2022 it's delivering alpha day 2022 and "squawk box" begins right now. ♪ good morning, everybody. welcome to skks here on cnbc we are live from cnbc's deliver ig alpha conference in new york city today i'm becky quick along with joe kernen andrew is on assignment today. we've got a huge lineup. we have roger ferguson, greg fleming, carson block, and r rostin behnam.

i'll be sitting down with my panel and joe's panel. paula worked closely with stan because she used to run bowdoin college foundation and obviously she's on the board there she said probably nobody is better at figuring out what's happening in changing market conditions than stan d drucke druckenmiller. >> 30 years, that money found at duquesne that's pretty good that's a lot of pressure with all this money i'm not trying to manage, it's just too difficult at this point. it takes an emotional toll and everything else. he was here last year delivering or the year before no, it was 2014 >> i can't believe it's been that long. >> 2014. so it's a rare and valuable moment, i think, for me and for everybody. >> i think so too. again, changing market

conditions is what we have today, which is probably why the timing for this conference is so important this time around >> i mean, in essence, you know one of the thing he was focusing on in 2014 >>. >> what? >> the fed needs to get off zero interest rate policy. >> well, they've done that. >> eight years later it's finally happened eight years later. it's amazing, isn't it, how long we were there. >> i'm very curious to hear what he thinks now. so many have said the fed needs to do more and then the fed knees to slow down. >> i don't want to speak for him, but he remembers a lot of different market cycles, and i think one of the things that we've come to sep saccept since, no matter what, stocks eventually need to go up do. we need to bring some of the complacency out do we need to not make money for

a couple of years? >> some went from buy the dip to sell on strength from some of these issues too and if you take a look at the future this morning, we've seen a little bit of improvement in the last two minutes had been down 250 points for the value of the dow futures right now dow futures are off by about 77 you would think that would be good news, but yesterday the dow and nasdaq closed at their lowest level since march of 2020 i'm sorry, since november of 2020 for the number this we're watching the nasdaq was slightly higher yesterday, but for the month it's down 8% the real story has to be treasury yields. if you're looking, the spreads have been increasing on all of these issues the 2-year inversion, the 30-year inversion, 20-year is higher than the 30 the 10-year is higher than 20.

the 5 is higher than 10, and the 2-year is higher than all of them all of those spreads yesterday, you can see, again, kind of getting wider on the basis the 2-year is 2.11% and the 10-year crossed about 4% for the first time since 2008 on a closing basis, since 2010 on an interday basis you can see how far back you have to go to see some of these numbers if you're looking at a long-term chart of the 10-year yield how speep things have climbed, getting back to levels we haven't seen since, again, 2010 and earlier along with bonds, though, the real impact this is going to have on consumers jourks to check out the rate on the 30-year fixed mortgage rate. above 7% for the first time in 20 years and we crossed the 6% threshold two weeks ago. that's how quickly things are changing it sends people spiralling. >> that's going to translate into housing problems, there's

no doubt you ooh going see that in housing prices. >> prices will come down because people can't afford it with the higher mortgages. >> najarian is getting close to winning this bet we need to go to a mets game whoa that was fun >> that's what the market felt like that's a pretty quick readjustment. >> i'm at the big table. i actually checked and the mets are going to be in the playoffs, so that's the good news. if we do need to go to a game together, at least we get to go to a game. >> what was the bet? just remind me come to me for a second. i'll talk so you can raise your seat. >> i can't get my foot out. >> you're really stuck in there. >> i'm really stuck. at 4,000 -- and my hemorrhoid pillow's not justed right

anymore. >> there you go. >> at 4,000 it was do we go up 10% or down 10%. >> i can't look at you straight. >> up 10% or down 10%? so we got up to 43 -- what, 43.30 in that nice july-august bounce i thought i was going to win all i was going to win were some tacos. if we go and close below 3600 -- it's bad enough that i can never retire now, but i also have to go to -- that would be fun if we go i'm still hoping -- >> i'm hoping you don't lose too. we'll see. it's been pretty brutal. if you were looking to the month to date t dow is off 7.5%. the s&p is downpy 7.75%. and the nasdaq off by 8.1% by the way, the month is not over yet people may wish it would end rather quickly the futures are down again, would you stop?

misery loves company misery loves company. >> if you move your foot, it hits this thing. >> it was by the dip, sell the rip. lacy was reminding me. sell the rip a couple of other things to watch, we've got interest rates in the uk. the yield on the 10-year bench market rising 23 basis points yesterday. this all came out as the imf came up with a new tax cut plan and then the chinese jchinese yn growing. again, all of these global currency moves, these yields that are moving so randly have really thrown people into a bit of panic as you look at these -- just the rate of change on some of these things and hitting levels we haven't seen in ten years or longer on all of these issues the on shary want hit it's

lowest level since 2008. all right. senior house democrats releasing a proposal to restrict stock ownership and trading by members of congress. what a concept the president as well and vice president supreme court justices and high-ranking officials the bill would also apply to senior congressional staff but not their spouses to be in introduced to the full claimer as soon as today any vote we should point out on the measure is uncertain at this time and in addition to equities to build restrictions also covers commodities, futures, and crypto derivatives and options. officials would be allowed to hold diversified mutual funds, etfs, and mutual treasuries as well as state and local government bonds. >> look.

if you exempt spouses, it's going to raise questions about it, but at least it would deal with some of the issues people are facing >> what about -- i don't want to mention any names. i know that there are some prominent members of the house that have spouses that have been very active in the market. >> there are some of those are potentially leaving soon, so it wouldn't affect them either, so, yes. the appearance of impropriety has always been a huge question. i don't know if you can clear that up. some would raise the question is it fair to restrict your spouse if they work in that industry? there are questions that come up, and i get it, but these are people who have an awful lot of information. >> they do it's great to have information. >> but not trade on it. >> and be able to affect what's happening too. vote aye or nay. >> in the meantime white house

officials are quietly preparing for the potential departure of treasury secretary janet yellen after midterm elections. the story says the outcome of elections will tag tore into whether she stays. control of the senate will determine what kind of nominee president biden will be able to get confirmed. those are big questions too. the white house is also considering the possibility that nec director brian deese could leave as early as neck year and cea chair cecilia rouse could return to her economic post next spring i think the most interesting part is the reasons they gave. if you read between the lines, janet yellen has been reluctant to make some of the overly political remarks that the white house has wanted to put. two of them would be faulting the administration and forgiving student debt she doesn't feel nezly as

comfortable in some of the political positions. >> it's tough the economic backdrop is tough i don't know that i'd want to stay would you? i think the latest abc news/"washington post" poll says it's not going to be skewed to benefit one side or the other. >> what did it say >> it said -- what was it -- 36-57. 36 approval on -- >> the economy for the white house? >> 57 total. underwater by 21 points. that's a big number. a bad number for november too. >> it is speaking of underwater. >> yeah. new in the last hour, hurricane ian strengthening now into a category 4 as it draws closer to land fall later today. it looks like between sarasota and fort myers, florida. the hurricane has maximum sustained winds of 140 miles an hour bands of heavy rain, continuing strong wind gusts lashing parts

of florida that point t penip, the pns la and florida keys. we'll bring you updates throughout the morning. >> it's something to watch, tracking it, where it's headed, how big. i was reading something how it grew 50% overnight yeah, knowing people in the area, kind of waiting to see what happens, a storm like this hasn't hit tampa in over 100 years. >> right florida -- i rebecca meal. was in camille, i think the early '70s and then we all remember andrew when it was a horrible storm that almost wiped out a couple of suburbs of miami at the time or did wipe them out it. was unbelievable. >> it's already shut down all power in cuba.

a nationwide power outage coming through with some of these issues we're watching this very closely and hope that everyone is safe and getting out of the way with this. in the meantime the bank of england just out with an announcement that may have something to do with the move in u.s. futures the bank announced a program of making temporary purchases of long dated uk government bonds at the same time it postponed a plan to stop government bond sales until october 31st those sales had been set to begin next week. the bank saying the move was made to stabilize the markets. obviously the turmoil that's kicked off has a lot of people trying to figure out what to do next. >> happy hooechballoween. futures pointing to more losses the stock with a busy day ahead. we're go ing to talk strategy next. later this hour, roger ferguson is -- we'll see if it moves. it's not going to, is it it's just going to go like this.

roger ferguson's going to join us live at the delivering alpha conference in new york city. we've got chairs that go down, nothing in our ears, and we're stuck without moving you're watching "squawk box" on cnbc otherwise, everything's great. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

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ross tin benam ross tin bennen ross tin ben scott ladner ^ ross tin benam ross tin bennen ross tin ben scott ladner ^ ross tin benam ross tin bennen ross tin ben scott ladner welcome back, everybody. ford ceo general manager farley speaking out about the economy here's what he said last night in an interview with phil lebeau. >> the risk has gone up for a moderate recession certainly from all the indicators we've seen, certainly the inflation continues to grow. for us as a business, we see labor inflation, a lot of input costs that are going up. we're doing our best to overcome that in costs obviously, and we have a -- we have a big job to do on costs that's specific to ford anyway. our revenue is really strong right now, so it looks okay. but i think this is -- you know, the risks are increasing, given the inflationary pressures now. >> we'll hear more from phil's interview with the ford ceo. that's coming up in the 7:00 hour. let's check on the markets, the trading day now.

