giving away his company. why so many people are talking about it this morning. it's thursday, september 15th, 2022 and "squawk box" begins right now. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. here we are thursday morning u.s. equity futures are higher this hour because of the good news you heard on the potential agreement for the railway to prevent a strike that would have been bad news. this morning, it looks like dow futures are up 65. s&p futures up 7 nasdaq up 21 this comes after the day where

the losses were stemmed. the market put in the floor. dow up .10%. we're still down pretty significantly for the week to date if you look at what is happening in the treasury markets. lots of movement in the treasury 10-year treasury is 3.44%. 2-year treasury up 3.28% that is significant movement still inverted the spread is widening to inversion. the 10-year treasury is closer to 3.5%. oil prices this morning at this hour are higher. wti is down 71 cents $87.7 $87.74 >> liesman's numbers >> it could happen in a day. >> we're okay with that now. i think with the markets and

that's what they're saying 4% is what we can do the cpi may not do it. the ppi number okay it wasn't worse. now we're sort -- if we were back to saying it has to be 5 or 6, i think we would be headed lower again. >> i imagine what would happen if all of a sudden the rails were to shutdown >> it's not going to happen. >> not this second. >> white house announced we don't know the terms of the deal >> that's where we will go right now. we have the news we go to washington. president biden saying a tentative railway agreement has been reached ylan mui joins us with the latest from d.c. good morning >> reporter: good morning, andrew we have heard from both the white house and industry that a deal has indeed been reached and strike averted ahead of the midnight deadline tonight. president biden called this a victory for workers for better pay and conditions the rail companies as well since they can recruit and retain

employees. in a statement, president biden thanked the unions and rail companies for negotiating in good faith he said the hard work done to reach the tentative agreement means our economy can avert the significant damage any shutdown would have brought labor secretary marty walsh tweeted this morning that the deal balances the needs of workers, businesses and our nation's economy the association of american railroads said the contracts would give employees a total of 24% rwage increase from 2020 to 2024 and immediate payout that averages $11,000 this would cover 60,000 workers, but it does still need to be ratified by the unions the statements this morning do not address the issue of sick leave. democratic lawmakers said that was one of the sticking points in the in the talks workers have been asking for 15

days of paid sick time a source told nbc news the negotiations could go on for several weeks as union workers ratify president biden got personally involved in the talks by placing a 9:00 p.m. phone call to the labor secretary and negotiators to work through the logjam publicly, president biden is hoping this agreement gives workers some hard earned peace of mind. back to you. >> let's talk about how temporary this is and when the timing lands and the sick leave issue. do we know how that will ultimately get resolved? >> reporter: yeah, we don't at this time from the information we have so far andrew, the independent panel that had been appointed by the president to help the two sides come up with the compromise had suggested one additional day of paid leave for the workers that was generic paid leave day.

not dedicated to sick time senator sanders of vermont has been vocal on the issue and talked about the need for 15 days of dedicated paid sick time especially in the wake of the pandemic we'll see what we hear from the unions on how excited they are about the agreement. one assumes the white house would not come out and say a deal has been announced if the unions were not on board. >> a couple of things on that. they want 15 days. how many do they have right now? >> reporter: that is a question that i do not have the answer to, becky. i know they wanted more than they have now, clearly the other complaint was around the just in time scheduling for the work hours and they had to be on call within 90 minutes to find out what their schedule was. there was some concern around the staffing and how workers were deployed. that was something sticking

point in the discussions. >> it's vacation time? >> paid sick time. they say it is time you can schedule doctors appointments. some complaints have been we're not allowed to schedule doctors appoi appointments if i have a heart issue to deal with -- >> you don't know if you are going to be sick. >> these are for scheduled doctors appointments that are difficult it get >> you want time off >> it sounds like that is the idea that would be my question. we don't have the answers to that >> we are spoiled. after years here, we have good -- i see how you call -- if you only got two weeks vacation, you want 15 days paid sick. >> ylan, there was a union that voted down and not go ahead with the terms that their leadership negotiated how tricky is that going to be as you mentioned with the union

membership is there an idea it will go ahead and that's why we are calling it tentative because it has to be ratified. >> reporter: the workers have to agree to it. there was polling of railway employees that said many were unhappy with the terms that were laid out by that independent panel. we will see what the details of the contract are and how they align with the three-member panel laid out i thought it was note ablenotab. i hedged my words because they said specifically agreements with four unions i think there were 12 involved in the talks i have not yet seen any statements from the unions celebrates this deal i think there is still caution to be had. certainly there does seem to be at least a breakthrough in

discussions and critically the midnight deadline that everyone had been so worried about seems to be avert ed for now >> ylan, warren buffett was the target and you saw bernie sanders invoke his name. was he involved in the conversations do we know >> reporter: becky would have more on that than i would. the frustration that they were calling on warren buffett to get involved and the ceos to be willing to sacrifice for workers to have more that wasn't happening. that was the frustration from bernie sanders yesterday >> it is interesting you say the union membership was not necessarily thrilled with the proposal that was put out by the biden team or biden panel that

was supposed to be negotiating this saying here's what we like to see. the railway companies said we'll meet you on all those counts the union said no. that's why this put the biden administration in a difficult position joe biden likes to call himself the most friendly president ever to labor to be in a position to shut the country down with the inflation running high and supply chain run muched and because they wanted more than the president's panel suggested is a tricky one. especially two months before the election >> reporter: exactly it is also important to point out that president biden had affinity for the railroads he is known arrest amtrak joe. this would have forced the two parties to adopt the panel had

they not reached agreement before the deadline. democrats were resisting those calls. they were saying they don't want to send a signal to the negotiators. if you know the outcome, what is the incentive to push for the changes you want to see to the recommendations? democrats put the ball in president biden's court and crossed fingers that nothing bad would happen by midnight tonight. congress has intervened before to prevent or end a rail strike. were you hearing rumbling from the democratic leadership that they would be willing to do so again. >> all right ylan, we'll leave it there we need to move on to the next big story of the morning the merge. it happened. the so-called merge taken place. ethereum software upgrade everyone has been talking about. it went live a couple of hours ago with a big -- i don't know

what sound did ethereum make when it happened it's down .80% maybe we have been building up to it. when it actually happened, not a lot. >> it has out performed. down 20% for the year versus 90% for bitcoin. >> 1,100 or 1,200. back above 2,000 it has held up better than bitcoin. reducing the energy consumption by 99% you saw crypto. still to come this morning, if you are dazed and confused by the market swings this week, you would not be alone we will have stock picks to consider ahead of the next fed meeting when we find out what the fed will do. as we head to break, we look at the biggest pre-market winners and losers check it out union pacific leading the way.

up 4.7% on the tentative deal. stay tuned you are watching "squawk box" and this is cnbc >> announcer: this cnbc program is sponsored by truist wealth. where meaningful relationships matter most. you need more than technology. [watch: 50 feet to pin.] well that's not fair. you need cdw to implement vmware cross cloud services. a portfolio of multicloud solutions. it'll simplify workflows, speed innovation, and secure all of your applications. how did you get here?! [watch: the backdoor is open.] vmware makes connected multicloud possible. cdw makes it powerful.

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welcome back to "squawk

box. the futures are higher up 70 points for the dow s&p up 7 nasdaq up 24 despite ending in the green, they failed to catch up with the significant ground lost on tuesday. we will be looking for those the next two guests are joining us elise at jpmorgan chase. and diane jaffey at tcw. elise, let's start with the inflation outlook. you say we are on cruise control for a while in ways of tighter monetary policy and stronger dollar what does that lead you to conclude for investors >> going forward, we're continuing to recommend investors focus on portfolio positioning. this means adding buffers with core bonds and preparing for

volatility and adding hedges or using derivatives to take advantage of the volatility and get more favorable profiles as we continue to weigh through the period of volatility >> ride it either way? the wave >> sure thing. you know, i think we're going to learn a lot coming from the fed meeting next yweek and we get a break in october until the fed meeting in november. then the market will swing on every data point particularly with ninflation. we have to be prepared for positive responses or potentially more negative responses like what we saw on tuesday after the release of cpi. >> diadiane, you were thinking is a bear market, but there is one area that is really poised to bounce. that is value. you want to explain more >> right we believe that we are in the early stages of a super value

cycle. it is important to recognize these companies are poised for growth and looking for companies and we think the valuations alone particularly with rising interest rates and they do better in that environment >> where specifically? what types of stocks or sectors are you focusing on? >> we have been focusing on health care which is the defensive posture. for years, they have been under investing in research and development dollars. if you look at the last 10 to 12 years, it had been low single digit rates. the last three or four years, r&d increased to double digit rates and revenues follow. >> you that i iink that is abouo payoff >> yeah. it is shock fog you have been in the business as long as we have that the valuations from the

particularly bio-tech are below market values. >> amgen and gilead are your favorite names why is that? >> gilead got good news with the hiv patents were extended for the next five years. they are selling at very attractive multiples gilead is selling at double digit free cash flow years >> elyse, it has been a while people have talked about bonds where are you looking in terms of treasuries and bonds and things you might like? >> sure. we are focused on a little bit of barbell exposure. higher yields on the shorten end you don't have to worry about interest rate volume tatility ie

meantime that is important to have in portfolios amid the volatility ifvolatility if the fed comes out more aggressive, then we could see the down side on the higher recession risks. we want the buffer in portfolios we are looking at investment grade corporates and steering clear of the high yield space. >> elyse, you are looking at midcap equities. there is some school of thought smaller companies will get punished as they get their way around supply chain issues and other things with labor? some people have looked at big companies as an alternative. why do you liked midcap? >> it is not a trade for the faint of heart there are three reasons. valuations and sector region and revenue exposure and performance when the cycle turns

on valuations, they are down 25% versus long-term averages. as it moves lower, we expect a buffer in terms of the sector. it isis more oriented to industrials and domestic re revenues especially with the international uncertainty with the war and what is going in china. when we look at how different parts of the market perform once the cycle turns, you tend to see the smaller cap out perform the larger cap peers. >> macro is the play you can dig down and find good stocks and investments you like. it was the cpi and ppi this week that rocked the markets. i guess i would ask each of you what is the next data point you have focused on that you want to hear elyse, you can go first.

