading guidance had already been lower for the three banks that have chaired it in link february, jpmorgan, citi and bank of america.

analysts believe there is room for further deterioration. as a result, they are recommending reducing exposure to universe -- the universal bank group and increasing exposure to asset-sensitive regional lenders morgan >> leslie, i'll throw a question at you it's david i have been hearing concern not from the u.s. banks as much as the european banks about the oligarchs, what position they will be in in terms of having to sell assets, how much leverage they have with certain institutions given the fact they may need to sell assets at lower prices. >> it's definitely a risk because lot of them have collateral in russian bonds, russian government debt as a way to take on additional leverage so of course those bonds are trading at basically nothing most of -- at least the u.s. domicile funds have marked those down to essentially zero at this point in time. if your collateral is worth zero, you are in a very, very

difficult situation unless you are able to raise cash to meet, you know, those collateral requirements yes, that is a big challenge oftentimes, you know, it is the u.s. -- sorry, the european banks, they are the ones that are having that counterparty exposure to those russian oligarchs. >> leslie picker, thank you. we are going to stick with volatility commodity prices. our next guest says he is working to mitigate the impact of inflation and rising fuel costs. andrew master man, thanks for being on with us this morning. >> good morning. >> so as we coultalk about inflation, higher commodity and material prices, higher fuel prices, higher labor price, just higher prices, how is that impacting the landscaping business in bright view specifically >> questioned every single day

over 11,000 vehicles powered by fuel unquestionably impact us as we service the customers across the country. >> so where are you seeing the largest pain points whether it comes to, i guess, this inflation discussion >> yeah, it certainly fuel is one of the higher commodities that impacts us. as we fill up the tank, that had continue to affect us through the summer as we ramp up unquestionably, on top of fuel fuel, other petroleum-based products, mulch in the spring season, that has an impact and our development group. things like pvc pipe or types of materials as we landscape and develop landscapes across the country. unquestionably in addition to fuel there is the labor inflation that across the country that we're absolutely not immune to. as we ramp into the busy season in april, me, tay, that will continue to be something which layers into our company.

>> andrew, obviously, your clients are big companies. i think mostly larger companies. have you seen any resistance in terms of price increases or any change in their approach to spending in this area? >> yeah, you know, one of the things i have to say is across the board our customers that we talk with absolutely have an ability to work with us. they are listening i mean, they are not immune to the same types of pressures we are. as the pressures layer into the company, the discussions are positive now, any price increase out there, obviously, is something which involves a discussion, an engagement that we have with our customers. so it's something which is something we need to negotiate there is no question about that. >> andrew, i am curious. between labor costs, between fuel costs risek, between fertilizer costs potentially going up sharply, how much are your costs going up or do you anticipate they will be up on a

percentage basis sort of '22 over '21. >> we are in line what you see across the board you have to remember the costs aren't, you know, the cost input factors we are of offset by some of the price increases we are able to work with our customers to be able to basically balance that out, whether it's 5% wage inflation or 7% wage inflation we are experiencing about a 7% wage inflation across the board. we are offsetting that with the price increases that come in to balance out the whole company. >> just to dig deeper into what mike was asking you, andrew, i mean, i have to think that landscaping on a commercial level in some ways is a future gauge on aspects of the u.s. economy. so what, i guess, is your outlook from a business confidence standpoint in terms of coming into that busy season and what those types of orders look like? >> that's a great question

because the reality is landscaping a fairly resilient business when it comes to maintenance. it's a growing and living asset. you need to take care of your business take care of your facilities and landscaping really is the entrance to facilities across the country. that's whether it's hotels, whether it's headquarters, universities, the kinds of things that we deal with every single day what we're seeing is kind of a steady constant demand across the board especially as we get into, again, this march, april, may time period. that's when you really see growth coming back into the spring season and really across the board i think customers are really looking forward, especially for people to come back after the pandemic, come out and use the hotels, engage with the people outside. it's something where people are moving more and more to across the board is engagement with people outside that's what we do. we maintain outsides. >> andrew, one of the dynamics we've seen in other industries is the somewhat larger

