good morning welcome to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm rebecca quick along with andrew ross sorkin and brian sullivan joe is off today >> good to be here >> i read through the beginning parts of this, andrew. you don't want to miss this. there are substantial things ben bernancke has to say you want to stick raaround >> thank you for that. he takes on all questions and provides clearances. >> very thoughtful maybe some more pointed comments than you anticipate. you have to stick around for

this let's get the equity futures. we're in the red we have gone back and forth. dow futures right now indicated down 60 points s&p futures off 16 nasdaq off 85. the nasdaq was up 3.9% on friday across the board the dow up 1.5%. s&p up 2.4%. strong numbers for friday. it was not enough to pull us out from the losses we have seen through the week the dow industrials were down 2.1% last week and s&p off 2%. nasdaq down 2% for what we saw for the week down side. big up day on friday volatility is still here if you are looking at where things stand, this is year to date off of the all-time highs, you see significant pain dow down 12.8% from the all-time high s&p down 16%

nasdaq down 27% from the all-time high. we're still in painful territory if you bought in looking over all-time highs. treasury yields are picking up the 10-year yield is 2.933%. yields are moving higher 30-year is up above 3% 3. 3.097%. >> you wonder when they start it to cut the median s&p 500 of the 25 strategists on cnbc is 48.75 we're down 17. you have to go up 21 to get back to where you were. do they start to capitulate? you know once one does it, all of them will do it within a week they are waiting for someone to give them the mark no one wants to be first >> a lot of people we talked to think we will get better we will get through the

inflationary numbers you have people wondering what happens to the consumer in the second half. we will see retail earnings coming out it will not just be looking back numbers. we hear from the retailers and what they see. we have breaking news. just happened in the last hour jetblue taking takeover bid for spirit hostile phil lebeau. >> andrew, we heard from jetblue over the last couple weeks they have not been happy with the spirit board they have gone hostile shares of spirit up 20% this morning as jetblue is offering spirit investors $30 per share with the potential of going up to $33 a share if the spirit board engages. they are urging spirit investors to reject the merger deal with spirit and frontier. that is scheduled for a shareholder vote on june 10th. i talked to robin hayes.

i said why are you doing this now? we are not hugely surprised here he said we wachbnt to take thiso the investor and the shareholders layout the story i said has the spirit board been engaging he said no we have been disappointed by the lack of engagement they did not do their fiduciary duty they twice have been rejected by spirit's board the spirit board has essentially said they do not believe that the jetblue deal is superior to frontier they are questioning if the doj would approve it they don't think it would go through even with concessions that jetblue said it would like to make or it is willing to make if that is necessary to get the deal approved. what does this set up? it means we have a couple of things happening as you look at shares of spirit and jetblue and frontier which has that merger

agreement already with spirit. we are going back to april 6th when jetblue made the counteroffer to the jetblue or to the spirit-frontier deal. do june 10th is when the shareholders are scheduled to vote on the frontier merger. until then, you have the tender offer that is out there. by the way, jetblue is engaging with spirit investors. talking with them, especially the large ones we're at 30. we'll go up to 33 if we can get the spirit board engaged robin hayes says there is a path to $33 a share the question issuccessful? through all of this, frontier has said nothing they are quiet and letting it play out we will see a very, very aggressive campaign by jetblue it believes this is the superior offer to frontier and it is the

right path for spirit. guys >> phil, in terms of what is going on in washington, even on spirit/frontier alone, how do you handicap that? putting aside all of the various sides say and the spoiling efforts that are taking place. >> there is no question he that most people believe that the biden administration is going to be very skeptical of merger agreements in the airline industry you have 85% of the market share in the country do you want further consolidation? would the biden administration agree? most believe the biden administration would be skeptical and put strong clauses in place to approve any merger with spirit whether with frontier or jetblue. add on to it that, you have the doj already questioning whether it should unwind the northeast alliance that will be going to trial

later this year. if they want to unwind the northeast alliance, are they likely to approve a full-on merger with jetblue and spirit when you talk with the jetblue management, they say that is a separate issue we think the doj will ultimately realize there is a jetblue effect and they will approve a deal between spirit and jetblue? as you mentioned, andrew, we are in the either where it is all putting your cards out there if you are jetblue and trying to tell the spirit shareholders, we can get you $30 a share, but get your management to engage with us >> guys, i'll ask both andrew and phil this question when you see something like this happen, i think about the board and what a difficult position they're in trying to handicap this and trying to explain this is a higher offer. $30 or maybe $33 i don't know if that will go through.

i think about the shareholder lawsuits that will come no matter what happens in the situation. >> i think you are 100% right. either way spirit goes, you will see a shareholder lawsuit. you can see the argument from the person or a big group or firm that owns a big stake in spirit they are looking at this saying wait a second. $33 a share? that is superior to the money alone with frontier. you can also see another group of shareholders would say why go down this path if we think it is not going to get approved? >> it is almost musk-ian >> it reminds me of the twitter board. >> it is dangling the extra $3 a share if you engage. if you are the board of spirit and you don't engage and you leave not only the 30, but the 33 sweetener on there, to your

point, all the lawyers. >> this deal is better i clearly see $33 is more than that if it is not approved and andrew states maybe none gets approved? >> i think there is a better chance that the spirit/frontier deal gets approved it has a better chance than the jetblue would. >> what is jetblue's position? jetblue's position is we think we can get it done and they won't listen to us because we think we understand what is going on in washington better than they do or we will be a spoiler because we cannot afford the deal to go through? >> i think a combination of both a, you get lawyers who convince you that it is doable and possible by the way, even if it is not possible, it is worth doing. meaning -- >> you don't want the deal >> not 100% it won't happen.

>> phil, can i ask -- >> brian, ted christie was on the spirit quarterly call a week ago. he said straight out he says i am starting to believe this is not about merging with jetblue. this is about jetblue trying to prevent us from merging with frontier he is skeptical about whether or not this is a full-faith effort from jetblue robin hayes sees it differently. >> i need to ask a more basic question why does everybody suddenly want spirit what is spirit bringing to the table? >> what else's is at the ball? i'm not trying to be coy the big four will not merge with anybody. that means you've got jetblue in alaska who are right now five and six in terms of size in the

u.s. alaska is five and jetblue at six. the only combinations is alaska has made it clear to this point they are not in the market to merge. if you are jetblue, you are looking at spirit and frontier coming together and being the fifth largest. that puts you to seventh where is your growth potential if you are jetblue can you grow organically as much as you think there are more than a few skeptics who say this is the only way they can grow >> phil, thank you we are fascinated to watch what happens next we have other breaking news just happening this out from mcdonald's the company begun the process to sell its russian business. this is forever. you may remember back in march mcdonald's announced a temporary

closure of the restaurants in russia now mcdonald's saying the ownership of the business in russia no longer consistent with the values at all. effectively going to give up on russia you may also remember -- you have to remember a lot you have to go back 20 plus years. mcdonald's was one of the first american businesses to actually go into russia and establish in the 1990s. this is an interesting decision. a lot of companies temporarily stepped back saying it doesn't align with values. we don't want to be here for now. the provision that maybe we will come back at some point. mcdonald's saying we're gone >> steve liesman talked about this he lived in russia it was symbolic of the soviet union. does this mean mcdonald's will

go away or will they sell the business, but license the brand to a russian operator? i don't know >> i believe and unless i'm reading this incorrectly i believe they're out and those businesses -- >> those mcdonald's will be gone no golden arches >> maybe somebody can buy? i don't believe mcdonald's as we here know it will be in russia >> this goes back to the mcdonald's theory. no two countries with a mcdonald's have gone to war together once you reach that economic development level where you have a very strong middle class that brings mcdonald's in, they don't go to war. that is being challenged broadly here >> the question i ask is what does every other american business do? is this the beginning of the -- we saw it. mcdonald's is one of the first to temporarily step back

now they're the first to permanently step back. are we going to see a wave of this going forward we obviously see with the oil companies. whether you see it with many other american brands. >> this is a big deal. mcdonald's owns 84% of the 847 restaurants in russia. russia was 9% of the total revenue. this was a big decision. this is not something that they say mostly franchisees >> another loss of ties to the people who have nothing to do with the war. all right. coming up, help is on the way to europe more natural gas arrived in poland helping them and the rest of europe wean off russian gas we while talk to one who did it. the first ship launched from

louisiana and arrived in poland. as we head to break, let's get a check on stock futures declines across the board. not big ones dow futures off 48 nasdaq off we have seen the trend where the selling has exaccelerated throughout the morning we have a lot more to do "squawk box" and we are live together at the nasdaq market site in times square good morning we're back right after this. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. okay season 6! aw... this'll take forev—or not. do i just focus on when things don't work, and not appreciate when they do? i love it when work actually works!

