is not facing a so-called lehman moment. tesla trading lower. the third quarter deliveries were short of wall street e expec expectations it is monday, october 3rd, 2022. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. we are watching the equities this monday morning. the turmoil over the last quarter and month. if you see this morning, things are mixed. dow is up 120 points above fair value. s&p up 7

nasdaq off 26. let's look at how the major indexes closed the third quarter. dow down by 6.66%. not a great number the third negative number in a row. nasdaq was off 4.1%. it really saw a crescendo for the month of september the dow off by 8.8%. s&p down 9.3%. the nasdaq off 10.5% you are talking about significant losses that last quarter -- last month of the quarter. the quarter dow transports were down 8% for the quarter. dom talking about mike wilson's note over the weekend. mike says for every 1% decline

is a .50% of earnings. gold was down 7.5% in the quarter. surprising with the inflation picture we have seen all over the world. 16.68. if you look at treasury yields, that's the big story for what we have been watching you see the 10-year treasury given back a bit to 3.78%. i saw it higher this morning we have news breaking early this morning uk government now reversing a plan to scrap the top rate of income tax after the public backlash and market turbulence the government plan for that had been poorly received by financial markets that following the announcement, the pound dropping to the all-time low and government bonds began to selloff in historic rate prime minister liz truss talked about this plan yesterday. this morning, it was clear to

abolish the top tax rate which was a distraction. we will have a live report from london next hour an interesting decision. if it changes the dynamic, i'm in the sure. -- not sure. >> this is something she chained on lowering the highest tax rate. it reminds you in a lot of ways of no new taxes from george bush this was going to be a pullback from the high taxes. this happened in the first three weeks of government. that's a very quick around >> wednesday it's like raising taxes for gh h.w. >> this was an all weekend situation. here we are.

credit suisse shares plunging after the financial times in a tweet that went out from somebody on friday actually is what led to this the bank executives over the weekend in talks with the investors to reassure them the financial health of the swiss lender is okay they have been trying to downplay the lehman moment the bank telling reuters it is in strategy review announcement could come -- is expected on october 27th mark your calendar release third quarter results. one including the bank exiting the u.s. market. literally, i would say starting saturday morning, i got a phone call from somebody who said are you paying attention to this do you remember 2008 it was talked about. >> i hate throwing those terms

around >> it was a ruined weekend for me i don't think we're in a2008 situation having made enough calls. credit situation market cap is under $10 billion. the spread default swap completely jumped on the news. stock down a total of 60%. the ceo over the weekend and i have seen the memo talking points for all of the wealth managers said look stock price is not our liquidity position. sources are telling me the liquidity position is similar to the liquidity position of the company at the end of the second quarter. if that is the case, we're talking about 727 billion francs that is the liquidity position if you look at the reporting on that, that means $160 billion in cash if the mix is the same. i don't know if the mix is the same the concern is between now and october 27th, if, in fact, the

company is going to be selling down assets, there is the security business and trying to get the investment bank to be asset like you would be selling those at a fire sale, a, that is the first issue. the other issue is a business is a wealth management business it is possible and i don't want to get involved in the idea of a bank run, but what happens is if you are in the wealth management business and you have your account there, even if you had your account there for 50 years, you call up and you say i know we had this great relationship for 50 years, i love you, but the truth is i like to move my money. >> that is the danger of talking about this stuff dig too deep and people call it a lehman moment. you create a run on the bank in this situation. >> i have gotten calls this morning about it you are starting to see bits of that the hope, of course, is that those wealth managers can keep the money there and that

whatever this plan is that you eventually see and of course, they hired a new ceo to run the company. restructuring expert the idea is he will try to restructure the company. you have to believe they get to the 27th and on the 27th, wherever the plan is that people love the plan. >> they will not say it until the 27th they need to announce quickly. the idea you stick around for the next three weeks >> that is the other issue the 27th the date is the earnings date. can they wait that long? this is when it you start -- i don't want to invoke lehman brothers you remember they brought up the plan early >> we spent last week talking about whether there was anything under the surface that we don't know about cyprus or closer with long term. that was no credit suisse. that still cast -- is it

specific to credit suisse? >> look at deutsche bank a lot of risk taken in these places i don't think the risks they have taken is what lehman brothers was doing it is not risky. the bigger issue is if you keep your money there the other piece is when you keep your money there, a lot of people say most of the stuff is in stocks. it should be safe. in equities or other assets. it should be safe. it shouldn't be going anywhere having said that, if you remember in the context of lehman at the time, everybody got the assets back. they were frozen for a period. this is the conversation that investors in europe that have their money there are talking about. >> it wasn't just lehman it seemed like a good move at the time

still, i was talking to andy, who said it was still part of bank >> you know what the chairman's name is? lehman >> that's fun. what does the ring say today you were up until 11:00? >> high stress i have not looked at the oura ring prediction on how i'm doing. i did get sleep saturday night i was proud of that i went to sleep early it is updating right now do you have time >> yeah. >> the other situation >> doing okay. 8 8 87 >> trying to answer the questions if they left the u.s they are not exiting the u.s that is why they needed to bring up the october 27th deadline you can't wait that long to tell people with the rumors each of the businesses are worth less over time >> i think the goal is to try to

make this as capital as possible and create an advisory business. this is the issue. these things do become self fulfilling prophecies. you have to report on them >> i don't want it to be one of the things that happened after what i'm calling a terrible, horrible, no good, very bad month. did someone use that already >> that's good >> i tweeted that out. terrible, horrible, no good, very bad month. how about our friends in the middle east? >> credit suisse today and opec and the folks -- >> russia, you need help you get ready to use nukes let's help you oil prices are jumping after opec plus is considering a production cut of more than 1 million barrels a day. they did not call them slumping prices you cannot call these slumping in the mid-80s

they got four rolexes on their wrists instead of three? $82 a barrel that's fair. they want it in the 90s? that would put further pressure on consumers with high energy costs and help russia as it continues its war with ukraine >> we got down to $77 and we may have missed that moment. they are having a meeting to talk about this. the russians would like 1 million barrels a day cut, maybe more saudis are not on board with that they are softening up with that. you talk about the higher extremes giving the russians what they want >> great relationship with saudi and the u.s. is coming through

here. >> right >> 25% in the third quarter after a month above $100 a barrel we needed to buy at 70 janet yellen did need to sell 50-year bonds. here is a look at major energy companies this morning full coverage of the opec plus meeting on cnbc on wednesday you can see that is 3% move in most of the makermakers. >> 4% for bp the energy crisis is the windfall tax uk has not done that yet other countries have >> zach wilson the reason i'm saying that -- >> quarterback >> because el-erian is coming on today. you know, still 15 points below.

>> now we're talking about the bet. >> not the bet the jets i'm taking el-erian to the jets game on sunday >> that was incredible against the steelers >> zach wilson looked like a quarterback. he is throwing darts. >> is he paying off the bet? >> this is me taking el-erian to the jets game. paying off the debt. >> i'm making sure >> i probably will have to pay for it i may make it a family thing we may just all good as one big party. would that be fun? he knows blake >> okay. >> paying off. >> i don't want to hear it we go through a pandemic and said nobody's had lunch, austin. we will kickoff trading for the fourth quarter what could move events today and change strategy as we head to

break. netflix is beating down the stock. stock up 30% in the last three months life's relative stock still down more than 60% you are watching "squawk" here on cnbc. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. ♪ ♪ ♪ ♪ introducing ihg one rewards. seventeen hotel brands. six thousand global destinations. one loyalty program that lets you guest how you guest.

and it's easier than ever to get your projects done right.

with angi, you can connect with and see ratings and reviews. and when you book and pay throug you're covered by our happiness check out angi.com today. angi... and done. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire millions have made the switch from the big three to the best kept secret in ma wireless: xfinity mobile.n.

that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them... see how easy it is to save hundreds a year on your wireless bill over t-mobile, verizon, and at&t. talk to our switch squad at your local xfinity store today.