we have our guests now amy, i've been looking forward to your next appearance today on "squawk box" because you've summarized what's happening in derivatives and options and the vix. any positives you see in the underlying i don't know why that's my default position, but i guess everybody's asking that question any signs of a near-term bounce or stabilization from what you can tell >> well, i know you have that bet, but unfortunately the derivatives market is not quite in your favor. when we looked to the market, things have certainly woken up, joe, in terms of volatility. but i don't think we're there yet in terms of peak volatility. we've been calling for a higher pickup since the summer, and we're at a high volatility

regime at 30, but i still think there is room to go. >> i saw some articles written recently that for whatever reason, that 40 or above or even high 30s might not be necessary, that a series of days with the vix above 30 in the past has set up a tradeable bounce. any -- am i clutching at straws there, amy. >> it's interesting. i think the nick calls around the vix is very psychological. at the end of the day, a 30-year vix means the stock is moving 1.8% a day, which i think is what you're saying, versus 1.2%. the reality is history in bear markets, where does it peak? you've had peaks of 80 and peaks of 40 too. so i think what it comes down to is how much vix has caught up versus other vulnerabilities and

rates and we're not there in terms of how those have moved. >> how about, you know, breadth being unbelievably negative, sentiment, put call. anything there that's at extreme levels, or are you surprised maybe that you're actually seeing some complacency even after this pretty brutal selloff? >> yeah. it's interesting, you know, because i think the narrative during the selloff last week, look, the ratios have hit the historical highs that is technically true, but it was true on a short-term basis, not a long-term history. i think owe now as well as anyone you can gain the data by pulling the chart back on a longer dated history. a lot of them look at i. you look at the demand for hedges they're still not that historically high. they're sitting in the bottom

core pile, and we're entering the environment. when you look at volatility across different rate cycle, there's a lot of room where they end up going that being said, i think they have returned to so much of the market, which has helped because there's been situations where one or two extremely large trades are moving the market during low volume in a volume that we'll see less of bear market volume returning to the market. >> are you still with us, gabriella, or did you leave and you're saying sell everything on the phone somewhere? what does this make you inclined to do, gabriella, or do you agree? >> i think strategically there's a lot of room for optimism we've seen a significant repricing. there's now income and fixed income there are now more discounted valuations on the equity side and the currency side. so we're very optimistic about longer term returns coming into the year the macro picture was positive,

but the return picture wasn't. we were saying expect only 4% annualized returns now if you look over the next decade we're expecting 6% plus annualized returns, but the trick is more on the tactical positioning. we still think it's too early to add risk, wholesale. we would be underweight equities, high weight credit because we still don't see day-to-day signs of stabilization. in the bond market, in the effects market, and hence in the equity market. so we're being careful about how we take risks and exactly where we take risks. >> the -- when you're long term, i guess when you're right about the eventual direction you can bail out do you think about recapitulation, gabriella? do you think about the big move down which all the analysts want

now. would that be a time when you would really go to less cash or do you sormt of, i don't know, stay calm, and when you see opportunities, you do it do you look for a big capitulation at some point >> so we are looking for signs that really we have the worst already priced in and positioned for in portfolios. we don't think we're quite there yet. i think ultimately the big questions that investors are wrestling with right now is we've moved away from an era of negative real rates to an era of positive real rates this 160 positive real rate we have right now is not a fluke it's something that's here to stay it leads to two questions. what is the appropriate risk premium investors should demand for. long dated bond yields and effects in credit, equities, it's different than what it was over the past decade it also leads to questions about the elevated recession

probabilities. we still don't think the bond market has stabilized. we've seen a lot of big moves on a day-to-day basis for example, we still see very low appetite for bonds, even a yield at 15-year highs we had a five-year auction yes we look for stability and demand coming back to the bond market for the equity market, all signs of capitulation would be being further along in the downgrade of earnings expectations in 2023, and we think we're really just at the beginning of that in terms of pricing in lower demand, higher cost pressures, higher dollar, as well as higher corporate tax rates next year. >> all right, gabriella. thank you. actually the dow is indicating a positive open. we'll see how long that lasts. yesterday looked a little better early on, only to succumb as the day went on. if you're listening on the

radio, global market strategist at jpmorgan strategy asset amendment amy wu head of it at rbc. thank you, amy and gabriella. >> the story of carrying out the purchases, the long-term treasuries is really important 're going to get a chance to talk to roger ferguson coming up. >> i saw roger. >> me, too, in the green room ahead of time. >> i was needling him a little bit. >> shocking. >> i get my chance i'm so nice in front of the camera when i get a chance to react to how i really feel -- >> anyway -- >> roger's a good company man. ky never get him to say what i want him to. >> you can't plant words in his mouth? >> yeah. go figure. >> he's not your puppet. when we return, gm's back-to-work office plan aerft

employee backlash. we have roger ferguson stick around "squawk box" will be right back. ♪ ♪ ♪ ♪ introducing ihg one rewards. seventeen hotel brands. six thousand global destinations. one loyalty program that lets you guest how you guest.

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> . welcome back, everybody. the futures are on the move. we went down, this time in flat territory. we've seen positive note whence you look at the dow futures, right now up by about 6. all of this happening because of news from the bank of england that broke at the top of the hour this was a fast move you saw things push up very quickly. chi karen tso joins us right now with the developments from london karen, good morning. >> good morning, becky the bank of england sliding off. there has been a lot of chatter swirling about the top of intervention we may see from the bank of england if anything. at this point we've seen fairly dramatic action. let me spell it out for you. the bank offen glaend sand it will by as many long-dated

government bonds a required between now and october. this is the window as it looks to stabilize financial markets it's added it would postpone next week's start of the sales program. this is the beginning of qt. that has been kicked off into the longer grass as it's tried to intervene in markets. it reminds me of the financial crisis you talked about some of the words used by the central bank like dysfunction there would be a material risk to uk financial stability according to the bank of england. we talk about dysfunction and stability very much to financial crisis language. this would lead to an unwarranted tightening of it and reduck to the flow of credit the bank of england says its purchases are designed to restore orderly market conditions it will carry it out to affect the income that's important as we talk about intervention by the banks. there are concerns if it did intervene, would it be a drop in

the ocean? would they lose a battle against markets? and they have lined up against uk assets in recent days so dramatic language by the central bank here. in terms of the yield, take a look at the market reaction. the 30-year government bond yields had climbed above 5% since 2002 there's been a pull back of sorts, by about 20 percentage basis points in some of the longer dated yields. so there has been yield based on this intervention. and the bank of england still saying it will keep its goal to reduce its 838 billion pound of holdings over the next year despite the qt program and it's a limited time window. it's not talking about ongoing intervention window. already there's a reaction by some saying this could be just the beginning. so they're questioning that window already first up. the other point is that we just

have jaw-boning on interest rates a that point the mpc says that they will not hesitate to change interest rates as much as needed to return inflation to the 2% target sustainably in the medium turn that's fast fating because we ontario had a 50-points basis move by the central bank it was not the 50 percentage points anticipated many would say it would be tone-deaf if we didn't get 75 basis points we importantly had the intervention on the interest rate out of cycles some of that's possibly why we're not seeing as much impact on the pound. becky, back to you >> karen, thank you very much. this is a pretty significant move here. >> is it good for us it makes the dollar potentially stronger they're blinking a little bit. >> they're blinking in a big way. >> we were hoping yesterday some of the comments from charlie evans where he said i hope we can avoid a hard landing still meant that maybe the fed doesn't necessarily need to go three or

four more 75 basis points, but they -- already? they're already not going to -- >> look at the moves this is done to restore orderly market conditions. when you're seeing moves 3062 basis points >> they're going to get inflation to 2%? how is this something that allows to get -- >> they're trying to walk a fine line with this they're saying it's a limited window those are contradictory statements that are out there. they're trying to dip their toe. they're trying to do roy hank paulson says you don't have to use a bazooka. just have it in your pocket. >> it make our move to have this firm resolve and tightening, once again they move too slowly. >> move too slowly, but they're always dealing with the second huge crisis, which the the natural gas prices they're so much more expensive.

>> remember the guy who broke the british pound back in the '90s >> soros. >> stan druckenmiller. >> it's an amazing day. >> fortunately we get a chance to talk to mohammed ed el erian. you're sitting in the uk watching this play out what joe said, you know, they're blinking, but what does this do? what are the effects we haven't maybe thought through yet? >> thank you i'm in the uk. this is amazing this is a country that over the last six days has experienced disorderly moves in the currency and bond yields, the lot of confidence and policy making. now there's an intervention an warning. it only happens in an

undeveloped country, not a g7 economy. this is historic the u.s. is a safe hechen, so this does not mean the u.s. will go through this, but it means that the u.s. is having to navigate through this. in the short term, the u.s. will benefit from this, but it comes at a time when the strong dollar and others will kwleeld, so it's not a good combination, becky. >> what does this mean they had the expectation the markets would take this. the markets did not. now what >> so what it should mean is she should keep the two elements of the package that everybody welcomes or almost everybody, which is structure reform, more economic growth. and the stabilization of energy prices and she says we think the timing

of these unfunded tax cuts, it's that third element that has completely undermined the first two, and that is basically going against the objectives of the government now, doing that is really hard, and if they don't do that, the bank of england's going to be forced into the next intervention, which will be an emergency ratemohamed, what is t world? is it where the central banks are synchronized and they tell each other roy they're ready to do do you think this was a surprise to the fed here, and is it -- i've seen two takes already on twitter. one is finally someone's doing the responsible thing in terms of data depen den sichl and then i've seen another that said, well, now we know how firm their resolve was over in the uk they have feet of clay i mean how do we view it long term do we want the world central

bankers synchronized and tightening the conquer inflation or do we want people to g their own way based on their own currency, their own circles? >> first of all, this has nothing to do with data dependency today it would have meant a more hawkish bank, not one that puts things in liquidity. the numbers that came out in the uk show that prices agts the supermarket, inflation is going up this is responding to the market malfunction. it goes counter to what they need to do for inflation so it highlights the inconsistency of monetary policy look, joe, you and i have always warned the longer you stay in this la-la land, flowing

dislocated markets, funny interventions, distorted allocation, the longer you stay in, the harder the exit. what we're seeing is the exit is really complicated. >> mohamed, i guess the data i was talking about was the pound and equity markets around the world. so that's more of a fed put data and obviously that's not what central bankers should respond to but the -- you see what i'm saying i'm not talking about the inflation data. >> yeah, yeah, i understand. >> i'm talking about the effect the tightening is having do you think the fed should take into account what's happening? 7% mortgage rates? i mean maybe they need to look around. >> well, if they're worrying about the mortgage rate, it's because they're worried about the economy. what they cannot do because of inflation is provide in the money put, they just cut those days are gone. i think all of us have to

recognize we're going through a major paradigm shift in financial conditions central banks have to step back. they overdid -- they overdid it. they were late in recognizing what they had triggered, around now they need to step back the problem with step back is very risky the last thing the fed wants is to find themselves in this major inconsistency that the bank of england now finds themselves in. it was about to do qt. it announced it would height more aggressively on november 3rd and now it's injecting liquidity. >> do you think it's a simple enough fix if they actually got rid of the third part you were talk about, the unfunded tax cuts, that that would apiece markets and not require intervention like this >> i think it would help, but politically, becky, it's very difficult. this is a new government and to come within a week and say we made a major mistake, but

yesterday -- >> the market's already kind of telling us that. >> yeah. it's very hard -- but it's not enough to stabilize the situation. you have to reverse it we saw announcements today of a rapid decline in the availability of mortgages. so it's not just that the price of your mortgage has gone up by 25%. you're paying 25% more every month. if you're getting a new mortgage t availability of mortgages has contracted. >> mohamed, you know the drop-in-the-ocean analogy, if this doesn't work -- a lot of times you're not willing to step up with the finances you'd actually need to expend to do what you want to do. do you think this is going to work, and if it doesn't work, then you're even in worse shape, aren't you >> yeah. and already people, as you discussed before i came on, are looking at this as temporary

what do you mean by temporary, okay so yes it is hard you don't want to be in this situation. unfortunately the bank of england has found itself in that situation because of what happened on friday in terms of fiscal policy. >> right well, you were counting your chickens earlier today with the s&p because it looked like it was going to go below 3600 you were probably checking out, what, the scheduled playoff games with the mets and when you're going to be back in the states is that what you were doing earlier? >> first of all, i wasn't checking second, it's not that i want to win, but i'm glad you're checking for me, joe i appreciate it. >> you're checking the mets, not the jets, right? >> i've got the jets.

the market is saying it's a huge mistake whether she wants to admit it or not. >> i suspect she does, but it's a very weakened new government. mohamed el erian thank you very much for calling in as we continue to watch this news. when we come back, hurricane ian upgraded to a category 4 storm as residents iflidn ora brace for a direct hit we've got more at this break

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still to come this morning we have much more today on the breaking news from the bang of england. we're going to be getting action from former fed chair roger ferguson that's next. in the meantime we've been watching the futures it's come down pretty significantly. we were talking about the dow futures at 6:00 a.m. immediately the futures shot

down the dow futures down by 14, the s&p down by 7, the nasdaq by 66. "squawk box" will be right back live from the delivering alpha conference in new york city.