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welcome back on some good news in the european energy crisis u.s. coming to the rescue. venture global's vessel of liquid natural gas arrived in poland last night. joining us now is mike sable is the founder of venture global lng. a big moment for venture global and you and poland the first ship arriving. you have been on a decade long journey never realizing at the time we would have a major land war in the southern part of europe and you would come to the rescue in a way. what was it like to have the first ship arrive? >> good morning, brian

i was thinking back to the first visit for our company was back in late 2012 or early 2013 to warsaw, poland even at that time, poland was planning to expand its gas relationships with the united states we really have been talking to them for almost ten years as you described. it was thrilling to see that first ship leave the jetty we were with the polish team here with the jetty video we are showing now. we have a team on the ground and were there when the ship came in yesterday. >> the port is in the northwestern port of poland. almost on the german border. poland wanted to get off russian gas early. now germany and other parts of

europe are racing to do the same germany is talking about the floating re-gas units. have you been in talk ans with other european nations do you have the capacity right now to support more out of europe if need be? >> absolutely. really prior to the invasion, the supply demand curve was out of balance we have seen prices really reach all-time highs before the russian invasion of ukraine. prior to that, we were in active discussions and it certainly accelerated. we do have more supply coming online we saw the market shortage and expanded our development we secretly have been in construction with our second facility on the mississippi river south of new orleans since last august. they already started assembling

the equipment which is produced if europe and including steam turbines and in poland itself. we have really what's ultimately another 60 million ton factory capacity that can come online by 2026 >> i tried to explain the business, mike, of lng i'm not sure i do a good job of it can you give viewers a rough example of one of the ships? how much energy can you produce from a ship load trying to get at the idea of how much would europe actually need to get off russian gas i've talked to many that said they can say what they want. we don't see it being possible fully. what do you think? >> when you take gas and you cool it down to minus 260 degrees to turn it to liquid, you increase the energy content by 600 times when you turn it to lng. roughly speaking, approximately ten ships of lng large tankers

would be enough to supply the gas demand of poland size for about a month. 1 million tons a year is approximately 13 ships a year. 10 million tons is 130 ships that's a large amount of gas >> it is one ship at a time, i guess, maybe we're getting there. poland saw this a decade ago venture global it must be very emotional to see the first ship mike sabel, i appreciate it. >> thank you, brian. still to come this morning, a red flag on rising medical costs. sharon epperson has that story next. as we head to break, check out the pre-market winners and losers in the s&p 500. royal caribbean leading the way at 3.6%. stick around "squawk box" will be right back.

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welcome back health care inflation highlights how unprepared americans are with rising medical costs. sharon epperson joins us now with the estimate for retiree health care costs hthat may surprise you >> good morning, becky a report by fidelity estimates a 65-year-old couple retiring this year can expect to see $315,000 of retirement. that is 5% higher than the estimate last year most of the increase for 2022 is higher premiums for medicare part b the plan for americans 65 and older. health care costs are expected

to remain elevated >> there's a lot of upward cost pressure in the health care system right now due to investments that providers need to make for the next pandemic and issues with labor particularly with hospital nurses >> fidelity found that americans are unprepared to cover health care in retirement and have significantly underestimated what it will cost. the ckconsumer expect costs to $41,000. that is $274,000 shortfall from the latest projection. by fidelity's estimate, retirees will need seven times that amount becky. >> sharon, thank you one of many things going up these days we appreciate it good to see you. by the way, to read more, go to cnbc.com we should note that nbc

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welcome back to "squawk box. ben bernancke is out with a fne book this week "21st century monetary policy. i spoke to ben bernancke at his home in washington, d.c.

i asked about the great inflation comparison in the '70s to where we are today. i asked him about it if he were in the seat now. >> there are big differences with the '70s and today. one is the inflation in the '70s lasted more than a decade and it was higher than now. it was a worse episode i think the most important things, first of all, that the federal reserve has to take the lead arthur burns, share of the fed in the '70s felt other parts of the government should take the lead secondly, worry about credit built. the fed credibility was shattered. when paul volcker did -- he had a lot of credibility it wasn't enough that is why the recession followed his tightening and it was so much greater. the third lesson from the '70s

is that political interference with fed policy can be very dangerous. in the '70s, arthur burns, again, acted as a member of the nixon administration nixon wanted to be reelected in 1 1972 arthur burns said we won't tighten monetary policy. that led to inflation. we have a more independent central bank today i'm pleasantly surprised if you look at congress and the president and so on, you are not seeing a lot of people saying the fed should not be doing anything about inflation there is a lot of support for the fact that the fed is tightening now, although we see the effects in markets and house prices, et cetera. those are ways in which the current situation is better because we learned a lot from the '70s

>> does that mean we acknowledged because the fed is leaning toward this because there is no tool >> clearly, the fiscal authorities could play a role. this is what modern monetary theory says. by raising taxes and cutting spending and reducing aggregate demand, fiscal authorities could play the same role as the fed which basically reduced demand and get inflation down unfortunately, the fed is just a lot more nimble and better informed about markets and so on it can respond quickly and provide guidance about the long-run policy goals, et cetera there are many advantages to fiscal policy. nimbleness is not one of them. it takes a long time to come to agreement. only under extreme circumstances will congress act in a powerful way. from the political point of view, the fed is the only game

in town. >> i asked ben bernancke if he thinks that with transparency and the forward guidance that comes with that, if it locks in the fed. for example, the most recent case of the 50 basis point rate hike >> there's no strategy that doesn't have occasional down side i think the clearest case and most recent period the fed would not begin to raise rates until certain criteria was met secondly, until they had qe gotten to a certain point and they would taper first et cetera, et cetera so the forward guidance, overall, on the margin slowed the response of the fed to the inflation problem last year to some extent. >> so does that mean it was a mistake? >> they had -- this is a complicated question the question is why did they delay that i think why they delayed the

response in retrospect, yes it was a mistake and they agree it was a mistake there were a number of reasons one reason was they did not want to shock the market. they wanted to avoid jay powell on my board during the taper tantrum. he wanted to avoid it by giving as much warning. that was one of several reasons why the fed didn't respond more quickly to the inflationary pressure in the middle of 2021 there were other reasons as well >> what do you think >> one of them was that in early 2021, after the american rescue plan was passed, this was $2.8 trillion in new federal spending with the rescue plan and december program you know, the fed could have responded at that point. they looked around and said there is still a lot of slack

because the unemployment rate was close to 6%. number of people working below where it was before the pandemic they said there is still a lot of slack in the economy. we should let the fiscal program do its job and bring the economy back to full employment. we've learned since then that because of the pandemic and with a lot of people staying home that the unemployment rate for example, the number of jobs may not be a good indicator if the labor market is hot or not looking now at things like the number of job vacancies which show employers are having a terrible time finding workers and the labor market is dis dist distorted. the other issue is the supply chain issue. the pandemic snarled supply chain issues around the world. it drove up prices the fed thought the factors would solve themselves

the shocks were transitory they didn't need to respond to the early days of inflation because it would go away by itself that proved wrong. there were a couple of issues that are related primarily to the pandemic itself and the way it scrambled and the usual caters that made it hard to read the economy. >> we got into how he read the economy at that time >> i wasn't particularly on board with the view that the number of jobs was the right indicator of how tight the labor market was i knew immigration was low i knew a lot of people were staying home not because they couldn't find a job but with pandemic and delta and other variants, they were not looking for a job. i did believe that some of the inflation was coming from factors created by the pandemic including the supply chain

problems and reduction in labor supply and the fact that people were shifting demand away from services like restaurants toward durable goods like cars. that was putting up prices tremendously in durable goods. i thought -- i don't know. i didn't have a specific time frame in mind, but over this year, those would begin to reverse. they will reverse eventually clearly, they are more persistent and problematic than we, i, the former fmoc, thought. >> the former fed chair ben bernancke read a lot about inequality i asked about the debate over the wealth tax >> i think a better way to do it is raise capital gains taxes you could tax and realize capital gains. the important thing is to eliminate the provision when you

pass appreciation securities on to your heirs, it is not taxed there is a way to pass on income which is more practical than straight wealth tax. i know defenders of the wealth tax would disagree i don't disagree with the objective. you need to find a meth onod th will not be impossible to enforce. >> ben bernancke has a twitter account, but not active. he is jumping into the deba deb. >> this is unusual to see a former fed chair offer chritica com comments >> i saw it differently. >> i would not have done this. he is not being mean about it. he is speaking how he sees things happening with it people will look at that and

criticize the fed and what they are doing now. i think the way he lays it out is rational. he is right on a lot of accounts >> it is interesting talking about the temper tantrum and jay powell was on the board. bond yields from 1.75 to 3 in ten months that was the tantrum we have gone from 1.4 to 3 in seven months we had a bigger tantrum than the tantrum. jay powell didn't learn the lesson -- >> or was trying to avoid it >> it happened anyway. >> he knew the lesson and tried to avoid it and maybe it didn't happen how he wanted >> i traveled around the country. i never stopped traveling as you know i saw everything the big mistake from the fed is not targeting aid to the places that need it houston never shutdown you were giving them money

the car salesman doing better than ever. good for them at the time. i think they didn't get out of their bubble. >> i think it is interesting he pointed out that the fed will have to step up and do this. you cannot wait for fiscal authorities to step in that was the mistake in the '70s fiscal authorities could do this >> it was a lesson for him in 2008 almost only so much to be done we will have more throughout the broadcast. we should mention ben bernancke's book is available tomorrow "21st century monetary policy. i should tell you, ben likes to think of this as an academic book given the moment, it is a practical guide to think about the world. we will show you more of that conversation in just a little bit. we will also get his take on esg and crypto and other hot button

issues where i imagine if he was on twitter -- >> a great interview congratulations. did you ask about the animated bears? the ber-nank >> the book is mentioned six months late because of the supply chain issues. >> it is timely. >> what would guttenberg say when we come back, mcdonald's is beginning the process of selling the restaurants in russia. this is a move that has very big implications for the company because russia makes up 9% if you were looking at this a few months ago before they shutdown. 9% of total revenue. we will talk about it in a moment $254.52 was the last tick. "squawk box" will be right back.