welcome back to "squawk box. on the planner, a busy day for the fourth quarter we will watch the fed presidents and what they will be saying look at the futures this morning. we have green on the screen with the dow. opening up 122 points higher s&p up 7 nasdaq off 23. let's bring in the director of portfolio strategy and catherine rooney to the extent we should be focused on europe with credit suisse and when we start to think about what will happen with the oil complex when you factor in the situation between russia and opec. what do you think it portends

for the week, meghan >> it is an early story. we don't have a ton of information yet. when we have the speculation, that creates panic we saw it in 2007 and 2008 that was more than a decade ago, people still have that in their heads. a lot of focus in the market i don't think credit suisse can wait until the end of october to address this in regards to oil, anything that causes oil prices to go higher, that is the risk to the inflation story. when we talk about the u.s. equities, we have to get inflation under control. that is the way to see the end of the bear market >> catherine, do you want to be in the market? >> cash is wonderful to have right now. the question is when to deploy

it more than liquidate it. the question is when do you start looking at british equities and european sglekts do you rotate to value? i like to be defensive and tell clients to be in defensive sectors. right now, i think looking at the duration curve is enticing in fixed income and treasuries treasuries in the 10-year space hits 4 and it is time to accumulate in the back end year. as a hedge to risk assets. be defensive and have the staples and energies megan is right it is more demand and destroy scenario going into 2023 expect recession have some cash have some gold

certainly be defensive with regard to credit suisse, it is negatively when you have this type of action this is intimidating we remember what happened back then megan says it is early to tell credit situatuisse has to come sooner >> we typically tell our viewers and consensus is when things look bad, hang on tight, but don't sell 2008 was anomolous in that case because you should have. i'm not saying this is 2008, but i'm curious what you tell people sdplc >> i remember saying the day before they went under i remember i said we're strong and capitalized. we will weather through this i'm the wrong person to ask. i agree with you

don't liquidate now. we don't know where the fed will go when the fed pivots, you get a rally in equities. my suspicion is we will see that >> megan, on the point of the fed and whether they will ease up that is the question here and maybe why we see green on the screen if you add opec and russia and credit suisse into the mix, at some point, does the fed wake up and say maybe we have done our work here and we're making it worse. >> at some point, i think they will i don't think that is any time soon they made it clear they have been hawkish in rhetoric if they turned now quickly, because of what is speculative news coming out of credit suisse, this is not something that i think they want to do transparency in the federal reserve is important to actually have the chance of having a soft

landing here they will go 75. the market is wrong is pricing in cuts into next year they told us they will not do that the long end of the yield curve has room to rise from here at a 3.75 i still think that is too low. that will break above 4% in the long end of the curve. >> megan and kathryn, thank you. when we come back, expect a quiet month in washington as law makers returned to districts to campaign. and later, we talktreg r e fourth quarter with mohamed el-erian "squawk box" will be right back.

(vo) while you may not be a pediatric surgeon volunteering your topiary talents at a children's hospital — your life is just as unique. your raymond james financial advisor gets to know you, your passions, and the way you give back. so you can live your life.

that's life well planned. thanks to avalara we can calculate sales tax on almost anything, anywhere, automatically. avalarahhhhh. what if tax rates change? ahhhhhh. filing sales tax returns? ahhhhhh. managing exemption certificates? ahhhhhh. business license guidance? ahhhhhh. does it connect with accounting? ahhhhhh. item classification? ahhhhhh. cross-border sales? ahhhhhh. what about? ahhhhhh. ahhhhhh. do you have those budget markups? thank you. mmhm. [bubbles]

the capitol, washington, d.c., will be quiet for the next month as lawmakers return to districts to campaign for the midterms the house is in recess and the house is expected to follow suit and disney and dish network striking a deal that ended the blackout week that lost access to abc and espn and sports programming. one of the issues was fees that disney charges for networks, including espn coming up, two big new stories from across the pond we have the latest reporting on the problems at credit suisse.

the stock is dropping in early trading. it is down 25 cents right now. that's good news bad news is atth's 6.5%. we'll be right back. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

♪ ♪ we all need a rock we can rely on. to be strong. to overcome anything. ♪ ♪ to be... unstoppable. that's why the world's largest companies and over 30 million people rely on prudential's retirement and workplace benefits. who's your rock? nurse mariyam sabo knows a moment this pure demands a lotion this pure. gold bond pure moisture lotion 24-hour hydration no parabens, dyes, or fragrances gold bond champion your skin

good morning if it was down, i was just going to go back welcome back to "squawk box. we're live from the nasdaq market site in times square. dow is trying to snap back after the friday which brought no relief to the markets. 500 points down. stick it to us harder. 500 points down. >> below 29,000. >> in last 15 minutes, once again, throwing salt on the wound. >> it matches what happened with the quarter. last month was the harshest.

not trends picking up. trends pushing further down. >> below 3,600 on the s&p. the question is is 3,200 in the cards? that's another 10% is that really necessary it depends on -- it is data depe dependent. >> it depends on what the fed decides. >> and the fed real pleasure to watch that play out. maybe it is credit suisse specifically you don't need to throw anyone else in there. recapping the top story. the uk government reversed the plan to scrap the top rate of income tax after public backlash and major market turbulence. prime minister liz truss backed the plan yesterday this morning, it was clear it

was a distraction to the government mission to tackle the challenges facing the uk economy. we will get a live report from london in the next hour. in the meantime, let's stay overseas leslie picker is joining us with more on the struggles at credit suisse i know she has been on the phone all weekend as well. le leslie, what do you know >> reporter: andrew, credit suisse is facing a crisis of confidence over the weekend. at least on social media platforms with buzz of proclamation of lehman moment. the stock prize slumping as c-suite is assuring the bank is not on the brink of collapse a report a week and a half ago that they were sounding alarm of the capital raise. that has since desk budisputed

on friday, that prompted the ceo to send out an internal memo obtained by cnbc where he said, i trust that you are not confusing our day-to-day stock price with the strong capital base and strong liquidity position of the bank the default assuring to 2009 levels which was reminiscent to some on twitter to lehman. some have called several tweets predicting the demise as fear mongering. the common equity tier 1 issue which was 13.5% which is higher than u.s. banking pieeers this could help shore up capital.

credit suisse is sitting on hundreds of millions of losses from leveraged buy out debt that the market will not absorb of risk-off sentiment it is impossible to get risk on the balance sheet minute by minute we have to wait and see. the firm will release the full plan on october 27th assuming the market is patient until then guys. >> that is what we were talking about earlier, leslie. perhaps the markets are not patient to wait until the 27th if they move that plan up and how far along they are in planning and not just what the plan looks like in terms of the restructuring effort, but also whether they need to sell assets as part of the restructuring effort one of the things that they may be intending to do is fromin fa that do you announce without pieces in place >> they put out a press release

last week saying they were undergoing the review for various assets in order to raise cash andrew, these things don't come cheaply. laying off hoards of bankers that costs money you need money to do that. in talking to people, you know, three weeks, obviously is a long time in a situation like this. for full transformation plan anywhere else, that is a short amount of time it is interesting to see how they approach things from here and whether they need to do more to calm what is going on in the market dynamic >> lieslie picker, we will continue to talk to you as we keep our eyes on the story. we have tesla shares that are sinking in the quarter we have phil lebeau with more. changing little things about the actual process of manufacturing or delivering or what? what did elon musk say >> it is more the delivery and

in transit process which is a miss for the third quarter here are the numbers for third quarter for tesla. the expectation of 364,000 the company delivered 343,000. 6% light of expectation. the bulls will say they produced 365,000. they really hit the target if you think about it they just didn't deliver them. why didn't they deliver? in the press release, tesla said it is becoming challenging to secure vehicle transportation capacity at a reasonable cost during the peak logistics weeks. the question is was it in transit in china was the problem or here in the u.s.? that is what analysts are waiting to hear. as the full year numbers are assessed today by analysts and if they bring them down, keep in mind tesla delivered 907,000 vehicles this year the estimate going into the latest report was for 1.36

million vehicles to be delivered this year. that means tesla has to deliver 450,000, approximately, in order to hit the target that analysts have the q3 results coming out october 19th that is the next opportunity for wall street to hear from elon musk about the state of business, if you will. in terms of hearing from elon musk, we did on friday night it was tesla a.i. day. what did that mean we had our first look at this. a prototype of the optimus r robot. elon musk said this is a prototype. not the finished product the goal here is that they will ultimately develop a humanoid robot to assist with manufacturing and sell for less than $25,000 of less than the cost of the car, if you believe elon musk that was friday night.

they got reaction. a lot of people are saying we're short on details here. let's see if this develops over the next several years >> gee, it did not look like arnold schwarzenegger after his skin got burned off when the truck explosion. it looks like t-1. there is no way. remember when the truck -- >> i'll be back. >> you remember the truck? >> yes, i do >> all you need are those eyes >> red ones. cyborg eyes. >> yeah. this is developed by the same guy who said a.i. is going to make a nuclear holocaust look gentle isn't this the same guy who said that, phil what is he doing >> he warned about the dangers of unchecked a.i. development. he has warned about that. >> and he builds that thing. okay it's very clear to me what is happening here, phil do you remember how hard it was?

even at the very end, it's hand. that was all that was left a metal hand twitching. trying to get at him >> that's right. >> that's coming >> anytime i can deliver a report and you talking about "terminator" is a good morning >> if it is on, i can still watch it it does matter how about when the guys gets thrown through the wall. getting stuff out of the cabinet. her boyfriend comes through -- remember that part >> vaguely >> i guess because i have seen it 400 times >> as recently as last week? >> it was on i didn't watch it i thought about it. when we come back, recovery areas for places hit hard by hurricane ian. we will speak with congress member kevin bradley for his take on student debt, inflation and more

"squawk box" will be right back.