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it's part of our heritage. and it's the foundation for our future. pursue active investment strategies at federatedhermesinc.com the bank of england out with an announcement that has a huge bit to do with the u.s. futures today, in fact, every bit of it. the bank of england announcing a program what they call making temporary purchases of long-term government bonds at the same time they've decided to postpone bond sales until october 31st they say the move was made to stabilize markets, and they also say they'll be carrying them out on whatever scale is necessary although, there are a lot of conflicting things they said in this release joining us is roger ferguson

he's the former president and cio of tiaa, and a cnbc contributor. roger, this is the perfect day to have you here to explain to us what this means, why this is happening, and what comes next we did see the futures we didn't expect to hear from them until november. >> exactly right i think what happened there was a budget that was large tax cuts, unfunded, and that led to the obvious presumption that the uk government has to go into the markets and issue a huge amount of debt. that clearly roiled markets and i think what you saw today was the bank of england stepping in a financial stability rational saying they wanted to keep markets under control and get control of interest rates. and so that's really important the other thing to recognize is there was a concern that a number of pension funds and others might have to sell bonds, which would have created even more of an effect.

so it was really important from a financial stability rational that i think the government has recognized that. >> why would the pension funds have to sell. >> i think there was a general concern about how many more losses they would have to take if there was a massive issuance of new guilts and so part of this was i think to hold on to or avoid future losses in terms of capital gains. >> this is a huge issue for the uk government. we were speaking with mohamed el erian who thinks they need to step back on this proposal >> that makes sense to me. the market says they lost confidence in this new incoming government the prime minister has been prime minister for less than a week they come out with a very dramatic swing in policy and the markets said, no, we don't like it, and we're not going to be there to fund it. >> isn't a tax cut, it's the opposite of spending money and it's sptimulative and they're

trying to dampen demand and it goes against the whole notion of what the bank of england is trying to do, doesn't it it's counterproductive -- >> it absolutely is, joe it created a great deal of uncertainty of who was in charge, what the overall policy was, the other thing was, we saw a dramatic drop in the value of the pound which creates more inflationary pressures it was a double-edge sword -- >> this is the point i was going to make, the supply siders would say we shouldn't be crushing demand, we should be increasing supply by cutting taxes and getting rid of regulation and that way the private sector does better but that's the -- that's what happens. that's stimulative too so you're handcuffed central bankers have a difficult task ahead. >> central bankers have a difficult task ahead bob ruben talked about the value

or the impact of fixed income markets and you see it here yet again. when fixed income investors lose confidence, it drives huge response because it affects interest rates in a way that central banks may or may not control and i think that's a little bit of the dynamic and so the financial stability side of the bank of england came to play here in a very dramatic move >> i mean, it's similar to what we see here, not on the same scale. but when you have fiscal spending that's taking place, whether that be $400 billion for canceling student debt, we've got some of the issues playing out here do we need to be concerned about that do you have to have the fiscal authorities moving in the same direction that the federal reserve is. >> you don't have to have them moving in the same direction but you have to have orderly markets. i think this is quite different in that the fed has been clear about what it's going to do. they're leaning against, you know, some fiscal stimulus for

sure, but in a way that the markets are now totally aligned with the fed because they've communicated clearly what happened in the uk was markets that became quite concerned and moved away from supporting the government policy and so i think the story in the uk is unique to the uk, but it's not necessarily a repeat of our story in any sense and the other issue is we have this financial stability overlay and that's what's driving -- >> you're showing your hand there. you think that spending over here fiscally is okay, but tax cuts -- i think they're -- if you really wanted to help central bankers, you would do -- wouldn't you do tax hikes which dampens demand and you -- that would also -- i don't know -- allay some of the fears ability some of the deficits so you do unstimulative things like tax hikes rather than tax cuts and no fiscal spending, you cut back on some of the stuff. >> let me be clear, i don't

disagree with you in the abstract i think what's going on here is the difference in magnitude is dramatic -- >> clearly we're watching yields go up significantly. i'm not saying we're in the same position of the uk it's watches the fits in the market over what happens here. you can kind of see, this is a difficult position and politicians are not going to want to continue to be as probably harsh as they need to be as the federal reserve chairman, jay powell, is saying he's going to be to try to attack inflation when you're facing a re-election, it's a lot tougher to do that. >> i fully agree with you. one of the reasons we have an independent central bank is exactly to your point. when it comes time to take away the punch bowl, guess who does that the central banks do it. so we have -- central banks showing actions on both sides -- many sides of their mandate right now. in the uk it's all about

financial stability, calming markets, avoiding volatility -- >> they're not taking the bunch bowl away. >> because they have to deal with the orderly markets here in the u.s. we have a different problem which is we need to get inflation under control and the fed is going to move agrgressively to do that an they are going to be criticized by everybody but that's why we have an independent central bank. >> would you concede that the fed got everybody absolutely hammered with like -- grain alcohol for days and days and days before they decided to remove the punch bowl. barely get off the ground, i think, right >> i would absolutely concede and the fed has conceded that they probably moved too late in the space. >> powerful punch. >> they got themselves very committed to this notion that inflation is transitory which proved to be inaccurate. i would admit that my former

colleagues and hopefully still friends at the fed made some mistakes there are many voices saying, maybe they overstayed their welcome. >> roger, we never have enough time with you. i'm grateful to have you here today and it's wonderful to see you in person. >> thank you >> coming up, lots more from the delivering alpha conference. big panels including mine later this morning with stan druckenmiller. "squawk box" will be right back. >> announcer: delivering alpha is sponsored by parametric

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breaking market news, the futures surging off session lows after the boe announces it's buying uk government bonds we'll show you what's moving now. markets have been keying on fed speak and there's a lot more of it coming. rockefeller capital management ceo greg fleming will join us live to talk about the market's next move and the fed's inflation fight. hurricane ian has strengthened to a category four as residents brace for a direct hit. we have an update on its path. the second hour of "squawk box" begins right now. ♪

good morning and welcome back to "squawk box. we're livie at delivering alpha and we're discussing the issues that matter most to your money and we're in a new venue did you know this place was here >> not until recently. >> it's right across -- just down from the intrepid and there's a big cruise ship where everybody is trapped on there. they can't get off because -- >> covid >> that's not true don't you look at a cruise ship and say, i'm not going to step off that thing because i'm never gets off it. we're going to show it, i think. that's a big -- we're going to need a bigger boat but that is a big boat right across from us, right out the window, if we turn around,

and sts it's a very cool space it's a 21st century space. we used to be at the pierre. now we're happening. >> now we're at new money. >> can you believe i didn't know about a happening spot in new york city? it's hard to believe i didn't know it was here. >> it is pretty. >> given the state of the markets and the economy, it's never been more vital to hear from some of the biggest names in business. and this hour we're going to speak to rockefeller capital management president and ceo greg fleming about the markets, the risk of recession, the impact of inflation and so much more and then longtime activist short seller carson block is going to join us to talk about esg investing and the fed. you'll want to stick around for that and then throughout the day we're going to bring you highlights from the delivering alpha conference, including becky's panel and my panel with

stanley druckenmiller. is it a panel? it's just the two of us, i think. >> it's more of an interview i wouldn't put you on the same level of stanley druckenmiller. >> he's much older. >> wiser >> maybe a little bit wiser. let's get a check on the markets. as we mentioned, the u.s. equity futures have been showing some improvement. they're still down by 45 points right now. but at 6:00 a.m. before we got the bank of england announcement, you were talking about the futures off by 280 points right now, the dow futures off by 45. the s&p futures down by 13 the nasdaq down by 96. of course this comes a day after the dow and the s&p both hit their lowest levels since november of 2020 the losses really starting to pick up. the month to date, you're not talking about the dow even before these losses this morning, off by 7.5% the s&p down by 7.75% and the

nasdaq down by 8.1%. yesterday, we saw the ten-year close above 4% for the first time since 2008. this morning, it's just below that but, again, the complex, the entire treasury complex, we've seen yields that have been higher and higher. the two-year is getting back to levels of around -- if we showed it this morning, i think it's 4.2 and change just watching again the spreads get even wider as we go through some of the issues 4.125% s oil prices have come down. it's the worst month we've seen since november of 2021 today you're going to be looking at wti up a little bit to $78.85 and then crypto prices i believe i saw bitcoin back above 20,000. >> above 19. is it above 20 now >> let's take a look no, it's back below 19 at this

point. 18,939 >> symtock futures off the earlr lows the bank of england postponed planned guilt sales until october 31st they had been scheduled to begin next week. the bank said it would purchase bonds as long as necessary that move perhaps revising some hopes for a fed pivot and an easing of plans to keep raising interest rates. >> can you see i've got some turf behind me in this shot here >> i do. i see it right behind you. >> if you stop by here, bring -- maybe we can practice a little chipping i need help. i'm trying left hand low have you ever tried that >> i have tried that i feel like i don't have as much distance on greens -- >> it doesn't work