>> we are looking at the labor market today and the initial claims for us , it is the message from the fed next thursday and the rate hike. >> diane >> for us, we think the 75 basis points is priced in. we are looking at the underlying pieces that you point out. hopefully the train strike is ave averted. that would have been a rocky road to travel if that train strike did not get averted and we are positive on that. we think the u.s. economy is one of the strongest in the world and this is best place to invest we agree with elyse that you want to be more domestically focused and value really has that edge over the broad based market or growth for sure where the s&p has 20% to 25% of

revenue non u.s. versus 15% to 20% for value indices. >> diane and elyse, thank you for your time. >> i love rocky road. >> ice cream she said it would have been a rocky rail metaphor. >> rocky road means one thing to me >> homer. >> purple. mmm. great, right here is the doughnut the corporate buzz story patagonia founder is giving his company away don't miss it. don't miss the cnbc event delivering alpha in new york on september 28th sitting down with stan druckenmiller. go to cnbc.com to register

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for a solve problems like a genius world. workday. for a changing world. welcome back to "squawk box. it is time for the executive edge founder of patagonia is giving away his company the company is now worth $3 billion. the privately held company stock is owned by a trust and non-profits to use all of the profits not reinvested in the company, but to protect the planet we are doing our best to invest in the environmental crisis, it is not enough. we need to find a way to put

more money into fighting the crisis and keeping the company values in tact we said one option was to sell the company and donate the money. the concern was how a new owner would act. he goes on to say, another path was to take the company public what a disaster that would have been public companies with good intentions are under too much pressure to create short-term gain at the expense of long-term expense and vitality there were no good options, so we created our own this story so many people are talking about. he said i don't need any money any more i'm done this is a fascinating decision they went down the road of a spac at one point in terms of how to raise money >> a better way to keep it pure. >> kids, this to me, was so interesting. the kids, his kids didn't want the company and ultimately didn't want the money.

they believe, he says, quote, and i think this is true of the family the kids believe that every billionaire is a policy failure. he said that it was so interesting to see him. look, he's putting his money where his mouth is we talk about hypocrites one thing and virtue signaling this and that. this guy is living the way he wants. >> 100%. >> i want to help spend it i do i want to find common ground here >> you want to help spend his money? >> spend it on -- i think that there's a lot that could be done i think a lot of issues get really short riffed. >> the u.s. government >> i want to help. i think the singular focus on a mission is wrong let's find common ground here. water pollution. >> right >> the oceans. the streams. think of our rivers.

i would like every person on this planet to be able to have access to clean water where it did not take four hours to get. >> yup. >> air pollution air that is not breathable do you now how much waste we generate it will take centuries to go away nuclear or plastics. wildlife conservation. overfishing. deforestation. resources of the earth are not sustainable. i think the singular focus >> you are now the u.s. government. >> no, this is bret baier. they were talking about it and they found the common ground i am the biggest enviro environmentalist in the world. we need to do things we can make a difference if india and china continue to

emit and we continue to chase the singular co2 obsession, are any of those not did causes or things -- >> you can spend all your money on that. deciding what somebody else. >> if you are deciding to save the planet, those are things money should be directed toward. the other things are a rush to renewables which put us into the mess we're in right now. a singular focus on stopping hydro carbon production? >> to put it up and say while they're living >> save the planet what does it mean? >> i'm going to give my money away that's a great thing i would say -- >> a lot of ways to save the planet that don't entail trace levels of carbon dioxide >> the story is about this guy and company and what they built. they built an extraordinary company. to me, what issing in interestie

doesn't believe you can run the company in the private sector. thatitssueissue. >> to not take the spac. >> to turn it into a non-profit. he is not involved are there incentives -- it pr is profits not the issue? as you know, i believe in all of the environmental issues you are talking about. no one will dispute those. to get to those, there are lots of things i would imagine are on the other side of the debate the circular economy you could start -- people would effectively regulate apple and say you can't make a new phone every year or your phone has to be disposable. by the way, other people would turn around and say it is a free market if they want to make the new

phone, you should. you shouldn't tell them how to do it. >> this is different from the giving pledge. the billionaires are ear marking cancer research and they have all of their ideas >> andrew, you have not been if favor of people giving away their money and not pay to the u.s. government. 1$17.5 million is that fair >> you know, there should be some arrangement along the line where we have a cut off. >> his kids aren't getting it? >> you think it is a privilege to ear mark what they earned in the lifetime you think that is a represrich person's privilege that's a crazy notion. >> my view is and i don't know the number >> it is not deductible. >> maybe a $20 million a year

allowance. every year, you can give $20 million a year no benefit after that, because there is no capital gains -- >> this is $3 billion not paid to any government. is that okay they are spending all of it. they are giving it all away. >> that effectively means -- >> they are giving it to their causes. >> you and i watching this broadcast, for the most part, right, are effectively subsidizing those folks. >> that's what i mean. >> you -- >> i wish there was a way to capture. >> what if they had to sell the company and patagonia could not continue we could only keep $1.5 billion and the other go to the taxes? >> this is the argument about farms. family farms >> this is a crazy example

>> you want the government to get it to spend $1,400 on toilet seats and 90 cents what they spend goes down the drain. i don't think private -- you want to give it to the government the government we have right now you are watching in action. >> i don't think our government necessarily spends the money properly i think -- look, you talked about we're printing money why are we printing money? hello. we were giving away money to anybody left and right during the pandemic we did that. who was supposed to pay for that who pays for that? if we sit around and say nobody pays for it? >> this is an interesting experiment so many question it iss it rais morning much they are playing us out. we don't get to. >> water matt damon love water let's make it clean. make it available for everybody. >> it is getting a short trip.

obsession. we have more coming up tentative railway agreement has officially been reached. rail stocks risingn othat news. we have more all morning don't go anywhere. "squawk" is coming back. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure oing through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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coming up after the break,

the oil markets trying to weigh weakening demand against potential supply disruption. we talk to goldman sachs head of energy research. we will do it next. later, barry sternlicht will be with us don't miss it. you are watching "squawk box" here on cnbc >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

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now to the energy markets. oil prices this morning in the high 80s we hhave damian joining us from goldman sachs. we may not be averting this rail strike which would be horrific, damian is it clear sailing now with

energy prices or are we counting the days until december and wondering what winter europe has? >> i think there are a few risks ahead. you mentioned the european gas crisis and the russian embargo with supply and the concerns of global growth. that is still ahead. i think what is clear and conviction is building with the ply side this has been years in the making of under investment all of the numbers today are disappointing production and lack of invesinvestment last few weeks, opec willing to cut and potential bid from the spr at 80. if anything, the elasticity of the supply is to produce less. you navigate the headwinds first and trajectory is clearly higher over the medium term

>> near versus long term is constant with what we talk about. pressing near-term issues globally about energy production are we doing all we can domestically depending which newspaper you read, recently i have seen permitting and leases and things that were in the works that the long-term impact on climate needs to be taken into account and a lot canceled based on something way into the future. are we doing everything we can right now to produce domestically, damien >> the simple metric is u.s. driven activity. that has been declining for the last two months. that puts downward risk to u.s. production growth which is the only source of production growth

at a meaningful scale globglobay that is the oil price in our view and on the margin, permitting with pipeline or drilling permits how do you solve that? first, you need higher oil price. you come back to the simple reality. interim investment and greater incentive than now you need investors to come back to the space if you look at the positives, oil equities are out performing the oil price, but it is still cheap. you need rotation and asset alle allocation back to what we consume today which is hydro carbon those are challenges how does permitting help where does the investment come from north america. short cycle. scaleable price. there is incremental help that needs to come through.

the first order is higher commodity prices. >> if you look at the kilowatt price. we use a lot obviously this is the world, you know, is hungry for energy that is what the global economy runs on. for the next few years, what will provide the units of energy we use for everything? is coal suddenly reemerge as one of the main sources? what can we transition to fast enough to prevent us from, i don't know, lng, coal, whatever? where will it come from global alley to supply the world with energy it needs? >> coal never went away. coal is 30% generation in recent years. the growth probably doesn't come from coal. china increased production if you think about the next few years, the sources will be

renewable and more natural gas natural gas is the bridge. it helps compensate for renewable volatility it is lower emission than coal or oil we have a significant resource base you have the middle east, but especially in the u.s. if you are trying to achieve the dual investment cycle and future source of energy, the bridge is gas. now the one difficulty is it takes time to get gas to the rest of the world. that's your lng. that is the opportunity for the u.s. if you look at energy prices in a common unit, the cheapest in the world is u.s. shale gas. that tells you that is the likely solution going forward. >> so, does the -- do we specifically look for shale gas or is it just drilling for hydro carbons and it is one of the things that comes along with that we need to do the permitting and

leasing and we need to get the natural gas as a side effect of looking for oil. we need to do all these things, don't we we should not be dragging our feet >> so, we know where the shale gas is if you look at the history of shale, first big gas story in 2008 onward. then we found the oil. we are discovering the need to drill for shale gas alone. plenty of resources. louisiana and northeast u.s. if you don't have pipelines to get out of appalacia, it is how do you move it this energy advantage of cheap shale natural gas is advantage for u.s. industry. if you think on the global scale the margin from the energy cost perspective is u.s. dindustry we will see migration of

industries fertilizer or smelleting >> damien, thank you coming up, a new survey this morning on what americans want their companies to prioritize. we'll be right back. go. go green. go wind turbines. go gorgeous reliable grid. go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson.