welcome back hurricane ian is one of the strongest u.s. storms. the death toll still rising. the $47 billion in insured losses is expected at this point. it is hard to get your arms around what happened without seeing this for yourself our next guest runs the disaster recovery company bell holdings is mobilizing manpower to areas hit by ian sheldon, thank you for being here what have yyou seen so far? >> the devastation has taken place and that's what people have seen on television. the toll this event takes place on people's lives. think about it the destruction to your home most people's largest

investment people's lives are turned upside down the death we heard about, but the tragedies of people's lives -- people worked their entire lives to have retirement homes. how do they rebuild? that is where you need to listen to authorities and safety. you cannot go back to your homes until the authorities say it is safe you have to remember, you have downed power lines you've got water water and power together is a disaster waiting to happen you have to listen to the authorities. you've got to document everything becky, you mentioned the insurance losses each individual person has their own loss they're responsible for. you have to document you have to take pictures. you have to recall everything that you had you have to be patient you cannot do this in a day or a week or a month. this is going to take a long process to rebuild

it will get rebuilt. the more documentation you have, the better i would advise people to make sure when you are hiring people, make sure that their licensed. check it out do not give upfront advanced money. be patient document go through the process properly. work with a reputiable firm. communication is key safety at belfor is key. we have 75 more people leaving today. 75 the day after that. 75 the day after that. everybody is going with food and water. don't let yourself get stranded without water available to you when you go back into your neighborhood, you will not have access to water. all of the retail stores are

down i think there is a lot for people to take in. i would encourage everybody to respect the first responders who are there risking their lives to make it safe for you please respect them. >> sheldon, one thing i would ask, i think not just the severity of the damage, but massive swath of damage. ian is still causing flooding up the eastern seaboard what does this compare to in terms of disasters in the past >> again, i have been working hurricanes since hurricane hugo in south carolina 30 something years ago. the wrath of this storm extending throughout florida, parts of south carolina, north carolina, virginia, all the way up to the northeast. it is enormous we have offices, permanent offices, obviously in all of these states that have been mobilized and people coming in

from 39 other states we sent reinforcements again, i think as you find a problem with your building, with your home, please make safety the number one priority. do not ask people to just walk in be careful make sure the power is cut off if you have access to water lines, cut off the water wait until you know it is safe because the last thing anybody needs is additional devastation in the wake of a life. >> sheldon, thank you very much. i know it is early days. your employees will see this first hand we appreciate the update. >> thank you coming up, the outlook for crypto in the fourth quarter that's next. get the best of "squawk box" in squawpok d and listen anytime. we're coming right back.

♪♪ ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia. how will your business adapt to change? you could hire an office full of peyton mannings. what's up, peyton? good morning, peyton.

hold for peyton. they'd huddle.... welcome to the peytonverse. such a visionary. game plan... you go. no, you go! and call audibles... double our investment in omaha! omaha! omaha! omaha! or you could use workday. omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday. for a changing world.

♪ at last week's delivering alpha conference, stan druckenmiller shared his take on bitcoin and how it could hold up given central bank policies. >> i don't own bitcoin >> crypto? >> i -- it's tough for me to own anything like that with central banks tightening but, yeah, i still think if the bank of england what they did is followed by stuff like that by other central banks in the next two or three years, if things get really bad, i could see cryptocurrency having a big role in a renaissance because people aren't going to trust the central banks. >> joining us now is forecast news editor in chief and ceo

angie lowe throw in gold, and we've got the dollar hitting a series of new highs. there's all these cross currents it's very difficult to gauge the effect of each of those on gold and bitcoin. >> when you take a look at bitcoin, what does it really represent? it is decentralized against a number of -- and if you take a look even this morning with the -- very dovish contrast that with the federal reserve in what powell is doing with -- with all -- 75 basis points up, you have a contrast of contradictions that's also then -- driving this dollar. against all of that, it boils

down to this you've got bitcoin trading at sideways level, you could say, and that's been happening for the past couple of months. if you take a look at data of those who had bought in -- bought in in 2021 prices, they have not sold. they have not sold, they've kept it there's an anticipation that this bitcoin, the crypto market is going to have legs that are run -- than what we're seeing now. >> angie, we're having some audio issues we can kind of put together what you're saying, but everything you're saying -- some of it we're hearing twice. i'm not sure what we want to do. we can struggle through it we're getting the gist of it, but it's distracting you have made the point that maybe a u.s. dollar-based

stablecoin would actually benefit crypto overall just in terms of more mass acceptance? >> look, and i hope -- i hope the audio is coming okay what's clear is that the regulation is coming we've got 20-plus draft legislations in congress right now. at some point there will be stablecoin regulation. think of stablecoins that is pegged to dollar, this by default means that the u.s. dollar has been digitalized for a global audience, for global investors. and so even the u.s. market, you have people using u.s. coins, u.s. dc, for example, tether, for example, but you have to take a look at how people are using it and it is to counteract their own central bank -- central bank policies within their own nations to counteract the

enormous inflationary pressure that is devaluing their currency and when you have that stablecoin regulation anticipated that's going to come in, all of this -- all of this that is on the periphery waiting for that infrastructure to come in, that's going to be more liquidity into the market. >> angie, thanks we got the essentials of what you're saying there. we're just having some issues and we're going end it there hopefully have you on again soon and have that looked into. was that a zoom issue? >> probably a computer issue >> do you know >> i'm not sure. i'm not sure how she was coming in depends on what kind of stream is making its way here meantime, we got two big hours ahead. the latest reporting on credit suisse doing damage control and trying to reassure investors that they

aren't facing a lehman moment. we'll have more abt atouth after the break. "squawk box" coming right back >> announcer: squawk coin is sponsored by bitwise the world leader in crypto funds. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support.

that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back. (vo) with their verizon private 5g network, associated british ports can now precisely orchestrate nearly ♪♪♪ 600,000 vehicles passing through their uk port every year. don't just connect your business. (dock worker) right on time. (vo) make it even smarter. we call this enterprise intelligence.

good morning, everyone futures pointing to a higher open as october trading begins the dow and the s&p 500 at their lowest levels since november of 2020 a number of major market stories to cover this morning, including credit suisse. those shares sinking after executives spent the weekend trying to reassure investors that it's not facing a crisis. and tesla's third quarter deliveries falling short of expectations former ford ceo is here to talk about the auto market, inflation and more the second hour of "squawk box" begins right now ♪ good morning and welcome back to "squawk box" right here on cnbc. we're live in time square on this monday morning.

i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures at this hour we have a little bit of green on your screen. the dow up about 199 -- i was going to say 200 points. the s&p 500 up about 18 points nasdaq up about 10 points. talk about why or why not that may be the case. let's show you treasury yields as well. you're looking at the ten-year note sitting at just above 3.762. we're going to talk about opec, russia and what it means to the energy complex you're looking at wti right now at $82.77. they may be contracting there and crypto we were just talking about in the last segment, you're looking at bitcoin sitting right now at about 19,239 dollars the big question on the screen, is that a function of the folks thinking that the fed is going to blink here and say maybe the damage between the conversation we're about to have about credit

suisse and energy, maybe we're there. i don't know >> you've been -- i've been thinking that they need to -- >> but when you get data-dependent, are these data points enough to say, okay, we've done our work? or not even we've done or work the work is being done for us. >> the only thing that's going to make the fed back off is market instability, to try and make markets stable again like you saw with the bank of england. >> cool inflation numbers would certainly help how far back -- they may be happening already and the fed wouldn't know it until it comes out. let's get to christina with a look at this morning's premarket movers christina, good morning. >> good morning. it's only been ten days, not even two weeks after the tax cuts were announced in the uk, and now liz truss is going to scrap those plans and you are seeing reaction in the pound

this change of direction is pretty much an attempt to just much off the rebellion in her own conservative party the pound, it jumped 1%. now it's up 0.4% right now let's get to some of the financial names. you've been talking about credit suisse, down about 4%. and this is after they're looking to raise for capital you can see that it has jumped over the weekend, that's been a major conversation credit suisse told cnbc they will provide a strategy update on october 27th. we can see reaction with deutsche bank. the stock is down 1.6% and i know we don't want to talk about it, but i'm going to end on one segment and this is the retail segment the holidays are just around the corner and inventory levels are

tie high and rising foreign exchange risk means gross margin estimates are too high and that's going to be possibly some changes for some of these names like figs, under armour, burlington store now they're higher. >> holiday, including halloween, which people are -- >> is that a holiday where you buy gifts and stuff and spend money? >> you have no idea. it's my wife's birthday. do i buy gifts, christina? yes, i do. it does give her powers. i'm not kidding. >> well, you can get the discounts. because clearly the margins -- not clearly, the margins are expected to drop for a lot of these names. so you can save at under armour for your wife or figs. but i don't think she wears anything from figs, right? >> thanks, christina see you later. oil jumped this morning as opec opec plus mulls a cut in

production >> it roiled my weekend, i will say that you wake up saturday morning and you find out that opec has decided to do their next meeting in person in austria they've been remote and virtual since covid began, kind of doing these monthly fed-like meetings. they kind of dropped a bombshell on everybody on saturday and said we're going to do it in person which has led to all kinds of speculation about why, what exactly are they going to do that on short notice they're going to basically ask every global oil journalist and analyst to drop what they're doing and get to ienna there's probably going to be a cut. it fedepends on who you listen o 1 and a half million barrels a day. the other question is on wednesday in austria, will the russians, will they be there in person obviously sanctions on the west.