one arm doesn't work >> the other thing i would say, i unlock putters let's get through the market impacts right now. the headlines you mentioned with the bank of england and that kind of almost new iteration of quantitative easing, it kind of runs against maybe some of the inflation themes that they're trying to fight right now. anyway, if you show the intraday chart of the ten-year guilt yield, this is kind of when you saw the announcement come out. you saw that bond buying from the bank of england. if there's a structural buyer of that size in the marketplace, it does raise the prices of those uk government bonds, lowering the yield. so that has been the direct implication there. if you take a look at some of the moves within the currency side of things, there is this sense among some traders -- and this is what they're talking about -- there was some intraday volatility and a lot of that has to do with positioning of order books in the foreign currency markets right now around banks and whatnot. we saw a big spike, a fall and

we're moving lower again the idea here is if there's any kind of stability to the british pound given the announcement that we saw, that may or may not be a good sign of things to come over the last year, record lows for the british pound against the u.s. dollar. keeping an eye on whether or not those headlines from the bank of england will provide any kind of stability. it seems as though for now we're holding. we'll keep a close eye on that also the implications around the world for other treasury markets and other interest rates markets and other kind of global bond markets with regard to sovereign bonds. the ten-year note yield still trying to find area here just around 3.94% will there be any kind of ruippl effects on sovereign bonds and the stock market implications, there are some headlines in the market that are driving some of the more bellwether type stocks out

there. apple is down 4% on the report of them reducing down production for the iphone 14 coming out so that report sending the stock down microsoft, jp morgan, bank of america, some of the stocks in terms of economic sensitivity are all down in the premarket trade. becky, i'll send things over to you. >> thank you very much. we have news this morning on the mortgage front we want to get over to diana olick. good morning. >> good morning. the big news yesterday was that the 30-year fixed crossed 7% these numbers are from last week rates did move higher still but not quite as high as they are right now. still, refinanced demand dropped to the lowest level in 22 year's years. down 84% than the same week one year ago why? because the average rate on the

mba's survey with loans with conforming balances increased and that's for loans with 20% down that's the highest level since mid 2008 mortgage applications to buy a home fell 0.4% and were 29% lower than the same week one year ago potential buyers are contending with high prices although the annual price gains are now shrinking at a record pace due to the recent adjustment of rates. arms offer lower interest rates and can be fixed up to ten years. this week, we crossed into a new number that is over 7%. becky? >> all right, diana, thank you very much. 7% just two weeks after we crossed 6% obviously shaking things up. when we come back this morning, making since of the markets and

putting money to work in this volatile trading environment greg fleming will be joining us right after this break to talk about that and the bank of england's move to try and delay bond sales, launch a temporary purchase of long-dated bonds a lot of things they had to do, they said, to restore orderly market conditions. as we head to a broke, though, check out this morning's leaders and laggards in the dow. "squawk box" will be right back. we're live from cnbc's delivering alpha summit.

breaking market news this morning, the bank of england intervening in the bond market after a massive sell-off we're joined live from outside the boe in london. >> good morning, becky certainly seeing a contrasting view just last week, the bank of england noted and said that they would do anything possible to kind of intervene in the market to get a sense of stability and where things might lie

deciding to get into the yield market, deciding to try and find a way to stabilize, that's exactly the wording from the bank of england, in order to ensure that the guilt market begins to stabilize, the market turmoil that we've seen has followed on from just last week. the uk finance minister putting out a growth budget, unfunded tax cuts of $45 billion and $60 billion proposal then, of course, for those energy price guarantees it's said to cost around 60 billion pounds for now and could go further from there. but this intervention into the market is said to stabilize things it gives a sense now that the boe are going to then ensure that they do whatever is necessary, whether it be hiking interest rates a little bit further onto ensure that the instability and the market and to get inflation back to around 2% that's the primary aim and that's what they will be following on from this point that market move has ensured

that the pound sterling or the pound dollar, i should say, which has gone to those lows continues then to get some sort of strength. but whether has happened for the long term will be seen in the market joe? >> thank you appreciate that. joining us now, greg fleming, president and ceo of rockefeller capital management and you were tuned in we appreciate that and we were talking about something that's glaringly obvious and that is the disconnect between central banks and maybe the fiscal policies of their respective countries if you're doing tax cuts over in england and then all of a sudden you're not going to do qt, you're going to do what almost looks like quasi qe, all of these things -- you're pulling in different directions. tax cuts are stimulative you're trying to hold inflation down buying back bonds just gets you back into being feckless, opportunity it

>> it does as we were talking about it, we have some of it here the fed has been clear and the rhetoric has been as direct as anything the three of us have heard in the careers with powell now saying there's going to be pain in order to get past this but here we've had fiscal policy with continued spend in different areas. when monetary and fiscal policy gets out of whack and in the uk now, it's problematic, you have actions like today where you have the bank of england trying to step in and stabilize against the backdrop of fiscal policy that frankly shocked the markets and the world. >> i'll make one point and that is, if the fed and the fiscal authorities were siynchronized, we wouldn't have this situation. what did we spend?

we spent i think $7 trillion in the last -- if you include this year -- >> if you add in this country the monetary and the fiscal stimulus, that's what's going on right now. the fed is actually starting to unwind the greatest stimulus that we've seen in our lives and are likely to ever seen given the size of the numbers and they know that they have to stick with this mission now. in fact, when this is done and when the fed gets through the rate rise cycle and gets inflation under control and we look back in 25 or 26 at the time frame from 20 to 25, let's say, you're going to see things get evened out we've pulled growth forward with all of that spending and they know that they've got to pull it in now and get it back on the glide path that the economy needs on a long-term basis. >> i wonder when you look at the bank of england, they're trying to say all these things that seems contradictory. they're doing this because -- it

will be carried out on whatever scale is necessary however they're saying they're going to limit the time frame so they're just doing it between now and october 14th, they're going to be spending more, to be buying these gilts but they're planning on the pullback on their balance sheet. which side do you believe? >> they're trying to thread something that's really, really difficult. they're trying to stabilize markets, they're saying we're going to do what we need to in the near term. when we get that set, we're going to go back to where we were it's hard to do that with the fiscal side of the equation, where it is over there. >> can it be counterproductive for people to see initially the markets rallied and they're doing -- and then you realize, this is a drop in the ocean. probably not going to work and it just shows, almost seems to indicate a bit of panic in terms of their ability to stay in a tightening mode over at the uk. >> i mean, the central bank, they're here as the entity that

everybody looks to when things really start to feel uneasy and you certainly have that in the uk now they feel compelled to step in and stabilize and have markets settle down. they're trying to thread something given that fiscal is out of step and really was -- becky was saying this, what happened over there was consistent with some of the things there but it was out of scale. and it was shocking and quick. we need to step in and stabilize this and they're running the other way from fiscal. so that's where as becky said, they're going to do one thing for a month and come back. it's hard to do. >> i guess the question would be, what are the market implications what would you do as an investor when you're looking at these global markets which do you believe and which do you not in terms of the snackback snapback potential. >> the fed is quite clear in the u.s., strong dollar attracts capital, but we're consistent

with where we're going here. and powell is not hedging his language anymore we've gone from being very careful, soft landing to, there's going to be pain and if there is pain we're going to have to experience it to get this back on track the dollar continues to strengthen because around the world people look at the u.s. and say this is the best bet that's out there from a ma macroe macroeconomic standpoint. >> if the fed were to give us the slightest bit of a blink or the possibility that they're data-dependent and they understand that a hard landing isn't something that we're all looking forward to, would that be bad for the markets >> i think he should stay with where he is now, joe >> you do? >> he's getting what he wants. look of the markets that have cracked from spacs, crypto has had a lot taken out of it, equities are struggling now. he wants some of this. it's pulling demand out and it's doing part of what he needs done i think you're not going to see -- i think now that they've

gotten to where they are in the 3% range, i think it's unlikely they continue with 75 basis point. they probably start to pare it back a little. i think the rhetoric will keep going and i think he gets to 4 1/2, 5%. we did an analysis at rockefeller that looked at the last 40 years. since 1970, every time the fed started to raise rates, they didn't stop until the fed funds rate was higher thancpi. so we've got 8.2, 8.3 now. >> 4.5% is higher than a lot of people are anticipating. >> but you probably have to get there -- >> don't use -- >> the analysis is cpi so, you know, joe, it's probably 4 1/2, 5. >> we can't do cpi -- do the core -- don't say that. >> history says they're going to

have to keep going until the lines cross. >> does that get you to the jason furman analysis for thinking 6 1/2 unemployment for two years? >> that seems high to me but jason was the one who stepped in on the fiscal side and said on the student loan, it was like pouring gasoline on the fire, which is similar to what we're doing in the uk. >> that is kind of surprising. he probably wouldn't like it that you said it's surprising. >> you have democrat, democrat he was quite clear >> i understand. >> i give him credit for saying that. >> i do too. thanks, greg great to see you. >> nice to be back here. when we come back, carson block of muddy waters research will join us in just a little bit on his read on the markets and the fed. "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. what year did ikea open its first store in the united

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today the u.s. is the company's second largest market behind germany. now hurricane ian has been upgraded to a category four. earlier this morning sustained winds now measured at 155 miles per hour just shy of a category five classification florida residents are bracing for floods, high winds and a storm surge. c contessa brewers joins us now. good morning >> good morning to you, joe. the florida insurance market is already in meltdown because it's a losing proposition even before the storm makes landfall, property insurers lost more than a billion dollars for each of the last two years with underwriting losses back to 2017 dozens of florida insurers are facing ratings downgrades and they may not have enough money

to sprespond to a major catastrophe. 15 insurers have left the state. property owners are skacramblin to find coverage citizens policies have doubled the last five years. it represents 10% of the market. now here's the market share of the top insurers in florida, according to am best progressive, by the way, rounds out the top five reinsurance costs are soaring. that's insurance for insurers. it's as much as a 50% increase and auto insurers are facing tough times as well. more traffic crashes plus higher costs to repair or replace cars. and the premiums just aren't keeping up in florida, berkshire hathaway, progressive and state farm are the three largest carriers there. they're bracing for the storm.

on the commercial side, it's progressive and auto owners. census numbers show three quarters of floridians live in coastal counties it includes aig and assurant all of them will be watching closely to see how this storm comes in and how much they have to pay out before reinsurance kicks in, joe. >> the coasts -- there's very few empty parts of the coast but there are, obviously, places where we hope that makes landfall versus other places fingers still crossed. thank you for that report. carson block is going to join us live from where we are, the delivering alpha conference to talk esg investing, the fed and his read on the markets.