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some news out this morning from mcdonald's. the company announcing it has begun the process to sell its russian business in march, they announced a temporary closure in russia following the russian invasion of ukraine mcdonald's now says ownership of the business in russia is no longer consistent with values after what they have seen and the crisis causing the humanitarian crisis after the war in ukraine and the operating environment as a result. this is a big deal mcdonald less than 3% of the operating income globally. they own so many of the restaurants. they mentioned in the release they have 62,000 employees they hope the employees will be kept on by the russian buyer they hope to sell to run russian

buyer. they have been paying employees in the meantime. they say this is a process of what they call de-arching they will hold the copyright and trademarks in russia and still move away from this. >> you wonder if they hold the trademarks as a defensiv mechanism so nobody can use it or also to one day relaunch. >> right as a result, the company is expecting to record a charge primarily non cash of 1.2 to $1.4 billion to write this off and recognize significant foreign currency losses because of what happened to the ruble. they say the company will look at operating margins in the 40% range. they would look for adjusted operating mash bemargins in the

40% range. you see the stock right now down 52 cents when we come back, european carrier ryanair out with the earnings and the company is blasting boeing. we have big problems with what is happening there the cfo llwi join us next. stick around we'll be right back. >> announcer: executive edge is respo sponsored by at&t business at&t 5g is fast, reliable and secure the one amaz camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment. and every new business that just opened! like aromatherapy rugs! i'll take one in blue please! it's not complicated. at&t is giving new and existing business customers our best deals on every iphone. ♪ ♪

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welcome back, everybody. ryan air group ceo michael o'leary is blasting boeing calling on the company's management to step up or step aside. he told investors that ryan air

is a willing customer but could turn to the secondhand leasing department for more aircraft unless boeing steps up he thinks boeing management is running around like headless chickens he also said we're very happy to work with existing management but they need to bloody well improve on what they have been doing delivering to us over the last 12 months he went on to say boeing needs a management reboot in seattle and either the existing management needs to up its game or they need to change the existing management ryan air's shares are down, it couldn't give a detailed forecast because the recovery at this point remains too fragile joining us right now on all of this is neil sorahan, the cfo of ryanair group. it's good to see you this morning. this is a lot to digest. what's going on with boeing, what's happened to make you all so unhappy with their performance? >> we had a very long wait in the first place to get the aircraft in. we have over 70 in the fleece,

and we're happy to have those for the summer period. fantastic air craft, 50% less fuel 40% less noise it has been difficult getting the aircraft in, and we have consistently missed delivery deadlines, and we have had to take traffic out of the summer months as a result of that we're hoping to take 55 aircraft in this winter, and we ask to get final clarification on what the delivery dates are going to be i will be hopeful we will have over 120 air craft in our fleet for the summer of next year, and they are phenomenal aircraft it feels like boeing has lost their way a bit. they are losing customers. they have had various issues in hitting delivery deadlines, and i hope things will improve radically over the coming months. >> just in terms of what you said, this is going to impact the number of planes that you've got servicing things in the summer time months is that part of the reason you're not able to give more

guidance in terms of what people should be anticipating in terms of the company's financial performance? >> it's more the risks that exist in the market. we remember very well what happens in the months of christmas where omicron disrupted christmas traffic. we had the unexpected invasion of ukraine, which badly damaged the easter traffic, and so we're wary of what may happen into the winter where we've got limited visibility as things stand at the moment, we're rebounding we expect to carry 165 million customers this year up from 97 million last year, and indeed, ahead of the 149 million customers that we had pre-covid. bookings into the peak summer months are looking good as far as our margin ahead of what we would have seen in the summer of 2019 pre-covid but we're just cautious in relation to what may happen over the second half of the year and the risks that exist in relation to covid or indeed the ukraine.

>> right covid, i think, everyone's concerned about what might happen when we get back into the winter time months with ukraine, this is a big issue. you fly a lot of flights in and out of ukraine, you did. >> we had about a million flights a year in and out of the ukraine. that would have been 1% or less than 1% for traffic. we were able to redeploy the aircraft very quickly elsewhere. we did have to stimulate for three or four weeks with lower fares and price promotions in central and eastern europe that has recovered we hope when everything gets resolved in that part of the world, we would be able to go back into that market, which is one that we were happy to serve prethe invasion. >> if you're seeing slightly higher fares for the summer months, does that tell you d consumers are feeling good or

just want to get out for the summer >> i think there's massive demand they're very keen to get out and see the big yellow thing in the sky. i think the summer is going to be pretty good it's just the uncertainties beyond that. >> neil, thank you very much the cfo of ryanair, it's really good to see you today. >> pleasure. >> that was fascinating. coming up, we're going to stay in the air, if you will, you get it, because we're going to talk about jet blue and spirit airlines, taking a bid, we're going to bring you all the details about that bid right after the break. plus, more of our interview interview with former fed chair bed bernanke coming up in just a bit as "squawk box" rolls on back after this. against thousands of compliance controls with the help of ai. bit as "squawk box" rolls on back after this. n bernanke comia bit as "squawk box" rolls on back after this.

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everybody be cool, alright? with ringcentral we can pull bonnie up on phone, message, or video, all in the same app. oh... hey bonnie, i didn't see you there. ♪ ringcentral ♪ good monday morning, and welcome back to sk"squawk box" right here on cnbc with becky quick and welcome to the party. >> i don't know how much of a party it's going to be. >> we'll see what this turns out to be like last week was a bit of a downer party, but check out the futures. >> better than a donner party because that didn't end well.

>> no. >> we're going to show you where we are dow off 37,000, 37 points. >> that would be a big party. >> s&p off about 13. by the way, where is bitcoin right now. are we under 30? >> it was below 30,000 earlier this morning, but above it before that, so i don't know >> briefly going back and forth. but it is a deal party this morning, meaning that there's deals. >> there's deals but there's also attempted deals, right, we've got some breaking deal news or i should say a fight for a hoped for deal jetblue is going hostile in its bid to buy spirit airlines phil lebeau joining us now with more where do we stand right now on what is turning out to be a pretty brutal fight? >> jetblue is emphatic that they believe the new tender effort they are making to the spirit shareholders is a deal the spirit shareholders will ultimately push the spirit management to accept or at least reengage in negotiations they're offering $30 per share with the potential of going up

to 33 a share if the spirit board can once again come back to the negotiating table with jetblue. they are also urging investors of spirit to reject the current deal that's been agreed upon between spirit and frontier. that vote is scheduled for june 10th i talked to robin hayes, the ceo of jetblue, and i said to him, look, why do you think this is the deal that makes the most sense for spirit he said it's very clear to him, both in terms of cash but also in terms of the agreement between the two airlines, this is a superior bid. quote $30 a share is a premium to spirit shares the deal is fully financed we also see a path to $33 a share. now the question is what does ted christie, the ceo of spirit, what do they do. they have rejected jetblue,

basically they think that the doj is unlikely to approve a merger with jetblue. there's a few other reasons but that's the primary reason they've given. i asked robin hayes about this, they have hidden behind the regulatory approval argument as a smoke screen he's emphatic about the fact that he believes that is not going to stopa potential deal between jetblue, and spirit, and that if spirit at least comes back to the table they will convince them that they can get this across the finish line. now the question becomes, what happens next in terms of the tender offer there is a vote, again, scheduled on june 10th for the spirit shareholders on the f frontier deal, which jetblue is saying to the shareholders, reject it, get rid of it whether you take our $30 a share or at least force the spirit management to come back to the table, that is the focus right now for jetblue. we have yet to hear from spirit. we have reached out to them this morning. i'm sure we'll hear something within the next few hours, guys.

>> phil, a couple of questions we talked about this earlier, and again, the shareholder lawsuits that are probably going to come because no matter which deal you take, someone is going to be unhappy, either if one is less likely to get through it's hard to turn down when you're looking at more money and say that's not a better offer. i guess the back and forth, and you were clear on this before, the back and forth is that they don't think that this could get through. explain the thinking in d.c., why jetblue would be less likely to get through than frontier, especially when you look at the size differentiation. >> we haven't heard anything from the doj we don't know that the doj would reject a jetblue/spirit merger if you look at this at the standpoint, the biden administration is going to be skeptical of any consolidation

or merger in the airline industry if you go at it from that standpoint, it's going to be tough enough just to get the frontier and spirit deal to happen now if you have spirit with jet blue, spirit's contention is that would create an airline that the biden administration would look at and say, what benefit is there to the consumer robin hayes, when i talked with him about this tender offer, he said, look, the jetblue effect is clear we believe that the doj believes us that there is a jetblue effect not entirely sure about that while they may have had some language about that, they are trying to unwind the northeast alliance between jetblue and american, but robin hayes believes that, and he believes that they can get this across the finish line. ted christie is of the opinion, it's going to be tough enough to make it happen with frontier, not impossible, wouldn't have agreed to the deal if they couldn't make it happen, but if you're going to have problems at least convincing this administration to put two

low-cost carriers together, why would the administration say, okay, we're also going to be approving you getting together with jetblue which is a larger airline. >> you pointed out the comments from michael o'leary, we spoke with the cfo who doubled down on that basically o'leary says boeing needs a management reboot in seattle and either the existing management needs to up its game or they need to change the existing management. he said they're running around like headless chickens at this point. what does this mean? is this negotiating for better prices or is there a lot more here, and are you hearing from other airlines as well >> i'm not sure this is negotiating for better applies as much as it is, ryanair believes that the boeing management has just been way way way too slow in terms of making the changes necessary, whether it was with the max, which they are gradually increasing product

production, but look at the problems they're having with the dreamliner it's more than a year they have not been delivering dreamliners, because they're going back and forth with the faa in terms of inspection protocol before an aircraft can be delivered. if you were a customer, and i've heard this from other airline ceos, in fact, i've heard it within the last week where they have said, i'm not crazy about this, i'm waiting for dreamliners or we know others who are waiting for dream liners or we have people who are, i mean, they're getting their maxes. i mean, it is not like they're not going to get them eventually they just want to see it happen at a greater cadence, and they want to have more confidence that the boeing management team truly has its arms around the issues whether with the dreamliner or the issues with the max which has been resolved and they haven't had issues since they have been approved for delivery boeing's contention is the max is behind us we're gradually increasing production but the bottom line is this. i mean, they have got to,