is there some sort of diplomatic immunity that would enable the russian federation to show up at the headquarters in vienna will the cuts be a million-plus barrels a day. it's leading to at lot of speculation. ro khanna, democratic congressman from outside of the bay area in frsan francisco sayg we will stop selling planes and arms to the saudis if they make some big oil cut that coming from democratic congressman ro khanna. i'm not going to read the whole thing. there's your basic thing b becky, we're starting to see this heat up between certain members of congress. you have very high gas prices in california and what opec is going to do, i think we have this midterm election coming up in the next month, i may have heard about

that, this is going to be the october 5th surprise a lot of intrigue suddenly around opec in just two days' time >> watching opec decide that, okay, oil prices are doing 23%, we need to raise prices, wouldn't be as shocking except for the fact that you have the entire world dealing with inflation and central banks trying to choke things off -- choke off growth to try and get that in line, when you hear this -- what do they consider the fair price of oil these days >> well, not where it is now because we know that the saudi energy minister bin salman believes the market is being manipulated. we had that phone conversation with him a couple weeks ago. he believes that the futures market may be being manipulated because the spread between the physical cost of oil, what they actually sell a barrel of oil for and the futures market has a widening gap you also, of course, got the

release of not just our stra strate stra strategic petrolyum from around, but ours some countries are worried they're not going to have enough diesel for the winter. they clearly have not said it's being manipulated by the u.s., but if they're talking about big releases and future markets, of course the u.s. dollar and its massive strength playing a big role as well if they view the markets having manipulated by that, is opec which is 40-some percent of global oil production, are they going to try to counter balance that we have an energy war. it's going to be another salvo. >> what is causing the gap in the case of russia, it's because they have to sell things to any buyer who will take it. what else is responsible for that gap between the retail price and what they're making on it >> i think it's two things

number one, you nailed the first one which is russia selling their oil at a discount. we don't know what that discount is they make private deals with each buyer but the futures market is where the saudis in particular are most concerned is there some big seller or big sellers trading houses, hedge funds, whatever it may be, pushing down the futures price artificially so that -- we look at -- we show our viewers right there on the screen. brent crude, $85.53. if you have the saudis selling it at 94, their buyers are looking at that going, well, it's 88 or whatever, 47, sorry, and you're selling it to us at 94, where's the gap and the saudis said we made the deal at 84 and we don't believe the futures to be accurate we don't exactly know why. but the saudis at least do

believe that the difference between what they're selling it for and what we're showing you viewers on the screen is always a little different but it's much more different than it should be, if that makes any sense at all. >> brian, thank you. >> sure. okay >> coming up, credit suisse under a lot of pressure following reports that executives are trying to calm major investors about concerns about a, quote, lehman moment. the latest on the developing story after the break. before we head to that break, let's get a check on the futures right now. we are looking at green on the screen the dow close to 200 points this morning. the s&p 500 up 18 points nasdaq looking to open up points higher we have a lot of fed speak today. you don't want to miss a moment of it. "squawk box" coming right back >> announcer: "squawk box" is sponsored by bitwise the world's leader in crypto index funds.

millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them... see how easy it is to save hundreds a year on your wireless bill over t-mobile, verizon, and at&t. talk to our switch squad at your local xfinity store today.

♪ welcome back to "squawk box. shares of credit suisse are under pressure this morning. they're off their lows of the session. the banks executives have been in talks with major investors trying to reassure them that their financial health is okay, down playing what's been on social media more than anywhere else, this idea that it could be a lehman moment. leslie picker joins us now with more what you got, leslie >> andrew, it really does appear

to be a social media phenomenon here executives seeking to dispel this notion that took fire on twitter and reddit over the weekend that the firm is on the brink of collapse. a lot of rumor contributing to this vortex of fear. let's take a step back and dissect the facts as we know them at this time. amid a slumping stock price, credit suisse's ceo sent out an internal memo obtained by cnbc on friday. in it he said, quote, i trust that you are not confusing our day-to-day stock price performance with the strong capital base and liquidity position of the bank to some, though, that language was reminiscent of the financial crisis when bank ceos went out and tried to assuage investors that their firms within on stable footing only to go under. it wasn't long before credit suisse and lehman were trending on twitter if you look at the numbers,

there's no clear and convincing evidence that credit suisse is facing a major capital shortfall. the firm has a sizable profitability issue, particularly within its investment bank. about a third of its balance sheet is comprised of liquid assets like deposits and cash. it's leveraged financial ex exposure is significant. with that market frozen, think what happened with a deal that they were underwriters for, they took hundreds of millions of losses but that doesn't appear it would bring down the whole entity. of course we don't know the mi minute-by-minute risk exposure these are based on q-2 numbers but credit suisse is set to announce third quarter earnings on october 27th, coinciding with the transformation plan that is in the works, guys >> stick around here just for a little bit

we're going to continue to talk about this developing story right now. larry mcdonald with us he wrote a book about lehman brothers, was a lehman brothers alumnus. is it being overstated here that a crisis is upon us or something that we should be concerned about? >> there's a lot of -- there's a lot of overstating on twitter, for sure but i think the bigger picture, andrew, this is so important when lehman failed, think about that moment, the core capital of the planet earth was solid, and that is government bonds in the last 20 years, we've never had a moment where you've got credit risk, which is obviously rising recession in europe, right, so that's clearly growing, so any bank in europe is facing increasing credit risk but also your balance sheet is

facing massive interest rate risk some of these bonds dropped 15, 20 points in the last month, right? so your core capital is in flames and your risk capital -- your risk-weighted assets as you described, the lbos blowing up it's a real problem and the banks are not passing a u.s. stress test. there's definitely i think a 95% probability that there's some type of force merger, bailout in the next say 30 to 60 days, but it's not a lehman moment >> okay. well, let's try to unpack that, larry, because the idea you're saying there's close to 100% certainty that there's a merger, rescue or bailout of this company in the next 30 to 60 days and yet you're suggesting it's not a lehman moment, try to make sense of that -- square the circle for us, if you could. >> well, like you said, they have better assets, you've got a

bigger backstop of government. the question is, is the fed going to continue to put stress on the global system you've got 50 trillion more debt today on planet earth, 50 trillion, than you did five years ago in the last cycle. 50 trillion. the only way to get out of this to avoid that type of dynamic, if the fed -- you got the federal reserve promising 125, 150 basis points more hikes, they're going to get stopped, they're going to get frozen, stopped in their track it was they continue -- >> that may very well be why we're seeing green on the screen this morning, this expectation that maybe the fed is going to, quote/unquote, blink, as they say, or you look at this data and say, okay, we've done enough but, larry, just to the point about credit suisse, october 27th is the date to mark on your calendar, at least as of now that's the date that they are planning to release their

earnings but also they're restructuring plan the question -- becky raised it earlier, do they have to announce that plan earlier than they had anticipated how much of that plan involves selling assets can you sell those assets into this market if you're going to do it without it being a fire sell and the secondary component, and you don't want to create a run by having the conversation, but if you're a wealth management client or some other client of the firm, are you calling your broker right now and having a conversation about whether you want to keep your money at that firm >> exactly and that's the problem it's a melting ice cube and we lived through this 14 years ago. it's a very dangerous process because, number one, like you said, they're out there on october 27th that's a long time they need to get this to the market the challenge within the bank is leaving. if you're a -- if you're one of their top traders and they're out there october 27th and you're looking at your equity,

your aat-1s are down seven point this morning institutional investors that we work with are saying they wouldn't invest without a backstop from the government and it looks like -- at the end of the day it looks like there's going to have to be some type of backstop from the government to get this thing through -- >> when you say backstop from the government, are you talking swiss government, u.s. government what government or central bank are you talking about here >> swiss government, for sure. if you look at the way -- not just the cds is trading, but the debt it's clearly, there's lots of stress across the capital structure. you're talking about a bank that needs to fund itself keep in mind nonperforming loans are right now marked in the books at 1.1%. you got to think an economic downturn, that's going to go up

substantially. really it's a melting ice cube heading into -- >> 1.4% -- i don't have to overstate the case i have to admit that i'm struggling with how to talk about this because the truth is that what you want to do is report the facts as we know them. at the same time, you don't want to cause a run on the bank leslie, speak to this issue. i know you were on the phone with so many people over the weekend. how you think investors who have money at credit suisse are thinking about this? >> yeah, just a couple things looking at the regulatory standpoint here. it's important to put into context how the world has changed since lehman for one, credit suisse's u.s. subsidy did pass the fed stress test a few months ago. it was adequately capitalized, at least according to the u.s. fed at that point in time. number two, larry brought up cocoa bonds which are

convertible into equity which help limit their debt hold fears surrounding that could be contributing to fears of price decline there. these cocoa bonds are meant so that governments don't have to necessarily do massive bailouts. they're put in place as a safety measure so it can help off load some of that debt and prevent them from major bailout. also credit suisse has living wills, in theory, it should have, you know, separate entities that could survive on their own if, say, the swiss entity was facing significant stress or the u.s. entity was facing significant stress. all of those things have been put in place in order to prevent some sort of lehman-type moment to prevent a financial crisis situation. they've never been tested. we don't know if they work but they are in place and that's something that's changed.