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♪ the stock index futures are well off their earlier lows. you're now looking at the dow down by about 36 before the bank of england spoke earlier this morning, you were talking about down 280 or so so we have seen quite a few of improvement. s&p off by 12, the nasdaq off by 93 just after 6:00 a.m. eastern time, the bank of england said it would make temporary purchases of long-term uk bonds in order to try to stabilize the markets. you've seen yields there for the ten year gilt move above 5% and do that in a quick succession. it's happened after friday the bank of england postponing planned gilt sales until october 31st the bank saying that it would purchase bonds as long as necessary. that move perhaps reviving hopes for a fed pivot and ease plans of rising interest rates but they're saying they're going

to do this for as long as necessary but they're putting time constraints between now and october 14th some questions in the market about this but you have seen the yield on the ten-year gilt come down significantly with that. joining us right now to talk about this and much more is carson block of muddy waters research the thing i want to talk to you about is how it is being a short seller these days? we have seen so many changes, so much activity, people going after shorts what's it like trying to find positions that you can short these days >> it's not hard to find companies that have problems but you do mention that the environment is -- it's somewhat toxic towards short sellers. ever since covid when you've had a lot of retail into the market, just the amount of vitriol that does get directed toward the short side, it's new i've gotten death threats since day one, but i feel like i get a lot more now and they're on twitter in many cases. that's somewhat new. but in terms of the environment

for finding problematic companies, yeah, i mean, there are lots of them and now these thesis are -- it's somewhat easier to realize them and they have to be more averse to risk than they used to be. >> you're talking about in the last month or two, it's gotten easier to find some places where stock prices are going to come down more rapidly because before you had stocks that would hang in there and retail investors who would prop them up even if they didn't like what they saw. >> the turning point was the meme stock craze after the meme stocks, around february or march of '21, it became a lot easier. after meme stocks, nobody in my little industry of activist short selling went out publicly on a company until a firm called hindenburg research was was in february or march of '21 on clover health which, by the way, has been a fantastic short and instead of that stock getting pushed up to the moon after they spoke, it actually

behaved normally so that showed the rest of us that, okay, maybe the waters are okay, we did a company called excel fleet in march of '21 and so there are these paroxysms where these low-quality companies just -- where they jump, but those seem to be short-lived. it's been a good environment, ironically, for us since the meme stock craze. >> where are you looking these days i know crypto is an area that you've thought is potentially rife with people who are trying to make a fast buck. >> right so crypto is -- we've been short a few crypto names in the past these are crypto miners. i don't spend my time looking at dogecoin versus bitcoin. that's pretty much irrelevant to me when you have a lot of money flow into a space, you know that you're going to get scammers and people trying to take advantage of that. so we're generally not thematic.

but when i look back on the past year and a half, a lot of our work has been in the green tech space or really these fake esg companies because there's so much money that has been thrown at trying to save the world through public companies that so many of these companies -- trying to save the -- >> a fake esg? is there real esg? >> well, esg -- >> he didn't say yes. >> look, i would like to save the world, okay? i believe that we do have problems however, these companies that i've seen are not the ones who are going to save us many of these are money grabs dressed up in -- >> no! >> -- green and so when i look at the companies we've shorted, xl fleet, sun run and armstrong, these are all companies that are grifting in their own way and

when you get into the solar space like sun run, i mean, they're grifting the u.s. government by inflating the basis for their tax subsidies. so they're screwing the u.s. government, they're screwing investors by basically creating this illusion of a lot of value at the end of the rainbow. as rates have done this, i think sun run is discounting these 25-yearlong assets by, what, 5%. it's completely disingenuous there's so much fraud -- fraught in this space that needs to unwind they say you're wrong and you don't -- they always say you don't understand our business. this goes back to these chinese frauds that we started shorting in 2010. you don't understand our business well, when your real business is being a public company, we understand it pretty well. >> the esg funds have already underperformed what happens when the actual --

air comes out of -- what you're describing now, they're going to underperform even more miserably. will they go away? >> you know what's funny, some people will pound the table and tell you that esg funds have outperformed there was an op-ed written by one of your competitors arguing that ron desantis is wrong because esg funds always outperform and they cited a few esg index funds. and i went in and looked at these indices and the top 15 companies are the exact same as the top 15 in the s&p 500. the weightings are different, but the fees are two-thirds higher than on s&p spdrs this cannot be real esg. j&j is one of the top holdings what's the theory there? if your company is so big that one division does something

horrible that we can overlook it because you've got all these other divisions that don't seem to be giving people cancer is that what gives you a high esg score. >> it's never going to outlive when europe freezes this winter. there's no way around the effects of that entire movement on the -- where we are right now in terms of an energy -- there's a crisis it's called an energy crisis. >> and the tragedy is, we have not invested in nuclear, been shutting down nuclear plants that's the tragedy -- >> can esg invest in nuclear how do you decide? true esg would have nuclear right at the top of tof the lis. if you're a fiduciary and hydrocarbon companies are dirt cheat, to maximum returns for retirees and other people in your fund, that's where you need to be. it's counterproductive to consider a lot of that stuff. >> well, also, let's be totally

blunt here, esg, nobody cares about the "g." i'm not even sure anybody cares about the "s." it's always been about the "e" because that's really sexy there's a great narrative that you can sell to investors, whether it's individual investors in the market or your fund investors. >> i know you're going to talk about china today, some areas in this china where you see some of this fraud >> we only have 20 minutes on the panel. there's a lot to cover china, the big news recently is about that pcaob agreement recently and, you know, the question is, is this just a delaying tactic or will they cooperate? but i think that there are issues that nobody has addressed. it's not clear that tgives them the authority to say, provide us the papers and the bottom line is, this

isn't going to stop fraud in china. fraud in china among u.s.-listed companies is endemic it's not as -- it's not as egregious in individual cases as it used to be, but it's still there. this doesn't fix that. >> you said at the beginning that you get more death threats now, there's a lot more vitriol. have you thought about getting out of the short-selling business >> to you have -- you have to think about these things from time to time but, you know, when i've gone through that exercise -- the first time i really went through that exercise was in 2017 and i just came to the conclusion that i would be right back doing what i'm doing right now, just potentially without my team to support me it's what i love to do at the end of the day i mean, it is what it is it's not the easiest way to have an investment business but it can be really hard. it's what i love to do i'm here >> carson, we're grateful that you're here.

it's great to see you today and we look forward to your panel later today. we're going to talk more about treasury moves and what we're seeing bank of england. and then in the next hour, the commissioner of the cftc is going to join us live to talk bitcoin, crypto regulation don't forget, you get the -- you get the best of "squawk box" in our daily podcast. follow us on your favorite podcast app. it's audio only, this particular one. >> as opposed to the other podcasts. >> we'll be right back

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♪ welcome back to "squawk box. some mornings i wonder whether the sun will come up but it did just come up in a window which is right here at the -- but the futures, will it ever come up again right now down 121 points. we were down more than 200 bank of england made that move we were up 70 or so speaking of the dow right now. but everything turned positive, all three, but now we're back

down this was -- you know, there's the dow as you can see but this news, you know, everything else notwithstanding, you have to -- this has to cheer you to some extent check out the shares of biogen they're surging today. after a study showed that its experimental treatment for alzheimer's dramatically slowed the professgression of the dise. rival drugmakers including eli lilly also moving on the news. a lot of different ideas about how to deal with alzheimer's, what the root cause is, what's a cause, what's a symptom -- >> plaque. clearing out the plaque seemed to make a difference in this study. >> we don't know whether that was the result or the cause. it's very difficult epidemiology of alzheimer's one thing we do know is that

there's an aging population and it could become a -- just a heartbreaking thing for families and also something that would be very, very costly. >> and at this point medicare would not pay for some of it this new study would probably make it much more likely for them to pay for some things because alzheimer's is very expensive. if you can find a drug, you could save -- you could save this population. in the meantime, ford unveiling it's next generation superduty truck amid supply chain challenges phil lebeau joins us now. >> good morning. we've got on our first glimpse at the new superduty when ford unveiled it's an important vehicle for ford 35% of the f series sales are superduty trucks it generates 10% of ford's

revenue every year this comes just a week after ford said that it's going to be cutting its q-3 guidance due to chip shortage and is the supply chain. you see jim farley right there we had a chance to talk to him he said the chip shortage, that's starting to improve they're seeing improvement there. as for the supply chain issues, they're going to linger a bit. >> i think it's going to take awhile it could easily take through next year. and demand would have to fall way off for us to have the demand side solve this problem this is really fundamental to our economy. we have to deal with this. and i think it's going to last for awhile >> saturday will be the two-year anniversary of jim farley becoming the ceo of ford this is what shares have done in his tenure this is a company that is dealing with the supply chain issued he's secured the battery

supplies for the ev side of the business and they're seeing strong demand there. but the bottom line is this, if you take a look at ford and gm against tesla, they've been trading on the ev news but you have to focus on what's happening with the supply chain. guys, back to you. >> very true. phil, thanks super duty you're a child, becky. is that second grade -- >> yes >> coming up, we'll speak with the move in yields and much more ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia.

welcome back to "squawk box. we're closely following the ten year yield which hit 4% earlier this morning joining us now, komal sri-kumar, president of sri-kumar global strategies i know you saw the news coming out of the uk, so i have a question should we say great, the uk, they blinked, maybe we'll blink here and there might be relief here with the fed, or should we say, oh, no, they blinked, maybe

we'll blink here i can make either case >> very timely questions the bank of england had an uncooperative chancellor who was essentially undoing the bank of england's moves to cut back on inflation. here in the united states, you do not have the conflict between the u.s. treasury and the federal reserve yet. but here is a major point that comes out of today, joe, you and i have been talking for the last four or five years and i've been saying since the january senate elections that the bond yields are headed up. and since i said that, we have quadrupled in terms of the ten year yield i'm going to say for the first time on your program that we have just about topped out 4%, a little bit more, a little bit less, this is where we'll

be, so in a sense there is less need for the federal reserve to blink, but what i'm watching is what is happening also with the dollar and the pound story, that is only one part of it look at what happened today. the uk came down because switch bank switched over to quantitative easing. but the pound sterling weakened. in other words, bond prices and the currency moved in opposite directions that is a warning signal i believe the currency market and i think if there is going to be further trouble in the uk markets, it is going to be good for the ten year yield, it will come down further. so that is why i'm saying we're just about topped out now. it is a big change in my expectation. >> if part of the angst that stocks were feeling was the strength of the dollar and

worried about continued strength, it was definitely a bad move that we saw because the dollar sort of could tell that the ik and europe didn't have the same resolve that the federal reserve has. so i don't know whether that is a good move if central bankers aren't synchronized in terms of if we really want to put a stake in the heart of inflation, they need to get on the same page and they are obviously not on the same page. >> they are not on the same page, they can't be synchronized because political interests are very different between the united states and the uk u.s. is headed toward midterm elections but not presidential election for another two years in the uk, we have a new conservative government that wants to prove that it is different from previous devel governments. but you can't just turn economic theory on its head which is what the british treasury tried do

and i think that they are paying the consequences if they double down and they have more tax cuts, if there is more bad policy emanating out of london, the ten year yield in the u.s. is going to go down further. so we are intimately linked at the hip with europe. >> so that is the first time u7d we're at the top of yield. 4% might be the top, we'll lead with that when we write something about you. thanks, sri. >> a quarter up or a quarter down, but i do think we're at the top. >> okay. got it, thanks when we come back, our next guest spoke with elon musk about bringing the internet to iran. we'll speak about the protests and the social media crackdown there next plus, cftc chair on regulating crypto and the oversight the commodity needs.