competitors, publicly traded such as yours, whether it's restaurants or home builders, have been better able to absorb a lot of these price increases relative to smaller sole proprietor or smaller private businesses are you seeing that play out is there opportunity for further conso consolidation in your business >> no question the landscaping industry is very significant. 500,000 landscaping companies in the country. one of the things we can do, by combining the m&a strategy we have, combining the best practices we have, best in class competitors to join and buy in and apply the practices into the companies. it's been a successful strategy. we have acquired over 35 companies in the last five years and is a rerobust pipeline of new businesses coming in utilizing the advantages brightview brings. >> andrew, we appreciate you joining us today andrew masterman, brightview

landscape ceo. >> thank you >> a quick programming note as we take you to a quick break we are going to have a new lineup on wecnbc starting today. count it down. "closing bell" with sara eisen 3:00 p.m. followed by the debut of "closing bell overtime. that's at 4:00 p.m. eastern with scott. they have a big lineup, brad gerstner i assume they will ask about grab not to mention ricky sandler and gundlach eashhis afternoon and for the foreseeable future don't miss it.

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now for our e"etf spotlight" taking a look at the crane shares chinese internet etf, k web falling this morning as the spike in custody cases in china leads to lockdowns some of the names most impacted, alibaba, jd.com and pinduoduo. all of them downgraded at jpmorgan they view china internet as uninvestable on a six to 12 month basis.

those three names at underweight at jpm after significant declines into this move, morgan. >> yeah, after the break, an exclusive with deputy treasury secretary wally adeyemo who is leading the biden administration's efforts on sanctions against russia a lot to hear from him don't go anywhere. we're back in a few. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq at ameriprise financial, our advice is personalized.

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welcome back i'm rahel solomon and here is your cnbc news update at this hour negotiators for ukraine and russia are take a break until tomorrow so they can work object technical definitions according to ukrainian president advisor who tweeted this photograph of the talks being held today by video link up. he is calling it a technical

pause. today president zelenskyy released a video addressed to ukrainians he says the country's armed forces are bravely inflakt ch flikting losses on the enemy that prompted russia to look for helpful he said we have no right to relax word that zelenskyy will virtually address the u.s. congress wednesday morning. china's relationship with russia is expected to be a prime topic when u.s. national security advisor jake sullivan meets with china's vsenior diplomats in rome. they have asked beijing for military equipment and support some u.s. officials have reason to believe that is what happened. a pregnant woman injured in the shelling of a ukrainian maternity hospital has died along with her unborn baby according to ukraine's foreign ministry images of her being taken to a hospital were shared around the world last week. morgan, back to you. >> that's really sad rahel solomon, thank you

now we want to get over to kayla, who sat town with the u.s. deputy secretary and joins us with those highlights. >> morgan, as the war in ukraine enters the third week and there is continuing to be carnage in the russian economy, the deputy treasury secretary wally adeyemo, who is leading the biden administration's sanctions effort, says that every single day vladimir putin faces a choice as to whether to continue or de-escalate and so i asked him what happens now what happens when russian debt comes due this week? is treasury expecting a default? >> the russian economy is in a state of pain, in a financial crisis that has been caused by our sanctions, but the result of president putin's invasion the steps they are taking there demonstrate that the pain they are taking is having significant impact they stopped to russian citizens to withdraw foreign currency they are going to have to make choices about what debts they pay going forward and those

choices will ultimately put him in a position to make a decision about whether he continues the invasion or stops the invasion. >> what comes next from the west president zelenskyy asked the west for blockage of international waterways for russia he asked for a full trade embargo. how likely are either of those things >> we are impressed and encouraged by the bravery of the ukrainian people the actions they have taken to stop russia's invasion have been remarkable and we continue to support them what we decided to do and what the president directed us to do, make sure our actions are targeted at having an impact on russia and minimizing the impact on our allies and partners going forward. you will see us continue to put pressure on the russian economy, to stop their ability to project power, continue to go after russian elites to take away resources from president putin and then use export controls to degrade their ability to project power into the future yall of which are consistent with what president zelenskyy asked us to

do. >> have you identified alternatives for nickel, you're iranian, titanium? >> you are right that russia produces a number of critical minerals going forward one of the things that we know is that there are plenty of supplies around the world. the challenge is many of the prices for minerals are set globally even if we find an alternative supplier, if the price goes up because of president putin's choice to invade, the price goes up globally. we will work hard to mitigate those things we know that the american peemd allies are willing to pay a cost in order to make sure that we defend freedom the key is to make sure to mitigate that cost as much as possible. >> we discussed the role of china in russia's ability to work around these sanctions. secretary, deputy secretary adeyemo said that to his knowledge china has not been offering a workaround but he did not say whether russia has been able to access its reserves that