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welcome back to "squawk box. a new survey from just capital on what americans want companies to prioritize. leslie picker with the findings. >> the answer is workers in the current environment it makes sense americans are prioritizing how americans treat employees. inflation is burning a hole in many people's bank accounts. union activities have been on the rise nationally and the workplace has undergone major change during the pandemic and is continuing to evolve afterward. and so just capital released a

survey showing that worker issues remain front and center thousands of respondents ranked various stakeholder issues about what they believed to be most important for business practices. the results show that at the top paying a fair living wage, that was followed by creating jobs in the u.s. and ethical leadership. worker-related issues rounded out the rest of the top six priorities in the survey as well including protecting worker health and safety, supporting workforce retention and training and providing benefits and work-life balance. fair wages is the most prioritized issue over the last four years that just capital has conducted such a survey, but 3/4 of respondents said it was an even more important issue this year than last year even guys. >> leslie picker, thank you for that report. we're going to talk a lot more about these new findings i want to bring in the ceo of

just capital martin whittaker good morning to you. we've been talking about the new stats and maybe how ceos should think about them i want to throw into the mix, how you look, we've been talking about this company because it's been in the news a lot recently, how you would look at starbucks and how something like that would rank or rate in this context given the sort of push/pull of what we're seeing from labor on wages and so many of the other issues. >> well, good morning, andrew. thanks for having us on. starbucks actually does pretty well and if you look across the retail space and companies with lots of front line employees, you know, hourly wage workers, you know, a lot of the issues in the top 6 that leslie just identified are very relevant for them i saw your interview with howard

schultz recently you know, i think this issue that you brought up about how companies are addressing workers' needs is only going to intensify. and so our survey shows that it's not surprising given the inflationary environment, given who suffers most typically when prices rise. people are worried about their jobs there's an expectation, i think, companies should do more i don't think there's a single answer to that i don't know what the answer to what starbucks specifically should do. when you look at the top six issues and you look at what best practice looks like, which we've done in our rankings for companies -- >> right. >> -- you start to get some real answers. and i think expectations for companies who invest in workers is -- are only going to rise. >> martin, here's the question shareholders typically, at least for as long as i can remember,

have been relatively antiunion for the most part. they've been relatively antiincreasing wages, right? because wages out of an employee's pocket is money out of the shareholder's pocket. it has been seen as a zero sum game the question is whether that has been a completely wrong view, whether it's a right view, whether something has changed. what do you think? >> well, our data does not support that thesis, that it's a zero sum game. if you look at the just 100 going back over 3 1/2 years of trading it's been the russell benchmark by 7.5%. our broad-based which is sector neutral in which workers are the most important part of the criteria, that's beaten it by 7 1/2% our data seems to suggest that investors are leaving money on the table by not looking to have companies are investing in human

capital and treating their workers. i reject that thesis i also think the other interesting thing, which i hope you picked up on in the data, is americans are united here. this is not republicans versus democrats or, you know, any other sort of demographic hub. majority of americans in the high 80s, low 90s, this has been consistent on a lot of issues agree companies should be doing this why? because it's good for business that's why this is an ethos of american business that you see, you know, early on in the '50s and the '60s jeff sonnenfeld had a great piece in "the economist" yet wh yesterday which talked about that. >> i don't think it's monolithic i think many companies have always considered workers as partners and have tried to balance market dynamics with making a company succeed so it's

there for the worker 5, 10, 15 years from now with a viable retirement, pension. i don't think the viewpoint that all they want to do is screw the worker as much as they can to pad the profits for the shareholders, i don't think that's the corporate -- >> that's not what i'm saying, joe. >> that was kind of andrew's question that was sort of the assumption, that the default position is they want to keep wages as low as possible to reward shareholders and i think it's more holistic. >> no. >> your efforts are appreciated, but i just think a lot of companies are trying to do their best by the workers and the shareholders. >> i know we're out of time but let me say this. companies are coming to us in droves right now in the russell 1,000 for help on being better fe these issues. i el that's a race to the top. >> very good we'll be right back. this is not just laundry.

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stocks on the move this morning. union strike derailed potentially. president biden saying a tentative labor agreement has been reached we've got the details. plus, markets, the economy and the fate of business with barry sternlicht as the second hour of "squawk box" continues right now. good morning and welcome back to "squawk box" right here on cnbc. we are live at the nasdaq market site in times square i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures at this hour things are looking like they're going to open down 17 points down on the dow. nasdaq down 23, 24 points, s&p 500 off 4 points we're going to get to this railway settlement in just a

minute i was hoping that that was actually going to turn things around for the markets this morning. treasuries, look at the 10-year note of 3.453. also show you oil right now as we think of the price of energy and how that's making its way through our economy. wti crude is sitting at eighty-eight zero seven. the world of crypto, down after the merge several hours ago. bitcoin sitting over $20,000 breaking news just crossing the wires this morning csx announcing that former ford president joseph hehinricks wil take over at the railroad. all of this a i had m the possible railroad strike he will be taking over for james foot foot's going to be continuing to work with the company through

march 31st to try to ensure a smooth transition. take a look at the stock, up by 2.5% railroad stocks have been the big gainers already on this news of this tentative strike -- the tentative deal to avert a strike union pacific up by about 4% it was the biggest gainer in the s&p 500 the last time we checked. csx, as we mentioned, up by 2.5% norfolk southern up by 1.5%. berkshire hathaway up by half a percent this morning we do have an exclusive interview with incoming ceo with joe hinrichs there it's going to be interesting not just because of the timing but what's happening with precision railroading, which has been a big question in the industry and something a lot of labor has pushed back against.

we'll get to talk with him as he takes that new role. the new change comes on the same day that a tentative agreement comes with rail workers avoiding a nationwide strike the white house had been holding talks with workers and railways hoping to avoid a strike with a friday deadline. the deal, of course, still needs to be ratified by the unions involved there are some questions with that we'll dig into more of the details on what the common ground was they reached. joe? >> let's get to dom chu to look at this morning's stocks to watch. hey, dom >> mentioned some of the kind of stocks on the move with regard to the rail stocks we just showed you those certainly something to watch there for sure let's now take you to a look at some of the things outside of the rails, stock that are moving on this possible deal. what you want to take a look at is the natural gas market pause we've been talking a little bit about how the ripple effects of that railroad strike of

permeating through the natural gas market the substitute effect is at issue here coal still powers a lot of what we use in terms of energy in this country, although reduced so in the last decades, but coal is transported by the rail companies. the rail companies could have been on strike if that were to happen the companies who use coal might have to use more natural gas as a substitute for coal to power their plants and facilities. natural gas prices were surging because of that. could they be at least in short supply because a lot of companies returning now to natural gas? that pushed the prices higher. now you're seeing prices come off fairly dramatically. the bump up here and the rollover we're seeing especially in the last hour or so with these headlines. as the rail strike looks possibly to be averted, you are seeing natural gas prices as part of that whole process speaking of energy, we'll turn now to the clean side of things,

on the battery side at least electric vehicle makers in particular analysts at needham are upgrading shares of tesla from a hold to an underperform. they're initiating shares of fisker with a buy rating they like the attractive valuation, the business strategy, their technology and their suv offerings. they tag lucid as the under performer with the suboptimal software option and potential manufacturing speed bumps and an already elevated margin. tesla shares just down fractionally and lucid group down 1/4 of 1% joe, back over to you. >> dom, always important to check out those individual names. thanks for that. coming up, csx announcing a new ceo, and we're going to talk to him in just a minute. the railroad is making that official we're going to discuss that.

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. csx announcing former ford president joe hinrichs as the company's new ceo and president. hinrichs will take over the railroad starting september 26th he's going to be replacing james foote, who is retiring from both the ceo and chairman of the board positions at csx joining us right now is joe hinrichs he's going to become the ceo of the railroad company starting september 26th joe, boy, you know how to have some timing here this is a time when we've been more focused on the railroads than any other congratulations. what happens first let's just talk about what you're hearing right now from this potential deal that looks like there is some sort of agreement. what happened? >> yeah, good morning, becky thanks for having me it is an exciting time we're very -- obviously very

appreciative of all of the work everyone has done to reach a tentative agreement over the night, it happened in the early morning this morning i wasn't involved but getting updated by jim and the team. probably great idea not to have a strike within 24 hours of getting announced as a new ceo of csx we're appreciative of that the next step is to let the union handle the ratification. >> it's weird we've heard from the white house and the organization representing the rails but we have not heard from any of the unions. one of the smaller unions did not ratify a deal yesterday they shot that down even though their union leadership had signed off on it. how big is the risk that union members won't ratify this deal >> well, i think it's actually very low because there's so many people involved. the biden administration did a great job helping here and labor leaders have been involved with this for a couple of years

we'll let the process play out one of the reasons why that might not have been ratified was they were waiting for the bigger agreement to be reached which happened overnight i think we'll have clarity now with the totality of the package. i think we'll move forward together. >> this is pretty interesting, the details, i've been following it pretty closely. what the president's panel had recommended and what we knew was accepted by the company. 24% wage increases from 2020 to '24. immediate payout that averages about $11,000. the sticking point had been additional sick pay, paid days off for the employees there. i think it's become a big issue because of precision railroading. do you know what the compromise was when it comes to those sick days >> i have seen the tentative agreement details this morning but it wouldn't be right for me to talk about it i'll let our labor partners talk about it with their employees. clearly we think it's a good deal for the rail industry and for csx particularly and for our workers. as you said, becky, one of the

most important things we have to do now is move forward they've been in this process for a couple of years. they've been through the pandemic and all of the work they have done for us. i have tremendous respect and appreciation for the workers they've been out there in the pandemic, all weather conditions keeping the railroad moving forward and we move forward with positive energy with having this behind us and serving our customers better. >> it's very good news for the entire nation to have a strike averted in a situation like this, particularly with the inflation we've been dealing with recently and the snarls in the supply chain joe, there was a downgrade that came for some of the u.s. rails from bernstein their concern isn't that these aren't well-run companies, they think all of them, csx especially, are well run they're worried about labor and macro issues and trucking industries getting back to hiring more people what would you say with concerns

with the wage increase, 24% between now and 2024, what does that mean for operating costs? >> well, you know, i haven't been in the details yet, but i will tell you we feel comfortable we can maintain our guidance and where we are given the agreements that have been reached. what i can tell you, becky, rail is still much lower cost opportunity for shippers compared to trucking three times more fuel efficient, emissions are much better, and opportunities for csx are out there to grow the business so the focus for us is to get in the agreement, getting the hiring done, increasing the crews, increasing capacity, getting better service and growing the business because there's more demand for rail people need lower cost solutions in this inflationary environment and we can provide this for them with obviously this behind us. >> let's get back to this idea of precision railroading it's something that csx and some of the other top railroads have picked up and helped with operating costs.