boeing's management has got to work on convincing not only their existing customers like ryanair, but other customers, potential customers. they have a game plan and a path to the future. >> phil, thank you, we will see more of you a little later today. in the meantime, a couple of other corporate headlines this morning. first up, shares of twitter lower, although off their worst levels of the session amid doubts about whether elon musk's twitter takeover will happen he tweeted over the weekend that he had been told by twitter's lawyers that he had violated a nondisclosure agreement by revealing sample sizes twitter uses when analyzing spam accounts stock is down 1 p.8%. we're going to talk about the ongoing twitter drama with former s.e.c. chairman, jay clayton when he joins us in the next hour. in march, mcdonald's announced a temporary closure of restaurants in russia following

russia's invasion of ukraine mcdonald's says ownership of the business in russia is no longer consistent with its values that stock down by about $0.52 let's look at the stock market obviously the market has been dare we say in turmoil lately. we are seeing not turmoil. not going to use that term, but we are in the red. nasdaq futures off about 2/10 of 1% dow off 16 points. fair value in the nasdaq is in the green. we're not getting a lot of help right now about which way this market wants to go today it's like the weather. if you don't like it, wait a minute talk more about the markets with sylvia, chief investment officer, it's good to chat with you again. what do you and your team think is happening with stocks everybody on wall street was bullish based on targets low s&p target was 4,400 coming into the year. the high was 5,300

obviously we're well below that, pretty much everybody got it wrong. why? >> good morning, brian, great to see you. well, i think that we got it wrong at least in the short-term because a lot of sort of head wi winds came into the picture. you had the russia/ukraine war that is what set us back on the first down fall. we had the fear of fed hikes, how often, how much, how many, how hawkish the fed would be could there be a soft landing. we have this persistent inflation issue with us. and i think that sent the market into the short-term turmoil situation. you've got s&p flirting with the bear market, 20%, came off that friday nasdaq in bear market. dow in correction territory but a lot of the froth has been taken off the market now a lot of negative things have taken play and are priced in indiscriminate selling is there. the put volume ratio is high consumer sentiment is low.

and you know, you could argue that it's, again, it's very difficult to call a bottom, but you can argue there are a lot of buying opportunities now >> andrew interviewed ben bernanke i don't know if you heard that piece earlier in the show. ben bernanke is polite in his academic way, said that jay powell and the fed had effectively made a mistake keeping rates too low for too long, and they'll have to do it aggressively do you think the fed made a mistake last year, that they overdid t and what they're doing now is ultimately going to, i hate to use the term work because what works for the market may not be working to curb inflation. >> it's hard to know if it's going to work. in terms of did they make a mistake. jay powell is saying they didn't act as quickly as it did >> perhaps hit the brakes as earlier as i needed to prior to the car enacting the tree. i made a mistake.

>> that's on the table, and now it has to be reversed but what's interesting about this is, you know, look how the market is reacting look how the consumer is re reacting at some point, there's a psychological impact that could impact consumers i think that what you said on friday reassured the market in terms of 75 goods off the table, and you have to think about how high can they go, and how fast can they go. we still have to service our own debt, right. i do think there is going to be this situation where a pause comes into play, and if that happens, perhaps you have an orderly situation within the markets, and slower growth, you know, for sure perhaps inflation starts to come down we take a pause and move onward and upward no fed has accomplished this plan before. there's one in history, so remains to be seen the good thing is balance sheets are strong consumer and corporate earnings are looking good there are a lot of positive factors in the market that could keep this at bay. >> earnings up 10%

i think sales were up 14%. a little bit more, but man, credit card debt up 21% year over year. prices out of control. we'll see what happens i hope your optimism or at least tempered optimism is warranted thank you. when we come back, we'll have more of that interview that brian was just mentioning, andrew's interview with ben bernanke, speaking to "squawk box" with the fed's battle with inflation. we saw his comments right after this break

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saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™ welcome back to "squawk box," former fed chair ben bernanke is out with a new book this week titled 21st century monetary policy, the federal reserve from the great inflation to covid-19. in an exclusive tv interview, i spoke with ben bernanke in his home in washington, d.c. and asked him about what he thinks about the idea that it's hard for the fed to say out loud it's trying to reduce demand and trying to make things right. >> well, i think powell can say that now because he has argued that we are beyond full employment we're not at full employment we are at a point where employers can't find workers

there's two jobs available for every unemployed person, and so his argument is that we could cool things down a bit, raise the unemployment rate a little bit, reduce that ratio of vacancies to unemployed persons, maybe to under 1, let's say, without creating a lot of real hardship for workers >> right >> in america. so that the need for long run stability, you need to cool the economy down. >> we also talked about whether the former fed chair thinks the fed is going to become, if it hasn't already become politicized, politicized >> i think at the moment that the fed is pretty independent, and certainly nonpartisan. >> you do write about efforts that previous administrations have made to politicize the fed. >> yeah. >> and the pressures that have been felt. >> absolutely. and i think the changes really

began to some extent with the first bush, but mostly with clinton, and since clinton, until trump, presidents have been pretty good about letting it do what it thought was necessary. >> president biden has said inflation is his top domestic priority, and has talked about higher taxes on the wealthy as a measure of something he could do here's what bernanke thinks about president biden or any elected official and what they can do about inflation at this point. >> it's fairly limited i mean, i think it's appropriate that the fed is taking the lead, and i think the most important thing that a president can do is support the fed chair, and let the fed chair do what needs to be done, even if it's a little bit painful. there's things in this particular case, things that probably could help on the margin, things the white house has done to improve supply chains, for example. work to improve public health so we don't have another pandemic and the effects of that, you

know, things that make critical goods like health and education cheaper, more efficient, it's not going to do much for inflation. it would be good for people that are feeling like their money is not going far enough. >> and given the price of oil today, here's what he had to say about the esg movement, a debate that we've had on this program a lot. and some of the new ways that businesses have approached these types of investments. >> the fact that people are willing to do esg investments does suggest they are interested in helping on that side, but i think real progress is not just going to take private actions, we should do what we can to reduce our carbon footprint, but real progress will take a collective effort that will involve other tools. >> do you think there's real economic theory behind esg. >> there's always demand for divesting unpopular stocks,

university endowments and so on. it's fine to show your concern about the way some country is behaving or the way some company is behaving, but when you divest, you're selling your stock to someone else who doesn't have quite the same concerns, and the effects on the issuer of the stock tend to be fairly modest, so i'm not saying it's no effect at all, but it's a more limited approach than either community level or personal level efrforts to reduc say carbon or even better. a social wide effort to take strong actions to meet carbon goals. >> ben bernanke throwing a little bit of shade at some of the efforts to divest. >> it's interesting he was throwing shade at the divestment, university

endo endowments -- >> but the government needs to do this more broadly. >> but did he weigh in on the esg proposals that are being pushed by governments in some areas, investors much larger than just university endowments, what that has meant for the lack of capx spending in oil and gas. >> he didn't touch on that, some of the debate we have had around this table, i think what he was focused on mostly is this idea that a lot of oil companies have said we're going to divest of x drilling plant or this or that, and that that actually, i don't want to say is fake, but, you know, all you're really doing is, you know, reshuffling the board basically. >> listen, to the point about esg, you can be pro-esg or not, whatever, if you sell all of your stocks, you have no seat at the table. if you look at a calpers, they would prefer to continue to own

the equities once you sell it you're not a stake holder and you have no say in what the company does you effectively absolved yourself rather than involved yourself by the way, i ran a poll i just tweeted this out. >> just now? >> per andrew ross sorkin's excellent interview with ben bernanke. >> thank you so much continue on. say more >> do you believe the fed is truly apolitical, we'll see how it comes out >> you got to read the book. even though he says that the fed is not political, he goes through a lot of periods, '70s, '80s under green span. there's all sorts of politics. >> he said if the early clip, arthur burns, not montgomery burns, arthur burns was basically just did nixon's bidding. >> it's actually fascinating to sort of see the full breadth of

the fed in terms of how he analyzed it all. >> did he get into the politicalization of the fed in terms of whether that's part of the reason jay powell and company didn't raise rates sooner >> he doesn't say that specifically you definitely feel throughout the book that there are moments where the fed has been very politicized and the pressure he does talkabout the pressure that people feel, but in fact, and i think he just said it in this last clip, he thinks that right now the fed is actually in even a more credible place than even it was when he was there. i don't know if people agree with that, but he thinks that the fed is now considering how polarized the country is, and by the way, we got into that at one point, talking about the supreme court and everything else, the fed is one of the last bastians of independence if you believe that's the case. >> i wonder 50 years ago how much people actually knew who

the fed chair even was. >> right. >> they did when volker was there. >> i think he was the first one that got notoriety >> i wonder if like my grandfather, now, my grandfather dropped out of school in 7th grade, so i don't think he knew. but i don't think he would have been able to be who's the fed chair. >> your country doesn't know who the vice president is. >> the american public thinks that the federal reserve is a national park. >> and it's no game. by the way, i'm an 81% no, the fed is not apolitical. it's early >> we've got a lot more of that interview coming up on "squawk box. ben bernanke on the record we're going to get his take on crypto and stable coins, as well as the digital dollar. you're going to see that in the next hour. also, still to come this morning, the same company that put a flood score on homes is adding a fire score, and some of

the numbers, pretty scary. we've got the details right after the break. and the drama around elon musk's twitter takeover bid rolls on as the tesla ceo now says the social media company's legal team is accusing him of violating a nondisclosure agreement on the back of his comments on fake accounts. we'll speak to former s.e.c. chair jay clayton coming up in just a little bit. "squawk box" will be right back.