are denominated in chinese yuan. he said that russia willmore th that he suggested sanctions on you crypto could be coming out european union has gone in that direction already. and he said that there could be support for a revived child tax credit that there are currently discussions with members of congress we will see where those go of course, that has been something that has been under discussion for several months. we will air a little bit more of this interview later today we covered a lot of ground, but certainly there are no good answers during a situation that continues to escalate by the day. >> so tricky such great work here you touched on it, china with the meeting taking place a little bit later today in rome, if for some reason the u.s. felt that china was helping to enable russia in some form or fashion from a financial standpoint around these sanctions, are there actions that the treasury would be willing to take where

china specifically is concerned? >> well, when you talk to foreign policy experts who really study this space, they note that the sanctions actions that pack the most punch pretty much have already been issued. they have already been put in place. but that counter sanctions on countries like india and china that are not participating in what the west is doing would be the most powerful action toss take next. trerk janet yellen said they are not looking at counter sanctions on china at this moment and what i heard from the deputy secretary is that they are not seeing any evidence to move in that direction that's not saying it couldn't change, but simply that's not w where they are now when i asked about the mun-russian central bank is holding in china, he said even if russia can get that money, what russia won't be able to get is the sophisticated technology, semiconductor chips, all of the things that russia needs to advance its economy and military that goes beyond just simply money at this point.

>> kayla, it's david you mentioned that money the reserves that they were relying on but much of which has been frozen through a somewhat complicated process. it's interesting and again i guess my question to you are there expectation as to how how much of their reserves the russians are going be able to use to support the ruble in some fashion? >> yeah, well, it's a good question, david. by some. estimates, of course they are not current because the last data is from several weeks ago, 14% of the $630 billion in russian central bank reserves were held in china so that gets you to, you know, back of the envelope math of $88 billion. certainly that's a lot of money that could help with the debt payment. when i asked the deputy treasury secretary about paying russian debts as you heard, he said they are going to have to choose which debts they pay and prioritizing the money that they have but he said they are going to need much more than that money

>> kayla, thank you. >> thanks. joining us now is bill, herm taj ceo. lobby congress to successfully pass the magnusski act, a law that punishes russian human rights rviolators. having read your book, highly recommend it for anyone to understand what is going on now and in terms of the way putin thinks about things. that's where i start with you. given your experience and what you know, what are your expectations for what putin will continue to do in terms of how they prosecute the war in ukraine? >> well, my experience with putin has been over the last 12 years trying to get justice for my murdered lawyer sergei magnusski. every time we had a success in our campaign of exposing them,

of creating consequences for the russian government, putin he escalated. even in situation where it hurt russia more than it hurt anybody else and so -- and we are seeing exactly that pattern of behavior right now. and so sadly, every good thing that the ukrainians do to fight off the russians just leads to more and more russian escalation in the future. and so, i mean, i don't foresee a situation where we're going to just be able to sit on the sidelines militarily when hundreds of thousands of ukrainian civilians are being killed in effectively a modern-day holocaust it's like -- it's the equivalent of sitting and watching as the germans killed jewish people during the holocaust this is going to be so awful that we are going to have to do something more than we are currently doing. >> that's a key question, as is

the possibility there is any pressure that could be brought to bear on putin to stop him and again given your experience, i'm curious as to what your thoughts are, particularly as it pertains to the oligarchs who have some power in russia. >> that's a great thought and something that i wish were possible and true. but the reality is that all of the oligarchs exist at the pleasure of vladimir putin at any point he can make them not oligarchs, take aware their money, put them in jail or kill them they are all desperately afraid of him he is seen by everybody as being a murderous psychopath i can't imagine a scenario they are going to take him out and install somebody else. it's very unrealistic. i think the reason why we're sanctioning the oligarchs because they have money that they hold for vladimir putin and money that vladimir putin can ask for if he needs it and he needs a lot of money right now so as part of the economic

blockade of russia, this is an important part of the whole process. >> bill, on that point of putin needing money and maybe just how much and how urgently, the sanctions have only been in place three weeks, not even that so clearly it's going to take time to change any behavior. but what do you think the effect of this is even with the dramatic sanctions among countries and companies. he still has most of the markets open for energy exports, even if at discounted prices it's not a particularly levered economy, right there is not a lot of external russian debt i just wonder how long you think economically the country can withstand this. >> well, i mean we've seen other dictators like kim jong-un who is running sort a hermit economy for many years anything is possible in these dictatorships. what we're worried about is how do we degrade his financial ability to execute this war.