basically it means you have longer train cars and shorter stops. it's made things much more efficient for csx and other railroads. it helped improve everything you're looking at with your margins and other issues, but it's also come at the expense of the workers who are expected to work longer shifts, longer time away, less notice on what those shifts are going to look like. that's what's led to the problems with the labor unions at this point. what are your thoughts on precision railroading and make it less onerous for employees? >> great question and great opportunity, you're right, csx has been the leader in the new operating model. it's delivered significant financial results for the company. the opportunity here is to step back and take a look at precision railroading. i've studied it over the last couple of months from my background, it's lean

interpretation into it now we need to engage the workforce. with this operating model we have to figure out how can we move from here, how can we build from here? how do we use this operating model we have that delivers strong troults better serve our customers and frankly better serve our employees? and let them be part of our discussion about how do we improve the business going forward. i'm looking forward to the first 100 days out in the field. i led four national negotiations with the uaw so i'm well versed with this topic. i want to be out there listening to the employees, listening to the labor leaders. let's improve the service, make it a better experience for the workers and improve the business overall. >> it's pretty unusual for the railroad to bring in somebody who's not a railroad let alone somebody who's not a lifer in railroading.

obviously huge background in manufacturing but what's different about the railroads? >> well, you know, it's business to business as opposed to serving customers at the end who are consume mers a lot of the items are there it's unionized it's all about using your operating model to better serve your customers and making it profitably we had the one ford plan, a lot of success we have the one csx plan around building the culture, working together with the environment and lead to better operating results. strong operating results with a better esg proposition and better cost proposal for our customers, we just need to take advantage of this time to grow the business and work together to do that >> let's just talk a little bit about how you go about doing that if you're going to be on a 100 day listening tour talking to

your employees, you're going to get an earful right after this contract negotiation because this has been negotiated for three years, you really only have two years when you're back in the thick without a contract back into negotiations pretty heavily. is what you're hearing going to go into that next negotiation? are you looking at the employees' concerns about their scheduling time, what they know? can you do that and still maintain these margins >> we believe we can and i think it's really important that we get out there and listen to our employees and engage in a healthy dialogue with our labor partners and union leaders that serve them in regards to what are the main issues. i believe if you work together, you can find them. the people that are out there doing the work are serving our customers every day. we want to engage them obviously we don't want to go

backwards financially and operationally. what an opportunity to engage in a dialogue, how can we be better and build from here and make it a better experience for, like i said, for our employees and do that collectively as a one csx team. >> the other issue is it hurts smaller shippers, too. burlington northern does not use it because of those concerns what would you say to customers who don't have the same hope of some of the larger customers >> i would say let's work together to find the solution that works for everybody we have the capacity we have the capability we have a great team so let's find a way to make it work it's adaptable the core of scheduled railroading starts with the service plan for the customer. then you look at how do you do that efficiently, most efficiently for the business and for them let's start by talking about what their needs are and we're ready to do that we want to talk about how can we

serve our customers better and grow the business together because, again, they're under pressure for better environmental solutions, under pressure for costs, we can be part of that equation. >> joe, i know you're not officially on the job but obviously you've been prepping for this and looking at everything in the books. what do you see just in terms of demand for the holiday season coming p, demand for things to be shipped and your ability to handle that. >> yeah, i mean, we're sitting very strong demand we are definitely seeing strong demand right now there's more demand for our business than we can provide, which is why we're hiring and why we're training so many people andadding to our crews. what a great opportunity in this environment. we're seeing strong demand and we continue to see strong demand throughout the year. >> i want to point out csx shares were up 2 1/2% before the announcement came up now they're up by 4.7% joe, congratulations.

>> thank you, becky. >> joe hinrichs is the incoming ceo of csx we hope to talk to you soon. >> thank you. coming up, barry sternlicht of starwood capital on the fed, housing, return to the office, ceo confidence wide ranging interview later in the program, senator tom cotton urging apple to rethink joining business from the chinese chip maker "squawk box" will be right back. time now for today's aflac trivia question. peloton sold its first bike in 2013 with a price tag of $1500 on what crowdfunding platform? the answer when cnbc "squawk box" continues gaaaaaaaaaaaap!!! is that a goat?! you talkin' about me? gaaaaaaaaaaaap!!! i think this goat is saying “gap.” must be talking about the expenses health insurance doesn't cover. so who's talking about the money

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the so-called merge, big day that merge has officially happened at this point ethereum software upgrade. it's what everybody's been talking about. it went live a couple of hours ago. that change is designed to reduce the cryptocurrency's energy consumption by more than 99%. this morning it's trading a little bit lower but, again, this is something that has been known for a long time and has helped feed the prices for a long time, too >> okay. still to come, barry sternlicht of starwood capital is going to be joining us live for a wide-ranging interview he is already at the table getting ready. plus, many companies are requiring employees to return to the office now that labor day has passed, but is it the right move we're going to debate that and ask barry what his take is i think i know his take but we're gointog see "squawk box" coming right back maybe he'll surprise us.

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get right to our guest on set. barry sternlicht real estate mogul. chairman and ceo of starwood capital. barry, when we get in the weeds with the federal reserve sometimes people's eyes can glaze over i don't see how we can avoid talking about it let's start from a different

perspective. you know how the economy is right now. you know how inflation is running right now. you have a lot of businesses is the fed going to be able to successfully get inflation under control without killing the patient? >> you know, good morning, joe good morning, everyone. >> "morning joe," i love him he's on a competing network, well, sister network >> i am sort of losing my proverbial with the fed. i think this is is an academic institution so late raising rates. there was pure speculation in the stock market we've seen crazy behavior and they did nothing and now that inflation arrived and actually is headed down, they are raising rates too aggressively and i could not disagree more with your guest yesterday morning, mohamed el erian. you cannot -- this will be the fifth rate rise this year. it's the steepest increase in rates in history since vu lca--

vo volker they increase 1 point if they go 1 point next week, that's $300 billion of incremental interest expense. $300 billion is half of the defense budget of the united states it's a lot of money. so the two or three rates he's done is almost a trillion dollars of incremental debt. not all is floating. significant portion. we do continue to have to feed this deficit by issuing bonds. the economy if you look anywhere is already slowing if you look at the signs like i have a slide on consumer confidence, if they could put it up, the consumer confidence is terrible where will that show up? it will show up at christmas at christmas if you survey the consumer, half of the people will spend less this year on goods than they did last year. 20% of people will spend 50%

less than they did last year and they're doing that against piling up inventories which you can put up the next slide. inventories are moving rapidly higher companies bought goods thinking the pan dem behavior would last forever, they were going to buy everything in sight. >> by the way, all of the stuff is on be the water or already here. >> it's here it's here in warehouses which are chock full you saw what target did. they had the terrible quarter earnings where they had to clear the inventory. this is just the beginning the inventories are here you're going to see huge price sales of things in the cpi the data they're looking at is old data all they have to do is call doug macmillan at walmart or call any real estate fellas and ask what's happening with our apartment rents. the economy is breaking hard. >> you're a real estate guy. you love low interest rates. you even like inflation. so what do we expect -- >> i think the whole dialogue is wrong. i don't think we need 2%

inflation. inflation driven by wage growth is fabulous. we should want wages to go up. that will help social issues and it's the trickle down with low unemployment that actually is good. you can pay higher rents, you can buy equipment, you can go to the restaurant if you have high wage growth. >> how hot should we let inflation run? >> inflation should run at 3 to 4% that would be just fine. i don't need zero% interest rates. the economy will function with 2% interest rate it's the pace of the increase and the dislocations the fed is going to cause in the capital markets. i was talking to a fellow from a big buyout shop friday night they're trying to finance a take private of a large company and the debt they're being quoted is 9% the capital markets, you've seen ipos grinding to a halt but nobody can buy anything right now. >> what do you make of rents in america and whether they are going to continue at the pace they are you have to look at phoenix up 20, 30% in some cases.

>> i think we own 130,000 apartments we might be the largest owner of apartments in the united states. we've seen 20% increases in rents year over year almost everywhere albany, you can be in dell ray beach or in phoenix. >> that's real money that's going out discretionary buying when you're talking about some of those stories. >> it's rolling over the pace of rent increases, we're seeing it go down. month to month -- >> pace of increase. are you seeing it go down or are you seeing it plateau? >> the rate of growth is slowing. >> right >> that is the component of cpi that freaked people out last week it's a meaningless number because i don't know what data they're looking at they can call anyone in real estate and the cpi number -- that's going to keep going up. you're going to see the rent component of the cpi continue to rise because it's such old data they have. they call us or they call co-star or anyone in real estate, you can get the real-time data where it is rolling over look at the housing market you've caused a crash of

unprecedented proportions. 500,000 single family new sales is the lowest since 1952 you're going to have a major crash in the housing market. housing prices are going down. you are seeing housing prices correct. they've already took $7 trillion of wealth out of the stock market the market is doing what it's supposed to do we're actually breaking the market hard and it's taking the excess out take the consumer that you just mentioned, okay. he's paying higher rent. he's actually paying more for food and he's paying more for gas so the savings he got and all the money he had in his bank account from the pandemic, one banker told me they had $2200 in the average american savings account, that was up from $400 pre all of that money will be drained by the end of the year so just from those three things. nothing the fed is doing is going to change. they're attacking the economy

wit with the sledge hammer and they don't need to. >> wait. be patient watch what happens watch how the bond market is making transactions impossible to do. watch the trades in real estate and the fact that you can't sell properties. >> we have to do this for a month, two months, three months to break the back. >> they can wait until the end of the year. >> she called into the show, actually, we're not raising anymore rates. don't you think we would be off to the races in a crazy way? >> the equity market is waiting for a signal that this rate rise is over, right people do want be to invest. i think corporate earnings -- >> why would the new normal be 4%. >> not inflation why is the entire interest rate regimen that we have in this country in your view, why are we at normal at 3 or 4%. >> i think everyone has pro verbally bought everything they wanted to buy. we're going to drain people's savings account.