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as a massive wildfire continues to burn in new mexico, and others erupt in california, more homes and buildings are at risk, and given the increasing frequency of the fires, the real estate risk will likely rise for years to come. so how much exactly? well, a new model thinks it has the answers. diana olick joins us now with more diana, what are you hearing? >> new technology launched today is mapping wildfire risk city to city, and even house to house. brooklyn based nonprofit first street uses everything from property tax data to satellite imagery, to incorporate construction type, exposure to combustible trees and grass, roof type and weather. and then it assigns a wildfire

risk score to each individual structure, commercial and residential. >> we can then use super computers to simulate 100 million scenarios of wildfire today, and then another 100 million scenarios 30 years in the future with the forecasted weather conditions >> now, it did the same for water. working with realtor.com to put a flood score on every property on the site. that's now the second most clicked feature right behind schools. starting today, there will be a fire score for each property, whether it's for sale or not so far, it found at least 10 million properties ranked somewhere between major and extreme wildfire risk, while flood risk grows by about 25% over 30 years, wildfire risk is doubling overall, and jumping more than 200% in some places you might not expect, like new jersey, massachusetts, florida, louisiana, alabama, and arkansas big real estate firms are buying

this data to inform their commercial investments they're looking at both potential purchases, as well as the properties they already own so they can reflect increasing risk in their underwriting back to you guys i guess how do you think this plays out just in terms of how much prices might go up as a result i mean, that's going to be the big question for homeowners. >> it's interesting. i asked about the flood score and if that had any effect on home values, and they said that it didn't bring home values down but in some areas that had very high risk, they saw appreciation slower but you have to wonder, those places are going to have to have flood insurance anyway, so people are getting salvy about this they said they were really surprised they didn't.

>> diana, thank you, diana olick. we have a very busy monday still to come here on "squawk box," and still to come, we've got jeff currie of goldman sachs, he's going to talk oil prices right as we all start driving in the united states, what's it going to mean for oil and gas prices we'll talk to jeff about that. at the top of the 8:00 a.m. hour, transportation secretary pete buttigieg will join us to talk about the supply chain woes, we'll talk about baby formula, why the roads are awful. a lot to do. dow futures are down about 56 points kind of a muted monday hope you're having a great start to your day. we're back on "squawk" right after this immune system, energy ...even skin. so healthier can look a lot like...you. cvs. healthier happens together.

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twitter shares on the move once again this morning, and elon musk could be in some hot water. late last friday, the tesla founder tweeted about plans to conduct research to determine the amount of twitter users that are bots his team will do a random sample of 100 followers of twitter, and invited others to do the same. musk tweeted that twitter legal called to complain that i violated the nondisclosure

agreement, revealing that the sample size is 100 the reason he used that is because that's what twitter used to get some of the numbers with more, let's bring in jay clayton, former chairman of the s.e.c., nonexecutive chair of the board of apollo management and a cnbc contributor we can talk about the issues he's going to have with twitter, with the nda the bigger issue may be with the s.e.c., the on again, off again and especially the comments he was tweeting on friday where he said, yeah, we need to reevaluate this. deal is still on he went back to say later. this is the type of thing where we saw massive market moves. the stock was down 25% on his first tweet that people thought meant he was calling off the deal or trying to renegotiate. >> good morning, becky, and look, i think you've, as usual, framed this very well. where are we in terms of this transaction, and that is we're between signing an agreed deal between the buyer and the seller, the buyer being mr.

musk, the seller being the company, and there are a number of things that have to happen between that agreed deal and the closing. during that period, what we usually have is a lot of cooperation around disclosures to the marketplace as to what's happening between signing and closing. that's covered in the agreement. the merger agreement really has just two components, one is how locked up is the deal, when can a buyer, you know, pull away from the deal, when can a seller pull away from the deal to get a better deal, and how do you behave between signing and closing. and what we're focusing on here is that. that is just to get the deal done, but also to ensure that people comply with their obligations to the marketplace so i'm certain that the company, the buyer, and the regulators are looking today at whether those obligations make full, fair and accurate disclosure

have been satisfied. >> what's the problem with him tweeting this stuff out without doing a filing to the s.e.c. i mean, you could say it's a public commentary area all of this is there but do you think there needs to be the s.e.c. filings that go along before you make any public comment on this? >> that is always a judgment as to whether a disclosure that you're making rises to the level where it should be included in the company's side on some type of form 8k, that's the technical term for a company making a filing with liability under the exchange act or with a potential buyer, in this case, on their schedule 13 filings. that is a judgment that you typically make. >> let's get to the chase. the stock was down 25% on one tweet. a little bit later, it was up and only down 10% on a second tweet that went there. the reality is people are losing money if they follow the tweets and go along with it

the s.e.c. is investigating some of these things and that's led people to say the s.e.c. is toothless here there are investors betting on this, making trades based on this they're losing money as a result is there something that needs to be done, and how quickly would that be done >> like always, becky, i'm not going to get ahead of my former colleagues at the s.e.c. i'm certain they're look at it in exactly the context i just laid out, which is in this period when you have shareholders, other financial professionals, financial providers and the like, all watching the probability of the transaction closing. there is an obligation that when you speak, to speak accurately and completely. >> jay, i've got a couple of questions. i'm going to make you a judge in delaware can i do that for a moment >> you're promoting me again, andrew >> you're the judge in delaware, here's the issue there's a billion dollar break up fee or walk away fee, but not really because as part of this

contract as you know, there's something known as specific performance, which effectively says that you basically have to buy the asset the way it's been described as is. so my question is do you think that a judge in delaware would -- if elon musk doesn't want to do this deal or somehow wants out or wants to renegotiate the deal that he can or he can't? >> well, look, andrew, these types of transactions, as you know, if we showed the sides of the agreements stacked on top of each other, it would be like this high in front of me, the real question comes down to is the buyer purchasing what they agreed to buy or has there been a change in the business or something undisclosed to the business that was so material, and that is a very high hurdle in your typical situation. >> and the argument he has been making online is the number of

bots, spam bots and the like that are on the service or not on the service, right? >> that sound to be what it is i haven't delved into details, and we'll probably see more. >> but is your sense that specific performance means you can't really walk, and then when you think about the sort of calculus at that point, if you're elon musk and you don't want to do this deal or you want it at a lower price, does the twitter board say, okay, i'll take a lower price because i don't want to have to live through court and have the whole company screwed up, even if you end up buying it at the end. how long would a case like that take. >> i think you have to look for precedent in situations like this, and we have had situations before where people have said the business is changed and it goes back and forth and a closing takes place as planned in some cases, there is a renegotiation, and in some cases, very very rarely, the business has changed so much that people agree to walk away

i don't know where we are here but that is why, let me get back to this, that is why the disclosure obligations of participants and transactions like this are so important so that you're not surprised as these things move along. >> jay, let me ask you about the disclosure, then, becky asked the question about whether the s.e.c. is toothless here in so far as they haven't done anything about this, and if they could do anything about it, their options appear to be limited. you could slap them on the wrist. almost any financial fine would be a slap on the wrist for a guy who, you know, has has much money has he has the only other thing you could do if you felt so uncomfortable about what he's doing, you can't be an officer of a public company but speak to the public policy debate that would be happening inside the s.e.c. about the kind of penalty you would try to seek because i would imagine there's one side of you would say, i would like to make an example of this guy

the other side you say if i make an example of this guy, can't be an officer of a public company that's going to create real va va value destruction for the public business you are trying to construct. >> there are many factors. you have identified what would go through any regulator's mind, which is protecting the integrity of the marketplace and the shareholders in the particular situation, and then the overall policy and what i would say is salutory effect on future transactions, and those would be going through the minds of anyone at the s.e.c. right now, and i'm certain they are thinking about it in a responsible way for the integrity of this transaction and the marketplace overall. >> jay clayton, thanks for your time today. >> hey, thank you, guys. coming up, is oil going to

150 bucks a barrel we're going to ask goldman sachs jeff currie. and crypto down, all the major coins down, not a lot but it's been a tough go we're going to be speaking with the commissioner of the c dftc about stable coins, unstable coins, crypto and more "squawk" is back after this.

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welcome back to "squawk box," let's get a check of stock futures. they're down but not down too much nasdaq down more on a nominal basis on percentage as well because math about 2/10 of 1% there tech stocks maybe not going to collapse today following the huge rally we had on friday but they're in the red remember, the biggest market jumps historically come during either bear markets or down periods in the market, so friday you're thinking, okay, was that the end of something, maybe, maybe not. but with a 4% gain, doesn't necessarily mean the slide is over because the biggest jumps tend to come in the worst markets. all right. ten-year yield, it is just a touch below 3%

2.29%. crude oil is close to $110 a barrel right now listen, we've got shanghai saying they're going to reopen on june 1st. if china does hit as summer hits, we call it the summer driving season i call it summer goldman sachs, jeff currie will join us. i'll ask if it's going to $150 a barrel and we'll have more of andrew's interview with ben bernanke, and to his point about is the fed political, i put up that poll, and right now, it's 80% no. >> he says it's not. he will say it's political he recognizes that he just thinks it's more independent than maybe the rest of the place >> yeah, right now, we'll see how that vote turns in at the end of the show. 81% of you are saying, heck no they are political we'll be right back. finally? this is financial security. and lincoln financial solutions will help you get there.