and this war is ex tremely expenses costing billions of dollars a day. the estimates are that the russian gdp will contract by more than 30%. they have now been cut off from their central bank reserves. yes, it's an unlevered economy but november no ability to get any leverage other than possibly from the chinese but i don't think the chinese could even lend them the amount of money that they need. so they are definitely getting squeezed right now are they going to be squeezed to the point they will stop this war in the near future probably no. but eventually they are going to run out of gas literally they won't have enough money to do this war if we keep the sanctions up and keep on tightening the noose >> so, bill, it's morgan when you talk about more and the fact it will take more to see an end to this conflict. >> is more time then and letting these sanctions work and thoses trickle through and have an

impact, or is more something else like more military involvement or something >> well, on the economic front more means instead of sanctioning 70% of russian banks disconnecting them from s.w.i.f.t., we should disconnect 100% when we sanction two dozen oligarchs, it should be 100 oligarchs. any stragglers doing business in russia should be pressured from the consumers, from their clients to stop doing business in russia entirely if we have a private sector ban and effectively a government ban, they are going to run out of money pretty quick there is a last thing, which is the elephant in the room, which is energy exports. and we have to get -- pressure and get the germans and italians and others off of russian oil and russian gas. that's not going to be an immediate thing. the lights will go out in italy, which is 100% dependent on russian gas.

that's a medium-term thing any place there is an opportunity to stop buying russian oil, we should do it and we should put pressure on our allies who aren't doing it because that is ultimately if they can't sell their energy to the west, then they really truly run out of money if they run out of money, they truly can't do this war in ukraine. and we are not going to be able to negotiate with him to stop doing this we have to basically physically stop him by making it either impossible for him to afford it or that it's just too -- he runs out much troops to be able to execute this war we are not going to go in militarily at this point so the first option economic surrounding is our best option >> all right bill, so, you know, i won't hold you accountable for this because this is seemingly an impossible situation to predict, but how does it end and when does it enend? >> there are a number of scenarios. the most likely is a scenario of

a frozen conflict. they are in ukraine, they're murdering more and more people, the ukrainians are fighting back and this thing trujs on in a really unpleasant and horrible way. that's the most likely outcome i would give that a sort of 80% chance of happening. and then there is two other possibilities. the one, the best possibility, is that the ukrainians sort of unbelievably and unexpectedly win this war, that they degrade the russian ability to such an extent that they have no possibility of carrying on i give that a low probability. and the really terrible, scary scenario is that russia wins this war and then moves on to estonia or lath via or lithuania and points thundershower guns and nuclear missiles at us and ask the question to the american public, do we want to go to war with russia with the possibility of a nuclear strike to protect a country that probably 1% of americans could locate on a map?

that's putin's logic we have to do absolutely everything to prevent him from getting to that 10% scenario of attacking a nato ally. >> okay. bill, thanks >> thank you after the break, more on the price action we're seeing in cryptocurrencies elon musk moving markets with a tweet. we have t osdeilnegothe tas xt

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from southern new hampshire university. - i'm nervous, i'm excited. - [man] okay, let's see it. let's see it. - oh my gosh. - as soon as she saw this, i did it and it's here. - [man shouting] yeah! (upbeat music) - [narrator] next term starts soon. visit snhu.edu

getting a check on bitcoin this hour. it's hovering around 39,000, just under 39,000 per coin but still down 15% year to date. in a tweet last night elon musk saying that while it's better to hold physical assets over cache mid inflation, he will not be selling his crypto joining us now is bobby, ceo of the u.s. division of crypto

exchange bit stamp good morning, bobby. >> good morning. thanks for having me. >> interested in your take on how crypto has been trading. it really has been echoing the moves largely in risk assets, things like the nasdaq 100 at least in the last few months was interested to see that your clients have also, you know, raised some cash and maybe are taking down some of their crypto risk what's your read on that >> yeah, i think it's exactly that so in this kind of uncertain environment i don't have to tell you guys about the sociopolitical stuff going on, inflation. we think that people are generally a little bit more conservative in all of their asset classes that they are dealing with, and crypto is no exception. we are seeing specifically at bit stamp evolution of invests trends so, for instance, a little bit more healed in stablecoins versus a year ago. >> a little more in stability