consumer savings or consumption is 70% of gdp. interest expenses are going to crowd out. >> why are interest rates still too low to prevent all the stuff you talked about at the top? how are the nfts and all of this crazy stuff, and you think a 2 point interest rate rise suddenly gets us back to what a normal interest rate should be you were around for 7 and 8% >> don't forget what the globe looks like today you have europe going into a recession. china is falling we're all going down really, energy prices are everyone not just the gasoline pump, it's the cost of taking your food from the farm to the processing mill back to the farm so the gas and energy when that reflects, a lot of components. it's bemusing. i talked to the ceo of one of

the cereal companies why is your costs going up 20% it's all the shipping costs and labor costs. one more thing, joe, which absolutely have to talk about, the labor force. what's going on with wages for everyone, wages are going up. >> that's not coming down. >> listen to this one, andrew, you love this because you'll love our administration. there's 1.8 worker million visas that haven't been filled 1.8 million people that's up almost 800,000. >> immigration again >> no, it's actually working worker permits immigration is down a couple million people we need to get back to a million, two legal immigrants a year we must let the people in. you look at the employment market, what's not recovered to prepandemic levels are the service industries those are the people applying for worker permits we can fix the wage pressure by allowing immigration and getting these people their worker permits and come and work in my

hotels. >> hotel rooms, prices through the roof. >> crazy crazy. >> rollover. >> that's going to roll over >> when? >> this fourth quarter you saw all pandemic -- like everything in real estate was slightly delayed the stock market took off. the wayfairs, zooms, docusigns went insane. they thought the pandemic would last, i guess, forever that behavior. then the real estate market reacted later. the last thing to go, rents took off. nobody saw that coming nobody saw rents going up 20% in apartments no one did i don't know anyone who did. and then now it's rolling over it's like the bubbles are rolling through the snake, right? you're coming off of a period -- i was blanketed with americans why? the dollar is so strong. everything was on sale it's more on sale now because the dollar continues to strengthen so what you're seeing is a burst

of travel. people won't have the money. just they won't have the money to spend $700 on a hotel room and $2,000 on an airline ticket. airline fares are already rolling over >> we had brian moynihan on the show and other bankers who say, look, people are still remarkably flush. >> no, the top is flush. if you're rich and down 20%, you're still rich. >> the fact real estate -- you love your inflation and you talk about how wage inflation -- >> the federal government. >> if you have no income growth the last few years because inflation is outpacing all of the wage growth that we're seeing, inflation could be a really insidious thing for people at the low end and you're ready to just let it -- >> no. i think the fed -- i think the fed can do smaller increments and see the outcomes of what they're doing. >> so be data dependent? >> yeah. >> remember the topic of current data i think the fed is living in a glass house. i think they should be talking to business leaders and asking

what they're seeing. how are you going to buy a car, joe, with a 7% -- used to get 0% financing. you ain't going to be able to get 0% financing home sales, car sales are going to keep going up they're not going to go up when they pile up the inventory >> you think we could solve this on the supply side instead of the demand side? let the demand run and increase supply that's an argument that appeals to me. higher interest rates don't help people start businesses, to provide workers, expand the economy, make jobs there's a notion we should be cutting taxes and not trying to crush the man to fix inflation >> well, you know, i think we've done enough in the stimulus world. i think this inflation is because of both trump and the biden administration decided at the time that all of these inflationary stimulus packages where they were trying to put money into people's hands were -- didn't even move the

bond market. you can keep doing this. rates stayed low and then people started spending all of that money they got and they started doing it against the backdrop of very little inventory because of all of the supply chain invein inven inventories. there are only eight ships that haven't reached port in january there was 122 everything is here the supply chains are fixing themselves out now there's too much inventory prices are going to fall if the fed keeps this up, they're going to have a serious recession and people will lose their jobs and it's not the people you want to lose their jobs. >> serious recession starting twh? you think -- >> i think fourth quarter. i think right now. i mean, you're going to see cracks everywhere if you don't stop. >> 7% unemployment for two years to get inflation under control -- >> i don't want 7% it's not necessary. >> i know that that will be -- that's a lot of job loss >> biden's already unpopular

he he's going to go down. it's not biden's fault it's powell's. how he's dislocating capital look at the dollar u.s. exports are going to crash. >> they were late. you wish they had raised sooner. you just wanted them to go up little >> i'm okay where they are now i think they should stop, 25 basis points now. >> barry is sticking around. >> i'm the opposite. just what he wants but if he keeps going, it's going to get really bad >> all right barry's with us for the rest of the show so we have a lot more to talk about. when we come back though, are these return to office mandates good for business? jon fortt will give us both sides of the argument on this week's "on the other hand. quick check on the railroads if you are just waking up, the white house says they have reached a tentative agreement with the rail workers to avert a strike the major railroads are up

sharply. csx up by 3 1/4% norfolk southern up by 1.5%. up up by almost 4% look at what joe hinrichs said right here on "squawk box" about this tentative deal. he was just named to this job this morning interesting timing good thing the strike was averted for his sake and everybody else's "squawk box" will be right back. >> clearly we think it's a good deal for the rail industry and for csx particularly and for our workers. as you said, bkyec, one of the most important things we have to do now is move forward eam to be an entrepreneur based upon the examples that i had growing up. and that was important for me because you can't be what you can't see. the ey entrepreneurs access network has a tremendous impact on my business and other african american and latino entrepreneurs across this country because they give access to networks, business opportunities and capital.

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coming up in the next hour, two big interviews you can't miss taleb will. >> joel: us and tom cotton will join us to talk about his letter to apple here are the futures dow's moved up 25 points nasdaq down 21 points if we opened up now and the s&p 500 looking to open off 3 points. coming up next, are return to office mandates good for business jon fortt is going to be with us

with what is on his mind >> the first full week of work after labor day is here and more employers asking workers to return to the office at least three days a week. so i'm going to give you both sides of the argument of whether or not these mandates are shortsighted or it's really time to get back in the office when "squawk box" returns (vo) while you may not be closing on a business deal while taking your mother and daughter on a once-in-a-lifetime adventure —

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welcome back to "squawk box. more employers are mandating workers to return to work at least three days a week. is this good or not? jon fortt. >> no, these are not a good idea they're shortsighted it's going to cost most talented workers. just 60% are in office before the pandemic it was 78% according to the bureau of labor statistics it's the legacy of the way we'd always done it and there was no reason to change just 20 years ago if you wanted to do research on the internet or place and receive business calls, you needed inoffice connectivity now the broadband and smartphone revolutions have made it you can work from anywhere also form and maintain relationships with both co--workers and partners why call workers back? there are three misguided ideas. some companies are big, empty buildings and they have to justify the overhead expense two, some lazy managers didn't

figure out how to effectively harness a hybrid workforce they're calling people in to look effective and then, three, leaders who over hired and under utilized their workforces since 2020 are using office mandates as a way to get people to lay themselves off, which is dumb because in the process they're also going to squash the morale of people they want to keep, andrew. >> but, hold on. hasn't the labor market gone way out of balance, don't you think, with soaring wages and companies pressuring to let people work from the beach isn't that the issue >> well, yeah, on the other hand, it is time to get back to the office i understand the commute's terrible and a lot of people have gotten used to doing better things with that time, but that's not the point there are some tasks that just get done better and faster with people in a room together. and in person is the highest band width, lowest latency to interact elon musk is mandating it.

cross functional creativity is better i've heard this. if you are executing existing plans, remote works great. coming up with new ideas, in person remote is fine for mid-career specialists who want to do most things if you are a leader building a strong culture where new employees are mentored by the mid career aces that's not going to happen as effectively over zoom yes, you will have some industries where remote work remains a trend like software development but even that's going to change. i had the ceo of a dynamic software startup tell me it was a mistake to have a hybrid option for this year's developer gathering. next year he's said is going to be in person only because the engagement in person is that much more valuable. >> jon, i don't want you to go anywhere i want you to stick around we're going to continue this conversation barry's here it's probably unfair to ask somebody in the real estate business what they think about in person versus --

>> inflation, interest rates, everything. >> you may have to talk your own book let me ask you this. for 100 years white collar workers have been going into the office, that's what we've been doing without really a thought about technology changing over those 100 years. we've sort of done the same thing in a relatively rote way we got blackberries, other things, haven't shifted. is there any argument you would make around how technology should have evolved this process? i'm just trying to make it a little bit harder. >> i think there are some things better remote, like road shows you're not building a relationship, making a presentation i think those are fine remote. i just had a meeting with my -- it's labor day i just was in the office we're fully in the office. all the young people in our firm want to come to the office in new york and our cities because they want to get out of their little apartments and they want a different venue and they want to ask somebody what they did

and how their date was and they can't do that on a zoom call i was at one of the major investment banks earlier this week they've mandated -- they're not saying you're going to get fired if you're not in the office, but the ceo in the bank said who's going to get the promotion the guy in the office that we see every day or the guy who's working from montauk and pretpreten pretending he's working hard i find it hashed to stay focused. i get distracted oh, there's a cobb webb in the corner of my kitchen or the dog is running by me i need to feed him he needs to go to the bathroom yeah, you schedule zoom calls and then they're 20 minutes or 10 minutes longer than you scheduled. it's not productive. a lot of wasted time on zoom calls. yesterday i walked into one of my executive's office. some people in the office were on the zoom call i said, have that meeting in the conference room. that's why they have conference rooms. at least the people on the call

can do it together that facilitates community, loyalty and it's -- you can recruit people much easier when they're getting calls at home than when they're in the office and everybody around them is saying, who's that call from i know that ceos generally want people back in the office. nobody's worried right now, contrary to what joe said. the whole market has changed on the employment front like right now goldman sachs is going to layoff some workers they know now that if they don't show up in the office, which david has asked them to do, the first ones that will go are nonessentials working from homes. that's going to happen across the united states. it's just what's happening even to -- >> what did i say? no >> well, you said that you're not going to have -- people -- the labor market's so tight that people aren't going to get fired anywhere they're going to start getting fired and the ones that are not in finally, some functions like accounting we are relaxing they can work anywhere

they proved they could do our books. in the united states all accounting function remotely nobody was in the office and all public companies were able to report it worked. we were all astonished, but it worked. >> do you think there are certain jobs maybe there's a bifurcation in terms of what a white collar job even is an accounting job may be able to be remote -- >> coders. >> even the hedge funds, but they're not a great example because they have homes in the hamptons, they want to work three days a week. >> what about a lawyer >> so i think the lawyers -- so those are interesting. for the real estate markets, legal and accounting are two big users of space. >> you want them in -- >> no, no, no. they're going to take less space. they're going to take less space. if you're morgan stanley, you want people in three days a week, i don't think they're going to take less space because they want everyone in on tuesdays, wednesdays, thursdays. i think the ambitious ones, when i was a kid, when the ceo was in the office, i was in the office.