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>> it is not a probability why are risk so high >> when you say high probabilities before we even get into why when you are doing a math, how do you handicap that >> we have a long tail, 175 to 200. we don't know how high it could go there are several reasons for that demand contains around 125 however, when we look at the way the models are constructed in history, the environment today is much different. why? you have subsidies going to lower income group particularly in europe. you also have subsidies going to many of the at the emerging markets. india have stepped in on the plate. and savings are quite high and

credit coapacities are high the upside risk are saubstantial >> when you talk about the possibility for the summer, is that something that lasts for months orweeks walk us through what the rest of this year would look like under that scenario? >> commodity prices don't trend up like financial markets. when you have severe shortages, when demand is up here and supply is down here, you can't, when you are out of inventory, you can't run a deficit in definitely that's what the price spikes are. you look at this february, we spike up towards $150 a barrel why? wehad severe near term shortages and dislocations jet fuels in the northeast

spiked because of local dislocations think of european natural gas. it is this and this. the trend is each spike is higher than the previous and each low is higher than the previous low and it keeps doing this when we go into the cycles. it is going to pop up there and rebalance demand and supply and once demand goes again, you pop again. >> let's bring up gasoline i never bought a barrel of oil in my life but i have put gas in my car and it is quite expensive. wholesale gasoline closed at a record high last week, which means gasoline is going to continue to go up and up can you talk to us about the dislocation that's happening right now in gasoline and diesel fuel do you think we could have

shortages literally dry humps in parts of the northeast for diesel fuels this summer we have seen shortages at airports and jet fuels, which is why jet is traded up at $300 a barrel >> u.s. alone retired 1.3 million barrels per day. i heard of a refinery last week being retired. not sold or anything because it was own by a company that didn't want to be associated with dirty refined fuels. this is happening broad base when you look at the overall refining capacity, it was down to a total of 4 million. some of those refineries are going to turn back online and that will ship to the refine product the the crude.

let's remember the -- >> where is that additional inventory coming from or 13 year over year, that's good -- u.s. producers are not producing. it is predicting daily record oil production next year maybe the two sides of the same department should talk to each other. where is that additional large to 2 or 3 million barrels comin from i don't see it >> that's the key point. i want to point that rigged account you brought in tuhe u.s it is still not close to record levels of 2018 or '16 or'15. the key point is this industry, everything in the old economy we continue to suffer from under

investment last week, capital flows into energy were outflow. they reduces the capability for sectors that need to grow production like you are talking abi about. no, this problem is worse. you are thinking about the u.s., you can't grow anymore you are out of pressure of pumping capacity and you are out of trucks and everything it is my point of the rebinge of the old economy. not only to debunk it but the rest of the input of basic materials going into the production we are not going to build new refineries so if you are going to create shortages for things like refinery products >> jeff, i want to thank you your analysis. kind of a down way to start the

week appreciate it. >> thank you >> great still to come this morning, transportation secretary, pete buttigieg will talk to us about supply chain issues, the surge and gasoline prices and much more that interview is next here are the futures this morning, take a look right now, you can see the dow and futures are off by 38 points nasdaq down by 61. this comes after a big day of trading on friday with the nasdaq up about 3.9% for the week all of the major averages down by at least 8% "squawk box" will be right back.

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good morning everybody, welcome back to "squawk box" on cnbc, we are live in times square, i am becky quick along with andrew sorkin and ryan sullivan we have been watching the futures, they have been a little lower this morning, not by a lot. again, after last week you may have expect more last friday was a big update,

that came after a lot of ups and downs for the week all the three major averages down by more than 2% majors down more than 26 points. nasdaq off by 55 >> all right, we got three big interviews ahead we got pete buttigieg, we got behnam and we have bernanke. we have the chair of the futures trading commission and the former head of the federal reserve, that's a stacked lineup coming up in the next 59 minutes. first, i want to get to mike santoli. as i said earlier, mike, if you heard it, don't the biggest up

days tend to come in the markets? that's the kind of the paradox. >> they do however, we did have 90% of new york stocks exchange that's one of the things folks look for maybe there is some demand this is the s&p index funds that goes back to the end of 2022 we are at levels here around the 4,000 mark that we were hitting at the first quarter of last year, jumping into april last year a lot of the evaluation risk has been reduced right now we are under 17, we got to pretty much 16 the lows on last thursday it does show you that we are not in as expensive market as we were and of course inflation and yields are higher as high.

a lot of chatter about the nasdaq and whether of this 30% decline is at the end of something or did most of the work we did or a start of something. this is a nasdaq from 2000s to 2002 all that encompassing the entire period the first 30% drop off of the peak of 2000 is right about here i go to my weekend column, a lot of distinctions, at this peak the prior five-year, the nasdaq had been at 500% back here, microsoft traded 50 times earnings microsoft got down to 22 the point being was a different index and a different time, the momentum was greater going into it it does not tell you the answer but it gives you some context. apple, the bell weather of the nasdaq, and again, energy take a look at how it stacksup. you have energy finally above

apple. apple is a greater weight in the s&p 500 so far than the entire energy ector you see they're trading off right here apple has been the stall you were pretty close to that negative crude number. >> what's our catalyst what's the most if earnings are over, 91% of the s&p and reported numbers are good but not great. the guidance is good-ish, i guess? what's for the market either up or down? >> i am not sure it is tactical i do obviously think if we are physical fixated on numbers, we are not going to get it. i think it is about the tactical and how people sold too much and do we think earnings have weaken up but not terribly at this

point. >> mike santoli, a look at the market we just said that breaking news, i don't know if anybody cares. virginia base contractor, man tech you got a love and -- a lot of people do care about, jet blue taking over spirit airline today jet blue told spirit holders that it was offering $30 per share. we are lucky to have secretary pete buttigieg with us this morning. so much more is taken place in our country, secretary pete buttigieg, good morning to you and thank you for joining us curious, what your thoughts are about consolidations in the airlines industry at this point given how much consolidations it had been, whether you think of

transactions like this will be approved >> i can't weigh in on the doj look, the most important thing is to make sure that the american people are served well by a healthy airline sector. part of a healthy sector in our economy is he wialthy competiti that needs to be demonstrated. it would not have a negative effect on competitions in order to meet that hurdle. we'll see how it plays out >> this administration talked a lot about competitive congresspersons and actually leading to inflation in this country. that's one of the issues that you have raised over and over again so when you look at a transaction, how much is it today about the competition piece verses you said you also want a healthy industry and also there is advocates for

transactions like this would say that making the industry healthier would be making the companies healthier. how do you see this? >> again, it is for the doj to evaluate the antitrust side. it is interesting at the time dn i don't think anybody thought the concentration would build up the way it has also, my department has an energized consumer protection team and department, we have taken a lot of actions on things like refunds and airlines that didn't come through with refunds they were required to offer to customers. we are held accountable. we are going to make sure whatever the sector industry structure is in terms of how many companies you got we are going to do everything we can to make sure air travel in this country is safe and all of our consumer production authorities.

>> i know you have been talking about inflation, one place and there is been a ton of it is in the price of inflation of air fares. >> that's right. we are seeing upward on prices and some is associated with fuels. that does not appear to be enough to account for everything we have seen part of what we have seen happen and this is true whether you are talk about airlines or whether you are talking about the freight rail sector was there was a lot of thinning out of the work force now that's come back around as a labor supply issue you see a lot of airlines that have not been able to get the staffing levels up to meet our match demand on the freight rail side this is as real concern because thousands of workers were removed from the work force there. now we are seeing our freight operators strongly to keep up which is one part of the supply chain puzzle right here. >> mr. secretary, earlier today we had the cfo of lion air on.

the ceo was making comment s saying boeing needs a management of rebooting or they need to change their management. boeing management is running around like headless chickens in his words. it is concerning when you realize boeing is so important to the american economy and this is two players in the game either boeing or air bus what can you tell us about the situation of boeing right now? >> the most important thing from our department's perspective as a regulator making sure their aircraft are safe and working to ensure there is total confidence in the safety of an aircraft flown by any airline or made by any manufacture and that's going to be flown in u.s. aerospace. that's our focus ho how a company is doing in terms of satisfying customers and once it goes beyond the safety regulations that we regulate,

that's a private concern of course, one that we follow closely given how many jobs are at stakes, we want and need for it to be an excellent and thriving robust u.s. aviation manufacturing sector whether we are talking about parts or aircraft themselves. certainly something we are seeking for all of our u.s. base companies to succeed >> secretary pete buttigieg, brian sullivan, we are talking about electric cars here, we admit they are fast and fun and many ways but they don't pay gas tax. states do. there are some fees they're trying to figure it out. i don't know last time when you drove up to new jersey, bring a ladder with you because you are going through the potholes, you may need a ladder to come out. electric cars are heavy, they got a lot of torts and they tear up the roads what can we do and expect around that >> if you look at the big

picture, evs also have fewer costs socially and kind of at large for the country because you have, for example, medicaid not having to pay the bills for people who get asthma from particular matter coming out there is a big intricate picture here you are right, traditionally we have funded our roads with the gas tax. with that being said, let's be honest, it has been a long time since any given year tgas tax received there are a lot of other ways to fund our infrastructure. the president laid out at the out set outset of this infrastructure law that not one penny would be collected from people making $4,000 a year or less, they're paying more than enough in federal taxes. we found other ways to fund infrastructure that's what america is going to

have to do going forward as we see increase in our vehicle mix away from those gas interests. as we saw six months ago this week when the president on the south lawn signed a historic, epic infrastructure law into being which we are now working to implement and getting the funding out for new roads and bridges and airports and rails and today we are announcing another billion dollars going into the safe streets and roads for all programs that's going to help communities making their roads and streets safer. there are many ways to get it funded congress provided on that. i have no doubt however we get there, that'll happen for the future too because we have to. >> we want to continue that conversation with infrastructure i want to ask you about this eve eventhough a lot of people agree that law is badly needed, government spending many blamed for high inflation i want to show the audience some tweets that you saw as well from