>> larry, everybody has got a view and, you know, some are worth more than others one question i was going to ask you, though, given your certainty about some kind of rescue in the next 30 to 60 days, what do you make of just the fact that at least according to our sources this morning, that the liquidity position of credit suisse is as strong as it was at the end of the second quarter. that would be $735 billion sitting there, if in fact that is the case? >> i just want to be very clear. if you look at the deterioration in the market over the last three weeks, the fed did their third rate hike. if we continue on this path for three weeks, this will weigh some of these banks can survive. they have to back away if they don't, they're going to force credit suisse into the arms of the swiss government things have -- things have just

deteriorated so fast across every type of risk asset class that we see. if we continue like this for three weeks, then the fed is going to push -- >> i'm concerned about the idea of a self-fulfilling prophesy. let me ask you one final question credit suisse is one firm, but there's obviously conversations about risks in other firms, deutsche bank and the like how do you think they stack up >> deutsche bank is in a much better spot. they've been through this cleansing process for a long time they've made some moves and then they have made the investment banking mistakes that credit suisse has >> okay. larry, we appreciate your perspective on all of this this morning. leslie as well i'm sure we'll be talking about more of it in just a little bit. becky? >> a lot of fed speak today and investors will be listening for any clues on where rates could be headed.

former dallas fed president richard fisher will join us on that and we'll get his take on the uk's tax u-turn at this point. take a look at some of the leaders and laggards in the s&p 500 this morning marathon oil, devon energy, halliburton all at the top of the list as oil prices rise again today. dasla is the biggest decliner toy. it's off by 5.6% "squawk box" will be right back.

♪ still to come, former dallas fed president richard fisher on the state of inflation and whether or not he thinks a recession is unavoidable tesla missing delivery expectations for the most recent quarter. we're going to talk more about the state of the car market with former ford ceo mark fields. stay tuned, you're watching "squawk box" and this is cnbc. at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward.

so you can enjoy more of...this. this is the planning effect. it seems like things are falling apart lately. the economy. the market... everything. but upwork lets you strategically hire talent to weather all ups and downs your business might go through. look at all that talent. ♪♪

a developing story this weekend, the uk government reversing a plan to scrap the top rate of income tax after public backlash and major market turbulence we're standing by in birmingham

where british conservatives have gathered this is a crazy situation. it gets a little convoluted. but the tax rate there i think was 45%. they planned to roll it back to 40% and now we're saying, it doesn't look like the markets will accept this >> yeah, a few creditability issues certainly is the case early this morning we got word that the finance minister had decided to reverse his decision that he had set forth on september the 23rd, which was to cancel and abolish that upper tax rate of 45% which, of course, impacted the wealthy to date, doing away with the abolishes of that top tax bracket and instead saying that it had become a distraction to what he believes was still a great growth plan for the uk economy. markets have stabilized somewhat on the back of that.

we saw the pound early this morning gain around 0.7% that weakening just a little bit. we saw predictions on interest rates, perhaps not set to hit that 6% mark it doesn't take away, of course, that impact on the gilt market where the boe, bank of england, has indeed intervened and said they will throw 5 billion pounds per day to shore up that gilt market questions around stability still at the fore. we are expecting him to speak to the market and that will happen in four hours time and that will give a clearer message to the market as to where to from here and give a sentiment as to what the mandate is then from the conservative party here at the conference in birmingham, england. >> thank you let's welcome former dallas fed president richard fisher he's now senior adviser to

barclays and cnbc contributor. we could have you on every day day, i think, richard. got liz truss, you have credit suisse, you've got jay powell. he's -- he is set to raise rates, it seems like what's up, andrew? you want to ask more what do you want to start with >> in terms of the brits, i mean, this is an embarrassment, but what comes back to these ldis which are leveraged instruments on gilts and i think it's just one more example of how keeping rates too low for too long encouraged people to try to earn greater returns and push out the risk curve -- >> richard, one second if kim kardashian is in the

news, we need to do it immediately -- we have fascinating breaking news in the financial world this morning because the s.e.c. is charging kim kardashian for her post on instagram last year that endorsed a crypto asset sold by ethereum without exposing how much she was paid to promote it. she's agreed to settle that case with the agency. the price tag, $1.26 million she's cooperating with an ongoing investigation and we're going to talk about this this morning at 8:00 a.m. we're going to have the s.e.c.'s chair gary gensler to talk about this in an exclusive interview about this case. there's been lots of questions about influencers who have used their platforms and posts to promote various cryptocurrencies some that have just disclosed them, some that have not in this case, by the way, it appears that she did interestingly use the #ad on he post i think we're going to talk to

gary gensler about what the distinctions are she was paid about $250,000 to post that. she's paying, obviously, close to five times that in terms of a fine and this seems to be one of the early cases, i imagine, that both gary gensler is trying to make an example of her given her prominence in this space and we'll talk to him about that and also she's clearly settling on this case early to try to ameliorate what is a -- >> smart move. but if she tagged it #ad, how is that different from what matt damon does -- >> this is fascinating we're going to have to talk to -- >> i'm assuming he was paid for that. >> my understanding of that is that in certain cases, at least according to the law as written -- this is the part that i don't understand and we should talk to gary gensler about it. in certain cases you have to disclose how much you're being paid and why in other cases you would not --

>> everything kim kardashian tweets about she's getting paid for or it's her line. >> there are examples where people don't disclose anything or they have an ownership stake in something and, therefore, whether they're getting paid or not it almost doesn't matter -- >> you're getting paid because anything you buy goes back to you. i assume anything any of these social influencers come up with, they've got some money coming in. >> elon musk promoting dogecoin. is he being paid to promote it no but if it goes up, he's a beneficiary. we're going to talk about all of this with gary gensler in the 8:00 hour -- >> i know that i couldn't call kim kardashian, but i think you could. >> we've also talking to other kardashians as you know on this broadcast. >> i just want to say up front that my endorsement of taco bell, i haven't even gotten a free taco. if there's any question -- i'm

an influencer in terms of mexican cuisine -- >> apparently not a very good one. >> i am fascinated by this case because it does she disclosed it properly in certain cases maybe not. we'll see. >> i can understand gary gensler's point that not everybody on social media is smart enough to figure out that this is an ad and maybe that's what this is, the identification to realize that you can't do anything and say anything you want in this arena >> we'll talk more about this. richard fisher, we can talk credit suisse if you want. i would rather just find out, you know, whether you think the fed is on the right track here the credibility is gone from the transitory period. now they're, you know, dead set to keep going and going and going. that was a bad move back then. they had no clue are they in a better position now? you think they ought to go another 400 basis points or does

the economy already get the message? >> we'll have to see i don't think the economy has yet digested the inflation forces, particularly the wage price spiral that we're seeing it takes time for the policy to affect the economy my guess is they may temper. but i don't think they're going to completely abandon the idea of continuing to raise rates we still have inflationary forces now i'm pretty sure that mr. powell's press conference after the next meeting will not be as exciting as kim kardashian's actions that have been taken but, look, we have an inflationary problem we are the lead central bank in the world. we have to demonstrate that we will deal with a problem even if we created that problem in the first place. and i'm pretty sure they're hell bent on doing it >> what kind of landing are you

expecting? let's say you're on one of them single-engine planes and you're -- you got -- you're expecting one wheel, the other wheel is gone? what kind of landing ware you expecting? could it be a three-point landing that you don't even notice still >> i doubt it. i think druckenmiller -- i'm on the same wavelength pretty much. i don't know how severe it will be it's likely to be sometime in 2023 look, enormous excess was created by keeping rates at zero-bound for too long and by not reining in the balance sheet. and we're seeing the reverse of the benefits that that did for investors and for companies. and so you take this away, you're going to have strains in the system in terms of what happened with credit suisse. >> okay. >> we -- we're looking at cdss