i think that will happen again when the times are tough and we're headed to tough times, gois, people will go back to the office i'm in hi i'm here with you. as opposed to where you are calling in from jackson hole it is inversely proportionate. it's no longer the case, you cannot tell me people are home for hardship right now the pandemic has passed. i know a few people will have covid today but nobody's getting really sick. it's a bad cold. i'm not sure there are elderly -- it's really not that situation today. people really should get back to the office and resume the work it's not changed forever we're going to go back to the office i can tell you in new york city, physical occupancy is up like 15 points post labor day. it's moving fast. >> really? 15 points to what? >> 65 from 15. better than zero >> okay. >> thank you, sir. i'm still waiting to meet a real estate person who wants to work from home. >> just talking -- >> it's better for the company my book

>> look at our children and look at what it's done to our children not being in school, i think it's a no brainer. you've got to get back stick around, nassim tale been and senator tom cotton stay tuned, "squawk box" will be right back are. go science people. go breakthrough meds and safe science. and senator tom cotton stay tuned, "squawk box" will be right back and senator tom cotton stay tuned, "squawk box" will be right back and senator tom cotton stay tuned, "squawk box" will be right back and senator tom cotton stay tuned, "squawk box" will be right back and senator tom cotton stay tuned, "squawk box" will be right back b and senator tom cotton stay tuned, "squawk box" will be right back emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson. this is not just laundry. this is laundry that's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile.

biden says key players have reached a tentative railway labor agreement. we're going to bring you the latest from washington and tell you what industry stocks are doing. meantime, futures are mixed ahead of the opening bell. in 90 minutes we'll speak of the big selloff with the author of the black swan a warning for apple and ceo tim cook from senator tom cotton he said the company shouldn't do business with a key chinese chip maker. we'll ask the senator why as the final hour of "squawk box" begins right now. good morning and welcome to

"squawk box" here in times square i'm joe kernen along with becky quick and andrew ross sorkin spending time with us in studio, it's been a while, starwood chairman and ceo barry sternlicht we'll have more from barry, i'm sure i'm certain. u.s. equity futures at this hour are indicated in a mixed fashion, actually. we have the dow just trying to hold on to some gains. it was up 50 or 60 points earlier. it's now up just 9 in both the nasdaq and s&p have dye viverge from the dow and are lower treasury yields this morning, now we're watching, i am anyway, the 2-year because we've talked about a 4% terminal rate for where we need to get to the fed and to handle inflation. we're at 385 anything that makes us move the goalposts to 4 1/2 to 5 would be negative >> the fed has to look at the

yield curve. market's telling you what's going to happen. >> but inverted yield curves have predicted 9 out of the last three recessions. >> they're right this time, jim. you know what, i just want to follow-up real quickly on the return to office it's interesting what's happened to the office markets real fast. good buildings are leasing and staying full and the commodity buildings you can't get the workers back so it's actually changed the nature of the office market. like there's a building i'm in meat packing, they leased the whole building during the pandemic everybody is in because it's a nice office. in miami we have a huge accounting accounting staff that worked remotely. we have cafeteria. >> that's the same with a, b, c level malls. c level malls, nobody is at them a level malls, they're there. >> it's tactile, they try them on, a great experience when you go online, you only know what you know you want to see things you don't

know you go to the mall to see a display case, a giant showroom. >> and to eat out and do something else. >> yeah, it's an activity. >> it's fun. there are a lot of stocks on the move this morning despite the flat futures that we've been watching we're going to start this hour with dom chu and get some key highlights of the movers dom, what are you seeing >> a handful of names with outsized actions shares of humana are seeing a pretty big move higher over 4%. that's due in large part to the health insurer and medical benefits company raising the full-year profit guidance. that announcement comes ahead of a big investor day that they will hold virtually. slated to start around 8:30 a.m. eastern time next you have shares of netflix which are on the rise by roughly 2 1/2% the streaming video giant gets an upgrade to outperform

over at evercore new ad supported subscription tear they don't believe all of the benefits are being priced. those shares up over 2%. we're going to end on shares of adobe. continuing the more near medium term of weakness the more proximate cause this morning has to do with multiple reports of the software maker is in talks to provide privately held software igma they're down 7.5%. it's also in focus because it is slated to report earnings after the closing bell becky, a lot more on the adobe front with possible deals and earnings later on. i'll send things over to you. >> dom, thank you. of course our top story this mornings, news of a tentative agreement to prevent a rail worker strike. president biden issuing a statement earlier this morning thanking both the unions and the rail companies for negotiating in good faith.

shares of the major railroads are higher this morning. csx up by 2.4% union pacific, 2.75. norfolk southern up 1.5% >> there are so many people involved obviously the biden administration did a great job helping here labor leaders have been involved with this for a couple of years. we'll let the process play out, but i think obviously one of the reasons why that might not have been ratified was they're waiting for the bigger agreements to be reached with half of the population which happened overnight i think we'll have clarity now with the totality of the package. i think we'll all move forward together. >> that is jim hinrichs, formerly of ford who has just been named as the new incoming ceo of csx he starts later this month. we're starting to get new details about what we know about the rail deal. i want to get over to kayla tausche who has the details. good morning to you, kayla. >> reporter: good morning, andrew we know the deal was reached

after 20 hours of negotiations an all nighter at the department of labor with a handshake deal earlier this morning in a statement the labor secretary called it hard fought and mutually beneficial. president biden was briefed around 8 p.m. and made what they said was a crucial call to nudge them towards a crucial deal. it includes a cooling off period at the heart of these negotiations, demands from workers for more flexible scheduling and the ability to take days off for medical care without penalty, paid or unpaid. one holdout union, blet, says workers will get one extra paid day off and railroads will provide additional time with

fewer restrictions it's still unknown how many days railroads granted workers. they're evaluating the deal and haven't weighed in even csx refused to discuss the specifics of the terms certainly, guys, it's a move in the right direction. we're expecting to hear more from the administration later today. >> kayla, we're going to keep our eyes on all of it. i'm sure we'll be back to you shortly to find out more as we get more thanks two big interviews still to come this hour on "squawk box. the first on risk in the markets with the author of the black swan, nassim taleb and the second with senator tom cotton he's calling on apple not to work with a big chinese company. don't go anywhere, "squawk box" will be right back [watch: heart monitor connected.] technology makes it easy to connect to everything from your wrist. [watch: speakers connected.] but to connect to all your clouds, you need more than technology. [watch: 50 feet to pin.]

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call and start saving today. comcast business. powering possibilities. welcome back to "squawk box," everybody. futures have been bouncing around this morning. earlier it looked like we were in the green dow up by 50 points. s&p and nasdaq were up naas take has rolled over. down by 38 points and s&p down by 2 points.

dow up to close to 9 points. this he have' been bouncing around still trying to regain our equilibrium. we'll be looking for the tallies at the end of the week tomorrow. by the way, it is official adobe out with the news that it is buying online design software firm figma a cash and stock deal worth about $20 billion. there had been earlier reports a deal was imminent and sure enough here it is. adobe posted better than expected profit and revenue. it had been expected to report its results after the closing bell but it's getting all of its information out there at once. 3% losses this week. tuesday was the worst day for major averages this week we're joined by a ma market expert in risk. the author of "the black swan"

nassim taleb, nice to see you in person. >> finally. >> we've been having a big debate, barry's been a huge part of it of what the fed should or should not be doing and where we really are in this economic cycle, whether we are already in a recession or not and whether the fed is doing too much or too little i'm very curious where you land on this? >> i think we've had 15 years of disneyland basically has destroyed the economic structure think about it, no interest rates so anyone who's, say, 40 years old has no experience in markets. >> right. >> zero. they don't know hthe value of money is. >> okay. >> the fed overshot by lowering interest rates too much. the first 100 basis points worked the second less.

zero interest rate, of course, for a long period of time you are hurting the economy. you're creating bubbles, creating tumors like bitcoin, creating -- >> tumors like bitcoin >> or hedge funds that should not exist but have existed for 15 years >> we're going to dig into that in a second. keep going. >> now we need to go back to normal economic life here i see people are experienced. you know, people with experience remember that there were -- there was at some point such a thing as a discount rate so we had interest rate, a value of money that your investment had to everearn cash flow. all of these notions escape the new generation >> that indicates -- >> but i think the question at the moment is they might have overshot on the down side lowering rates. >> yes yes. yes. yes. >> have they overshot -- barry's making the argument they

overshot the other way. >> i think what they need to eleven is what economic policy should be and what monetary policy is, right you don't lower rates too much you need to bring them back to a normal level and not vary too much from these levels. >> are they at a lower level now? no, no 3 to 4% is a normal level. then you have room to go up or down from there. >> but the argument i think that ba barry's making, i'm not sure if you got the chance to hear it, he thinks we're already in a recession. >> i think we are. >> it will turn over in a terrible way and that by continuing to raise rates we're only going to make it worse and not affect the supply chain. >> i think he should be going slower slower. >> you have a dilemma, right you cannot lower rates you can't -- we've learned that it was a very bad environment for the u.s. economy, all right? you have transfers of functions. >> right. >> you have -- >> did have a pandemic you had a pandemic revenues went to zero. >> it was not -- it was not --

the last 15 years were not good years, okay so that generation of people that have the wrong instinct, that have the wrong methods, those who made a lot of money during that period are the least fit. >> what would you do if you were jay powell right now >> as he said, i'd be careful in raising slowly or i would stop i would be careful not to use monetary policy excessively by raising too much because that's what brought us here also, remember, that when you lower rates, you create bubbles, financial bubbles without necessarily helping the economy. this is something they figured out in the last 15 years. >> as the author of "the black swan" what is the chance that there is a black swan event? something systemic -- >> not a black swan. >> this is a white swan. >> a white swan? >> this is a white swan.

think about it people are pricing things at a discount rate close to zero and now suddenly they've discovered there's time value of money. what does it do to equities? think about it they just plug in 1%, 2%, 3% and discount and see what happens. >> we see the multiples come down on everything >> they have to come down a lot more. >> how much more. >> nassim -- >> eventually real estate, i mean, they created $100 trillion of value. >> to becky's question, what is the true value everything has to come down. >> it's not going to come down in an orderly way. >> it's not going to come down in an orderly way? >> no. >> why not >> in the beginning we had an orderly decrease, but typically when you see what happens with pressures, people have stop losses, stuff like that. it comes down, then snaps up, comes down

bear markets are violent, often mean reverting like big down move followed by big up moves, but overall, you know, down this is what we observe. so is it the black swan -- no black swan it's just the nature of markets, okay >> all at once. >> there he goes that's the story gradually then quickly, that we're still far away from uncle points in portfolios we're far away from stressors. bitcoin is still used still at 20,000 it's not at -- you know, at 1,000 or zero so you still have things that need to be corrected. >> bitcoin is the signal for you? >> no. a swan is -- to me i call it a tumor, all right there's something that produces tumors real estate is another tumor. >> goodness. talk to this gentleman about that we had what?