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breaking news, seriously, the bank of england making waves in global markets this morning saying it will start buying, that's right, buying long dated bonds to bring more order after a new british fiscal policy caused borrowing prices to soar. that is a bona fide blink by a

central bank futures here in the u.s. have been volatile. we've been down 250 on the dow, we were all the way back and into the green and now we're back down a little we'll get you up to speed on all the market action in a moment. and we'll talk crypto and the question of whether regulations are finally coming into view in a special interview with the chairman of the commodities futures trading commission he is here final hour of "squawk box" begins right now. good morning, and welcome to "squawk box" right here on cnbc. i'm becky quick along with joe kernen andrew is off today. we are live though from cnbc's delivering alpha summit in new york city, it is back in person this year with a huge lineup of guests ready to talk about this

historic time for the markets and what investors need to know to navigate that volatility. these sessions will be happening here all day including my conversation that is coming up with carlisle's david rubenstein and rockefeller university and joe will be talking withstawith s s stan dreckenmiller >> and he's been saying things for quite a while and we're reference comments made in 2020. and there is a reason we're here we want to try to figure out how to minimize the damage, but there is some things that you are just going to have to deal with, policy mistakes that are already made >> and that is what we're watching, that is what the bank of eu is doing today, trying to reverse some of the huge damage done to its markets. stepping in and saying that it

will be buying guilds. but right now dow futures down by about 55 points it has been a wild ride. before 6:00 a.m. when we heard from the bank of england, you were actually looking at the dow futures down by i think more than 250 points. it reversed very quickly on that news, that was the knee jerk reaction and we saw positive territory for the markets, dow up by more than 50 points and then as we kind of sit and think through some of the implications, whether the bank of england will have the result, we've seen futures come back off. s&p 500 down by 14, nasdaq off by 92. and these are added to the losses of what has been a very painful month for investors. month to date dow is down by 7.5% you are talking about the s&p down by 7.75% and nasdaq 8.1%. and we'll talk more about this right now. >> and for more on the bank of england's moves this morning,

steve liesman is joining us on the squawk news line steve, i could easily talk to you probably until the end of the show i think that i'll start with something that just occurred to me and that is, do you think that this sort of surprising and almost emergency type move, i don't know maybe that is overstating it, is it because of the fiscal mistake on the budget that the new prime minister made or is it just a reflection of what happens when we see a sharp rise in interest rates occurring really around the globe? is there more to worry about in terms of those dislocations when interest rates move quickly, or is it really specific to the uk because of the tax cut involved? >> joe, good morning and the answer is yes and yes. exactly my thinking and we could talk about this for a long time, you're right i think that the story is local in the sense that you nailed it,

it is the fiscal side that caused this. specifically what is happening, a story from the fg making the rounds which is that there were margin calls holding all the bonds, the bonds lost value because of what the fiscal side said they came in with these big tax cuts this was not precipitated by what i think was a pretty well telegraphed series of moves by the bank of england. but this was not expected by either the bank offer gland or the -- england or the markets what is happening, the bank of england is trying to do emergency triage is the best way put it, stop what apparently was a run on bonds, and so that they can continue with the posture. they are doing these things. they are buying long dated bonds to stabilize markets from today

to october 14 and this is in any amount necessary they are suspending their plan to sell assets that was going to start next week until october 31 but they are also hinting that they won't hesitate to change interest rates very quickly, on the second part of your question, this does of course raise the concern that in this global hike of interest rates, changes in currencies, what is going on, that something in the markets will break. what the fed has tried do is tried to telegraph its actions to give markets an opportunity to adjust, but when something like this hits you from the side, you know, like a car coming down the street that whacks you and you didn't expect, central bank has to respond and what we havehave hes one of the most striking examples i've ever seen of a central bank's inflation mandate coming up against its financial stability mandate. >> can i just ask you a question on that, steve we heard from jason furman, he

tweeted out this, says the bank of england is now rescuing fiscal policymakers from their recklessness this is how fiscal dominance starts, how fiscal dominance ends is with high inflation auand currency collapse. >> yeah, this is quite remarkable that the fiscal side does not agree with the bank of england. i know the governor bank of england, he is a very sober managed man who has a long career at the ble. they have a very good -- i mean, boe is one of the preeminent central banks in the world they have been dealt a different hand through brexit which has challenged the uk economy. they were doing what they could. they announced actually a more aggressive quantitative tightening than the fed has. our fed is only letting assets runoff they have a much bigger inflation problem over there they did 50 the last time, three

of the nine members wanted to do 75 so the bank of england is in a difficult situation and seemed to have its ability squared away, but then they got hit by the side here and i think inherent in some of the commentary earlier, the need for the fiscal and the monetary authorities to coordinate and i think this might be a wake-up call for the biden administration that they better get their act together >> that's what i mean, yeah. you can spend money, you know, and blow out the deficit in two different ways you can cut taxes, you can keep spending like crazy. so every guest we've had on has pointed out we're in a similar nonsynchronized fed versus fiscal policy in this country too. we can handle the uk, but if the united states had a similar type of situation where we were worried about what you just described, that could be a very

big deal i would think and when the uk did it, we almost embraced it, traders did, because it signaled maybe someone will blink somewhere do we want any blinking here, is that something to feel good about or to say, oh, my god, things are going south faster than we thought? >> not in the current context i don't think. i mean, i think that powell did not have to be quite as stern as he was at the last meeting when i asked him -- and i get why he did it, but when i asked is there a possibility of a pause, he kind of shut that down and said, you know, maybe down the road but not where we are right now. i think what happened in the summer is financial conditions eased and the fed needed to undo that and part of the way they are undoing that is by showing absolutely no give at all. as for the u.s. fiscal side, they have, you know, tweaked around the edges but they have not announced the way the uk did

a major deficit tax cut and expansion. and plus they have the thrg pro energy problem over there. we don't have that problem over here but if your concern is the fed questions until something breaks, i'm interested in what stan thinks about that, but powell will keep doing what he's doing. this morning real quickly, we had some change in the fed funds rate some easing of the outlook it went down to where we are now, 418 for the end of the year and 448 for the peak so there was a sense that maybe the fed will do a little bit less in this con test. i context. but i'm not sure that is warranted. >> well, we don't have the energy problem yet we got a couple barrels left in the spr. i haven't looked at the tank where that needle is, but, you know, with the hurricane down in florida, it makes you wonder,

doesn't it i hope we are well prepared. there has been a little bit of speculation. there was some real effect down there. the spr is -- >> the point that mohamed el-erian made, you are not surprised to see them trying to help their consumers, trying to help their businesses dealing with these incredibly high energy prices. the trickling down third leg of that was this idea of unfunded tax cuts across the board to everybody. and that is what they are kind of dealing with the after effects of some of this too. the market said no more. >> stick around, liesman >> we'll need you. when we come back, we'll be talking about elon musk's efforts to try to get internet service up in iran protests there have been flaring since the death of a 22-year-old woman. and later the very latest on crypto regulation, rostin

behnam

we're continuing to watch the situation in the markets this morning a lot of breaking news that has been impacting things today. right now dow futures are off by

about 74 points, it nasdaq down another 100 and s&p off by about 17 this is coming after a day when the s&p and dow both set their worst levels that they have seen since november of 2020 let's get over to mike santoli, he has more on what has been happening. and we've been talking about the boe's move to shore up what the fiscal authorities there are doing and kind of blinking on that front steve liesman was talking about how that could lead to some things breaking. what are you seeing in the markets today? >> in a sense it has been a slow motion breakage in the fixed income and currency markets. that has really been where the battle front is and equities have been a bit of a collateral damage maybe not that much of a reassurance, but markets are already very oversold on the stock market side of things but not accelerating to the down side last three days if anything people have been squinting saying that maybe stocks are

underreacting to what is going on in yields and the dollar. but that is because we've been for sale since mid august and especially since the cpi number in september, very deeply he oversold so you see that the intra day low, this is the s&p 500 index fund, previously was 3636. you are going to be in that area probably breaking it for now under 3600 is some very widely watched levels which are basically this very long term like thousand day moving average, and it takes you back a certain amount of time like two years. that is maybe where we have to check out. but what is interesting too, you've gotten to this stage of the equity selloff where basically the stuff that seemed like it was safe heyavens is starting to foolalter. stocks have outperformed on a year to date basis, but last month, that is consumer staples on an equal weighted basis and equally bad for one month.

similarly with apple, they will falter on that news headline today. so this is the necessary part of a down side flush. usually you don't want necessarily people to think that there is a place to hide now, maybe slightly in contrast to that, take a look at tesla relative to a global balanced 60/40 equity fixed income portfolio right here so over the year to date, basically tesla has been less volatile than supposed to be kind of the total stock and bond market pension type as is the allocation that shows you what a wild year it has been when essentially the most volatile stock in the upper end of the s&p 500 is actually holding up a little bit better so that shows you that stocks are at the mercy of the volatility storms in equities and fixed income i know sri said short term high in the treasury yield.