as we were getting into 2008 and 2009 it's important to pay attention to them. i'm not saying this is a like situation. but it is an indicator of stress we saw it across the board on every financial institution. merrill lynch, et cetera, lehman and so on. so i do think there's a signal here that people who have overleveraged have been unwise in assuming that interest rates would stay low we're going to have some real fissures in the system and it's going to scare people i don't think it's the same kind of situation as '08/'09. but we're going to see these things pop up every now and then and we have to be careful not to exaggerate them but at the same time pay attention to them, joe. >> when we saw that -- what did you make of that bizarre move from the bank of england that was a quick pivot there was a reason for it. bond loss. we hope that this location

doesn't happen in a bigger setting. is this the beginning of some dislocation in a bigger setting or is it credit suisse >> what they were doing -- it's basically a leverage mechanism, the ldis, as they're called, to try to obtain better yield this always happens when rates are at the zero-bound. we see it with insurance companies as well. so let's see how people can rein this back in in their case it was an exotic instrument and they were playing with pension funds and they shouldn't have been. i don't think it will deter the fed from continuing to move in a way that raises the inflationary pressures that are in our economy right now. >> richard -- >> indication, joe, of other things that are likely to pop up and we're just going to have to see what price is paid for, again, having started this process, ben bernanke started

the process of using the balance sheet and hugging the zero-bound it has to be brought back in, and that will be painful. >> how do you handicap the situation at credit suisse a lot of folks said don't look at the stock price that's not what you should be looking at or necessarily cds. what you should be looking at is our balance sheet, liquidity, have something -- if in fact that balance sheet looks anything like it looked like at the end of the second quarter, is balance sheet the thing to look at? or is the repo market? can you turn that paper over and how much do you think about the swiss bank in terms of central bank in terms of its roll in supporting this bank in the future >> well, you raised a lot of issues there, andrew i think there are all of these indicators one needs to look at. the strength of the balance sheet and having access to liquidity is the key the good thing is, at this

moment, our larging ber banking institutions are solid i don't think it's necessarily the case they've had a lot of turmoil at credit suisse. i don't think it's necessarily the case for the big british banks or for the big just banks. but we'll have to watch and see if others have made these mistakes but he's right, look for how much liquidity is on, how much access you have to liquidity but at the same time try to figure out why the cds market is sending a signal that it was sending. and i wouldn't so much worry about stock prices i would just worry about the soundness of the institution and we'll have to learn more as we go through time and see how they deal with this current bruise that they've inflicted upon themselves >> we got to go. you think the current labor market is -- you can use past analysis and it still holds

true, even though it's a postpandemic situation in terms of participation rates and hybrid work and trying to bring people back and obviously it's a -- people can ask for raises now and the skills are mismatched we got -- it's so weird. does that constitute '70s-style inflation, or a one-off for the labor that the fed is fighting some battle that's going to kill the economy for something it can't really fix >> kill the economy is an extreme statement, joe we have 3.6% unemployment and normally when i was at the fed 6% was considered the break point in terms of creating inflation. there's some room here i don't think it kills the economy. but, again -- >> hard landing -- kill is a bad word but you said you're expecting a hard landing next year >> i'm expecting -- >> why do we got to do that? >> you used the airplane analogy. i'm expecting a bumpy landing,

and i don't think the economy is going to be killed we have to be careful not to exaggerate this. anyway, love you guys. >> this kim kardashian thing came out of nowhere. tesla delivered nearly 344,000 vehicles that's a little bit short of analysts forecasts we're going to talk evs with former ford ceo mark fields and flioankevin brady on oil prices, inatn d much more. "squawk box" coming right back what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

coming up, former ford ceo mark fields is going to join us on the state of automakers and the car market and then in the next hour, an interview you do not want to miss, s.e.c. chair gary gensler is going to be with us on the breaking news that kim kardashian has been charged and has now settled about unlawfullily touting a crypto security there's still an ongoing investigation. gary gensler will be joining us. we're going to be right back

mark fields is now a cnbc contributor. let's talk about this and then vehicle sales overall. for tesla, this was an issue where the deliveries didn't meet the end of the quarter expectations elon musk says it is different the way of the shippings that makes sense the stock is the largest performer in the s&p 500 what do you think about it all >> well, you know, the tesla

stock prices really based on at built to continue to grow and celebrate ratings and probably from what you saw in this quarter is not only the supply chain issues that are affecting the whole industry, but at the same time they're ramping up plants in austin and when you ramp up a new plant, you know, issues can happen. i think that plus the supply shane chain issues hindered the production and deliveries this quarter. >> there is also a temporary shutdown of the factory in china, too but longer term, what do you think about the probe and the possibilities whether or not they'll be able to make up for it in the fourth quarter >> at the heart, tesla is a battery and software company learning how to manufacturer cars i think they're doing a really good job the last couple years you know, improving productivity at each plant. when you combine that knowledge that is continuing to be with the big macro trends with the fact that, you know, evs are

going to continue to capture more and more marketplace and the fact that their brand is known as the leader and held in high regard, i think that bodes well >> what about auto sales overall? we haven't really seen any slowdown in auto sales or auto demand is that because of the backlog there is ho how long will that last? there are not incentives out there. >> well, you know, becky, there is that old saying, trees don't grow to the sky. what you have right now is a lot of pent up demand. you have average selling price that's are near record levels. that's telling you that pent up demand is still. there the bottom line is, you know, we're going to run into affordability issues particularly given the headwinds for the market whether it's the rising interest rates, interest rates which impact monthly payments on cars. you have consumer confidence that's been declining. you have inflation

and you have just overall economic uncertainty so at some point the automakers are going to lead off their waiting lists. they're going to restock the dealers. that's going to impact the production i think the point being is going into an economic slowdown, there are much better shape particularly because of the low inve inventories than they have been and the most recent economic slowdown i think they'll farewell affordability is going to start to be an issue and you're starting to see places in europe where they order a vehicle and those order deliveries are down the last couple months. >> yeah. i think the question is when do you think that actually catches up here? is this something that happens in the first half of next year the second half? or just push its way out to 2024 >> well, i think depends on the severity of what happens in the economy. and inflation and, of course, the intererates and what the fe

doing. that's going to dictate the timing when you look at the inven tore you levels, the uninventory levs are at historically low levels when you have the demand drop off, the automakers are still going to need to restock the dealers. maybe not to the levels of precovid but they're about a million units now. and about this time of year you can have about three million units in inven tortory for custs to choose from when you combine that with the continuing supply chain issues, we won't start to see this impact probably until well into 2023 >> yeah. what would you do if you were running one the companies right now? we've seen this phenomenon hit the retailers, the chip companies. you know, there is a time where they're chasing and chasing the demand and then the demand disappears how you would prepare for that potential dropoff? >> well, first off, obviously, you're monitoring demand and the

influx of orders importantly, i think they're going to look at the mix and are consumers now choosing less equipped vehicles? i think most importantly because of the high fix costs and the auto industry, you know, you're really starting to attack those costs and becoming even more cost efficient that's why you're seeing a number of announcements from a number of manufacturers, you know, over the past month or so really laying out plans to become more efficient in an environment where the demand is lower. i think that's the order of the day. >> mark, thank you we appreciate your time. mark fields. >> thanks. coming up, sec chair on you know what. plus, we're going to talk congressman kevin brady about kim kardashian it's on crypto we expect a big jump in, like, young viewers for this i guess maybe can you call and ask for that segment

>> probably includes not talking. >> we're going to talk to kevin brady for his take on inflation, student debt and more and mohammed el-erian, what he expects the foed do next impossible odds, save the world. i'm done. what do you have for me? a new way to transform our agency. strategy to execution. oh, looks my laces have come undone. a business card? yes, for ey. tech expertise? $2.5 billion invested. impressive. okay, you've convinced me, i'm back. just gonna... get this...

♪♪ ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia.

good morning, stock futures pointing to gains. we're ready to kick off the fourth quarter investors hoping they can put an ugly september behind them credit suisse shares are getting hit hard over fears of financial health of the bank telling workers no the to confuse stock price with stability. we'll talk about it. then breaking news just this hour kim kardashian paying a millio dollars to settle sec charge that's she hyped a crypto security without disclosing how much she was paying. we're going to speak exclusively this morning with sec chair gary gensler in just moments. the final hour of "squawk box" begins right now >> good morning. welcome to "squawk box" on cnbc

live from the nasdaq market site in times square. u.s. equity futures up 250 points on the dow. and the nasdaq now popped. it was lagging a little in the red. but up now in the s&p 500 about 20 points. looking at treasury yields obviously, that's what we're all keying off of or have been 4.1 on the two year. 3.69, a little lower on the ten year kind of under control. crypto not much to talk about with bitcoin, 19,000 and change. and oil with news we may see opec plus cut production potentially. and that has got oil firm this morning. from a seven handle. and now back to 83, up almost 5% this morning >> quite a few stocks on the move this morning, too, as we make our way to the opening bell

in wall street we're tracking all that action kristina >> let's start with shares of credit suisse. they continue to fall this morning even after the bank tried to calm fears about the bank's financial situation the ceo saying don't conflate the day to day action. the stock is below the book value. typically put minus liabilities, that implies a lack of confidence in the assets it's down 5% right now we have not seen this trade right now since the low since 2008 and this chart here is just year to date. down 61.5% tesla shares also down this morning. even though it delivered a record number of cars in the most recent quarter. still wasn't high enough for wall street's forecast tesla did blame the lack of transportation options or the miss you can see are down 5% right now. and lastly, nike shares are also lower.