we created how much valuation in real estate? how many trillion. the overall market the net worth of -- worldwide, okay, has increased by $100 trillion. >> the housing markets the housing markets. i mean, the housing markets globally, new zealand, they are a bubble territory they make the u.s. look like nothing. prices have gone crazy in canada and even england you know, it's going to come down, but it's interesting i think -- i think the -- what i look at is when people start talking about multiples of cash flow or ebitda or multiples of revenue. that's when i know people are back they have no idea how to value companies. >> are we through that yet or no >> no. we're not through that still a lot of craziness out there. but there's a lot of money dedicated to multiples of revenue. and some of these companies,

facebook started or google, they were not cash producing. some companies have paths to profitability. others do not. they have no gross margins you'll see these companies continue to file someone went public a regular way or spacs. >> both of you believe there's a leg down, not a leg up. >> you may have swings -- people have the notion markets should behave the way they think they should markets swing from over value to under value. >> right >> you have what's called fair value probably is a transit start. it's not even a stop, right? it's leak a transit point. so you will go from under value to over value, under value when you see a squeeze, something is usually over valued it ends up being hugely under valued right after >> right >> i've almost never seen something very under valued not

turn into -- >> you don't think we're hugely under valued right now >> i don't think so. if we're over valued at all and we could go to grossly under valued -- >> yes. >> -- we're going to learn about loss. >> we're going to learn about a lot of things. swings the ctas. >> yeah. >> people chasing trends you're going to have some surprises. >> nassim taleb, always one never to hold back never holds back on twitter. >> yes. >> you are on twitter a lot these days. >> time wise, maybe about 20 minutes a day. it's my outlet. >> you want elon musk to own it. >> let me tell you something about elon musk. he blocked me on twitter he told me it was stupid to worry about covid when i was holding the same day, i was telling people -- i'm a trader better panic early if you are going to panic, panic early. so he said it's stupid to panic over covid and i said it's stupid to say that it's stupid

to panic over covid and i was blocked. so i'm not very excited about the owner of the outlet making -- >> blocking you. >> -- looking for some other place because with all this spiel about free speech and stuff, i block people because i don't want noise but i don't want to be the owner of twitter. plus there are other things about elon musk. he's so erratic, as we can see, that you -- you will be on twitter thinking it's a transitory thing you don't feel any permanence. >> nassim, if you need an outlet, you can always come here. >> okay. great. >> are you a tesla owner >> unfortunately i'm a tesla owner. >> unfortunately you don't like the car. >> the service when i bought it service was great and -- exactly, unreliable they changed policy. service degraded you discover when you learn more about electric cars, it's like someone had a great app like an

iphone app, great, now we're going to put the car on it and they downloaded the menu on what, 1990, how to make a car. so you open the trunk, rain's coming, stuff like that. >> everybody i know loves the tesla. >> in the beginning you always love the tesla until you start comparing it to other cars >> okay. this is a longer conversation. we'll have you back. >> now we know why elon blocked him. >> you're going to be really blocked. >> if elon blocks me from twitter, i'll have to be friends with you guys. >> nassim, thank you. >> thank you. when we come back, a big slate of economic data republican senator tom cotton said apple should not work with what he is calling a dangerous chinese chip maker he'll join us to explain you're watching "squawk box" and this is cnbc

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welcome back to "squawk box. this is cnbc we are just a few seconds away from more reports out. the jobs picture is very important ahead of the fed's meeting next week as well. dow futures are down by about 8. s&p futures off by 10. nasdaq down by about 47. again, the market's really just been wandering around a little bit trying to figure out what

happened after it got smacked so hard on tuesday. yesterday markets ended up but not by a whole lot it's up by a 10th of a percentage point the s&p was up by 13 points. again, trying to find its way and figure out what the fed's going to do next week. the treasury market has been watching that. the 10-year looks like it's yielding 3.457 rick santelli is standing by the cme in chicago and, rick, take us away. >> reporter: yes there is a litany of data here i'm going slowly on initial jobless claims, 213,000. that is definitely below the expectations and at least until we get a revision, that's 9,000 below last week. last time we were down to 213,000 was a while ago. i would say we'd have to go back to the end of may to see a lower number continuing claims 1,403,000. a very, very nice drop there we were expecting a number close

to 1.475 so that's good news. indeed, empire manufacturing, this is september number it is down 1.5 down 1.5 even though that isn't good news, we were expecting down close to 13 and the big number lately, that was in april when it was down almost 25 points last month down 31.3 it is yet to be revised. we haven't had a positive number since july if you look at retail sales, up .3. we were expecting down .1. very solid number. strip out autos and you can see that autos kicked in a lot to the headlines because you go exactly the other way, down .3 of 1%. strip out autos and gas, it goes flat line, unchanged philly fed now philly fed is always an important number we want to pay very close attention. minus 9.9. that's a big reversal. last month we went positive at 6.2. we were expecting a positive number that is a disappointment

import prices for august month over month, down 1%. less than expected strip off petroleum, it's down .2 of 1%. that was month-over-month. let's look at year-over-year prices they are up 7.8% 7.8% last month it was 8.8. darn close to expectations if we look at month-over-month export prices down 1.6, we were expecting a negative number. it's half of what we had at 3.3. finally maybe the most important on the pricing numbers today, export prices year over year, still stubbornly high at 10.8% less than 12 1/2 expected and lower than the slightly revised 12.9% from last month. if we look at what's going on from treasuries, joe said it earlier. 2-year note yields are definitely on track for what's going to occur on wednesday of next week. they continue to make fresh

15-year high closes almost day after day. and even though all rates are up, 10-year note yield, still haven't been able to take out the mid june high yield close just a whisker under 3 1/2%. becky, back to you. >> rick, thank you so much excellent job breaking down all of that information. steve, you take a look at this it basically says retail sales, consumer a little stronger than had been expected. jobs market a little bit stronger than had been expected too. what's that mean for the fmoc when it meets next week? these are the numbers they're going to be watching. >> i'm trying to put it up, becky, against the vision laid out of the world by barry sternlicht i can't find it in the data. i think that's kind of barry's point, that the data's old, it's not reflecting what's really happening in the economy but when i look at the contemporaneous data, which is the jobless claims numbers, i don't see weakening there, which suggests in the sternlicht view of the world that employers are making a mistake and holding on

to workers they don't need i don't know about that. i see these consumer numbers and they look okay to me you know, a 4.2% decline in gasoline sales, which is actually a little bit less than expected a lot of that is going to be price as well, but you look at motor vehicles up 2.1% food service and drinking places, the one bit of service up 1.1%. that's a strong number some negatives in there. health and personal care down 0.6. mostly looking at furniture and home stores, 1.3%. that's the real estate section again, it's a question about how much the fed does, indeed, talk to business executives i know they do they do the books and puts that together whether there's some shadow recession going on and running below and not being shientd on by the light of the data. >> steve --

>> that's a question we're not seeing it in the data right now and the fed i think has to be full steam ahead on the 75 basis point rate hike next week. >> steve, barry's here and listening. >> i have a question for you. >> oh, hey, barry. i didn't know you were there. >> i'm here. >> they don't tell me anything. >> flat retail sales are nominally down because prices are up so if you take out -- and you have to take out autos because autos are sort of a trailing number because people couldn't get a car. >> right. >> there were all these problems you're still going to see auto sales continue to be strong. this is what i mean about really looking at the data hard people were backlogged, they couldn't get the teslas, the ford -- >> sure. >> -- but general retail sales are flat, unit sales are actually down because prices are up so it's actually a fall in real terms in retail sales. and i think you see that unit counts if you talk to a furniture manufacturer, you

mentioned the housing complex. the economy cannot roar with a housing market in a complete free fall. the same will happen eventually when you buy a new car and you have to finance it and they can't give you 0%, they give you 7% people aren't moving out of houses because you have a 3% mortgage and you're going to move to a new house with a 7% mortgage you're stuck you're staying where you are i think the data -- the only one that's curious to me is the unemployment number, unemployment claims. i hear, as you can see in tech world, with the stocks down -- the average tech stock, some of them are down 70%. they are even -- even facebook and google is talking about layoffs. this could be the first time in history i've ever heard google talk about layoffs and streamlining cost structure. so i think, again, you have to look forward the fed has done enough and if i gave you the prices iron ore down 60%, copper down 35, dram prices down 36 oil down 35.

silver down 35 baltic freight rates down 80 you already have deflation it's on the way. they've done a good job. they've signaled we're going to stop the music i'm saying be slow because you're moving -- the amount of money that comes out of -- that goes into t bills when you can get 3.5% on t bills, where's the money coming from? it was in the equity market, it was somewhere. they're going to pull it out and let's see the implication of that. >> this reminds me an awful lot of jim cramer's call back in 2007, 2008 they know nothing. fed's not listening. we're going to give him more time to talk about that, steve, we have a senator waiting. >> we do our next guest is saying apple is doing business with a chinese chip maker in a letter to apple ceo tim cook senator cotton says it is

an i will-advised plan to work with yanzee company. i would start by the old cliche, made in china. we buy a lot of things from china. you know, it's a global economy. what specifically about this relationship troubles you? >> joe, we buy way too many things in china. i understand a lot of companies were encouraged by our government and administrations of both parties to make investments in china for 30 years, but we need to be taking steps to decouple ourselves especially in strategic policies apple needs to rethink this. ymtc is state affiliated and state subsidized they can grow market share in low tech but ubiquitous chips.