went vertical and pulled back so we'll see if it calls down >> mike, thank you in the meantime, we'll change gears here. protests have spread to dozens of cities in iran following the death of a 22-year-old woman after she was detained by the country's morality police. the government is trying to stamp out protests with tactics including online clampdowns. but our next guest says elon musk said his internet service is now working in iran let's bring in karim starlink has already made massive changes in ukraine and the war with russia. what is happening in iran and what did elon musk tell you? >> becky, i think the challenge in iran is that the united states government -- first of all, as you mentioned,

nonviolent democratic protests against a regime whose official ideology is death to america so this is a no-brainer and is a bipartisan issue both democrats and republicans see this as an opportunity in which u.s. interests are aligned to support this movement. best way that the united states can help people in iran is to inhibit the regime's ability to control communication and controlling information, to help iranians communicate with one another and the outside world. because the goal of the iranian government is essentially shut down the internet to prevent the world from knowing what is going on in rin iran. and starlink has been very useful in ukraine providing internet for up to 200,000 people the difference with iran is ukraine is a u.s. ally, the u.s. has a strong presence in ukraine and the ukrainian government eagerly is cooperative to get

the star lilink terminal set up in iran, it is the on pposite sa little more complicated to set that up. but i think that you see a will both from the biden administration and from elon musk to try to address this issue. >> how do they do it technically? >> so technically as i tweeted, and i can't share much more, elon musk said that sar tarlinks now turned on in iran and so you need to get the devices inside the country. and that as i said is logistically much more of a challenge in iran than it was in ukraine. you will have to go through neighboring countries. >> wow elon musk is somebody who has not stopped or backed down with any of these things. what did he say just in terms of why he is so interested, why starlink is doing this and kind

of what he has put behind it >> sorry, becky, i can't go into the details of what we shared because it was a confidential conversation but i can tell you that he has been in touch with the biden administration and as i said, these protests happening in iran which was triggered by a young woman who was killed at age 22 for showing too much hair, this is one of those rare black and white issues in international politics it is not often that we see an issue which is just a no-brainer, perhaps apartheid south africa was another one of these issues where it was no shade of gray. and i think this is -- ideology of the iranian regime, death to america, death to israel and mandatory veiling of women and even iran's allies really can't defend this issue. so whether you are elon musk or

you are someone sitting watching these protests, it is pretty clear who are the good guys and who are the bad guys in this context. >> what happened last time iran did this and shut off the internet from all its citizens there are pretty high stakes here >> so the last time iran did this in 2019 when they also faced nationwide protests, reuters reported that around 1500 people were killed. and so this is no joke the iranian regime, their mentality is either rule or die. and we saw what iran has done in syria, helping assad regime kill perhaps as many as 500,000 syrians, displaced half of syria's population, 13 million people and so, you know, we have every expectation that the iranian government is going to continue to try to crack down and, you

know, from far away, the united states has limited ways of being able to help people in iran. and i do think the most effective way is to inhibit the iranian government's ability to, you know, put a black cloud over iran and prevent iranians from communicating with the outside world and with one another >> thank you for the spotlight you are putting on this and thank you for your time today. >> thank you, becky. >> the dow is up the blink of the uk and what that means for maybe some, i don't know, some softening here is winning out >> unioi don't know if this loos like a better place to put your money because they will have the fiscal authorities in check and the fed will be resolute in trying to fight inflation. so depends if you want the short term relief or longer term relief >> i think that it is cou

counteracting the notion that oh, my god respect something was ready to hit the fan in the financial markets in the uk. normally that might outweigh now we're actually up. >> and roger ferguson hinted at that with us just after the announcement >> i think people would really like the fed to say okay, we're watching >> do you want that or is that going to -- >> i do want it. another five points of hikes >> what jason furman said, fiscal authorities are winning out and that ends in horrific inflation and the tdevaluation f your currency. and he will join us tomorrow morning. so we'll talk more about this. >> we've messed it up fiscal will i here too. >> and we'll talk to him when we come back, the state of regulators' push to police crypto

cryptocurrencies ftc care manhairman will be jois and we'll talk about guybiogen, that stock is soaring.

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and we showed you this earlier, shares of biogen surging after a study showed that its experimental treatment for alway alzheimer's dramatica slowed progress progression of the disease. let's bring in dr. scott gottlieb we have him now? good then let me know that. hey, doctor, are you there >> how are you, yes, i'm here. >> so there has been a previous study that wasn't nearly as robust at this point are you inclined to say this is the one to pay attention to or is there still

some question? does the thesis that the amyloid plaque is the cause and target for therapeutics, has that been proven or the evidence is getting stronger >> well, certainly the evidence is getting stronger. i see three main things coming out. first i think this is an important result that will prompt people to reconsider the entire approach to the treatment of alzheimer's to your point the long running debate has been whether drugs that can remove the existing plaque would have a benefit and some believed that the plaque was merely the result of the process and by targeting you are not assessing the underlying cause of the deal. i think this along with the previous trial strongly suggest that the plaque is playing some role and by targeting it, you can faebaffect the process it may not shut down the underlying biology of the disease, but it is causing the

disease to progress more slowly. and i think secondly this is also good news for the drug development from other companies that take the same difference. there is an important difference, so we need to be cautious about reading through too directly to the other drugs in development and final point i'd say this is going to have to cause the industry to reconsider the decision it made about a year ago with bio againge decision it made about a year ago with bio agbiogen's first d when it denied coverage for that drug and at the time i think we talked about it, had argued that it didn't believe the approach worked and wanted to see the results of a more definitive large scale trial. and based on that decision, it effectively curtailed access to the drug and i think now cms will have to reconsider the decision and maybe concede that this approach is providing some clinical benefits to patients >> so the fda can -- what can

they do, talk to joel, beg do you expect that and will they be successful in terms of chs >> i don't know that cms will move quickly enough. they will look at these as distinct judges. but i think that it will have to reconsider the framework because the framework basically said that the agency didn't think that this approach worked and it wanted to see the ruts of more definitive large scale studies before it will consider reimbursing any drug effectively in this category i think that this will open the door to cms having to reconsider that, maybe withdraw that aspect of the decision. we'll have to see the full results, but this is a large scale trial, 1800 patients, magnitude of benefit was strong. we'll have to see the full results. they promised to publish those results.

and the improvement was pretty rapid. you started to see improvement as early as six months which is important. >> i just wonder, you're very guarded or at least careful in not ascribing too much efficacy to the amyloid plaque as the underlying cause of alzheimer's. i guess we just didn't know yet. >> yeah, i think that this is providing a clinical benefit we now have two large trials and this is a pretty definitive trial. so it doesn't get much better. i think this was the gold standard trial in the way it was designed, it had diverse population i think that we have to be guard, is the amyloid plaque causing the disease or is it a symptom. i think that we can surmise that by slowing the plaque, you are providing a clinical benefit

i don't think that we understand the disease well enough to know whether it shuts down the disease process. >> good news nonetheless and stock certainly reacting this morning. thanks, doctor >> thanks a lot. let's take another look at the futures this morning you will see right now we're in the green for the dow futures, up by willabout 42 points. we've baeen bouncing around. s&p 500 are flat nasdaq down by about 47, but remember this is on the back of some pretty extensive losses for the month where you had anywhere from 7.5% to 8.1% declines to these three major averages for this month yield on the ten year has been the huge picture people have been watching. yields have been coming down today, but again, everything we've watched over the last couple of weeks and kicking off what we saw in the uk on friday and the last couple of days has been a huge point that has moved

the markets everywhere rick santelli is at the cme in chicago and he's been watching this global bond story unfold. what do you think of the boe's move today >> well, first of all, i think that we automatought to make a e things clear i have been watching what is going on in bond land, but it really does go back to the credit crisis. and to answer or to try to even understand what the bank of england is doing, or how all the ex-government bureaucrats or large institutional ego traders are all complaining at the bank of england ruining the world and ruining the markets, they really need to think about what is happening the last dozen years we all can't be japan. we all can't print our way to prosperity because once you get more than a couple large economies playing the same game, the jig's up for the most part and when you add into that covid, when you add into that

shooting ourselves in the foot on energy, nobody is talking about this, as a matter of fact, this is not a good thing to say, but in my opinion, there is a big chunk of what is going on in england and the bank of england that is the first significant collateral damage of the putin war. i know there is more to it than that, but putting as many people in the uk in energy poverty, this is a big deal and i think, becky, that the biggest deal should be that we all need to kind of take a look within our own borders at all the sins that we've all been committing in terms of global economies, and understand that what is going on now is just paying the bill. the bill has come due. >> i agree with you, rick. this is a situation where we are have used stimulus, we have used the central banks to bail us out of trouble after trouble we knew there was going to be a

day that this came due uk ran into another huge issue after the pandemic, and that would be the huge energy crisis that they are facing and trying to find a way to bail out their -- >> yeah, but it outlives covid, thrg crisis outlives covid and all the current administrations, it outlives liz truss and biden, it outlives all of them because we have been doing the wrong thing with regard to energy for a while. we have a noble cause, but it is not underpinned in a fact all world. and when you add in how energy -- listen, all you people out there that don't like fossil fuel, consider this, you wake up in the morning you like your lights and your tesla, you like to charge it, you like to put gas in your car, you like to be warm in the winter,you like to be cool in the summer. all that means energy, energy, energy it is the life blood of the global economy and we have been pretty dumb about understanding that and that is why i keep stopping

you, becky, because that is the story we should be discussing now. the rules california is making will screw up the whole country, okay let's do the right thing here. and let's make sure we don't put our population in energy poverty in the next 16 months. >> jason furman said that this is a situation where the bank of england is rescuing these fiscal policymakers by stepping in and doing this, that that ends in high inflation and currency completely collapsing. do you breaagree with willhim? >> i think that possible outcome would have existed no matter what they did. and i don't necessarily think that is going to be the case, but i do understand that it isn't the best decision, it isn't the best policy, but the choices are very limited you know, the bank of england is dealing in realities because reality has dawned so toanswer your question, i

don't think it is a great thing, but is there an alternative, what are they going to do? they need to subsidize these energy bills they will keep going up, up, up. they made it so they can start fracking but that will take a long time. so i do agree it isn't the best outcome, but i completely think that it would have happened no matter what. we are coming down the funnel of bad decision making and a reality is going to come to every major economy. and today we're getting a taste of that. >> rick,thank you. we'll talk to you again later today and again tomorrow morning. dow i just saw was up over 80 points. so suddenly there it is up 85. let's talk about the currency, a hot topic at the summit. senators were told that this month's ethereum blockchain

upgrade is a step in the right direction when it comes to reducing crypto energy usage, but still a need for regulatory clarity and market protections chairman, do you have clarity for what the future looks like in terms of regulatory clarity for crypto >> first of all, thanks, great to be here there are gaps in the regulatory structure right now. and we need to fill those. bottom line is we have a lot of retail participation, a lot of speculation. volatility has come down a bit in the past couple months especially since what happened in the spring in the marketplace. but still we have a growing emerging economy, markets that are acting like traditional markets that we have and we need to create a regulatory structure that doesn't have holes and gaps so that we're embedding the principles that we have. >> and what is the s.e.c. doing? it makes perfect sense, does it not, if you can decide what