this is after analysts downgraded the company to a hold on concerns of nike's high inventory levels we told you the inventory levels jumped 44% in the last quarter these analysts are saying that they'll have to cut prices to get rid of that inven tore you of course, hurting margins and earnings in process. you note only have the margins, you also have the foreign exchange headwinds and weaker sales in china that's weighing on the stock you're seeing it down .7%. andrew, back to you. >> thank you so much new this rng month, the sec charging kim kardashian for a post on her instagramen that do endorsed a crypto asset. the sec saying she agreed to settle the charges sh is paying more than a million dollars in penalties she'll pay $1.26 million she is cooperating with an on going investigation. she is also agreed we should they will you to not promote any

kr crypto securities for the next three years. she was paid $250,000 at the time she had #ad on the post which is typically what folks do to disclose that they are advertisements it raises all sorts of questions about the rules of the road, what the law really is clearly at some level she's being made an example of and in part to influence others not to do the same. we've been asking the question when you see a post from whether it's elon musk or mr. sailer or matt damon, what the differences are? i think we'll get into all of that when we have our exclusive interview in a little bit. >> i think it makes sense. maybe the way of doing it on these social platforms is to say #ad. but that is clearly not as much of a nod as you would get if

you're doing an ad in the super bowl and you know this is a crypto ad for another company. again, you tend to think thattive in the social influencers are promoting are things they're making money off if not paid outright >> is that little -- >> they're not denying it. the interesting component, this idea that if you say it's an ad, does it count as an ad >> can you barely see it >> well, that's how they do it and the first time though i ever saw where you have to disclose how much you're being paid which to me is an interesting kboen en kpoen component. that is an interesting rule. >> knew jerk reaction is they're kind of like not really sure why and she just said, you know what a million dollars for kim kardashian is like go ahead. if i were her, i'd say, look, you know i do this stuff

i'm an influencer. and they're like okay but we're going to make an example out of you. >> we should say he has a post now out on twitter this morning. i don't know if he says ad on it but he has an ad out there talking about this settlement and also effectively telling folks what to do in terms of how influencers should be posting about this and we're going to talk to him in a little bit. >> seems like the thing you're always talking about is who is trading on some congressional tra tr trading or fed that seems a lot i may be a little more interested in that if i were him. >> we'll talk to him about it. that is why i said when you think about mr. sailor, of course, the micro strategy he is promoting bitcoin. he has a huge amount of bitcoin on his balance sheet >> people have a lot more skin in the game than this. >> a lot more at stake than kim kardashian it's an interesting one to think about. >> by the way, this got more

headlines and more attention just in a half hour since this has come out so if you do want to make a case of it this is how you do it. >> we are going to get back to that and the sec chair we want to switch gears a little opec gets ready for a key meeting this week. reports say that cartel and allies are considering cutting oil production by more than a million barrels a day. that is an effort to shore up prices that have fallen from the 120s in june to the 80s today. joining us now to talk energy, inflation and more texas congressman kevin brady. he is the lead republican from the house because and means committee. and, congressman, you know, you're a republican. and if a republican really wants to complain about the way the biden administration has handled the energy situation here, i mean, i know what you're going to say do we want to go through the process of of that because you've got a million things you could say

i don't want to put words in your mouth we're doing the spr at $80 just to get it down this was not an emergency. that was not something that knocked out production that was just purely november's coming we want to give people a little relief at the pump biden went over hat and hand to the saudis and said, meplease, help me. this is how he is repaid and we still haven't done anything in this country to loosen up a lot of the executive orders that were put on as entered the office on january 20th i just getting you started if you want to go through this, you can. it seems like shooting fish in a barrel >> it's been frustrating we talk a lot about energy independence, energy security, and what we really mean is not being dependent on opec and other countries' decisions,

supply issues for the price of oil. and, you know, under president trump, america really was sort of the market maker here on energy prices. no more is the case. there is so much more we can do as well as help supply our allies in this war against putin and level the prices out, create that stability yeah, this is a self inflicted wound. i think from the president and he still has time to course correct. the no one believes he will. >> what do you mean? he could, of course, correct and talk about the president is one thing. what about our friends in saudi arabia that have no problem at this point helping putin fund the atrocities that we all witnessed on the "nightly news" in ukraine >> yeah, that is a long discussion too, joe. just frustrating i think for

many of us to see a u.s. dependent on saudi arain ybia on ez venezuela. they're environmental responsible here in the united states i guess that's the bottom line why are we running this path >> what are we going to do about inflation and the fed at this point, congressman you are expecting a recession next year? >> i do. i think every indicator shows that the i notice the conference board and leading economic index fell to .4% the last six months. that is for the last 60 years been followed by recession we're either in it or close to it certainly we have a pretty dangerous wage price spiral. we've been talking about that. the no country wants to be in it we're deeply in it just the traditional definition. so i think what worries me a bit

is i'm not sure the fed knows what the unemployment rate needs to be to decelerate inflation. i don't think they know what the economic growth should be slowed i'm just worried that they're winging it here trying to get this -- the president's inflation down >> looking at predicted senate for 2022 the things have been moving a little bit recently. i don't know unfortunately the stock market has given people a case of that in the last month. and for whatever reason, i think even the senate looks like it could be more favorable from republicans. the house is predicted at 80 to 20 right now in terms of vetting. what do you expect >> yeah. so i expect a very strong election night for republicans in the house the and a lot of it, too, is not just the groundwork that is laid

and the history this is a record on joe biden, clearly. recruitment of candidates has been in the house is again some of the best i've ever seen that's really important in the house because that's the last local election that's really where people connect with that elected leader the senate level, i do think things look better i think it probably is down to one or two seats again maybe election night or runoff we may be seeing a replay of that i feel real confident about the house. >> this morning it was very weird for me we were talking about if you disclose something is an ad. i don't know if you saw this i was very interested this morning. "the wall street journal" on my twitter feed had democrats see an opening as the polls numbers improve with independents. i looked at it it was from september 1st. it was rerun by "the wall street journal" and at the bottom it said ad. and --

>> yeah. >> do they do that do they run things -- >> it's just promoting things. it's a click bait, get links >> but back to back there were two that were very favorable democrats and both of them are totally misleading in terms of polls. i went on it and said -- how do you block this i don't like this. it's from september 1st, andrew. isn't it -- it's october now >> a lot of news organizations will promote certain tweets and other things to -- >> a whole path of the twitter sphere loves seeing that and thought it was today's poll. that's -- congressman, i don't know that's just disingenuous in the last month it's moved >> it has moved back the other way. i saw totally under water on the economy. >> in a big way. >> 21 points >> yeah. in a big way and i ngtsoticed the president's

approval ratings have gone back up >> they're back down. >> it's up among the democrats not the independents on republicans. >> yeah. and it was -- i mean i believe it it was "washington post"/abc if they could have had 59, they would v they didn't in this case they put the real numbers do you remember -- the real numbers down congressman, thank you we have sec chair coming up. i didn't ask you about kim kardashian i don't know if you have any comments >> no. >> i'm with her on this, andrew. the more i think about it. >> we'll talk to gary gensler about it. >> thank you >> all right thank you, congressman >> good to see you >> in fact, when we come back, we'll be speaking with sec chair gary gensler he'll join us on the sec's case against kim kardashian stay tuned you're watching "squawk box" and this is cnbc

♪ ♪ ♪ ♪ ♪ ♪ introducing ihg one rewards. seventeen hotel brands. six thousand global destinations. one loyalty program that lets you guest how you guest.