there is no confirmation that they are not working on behalf of the government when it does business with companies like apple. this is not just my concern, this is a bipartisan concern of senators chuck schumer, mark warner have also called for ymtc to be hit with sanctions, the same way that we did to wawwei during the trump administration i think it's vitally important they rethink this not just for american security, privacy and security of their customers but also their shareholders. what would happen if they go into business with ymtc and it gets added into the sanctions list in 6 months and 12 months i think this is very ill-advised. >> how many other companies could you throw into the same basket if i think memory chips and low tech and -- you know, we lead in

technology for chips, chip making and intellectual property we do farm out a lot of the low tech memory type stuff to other parts of the world we can't really -- it's cheaper to get it from there it raises the entire cost structure. what security concerns do you have that might be in these relatively low tech memory chips? j >> joe, it's right that we do outsource a lot of the manufacturing for these ubiquitous chips, they're in iphones, washing machines and especially when they're in personal devices, enterprise devices. the risk is with the manufacturing occurring in china, we may simply not know what the company is doing at the behest of the people's liberation army or the chinese army one analogy, look what we did

with wawei we didn't want them manufacturing our telecommunications devices in the civilized and free world if we have these kind of chips running all kinds of other devices around the world, we simply may not know. there are many examples of china using its power over its own companies to implant devices that's happened when they built the headquarters of the african union. look what tiktok can do with the data it collects from so many users. it's not safe and prudent to allow chinese companies to manufacture these components for systems that may make it into the hands of americans or in other friendly nations. >> senator, is it a big ask for apple? apple, chinese iphone sales are

impo important. do they link with the company and if they were to follow your advice here, that could harm apple. we don't want to cut off our nose despite our face either >> no, we don't. that's one consistent point i've made speaking with business executives, is that when we go about strategic dedoubling that's why we don't want to go cold turkey. what's ill advised to be expanding that operation, to take more risk to expand the contracts our businesses have with chinese production. you need to get out of source and not from china and get them back into the united states at least into friendly nations where we don't have concerns about the government being able to control the actions of corporations that are nominally private but in reality because of china's laws and china's

massive subsidies are really an extension of the chinese communist party. >> i probably should have checked. did you vote for the chips act should we be buying it domestically buy it from south korea, another more friendly nation >> i supported on shore chip manufacturing. that's different that's about tsmc in taiwan that makes some of the world's most advanced semiconductors. we have a strong, robust trading relationship with taiwan but taiwan is within missile range of mainland china which constantly threatens to invade taiwan unfortunately the chips act didn't have enough security rels or steps and they're not big or

smart for america's economy. we have to get advanced semiconductor manufacturing back in the united states. >> i think it bogless the mind the things that come from china that we take for granted, whether it's even in pharmac pharmaceuticals or name an industry telecommunications that's why it's such a great exports nation where does it stop, senator? if you were going to make a point that they could cut us off with, i don't know, materials for evs or technology, they can always hold us hostage based on just cutting it off. you're more concerned with actual security concerns with what might be built into these chips? >> that's right. >> it seems like it's going to be one thing after another we shouldn't buy anything from china. >> the telecommunications is one example with huawei and ymtc

it's not high tech cutting things, it's where they have the market that's essential due to freedom and prosperity of americans. i think many americans are shocked to learn that we depend entirely on china for things like latex gloves in hospitals, medical masks or acetaminophen, ibuprofen, penicillin and heparin. they are not high tech but essential to the health of americans. we need to take a look sector by sector where china has america over a barrel if not to on shore the manufacturing and get it out of communist china there are other sectors where china does have the dominant production advantage but things that are not strategically necessary for people like low end toys. >> we've got a lot of cheap stuff. not exactly in an economy where we can afford to spend a lot more money right now

that's a whole different subject. appreciate having you on thank you. >> thank you, joe. coming up, jim cramer's first take on the trading day coming up. plus more with starwood capital's barry sternlicht stay tuned, you're wchg quk x"n bcatin

what are the main issues i believe if you work together and you listen to each other you can find solutions >> that was incoming csx ceo joe

hinrichs it starts on september 26th. want to get down to the new york stock exchange jim cramer joins us this morning. jim, curious how you think this settlement with the railroads is going to impact things, impact the markets and also want to hear your thoughts on how much you've had an opportunity to hear barry sternlicht with some pretty provocative ideas about what the fed should or should not be doing and where the economy really is. >> well, listen to every minute of barry barry knows a great deal he's a frequent guest on "mad money. rails are 30% of commerce. i'm very worried about commerce in general and the commerce slowdown i think it would be terrible if the rails shut down. you've seen what's happened in our country years ago when they do i know that the job issues are really much more about the things that starbucks which

ai ailes. >> a lot of collateral damage.b, becky was the one who made the point, is making a sort of, you have no idea kind of -- you have no idea, i'm channeling you, jim, from 2007, it's sort of a, you have no idea how bad it really is out there kind of perspective. right? >> i didn't like what -- i mean, look, i like barry's comments, but i thought they were way too negative anything are that relates to 2007 to 2009 has to do with the balance sheet of everybody, and i'm looking at the balance sheet of a really interesting company, tremendous amount of real estate, well run, really, really big, big amount of debt, yields 8.19% and i'm not afraid at all, and that's starwood property trust. >> thanks, jim

>> what do you think about that? barry, come on that's a great thing to own. in the environment you just described, i want a seasoned hand who gives me good yield and i'm not concerned in a real crisis i would not be running toward your stock i'd be running against it. but i do think that you will come through this, and there will be other operators who come through it great >> thank you, jim. >> look, i think i want to put in context i think the economy is slowing dramatically, and you can look at the housing market, and you can look at the sales misses of the kohl's and the targets and walmart shock. the consumer is going to be out of money you can easily fast forward, the implications of higher gas prices, higher rents, and higher food costs to their savings and they've gone on their credit cards now. they've spent their cash and the consumer remains -- we have amazing consumer, he's resilient, but you know, there's a lot of noise in the world. this geopolitics -- they, the

group, are resilient, and i just think the fed should really slow down, because they should see the impact of what they're doing and they're moving too fast because of people like mohamed screaming at them and he's dead wrong. >> you are so right. you are so right >> thank you, jim. you're going to wind up with a deep recession, which we could avert and the only way to avert it is to go slower that's the message just look at what's happening. look at the dislocations i could hold up charts here. home prices sinking, employment gains decreasing month over month, and we're going to -- you know what's going to happen, it's pretty obvious, because you try to get credit. credit today in corporate america and in the real estate markets is contracting hard, and the combination of rates rising and shrinking the balance sheet is the tightest fed monetary policy we've ever seen, so they're overdoing it >> agree >> that's the only point i have. >> we're going to come back.

>> can we do 75 and wait >> i'm sorry, jim? >> he said, 25 and wait earlier. >> can we do 75 and wait why do we have to do 75 and 74 the ramifications of a 75 are very high. >> we got to run sounds like we need to do like an oxford-style debate special in primetime with you and mohamed alarn. at wwe need to do next we're coming right back after this 's smarter than the dial. this is ge profile smarter wash technology. fully optimized cleaning, no more guessing. this is smarter cleaning. this is ge profile. go. go green. go wind turbines. go gorgeous reliable grid. go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable,

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starwood capital's barry has been hanging auto with us this morning. we've been fortunate enough to hear lots of him we've got one last time to talk with him i know you've got something near and dear to your heart that's coming up. >> the robin hood investment conference is coming up, our tenth investment conference, and we'd like everyone to buy tickets. we raise money to fight poverty in new york, and i've been on the board almost 20 years. it's an incredible conference with great speakers like paul jones. i know john gray is going to teach a master class on real estate, and mike will talk about crypto i think we have sam bankman-fried. we'd love everyone to show up and support our organization which fights poverty in the city and does incredible work >> what's the need for it now, just poverty in the city >> i mean, sadly, poverty is something you can always keep fighting it's october 11 and 12, by the way. you know, i think that we raise over $140 million a year and a lot of it comes from small gifts, and we disperse all of it

and the board pays all the overhead there are 200 organizations that we empower to fight poverty and bring education and social services to people in need it's a great, great, incredible organization led by a great ceo, richard barry. >> people should look for tickets now. and by the way, come back when you're in town to talk about it. bring as many guests as you want >> thanks. >> i got a different real estate question for you >> good. >> a guy we used to talk a lot about. adam newman. former wework. what do you think of the fact that mark and horowitz are backing this new real estate venture? it seems like it's about residential real estate, branding residential real estate >> you looked down >> you're in the hotel business. >> i'm curious what you think. >> i know adam really well, and i was someone who should take the fifth. like many politicians these days look, i think adam -- tom brady is the greatest football player of all time. adam is the greatest salesman of all time

he's the extraordinary talent, and i think his idea is not a bad one, bringing activities and services to apartments they do this in asia, service departments. he's talking about yoga classes and dining >> can you collect enough of a premium? >> it's a tech investment. >> can you collect enough of a premium, though, right >> we'll find out. >> the service layer and whether developers like you and other people who develop will actually partner with that, because that's how this is going to work, right? >> yeah. >> would you invest in the venture? >> i don't think so. but for other reasons. we can do it ourselves it's not a -- there's no mode around it. i can do yoga classes and cooking classes and teach swamis and stuff what's that -- ayoasca go on a psilocybin adventure >> my favorite thing about you, you always think about ticking the fifth, and then you don't.

>> yeah. >> i think my mom would like me to take the fifth more often >> what do you mean he's the greatest salesman? >> we can talk about we dmwork >> what is a great salesman? is that good quality or you need something underneath that? >> you need both >> your very measured. >> this is one of the first times we've heard psilocybin on the air. take that to the bank. >> we're closing we got to keep everyone wanting more >> barry, we have missed having you at the table you've been remote over the pandemic, but this is really great, having you here >> thank you >> back to work. >> nice to see you all >> great to be back. >> we're back. >> here we are i know i know and we can laugh >> we can. >> and i can see his tan and buc becky's great hair >> barry, thank you. >> might be make-up. >> come back soon. let's wrap things up let's take a very quick final check on the markets this morning. again, it's been a rough week. dow's been fluctuating right now back up 53 points but

the s&p and the nasdaq are both still lower. also watching the treasury market ten year is yielding 3.424%. the two year is a 3.81%. jobless claims below expectations, retail sales a little bit higher than expectation, but as barry says, retail sales are flat or worse than that when you consider inflation. more to come tomorrow. right now it's time for "squawk on the street. ♪ good thursday morning, welcome to "squawk on the street." i'm carl with jim. david faber is at one market in san francisco, his exclusive with disney's bob chapek is moments away we got this tentative agreement to avert a rail strike, lots of eco-data, signs that prices are falling, not rising, and a $20 billion software deal from adobe and that's where our road map will begin this morning, that desig