jeff bezos who weighed in on inflation after president biden sounded off about it he said you want to bring down inflation, let's make sure the wealthest corporation pay their share. jeff bezos responded, yesterday in response to one twitter user who said the biden administration does not deserve any credit for lowering the nation's deficits. jeff jeff bezos tweeted the administration tried hard. inflation is the most aggressive tax that hurts in this direction does not help this country what do you thoink of that

analysis >> of course, a lot of what goes into fighting inflation. the point is with the right kind of investments, we can go to some of this the things that are triggering they keep a lot of working parents, particularly women out of the work force. that's why so many nobel-- now, will conceive that the issues we are having now are the kinds of issues you often see when there is a lot of demand when unemployment is very low the president took swift action to make sure that unemployment would be low creating more jobs

and millions of jobs in his first year in office, not many presidents have in their first year now we are dealing with high demand and a lot of income in their pockets and a tight labor supply because so many people are working. those are real issues. >> mr. secretary, on the corporate tax front and look i have talked about how you can raise corporate taxes from where they are today we are not so far off here, but do you not agree these are two different issues if you change corporate taxes, y yes, it will have some impact on inflation. corporate tax is a long-term issues whether to deal with it because you think it is the right or wrong thing to do but not when you are trying to deal with inflation right this second >> a lot is what you are going to do with the revenue we have andr agenda to use tax

revenues on things easing inflation. you have senate republican proposals that are about raising taxes on the poor and middle class and you have the president's view which is shared by majority of americans that if anybody needs to be caring more of the load is the wealthiest and corporations >> that's not how you are going to sell inflation. >> hold on, this is really important. >> we are going to lever the conversation there it is a much longer debate, mr. secretary, we love having you on the broadcast. we hope to have you come on back so we can continue it. thank you. still to come this morning, crypto is under heavy scrutiny after this month's big sell off. we have an interview with rostin behnam, we'll talk with him in a moment, stay tuned, "squawk box" will be right back.

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washington of the recent crypto melt down. joining us now is the chairman of the commodity future trading commission is rustin behnam. thank you for being with us today. people are wondering what washington is going to do next when it comes to regulating this arena. what do you know at this point >> becky, thank you for having me i think regardless of what happens last week in the markets that the administration is going to continue forward with its plan and agenda which you probably remember president biden issued an executive order a few months ago working hard towards putting together reports that would include legislative proposals and pause the idea of what we need to do to regulate the markets at large whether stable coins or all the issues that are involved in this very complicated and novel technology which is driving disruptions but also causing some confusion and

chaos in markets at times. >> there is a lot of back and forth of a senate bill that made it through would leave the aec are you familiar with that bill and what do you think of it? >> this is a little bit of an old issue. we have a great relationship and we continue to work together within this space, you know, in my view it makes sense to regulated by the economy and regulated by the scc they are naturally going to be some commodities and securities and in my view it makes sense of the two and figure out where we can place each it is going to be difficult because from a legislative standpoint and given what i have said earlier and given the

novelties of some of these coins and technology, we have to figure out what constitutes the security under a traditional security law and cons subtitute the commodity so we can regulate the two structures >> the scc's chair, he thinks most of those tokens are security under the law right now. does that sound about right to you? >> i can say for sure bitcoin which is the largest of the coins and have always been the largest regardless of the total market cap, it is a commodity. ether as well and i have argued this before. it is a commodity. there may be in fact of hundreds of thousands of security points. as we have done historically each agency has jurisdictions over commodities and security

persp respectively >> there is some disagreements of who should be in charge here. >> i would not say disagreements. we are trying to do what's best. a lot of values lost in the market and there are no customer protection right now we have a number of state level regulations and oversights but in terms of market oversight and disclosures, we don't have much right now as it relates to traditional financial markets. i have made this argument before whether it is the security market or drerivatives and the best that we have. it is important as we continue to see this market scales and integrate itself into financial market, we need to put a regulatory framework that'll protect customers and make appropriate disclosures and ultimately for those who support the industry support its growth and maturity in the next couple

of years regardless of what the narrative may between us and the scc, we are like mi-minded in the fact t we want to regular thoughtfully and figure out the details and what may constitute as security and what may constitute a commodity and do what we have done in the past whether it is after the financial crisis or going back many decades >> rust, what do you think of all of the advertising and marketing for all of this. nbc news reached out to a number of celebrities that appeared in the ads that we see during super bowl and so many others, all have not comment on what have been a remarkable fall of the world of crypto. i am curious of what you think is appropriate for currencies or commodities or whatever you want to describe them to be marked as the way it has been thus far

>> andrew, it is a good question you can't prohibit or stop individuals from engaging with some of these firms or trading platforms and advocating or speaking about them. what's unfortunate and what the challenges right now is there is no counter balance there is not enough of a counter balance so investors and customers can go to a government website or a consumer website and figure out for themselves what risks lie out there for the pure market perspective and also what these points do and what their intentions right now it is a little bit of a misalignment of what individuals are hearing during super bowl or ads going through on the internet and what information that we as a government able to send out to consumers and customers that we traditionally do whether it is in the commodities space or the security space there are two elements

making sure individuals and investors understand the risk and the volatility as we saw last week and the substance as i said earlier of a few layers of what they are investing in and the outlook is and what they should be thinking about of being the most informed investors. >> what we have watched the last couple of weeks was a melt down that was not just in these coins and in minor areas, it ended up im impacted all of the markets overall because there is so much money going on and when there is a question of creditability in one of these areas, it bled through in every one of these markets and beyond is there a feeling of some sort of decisions is made who gets to regulate these areas before it does more damage to the rest of the market >> that's the conversation that's going on right now and as

i mention following an executive order, we are in the middle of it a key process is we do not rush. we have to get it right. it is going to be difficult because of the innnovelty of the issue. as i reflect last week, you make a good point, the correlation factor and the narrative of crypto being correlated as a safe haven asset, it is been fairly debunked, we have seen higher correlation on technology stocks the systematic nature of the single stable coins verses the rest of the market this is an issue we have been talking about for several months the fact that we had this across market melt down because of a single stable coin hitting different currencies and as you pointed out the knock traditional markets. this is what we have been

thinking of the markets resiliency issues and making sure we can curve those challenges >> last we had the cfo of coin base on, the company disclosed of what they're calling a tail risk if you are a customer of coin base, if the company goes into bankruptcy, effectively, traders of coin base could come first and take money from those accounts they say they have legal structure in place to avoid that but it is left up to a judge. there is no specifics in this case do you think these accounts are properly safe guarded and do you think in the case of bankruptcy which we are not suggesting it is going to happen if it were to happen, those customers would be protected >> these are legal issues of first impression and this is again another reason why we would need and i think strongly

need a regulatory framework around the entire system because as you pointed out the bankruptcy provisions and perfections that we have relied on in traditional markets don't actually exist here and we have not had a chance to test them. the custodial issues, again, issues of first impression that we can guess how they may play out if there are sicyber attacko risks. i know there was an account notice pushed out by the scc that weighs this issue again, in my view, another reason why we have to push forward from a policy perspective in conjunction with the private sector to see how these markets are being handled so we can deal with these issues before something happens these are serious concerns for investors and shareholders on

these entities more importantly for individuals who have accounts at these trading platforms. >> rust, thank you for your time again, rust behnam >> we should have stopped calling them stable coins. >> who market that we call ourselves talent i don't know >> i don't call myself anything. >> yes talent coming up -- we'll have a lot more of our interview of ben bernanke we'll talk crypto with him as well you are watching "squawk box" righhe ocn t ren bc at cdw, we get your it staff has be ready to take on new challenges. that's why we built an office obstacle course ... to prepare our people for anything. you're late well, cdw amplified services experts will consult with you to design, orchestrate and manage your most complex technologies to help you quickly overcome any obstacle ... without all of this. oh, that is better. who's that? oh, if you want coffee, you gotta get past tantrum.

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welcome back, get ready everybody, tomorrow is a big day. cnbc is unveiling our 10th disrupting 50 list julia boorstin is joining us now at some of a look at the financial performance. >> good morning. the list did identify the next generation of public companies over the past decade it launched in 2015 which tracks performance of 80 companies that gone public at 179%, compares to the nasdaq at 135% gains in the

same time period it has been a great decade for the destructor 50. as a broader tech sector suffered and investors shifted from growth stocks to value stocks some weathered the recent downturns and performed better 20 in the list doubled their caps since their ipos. block, formally square went public in 2017 both companies are up. the worse performers, blue a apn

is down and didi went down to 80% since then the combined value of this year's 50 list is the highest ever by a long shot. that disconnect between private and public company valuations is pushing private companies to stay private longer until the public markets rebound we'll be revealing the list tomorrow here on "squawk box" and on cnbc.com/disruptor. >> how many companies do you look at to get down to 50? are there hundreds how do they get nominated? is it like julia boorstin decides these are the ones i like >> we have a team of reporters and producers and people on our

specials working together on the nominated companies. it is an open nomination process. we start at the beginning of the year and anyone can nominate their own company. we get over a thousand nominations. it is a very selective process and we evaluate quantitative and qualitative factors to try to figure out not only how fast these companies are growing or how big their markets is, a lot of factors to come into consideration. you can find a lot more details about our process and how we identify these 50 companies on cnbc.com/disrupter >> we'll have a lot more for you tomorrow >> it is an honor to be nominated. that's not just a thing to say >> well - >> i am honored to be here. >> i am honored to be here and everybody is off. >> that's not true, we asked for

you. when we come back, the feds' delicate dance ahead, cooling the economy without throwing an indoor recession we'll hear from ben bernanke on this very topic. that's next, stay tuned, you are watching "squawk box" and this is cnbc. because you've got the next generation in global secure networking from comcast business, with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want—your team, ours or a mix of both. with the nation's largest ip network. from the most innovative company. bring on today with unbeatable business solutions from comcast business. powering possibilities™.