crypto assets are securities and which act like commodities, it should be fairly simple to delegate responsibility. like swaps, options, those are all your purview, things based on securities could be the s.e.c.s. can't you guys get along >> we did get along. and we have shared, we will share. but for us, the difficulty is we're derivatives regulator, we don't oversee cash markets so i've been asking congress for cash authority so we can go in the bitcoin cash market and other -- >> but those aren't securities >> we'll have to figure that out legislatively. there are different components amd ch and characteristics. we have to rely on 60, 70-year-old case law and we have at least one court case in the eastern district of new york that says bitcoin is a

commodity. there are other cases out there and we're just trying to figure it out as we go. >> looks like a big turf war >> it is not a turf war, it is two regulators who work together in the swaps and futures space and we're trying to find a reason be outcome that will create certainty for the market but also customer protections. >> and i want to go back 70 years to the people who wrote the law and explain crypto to them >> well, i don't think they knew it back then >> and show them an iphone >> yeah. >> do you feel we'll get this right? >> i think in the end we are i'm pretty encouraged by what is going on in congress there are a lot of members that want to make this work they view it from twos perspectives and i think it is about market protection and protecting customers. we have to move slowly and be

deliberate and president biden put out the executive order and we're starting to see reports come in, so i think that we'll start to see some legislative action and that gives me the tools that i need to oversee the market >> remember when oil went negative >> i do. i remember the day >> and do you feel like, wow, i'm in the right business again? >> it is funny because often so much of the focus of what i'm doing now is on crypto, but there is a global commodity crisis going on, our markets are impacted we have to make sure the markets are fair and orderly and reflective of price discovery and supply and demand. and there is a lot of stress in the market, stress for commercial end years and liquidity providers. and we're doing the best we can working with international partners >> the market is up. is that the right response to seeing an emergency you've by a central bank because they are worried that gilts were not trading in an orderly fashion?

currencies, isn't that your purview too? >> on the futures and options side there was i think after the decision, you know, from the chancellor about the fiscal policy and the move, there was a little bit of need for certainty from the bank of england i think the bank did that, providing that certainty and the market reacted >> what kind of conversations were you all having after friday's move after monday and tuesday? >> we talk with our counterparts across the globe from my perspective, we don't set prices we have to make sure the markets are orderly. when we see high volatility and high volume, we just need to make sure the plumbing is working. and thus far we heard that from secretary yellen, we're pretty pleased with the way markets are functioning. >> bitcoin, 65 to 19, you don't know what might happen from that do you have a feel for any systemically important entities

that have exposure >> what i've found, and these are just through anecdotal conversations, a lot of institutional traditional money is staying on the the ssideline. i think there is probably some high net worth individuals and institutional investors who are obviously investing in the space. but this regulatory structure, this need for a regulatory framework i think could end up being an opportunity for more institutional -- >> you didn't know if 12,000 -- >> i hear you. when the price moved to 20,000 back in the spring, what was the bottom, right? again, i'm agnostic to prices. >> there are some things that -- there must be certain price pints where -- >> certainly it is trading like a traditional asset more than it has historically and we're seeing that consolidation in prices and there is a high correlation to risk assets we're seeing too. >> carson block was here

earlier, he is looking at crypto where he said anytime you have that much money coming in, you are going to have people trying to take advantage, creating fraud. do you see that? >> in six years with authority over cash markets, we've brought 60 enforcement cases, as large as nearly $2 billion to as small pump and dump and ponzi schemes. this is what worries me that we are touching the tip of the iceberg because we have to rely on people to come to us and give us whistleblower tips, complaints about what is going on, using a very, very small authority over cash markets. if i have authority like i have over futures options and swaps, to do surveillance, market oversight, then we can you ever country the fraud and i think that we'll see a tightening and confidence in the market.can yo country the fraud and i think that we'll see a tightening and confidence in the market >> thanks and enjoy the day. good to have you here.

coming up, we have cramer and david faberman will be right here the summit just getting under way. first up is the deputy treasury secretary. all sessions for delivering alpha are available on demand, but you got to scan the qr code on screen or visit delivering alpha.com to access the sessions stay tuned

welcome back to "squawk box" live from the delivering alpha conference futures this morning have turned quite a bit higher in the last few minutes. dow futures up by about 180 points we're joined by jim cramer and david faber. and guys, it is really good to have you because we're watching the news trying to figure out what to make of it, from the bank of england in the bond prices and futures markets >> if you watched frank holland this morning, around 5:05, it

did feel crash you had a feeling that it was pretty of the end of the nasdaq. and that was before the bank of england i would say panicked i won't say that they had a considered thought about what to do but reaction totwo-year, david, basically, that the fed has completed, and i'm not so sure that's an accurate depiction >> certainly wouldn't seem to be what jerome powell's been indicating or many others, but as you said many times, and you guys reported on this as well during your show, the two-year seems to be dictating where we go in the market right now >> right, and i think people were surprised, because it's been on the move four and a half. people were expecting 5. mortgage rates continue to go higher, and maybe there is a maybe a crescendo moment where people say, the fed is cognizant that they could destroy the economy, and maybe that's not their goal >> i just think, you know, it's all different amounts of half

blinks, quarter blinks, maybe -- how many eyes, you know, there are animals with a lot -- maybe one blink out of a thousand eyes that's what we want. >> i want to be chase. i want to tackle inflation but as strident as they were about transitory, i don't want them to be so strident about going up another 300 basis points if the patient really can't be resuscitated. >> yeah. >> the transition is always hardest, isn't it? it's like once we get there, we'll be fine. >> right, but -- >> it's the -- >> mortgage rates have doubled >> it's the trip >> mortgage rates have doubled >> lagging things that we're going to see the effect of so, the uk messed up fiscally by tax cuts we've messed up fiscally here by continuing all this student loan, whatever you want to call it are we in a position where we've done too much mfiscally and we have some type of dislocation? >> i know there's a propensity to trash jerome powell but he's

not the one that's been printing the money. >> he's been sort of letting -- >> he could have moved a bit sooner >> we all know >> right, but -- >> well, many people believe -- >> he didn't have the job at that point i think some of it was waiting for his confirmation >> let's go back to the week after thanksgiving where we all decided that omicron was going to be the worst, and the chinese reacted by saying, let's lock down the country powell reacted by saying, let's take a look at this. let's take a look at what's wrong. he should have continued the action, but let's compare him to a 1.4-billion person country, which has basically been on hold and caused the whole world to be on hold with the exception of putin, who's causing the worlds to be on hold. i pulled up at the house agricultural committee of all people yesterday, and they're blaming russia-ukraine for the price of food because of how much fertilizer went up. it's 30% to 40%. again, i'm not sure powell versus putin is the way to --

it's kind of odd >> does it surprise you to see the futures higher this morning, jim? >> i think there are a lost of people who have continually said this is the end, not unlike, say, the doors, "the end, the end. and maybe it's not david, you know that we come in every day, we watch the two-year, and we presume that what the fed wants to do is take rates to 5.5 that's been the -- >> that's been the number? >> between 4.5 and 5.5 yeah >> i mean, that's volker we had someone on last week who said, he's got the book of volker can we remember that volker was the most hated man in america, and that he overshot, and that we may revere him as a hero, but he crushed the economy at a time when we had, fortunately, a president who understood that? >> right >> yeah, the magnitude of this move is more so than volker's, to a certain extent, that's what cathy wood would say that said, 5.5, you and i were

sitting across from each other every morning and things were pretty darn good >> they were, but we're never going back to that interest rate environment. remember jimmy rogers? if we ever go below 6.5%, i will turn in my resignation and never speak again on the long bond >> right, right. >> look, remember, we're back to 2008 rates, but i remember seeing you in the cafeteria -- >> the satellite dish. >> ge would take -- our checks would cash we're not in that perspective. >> ge might be still >> oh, that's -- >> no, no. >> well, you know, i remember seeing you in the cafeteria. that itself was rather incredible >> we can see everybody. >> isn't it nice >> this is your life >> behind the camera, every place. >> it's an exciting year >> gentlemen, we are happy to hand the baton over to you in just a minute. we're going to clean out, give you guys the set >> there's the best collection of breakfast foods i've ever seen here. >> we haven't made it over

>> i'm talking about just -- it's like one of those grape up days >> the dessert, i recommend. >> have you already had it >> of course i have. >> it's great to be here >> it is >> seeing people i shook hands with people i don't know >> that's nice, isn't it >> well, i got to get that next vaccine. the one that knocks you out for three days, you wish you didn't have >> i got the shingles. i'm trying to get one per week if i don't get the vaccine -- >> what are they doing in china, by the way apparently, like, it's just the super spreader event of a lifetime coming up >> jim and david are going to be heren st iju a few minutes "squawk box" will be right back.

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all this normally happens in a developing country, it does not happen in a g-7 economy, so this is historic it points to the paradigm shift that we're going through and the fragility of markets >> when monetary and fiscal policy gets out of whack and in the uk, now, it's problematic, you have actions like today where you have the bank of england trying to step in and

stabilize against the backdrop of fiscal policy that, frankly, shocked the markets and the world. >> it created a great deal of uncertainty as to exactly who was in charge, what exactly the economic policy overall for the uk was the other thing that happened, obviously, is we saw a dramatic drop in the value of the pound, which creates more inflationary pressures, and so it was a double-edged sword it was a real whammy >> and those were just a few of the highlights of our big line-up of guests this morning talking about some historic market moves look at that backdrop, what a great scene we have here i'm feeling like tom cruise, sort of. i might go over there. >> looking like him too. >> might go pilot one of those babies or maybe not. the g-forces look pretty bad >> the markets -- delivering alpha, you want to hear all the things that are coming up today, you've got stan druk miller. this is what you need to know right now, how to figure out how

to navigate these markets. >> 133 on the dow, which is just surprising that the bank of england makes that move and maybe there's hope here that we don't have to go as fast as we thought. >> s&p right now up by about 10, the nasdaq down by about 10 points they're going to be picking up coverage with david and jim, who are right here at delivering alpha. that does us for us today. right now, it's time for "squawk on the street. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla at the new york stock exchange. cramer and faber at cnbc's delivering alpha investor summit in new york today, and what a day to have that conference as futures swinging green here as the bank of england blinks, says it will buy long-dated bonds to calm markets and meantime, hurricane ian does look to hit florida, potentially as a cat 5, the ten-year retreat