coins. in other words, people are less aggressive about speculating on immediate upside if koips then >> exactly there is a de-risking, i think across the board. >> and have we learned anything about the utility of crypto over this period of time when you have seen it really not make new highs on higher inflation, where it's been kind of in this middle zone in terms of prices during this moment of global turmoil. do you think it's not lived up to some of the promises, or is it actually doing what it's supposed to, so to speak >> i think it's accurate to say we expected that it would be more of a valid hedge. for instance, against inflation than ma we're seeing today so this correlation, however, is not unexpected when you think about the role that crypto plays in most investors' lives today it is a bit more speculative and so when you are in an environment where de-risking is

appropriate, they are going to take it out of stock and crypto. however, i do think in the future as it becomes more of a mainstream investment and more of a central part of different people's different investors' portfolios, i think it could start to play a different role more like gold >> yeah, it's an interesting discussion, especially when you have this trading in speculation piece of the puzzle versus the doomsday insurance, aka digital gold and how there is a push/pull now. how does regulation fit in given the fact that we got the biden executive order last week? >> i think the executive order is incredible y important and is important for a few reasons. firstly, just acknowledgment there is over 46 million americans who have invested in crypto and i think it's just really important that the government recognizes the opportunity as legitimate and valid. so as an exchange that has been around ten years, that hasn't

always been the case secondly, to your point, clarity. we are in the u.s. living with some fairly confusing jurisdictional and other ques questions regarding regulation we do think that keeps people o, investors on the sidelines, institutions on the sidelines, and ultimately impedes innovation in the space. so the biden order, i think, is a really strong step toward asking for clarity, and clarity will bring about confidence for consumers and investors, and we think that will be good for broad-scale adoption. the finally thing i'll say about the executive order, it's notable in tone. in my read it's focused more on innovation and competitiveness for the u.s., which is a bit different from some of the commentary we've gotten from regulators over the last couple of years, and we think that's incredibly important

you know, president biden is not only saying that the u.s. should accept crypto but also be a leader in this emerging global arena. >> yeah. it seems like some of the worst fears among the business that they might be hostile were not realized by that executive order. we'll see where it goes from here bobby, thank you very much. coming up next hour on tech check, russia blocks instagram, plus threats to google, apple, and more by russian agents that's going to start at 11:00 a.m. eastern stay with us as major averages move toward session highs. the dow's up 364 >> announcer: crypto decoated is sponsors by grayscale.

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welcome back to "squawk on the street." i'm dominic chu. stocks are mostly higher today the s&p is up about 1%, 4242 the last trade there every sector is in positive territory except for the one loan tech, that's energy every constituent is trading lower on the day notable declines in this one

oil prices head lower with wti and brent each firmly in negative territory but holding near that $100 per barrel. it's horcherring above 100 bucks a barrel remember, last week it was 130 bucks. i'll send it back over to you. >> yeah, it's been a wild ride for crude. dom chu, thank you. after the break, the u.s. justice's department newaccs tti on freezing russian assets "squawk on the street" is back after this >> announcer: retime exchange sector sort is sponsored by sector spdr etfs

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the u.s. justice department now targeting crypto exchanges and other payment services as it hunts for russian oligarchs' assets robert frank has more on what they fount robert. >> good morning, david they warned they could become targets in this oligarch crackdown. the new sanctions task force

saying banks and crypto exchanges that failed to maintain adequate money laundering policies will be in the crosshairs of this investigation. so the u.s. is not yet freezing the accounts or even banning these guys from trading, but the eu has included crypto in its sanctions trading. that's because trading between ruble and crypto assets doubled right after the invasion of ukraine. the u.s. going after the financial u.s. investments of the oligarchs, uk authorities freezing the investments made by roman abramovich he is the billionaire who was sanctioned over the weekend. officials say he invested billions of dollars through an invested investment firm called con concord. the names he's invested in are big. some funds like brevin howard say they will return concord's investment he had been trying to sell his

hedge funds investments in recent weeks abramovich also has large holdings of u.s. stocks. unclear what vehicles or brokerages he used concord did not respond to request for comment. these guys are putin's atm, so you're cutting off their money and their assets and you're cutting off putin. >> yeah, that's the hope at least. robert, thank you. that's going to do it for us right here on "squawk on the street." "tech check" starts right now. ♪ happy monday, welcome to "tech check" i'm jon fortt with us cnbc contributor guest hosting this hour and today nasdaq trying for a bounce