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a piece of economic data comiing in more negative than it has been this morning. it was well below what the street was anticipating. the dow futures at this point up by 57 points after being in the red for most of the morning. s&p futures up >> i just posted this. it came in negative. i want to be clear the index is very choppy. this is an index that moves wildly up or down. the trend is terrible. next month it could be up. it is extremely choppy index >> you think the flip from futures from negative to positive because we are seeing signs of weakness of the economy, the fed would

rerelbe reluctant to raise rates >> it was down two months ago and now it is down it is like my ekg when the alarm g goes off every morning >> ben bernanke is out with a new book this week it is titled "21st century monetary policy. it is also the subject of column i wrote this morning an exclusive interview, i spoke with ben bernanke at his home in washington, d.c. i asked him the feds got locked into its 50 basis point of rate hike this month. the former guidance that effectively that comes with it >> the foreign guidance overall on the margins slow the response of the feds to the inflation problem last year to some extent >> so that mean it was a

mistake? >> this is a complicated question the question is why did they delay the response in retrospect, yes, it was a mistake and they agreed it was a mistake. >> we talked of ben bernanke about the chances of a recession. >> the more the feds tighten to get an inflation down, the bigger the chance. how much the feds has to tighten determines on how much they can control like supply chains and commodity prices that prediction not only the feds' behavior but a lot of other things and etcetera, it is a hard thing and uncertain thing to say i guess that i still tend to believe that some of these forces pushing up inflation like supply chains, like preference for durable goods and services and some of the cost of goods s commodity

prices inflation will come down to some extent by itself but without the feds' directed if that happens, the feds may have to raise rates in the threes some where. as jay powell pointed out, the economy is very strong we are not going into a recession. it is quite strong, we have a strong neighbor market we have a strong financial system and we have strong balance sheet. so if inflation slows as i expect it will ultimately will, although i am disappointed of how slow the process is then the feds should not have to raise rates too far and what we would get would be a slowing of the

economy and maybe a stall but not a severe recession a recession will only come if other factors do not cooperate the thing people should watch is inflation expectations if inflation expectations measure by break evens and security markets measured by surveys and so son and people have lost confidence of the credibility of the feds, the feds would have to react much more strongly. >> how concerned are you about that >> for the moment, knock on wood this is a big difference between today than the 1970s in the 1970s, nobody had confidence the the feds that it would bring it back down today, most are pretty confident of the feds.

>> could not have a conversation without talk about bitcoin, take a look at this bitcoin right now down a little under 30,000 he writes about the potential of a digital dollar i asked him to share his point of view on crypto currency these days >> bitcoin and other currencies whose value changes minute to minute, they have been successful you see the downside of that right now. but, they were intended to be a substitute for fiat money. in that respect, they have not succeeded. if they're a substitute for fiat money, you can use your bitcoin to buy groceries nobody does that because it is too inconvenience. the price of celery varies day-to-day in terms of bitcoin

so there is no stability either. the main use of bitcoin is mostly for underground economy activities and things that are illegal and elicit i don't think bitcoin will take over an alternate form of money. it will be around. again, i don't think it is going to -- >> you don't buy into the idea of being a store of value or some kind of version of digital gold >> well, as i said it is a speculative asset. it is one that whose under lying use value. gold has underlying use values one of the other risk of bitcoin has is it could be subjected to

a lot of -- investors of bitcoin should be aware of that. >> mr. ben bernanke causing some controversies this morning among the crypto crowd "21st century monetary policy," it is available tomorrow for more of that interview, you can go to cnbc.com to watch his comments >> he said 3%. >> at one point, we also talked about whether they should raise the target he does not think we should raise the target he got into a whole conversation of student debt whether we think that should be forgiven. for so many years his trademark had been to hold back. all of these fed chairs are

speaking outloud there he is, unfiltered. we'll ask a top analyst whether elon musk's bid for twitter is getting less likely or more likely each time he tweets asbout it. stay tuned, you are watching "squawk box" on cncnbc integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve, with our commitment to better esg outcomes. join the pursuit of outperformance at pgim. the investment management business of prudential. dad, we got this. we got this. we got this. we got this.

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just nonsense. we're in 2022. the government doesn't want these deals anymore. >> we were talking -- >> they're very unrealistic. >> wewere talking with phil this morning, talking about why would you see jetblue go ahead with this, and he's even talked about how spirit has said maybe this is because they want to make sure the deal doesn't go through at all, that it blows up any potential deal >> i think there's a lot of irresponsibility involved in this i think they haven't read the room right i think antitrust feels like the last ten deals were wrong. probably right about that. a lot of supply chain, i think, comes from the fact there are a lot of mergers between number one and number two or three, and there's not a lot of competition. maybe this is the one that gets through, but i know that kanter is widely anti these kinds of deals. >> what did you think of mcdonald's announcing it's going to prepare to sellilities russian operations at this point? it's a big part of their

revenue, not a huge part of the operating profit >> when i went through that, i said mcdonald's, real american company. wants to do the right thing. takes the hit, very responsible. i sent them an email saluting them i thought that was just what you should do. and time to move on. russia is no longer an investable country russia is the enemy. and i think most people in america regard russia as the enemy. so why would you sell burgers to the enemy? >> it did sound like they were trying to take care of their employees. >> this is the most stark good guy/bad guy thing i have seen in america since, i mean, look, i think that vietnam, you could argue, i mean, iraq, i don't know, but these people are enemies. and i think that if you're selling burgers to the enemy, we're eventually not going to want to go to you. >> jim, thank you. we will see you in just a few minutes. hear more about what you're thinking about the market open

if you haven't signed up already, you should sign up for the new cnbc investing club with jim. do that or find out more information at cnbc.com/jointheclub or point your phone at the code on the screen it will take you directly there. "squawk box" will be right back. this... is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations. this is "the planning effect" from fidelity. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like...

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welcome back probably your top corporate story right now is the jetblue going hostile in its bid for spirit airlines and throwing another wrench into spirit's deal with frontier which agreement, if any, now

gets done? aaron glick joining us now we can also talk about twitter and elon musk, but i want to ask about the airline thing. do you think jetblue ultimately wins spirit because it's getting ugly >> absolutely not. and actually, i agree with everything that jim said earlier. this deal, this offer is a head scratcher from jetblue, and especially in this -- with this administration, in this regulatory environment >> why do you call it a head scratcher? >> so jim pointed this out i think the administration thinks that a lot of the deals that have been approved over the last ten years really were problematic. if you look at the department of justice, they just put out a request for comment on the merger guidelines, and essentially, what they pointed out was there's a section of the antitrust act that has been underutilized by regulatory agencies and it's a section that says

mergers that quote/unquote tend to create a monopoly are anti-competitive so they're going to be looking at deals through a new lens, and this one presents a lot of problems >> if you look at the arb on this deal, and i don't want to go too much into the weeds on trading stocks that are going to be bought, et cetera, how would you recommend investing around this, if at all, because there's a variety of different outcomes here, and it seems like there's a lot of downside risk if things don't go the right way >> yeah, so look, i can't make a recommendation on this stock but what i can say is let's try to understand what jetblue's motivations could be if they're not just to acquire spirit and i'm assuming their regulatory advisers are well aware of the risk, as are we perhaps they're trying to disrupt the deal spirit's shareholder vote is coming up on june 10th also, jetblue is currently

litigating the doj over their northeast alliance and there are some reasons to suspect that going after spirit in this way could actually help them in their defense. >> aaron, right now, twitter's $15 below musk's offer of $54.20 the market clearly is saying the deal's not going to happen or at least not at $54.20. would you concur with that is the market correct in having a sub-$40 twitter share? >> well, so i'll answer that by saying, when a merger arbitrage investors are going to price a deal spread, or whenever they're thinking about the investment risk of a merger situation, the number one most important factor to consider is buyer commitment. and so before he tweeted on friday, a lot of investors had concerned about his commitment after friday, a lot more had concerns so the market is going to price this at a significant discount personally, i think musk is going to get the deal done

i tell clients i'm an elon musk fan, but what really matters here is what elon is thinking. if you can't answer that question, and maybe there's only one person who really can, the question, how committed is this buyer, it's going to be priced at a discount. >> he may very well be committed, but what about the prospect he goes to twitter's board and says i want it, i just don't want it at thisprice anym. they could say we're going to force you to and go to the court and go 14, 18 months, or we'll take a lower price >> that's a great point because at some point if you're the twitter board, you have to think, should we go to court this gets a little technical but essentially try to enforce their specific performance provision, which would require the court to force musk to pay for the deal assuming that is available, or do they say, you know what, it's not worth it

we'll take a billion dollars we don't want to be owned by somebody who doesn't want to buy us i think the merger contract does seem pretty tight. we can get into those details, but again, for investor -- >> we're -- we have to jump. it's a longer conversation we're up against a hard break, but we want to thank you this morning. we also want to thank brian for hanging out. we'll see everybody tomorrow "squawk on the street" begins right now. good monday morning, everybody. welcome to "squawk on the street." i'm david faber along with jim cramer carl has the morning off let's give you a look at futures as we get ready for another potentially tumultuous week in the markets a half hour from now. looking for a slightly down open our road map does start with, well, recession risks. and a warning for investors. goldman's lloyd blankfein, formally of goldman, calls the risk quote