the sec charnling kim kardashian for an ad for crypto

asset sold without disclosing how much she was paid to promote it kardashian agreed to settle the charges in more than a million in penalties and cooperate in an on going investigation joining us now to talk about it all, an interview with gary gensler. great to see you this morning. help us understand why you brought this case and why you settled it >> thank you, andrew good to be with you. look, congress passed a law many decades ago called the securities act and it was to protect the public and part of that law said that if you tout a stock, you need to disclose not only that you're getting paid but also the amount so the source and the nature of those payments and so this was to protect the public when folks -- and this law was passed in the 1930s. we brought the types of cases over the decades but even in the last five years

with regard to crypto, it's really important that the public understand if somebody is touting a crypto security token that are they getting paid how much are they getting paid and we brought a case a number of years ago, i think four years ago and it was against floyd mayweather, get d.j.kalid, steve segal, an actor and others over the years. so this is unfortunately another time that we brought a case. >> explain this though i think there's probably lots of questions in the public and the influencer's space about the distinction being made here. it is our understanding from the post that i've seen from kim kardashian that seems to be the one in question she had what is called a #ad under the post which is something that a lot of influencers do to identify, in fact, that this is a promotional

post why does that not count in this instance is it simply that she has to actually disclose the amount of money she receiving? and how does that differ, for example, from others who make similar posts who made own, in fact, different cryptos or other securities and promoting them? i'm thinking of michael sailor from micro strategies. he has a huge stalk in this and promoting on line and elsewhere or even talk about elon musk they may not be being paid specifically cash to promote those things, but it has such a large investment in them that they have even more at stake, frankly. >> so let me talk about the core i think why this is in the securities laws. you're right if you're advertising perfume or vacation homes or anything else on the internet, there are laws about that

but these are the securities laws the other laws may be appropriate to just say #ad. but in the securities laws congress put in place you have to disclose that you're getting paid and the amount, nature of it and this was really to protect the investing public when somebody is touting a stock. and whether that is a celebrity, an influencer, or the like and that's at the core of what this is about. >> so if you see an ad -- if you were to see an ad, i think we all did during the super bowl with matt damon around crypto, i don't know if in the fine print of that ad it said how much he was being paid personally to promote that would that be something that would be required? >> i'm not going to get into it. i understand the quechstion. i won't get into any other specific circumstances it depends on the facts and circumstances. and the anti-touting provisions

of the acts. >> if we were to see an ad on television, an ad in print with a picture of an actor, actress, v individual of any sort, a model, are they supposed to specifically disclose the amount of money that model or actor or whom ever is being paid? >> in this circumstance, let me say i want to acknowledge miss kardashian in cooperating and on going cooperation. we really appreciate that. but in this particular case, this was about an influencer, a high profile celebrity on their instagram site putting out a tout for this token which is a security we determined and so those are the facts and circumstances here it's important for the investing public to understand also this is a highly speculative asset

class. and so when a celebrity or influencer is touting it, it's important the public understand that's relationship and are they getting paid and how much they're getting paid on their instagram site that's what this is about. >> we have a statement from miss kardashian i want to read it in a moment. but i want to ask you a separate question a lot of people are focused on it this morning. you determined in this case that it is a security and that unto us self is interesting. there are questions about whether firms like coin base are exchanges or whether they are broker dealers because of this issue of securities and whether all of these things are now consistent or not. >> so there is about 10,000 tokens, crypto tokens. and the investing public is investing hoping for a better future an agency, the securities and exchange commission was put in

place to protect the public in those circumstances. when you're hoping for a better future, you're unvesting in something, anticipating profits based upon the efforts of others and that's what we found in this case with this and to your question, i think and my predecessor thought this as well, most of these tokens are, in fact, that that the public is investing and anticipating and hoping for a profit based on somebody else's efforts. yes, there are various intermediaries are likely need to register as either broker dealers or exchanges as you said >> we had chairman from the ftc made last week kcftc should be regulating these things. when you start to build up case laws, examples of people that agreed to settle with you like this, does that make the case more affirm the sec would then

be placed where these are regulated? >> look, our agency is an agency that oversees this basic bargain when a group of entrepreneurs is raising money from the public and the public is anticipating a prove they need disclosure, full, fair, and truthful disclosure and that's the core bargain in our capital markets. you get to take the risk but the person raising money or the persons raising money has to disclose various information to you. that is how our capital markets work best. the sec is very good at this and that's what we do. and the case law is clear on this the law is clear i believe based on the facts and circumstances most of these tokens are securities. >> chairman gensler, one more question and then i want to pivot the conversation i got the e-mail from the head of an advertising agency who said please ask him to explicitly explain what the

rules are both for social media and for all sorts of other media as we make determinations about what kind of disclosure we have to make if in fact we're going to be promoting and this becomes more complicated, whether it's securities or how you dining room bitcoin or some other crypto to be so for those advertising agencies and executives watching you right now, what would you tell them? >> i would tell them that they should read the securities laws and 17 b the anti-touting laws that's been on the books for a long time and they know the advertising executive with all respect they know if somebody is out promoting a security, they've got to disclose not only that they're being paid but how much they're being paid and particularly crypto. if you thought about it miss advertising executive, highly speculative asset. why is it that somebody is having that celebrity put something on their instagram

site it's to gain attention, bring people in. if somebody is paying them, that's an important piece of information and congress is the one that laid out these laws >> i want to pivot from the conversation i want to read a statement from her lawyer he says miss kardashian is pleased to have resolved this matter she fully cooperated from the beginning and she remains willing to do whatever sthe can to assist the sec in this matter she wanted to get this matter behind her and avoid a protracted dispute the agreement she reached with the sec allows her to do so. she can move forward with her many different business pursuits and, of course, we just heard you thank her for settling this case let me ask you about the other big issue though that i think a lot of people in the markets are confronting this morning which is what you think about credit suisse this morning. there is lots of speculation, again this is speculation that is online. it's in print. and he is where. they don't have #ad on them. but how concerned are you about

liquidity issues and the stability of the marketplace and credit suisse specifically if you could. >> let me step away from the specifics of any one company i think your viewers understand kint i can't comment on any one company. but we're in uncertain times a war continuing in eastern europe various changes in the marketplace. highly volatile. as we just saw last week in the united kingdom and the guilt market that, is the sovereign debt markets very volatile. and so in these times, it's really important that an agency like ours sort of redouble our efforts on resiliency. financial stability. that's why we have numerous projects, on going projects to heighten the resiliency of our u.s. treasury market or our money market funds or our bond funds or something as boring as shortening the settlement cycle

one day to two days. so these are the projects that we're working on but for the unve investing public, we're going to make every effort to lower the risks financial stability risk where we can but these are on going projects that don't speak to your one company. >> let me ask you then more specifically in, terms of the stability in the markets, people talk about the possibility of a lehman moment. can you speak specifically to this weekend were you on the phone talking to folks about concerns in europe at least broadly around banks in that region? >> i had nice conversations with my daughter who birthday was twh weekend. i think that's all i can tell you about my weekend, andrew >> thank you we appreciate you joining us this morning to talk to us about this settlement with kim

kardashian and social media. we appreciate and look forward to talking to you again very soon >> thank you coming up, we're going to weigh in on whether the markets can find footing after a pretty miserable, awful, horrific, bad september. and jeff curry from goldman sachs is going to tell us what he thinks of potential million barrel per day output cut from opec plus, what would that mean for the energy markets we'll have the first knee jerk reaction it is 5% higher on crude bc"sawbo oching quk x"n cn

coming up, moha mechlt -- mohamed el-erian will join us.

♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq welcome back to "squawk box. we're coming off the worst month since march 20of 2020. troubles at credit suisse, uk's reversal on cutting the top tax rate for high earners. what we're watching, we're going

to bring in our own rick santelli what's on your list? >> well, first of all, i find the whole thing with the reversal of 45% tax rate highly fascinating. don't you, andrew? the whole package of the tax cuts is, what, in the zip code of $50 billion pounds. and how much is that 45% top tax rate that they did the u-turn on worth? two billion pounds two billion versus nearly 50 billion. listen, i understand it's all about optics and it's about timing but i think that there should be a deeper understanding of the numbers which doesn't appear to be so. it makes me even that much more nervous considering what a tinder box the global has become because we left ourselves so vulnerable whether it's unlimited printing of debt with the notion there is no recourse or the notion of why frank enstein has the two things

in his throat. it's alive central banks have kept zombies alive. so credit suisse, another area that i just don't understand, andrew maybe you could tell me. i don't get with all the ire they had over a $5 billion hit not long ago they're getting rid of a bunch of lines of business that are not profitable i mean can you see this one coming as well so i guess ultimately, there's a lot of things that we need to worry about because we have done a lot of things wrong in the last eight to 15 years but i think the two biggest stories are portrayed as canaries in the coal mine when they're more outliars than anything else. >> okay. maybe that's the case for optimism, rick stay with us joining us now to talk more about uk government's reversal on taxes, troubles at credit suisse and so much more. adviser and president of queens college cambridge, your thoughts het's start with credit suisse

how concerned should we be is this an idea of being a lo lehman moment. too far, too fast? >> ien to the think this is a lehman moment. if it is defined about counter party risk f you're worries about systemic risk, look at the nonbanks, not the banks. i agree with what rick just said importantly is look at the market reaction. it is the market reaction that is the interesting thing here. and it tells you that anxiety not only about the things we knew, financial conditions, central bank mistakes, slowing global economy, all these other noneconomic issues, there is also concern about market functioning. and that's what the uk and credit suisse really tell you. market functioning after years of repressed interest rates are starting to be an issue. >> but the perverse and

interesting element of this is we're looking at green on the screen we're showing you red right now on credit suisse but green in terms of futures. in part on perhaps expectations that maybe the fed pivots because they see if the data dependent they see this news and say to themselves, maybe we got to take our foot off the neck of the economy. >> we have to stop with this love affair of pivot we saw what it resulted in during the summer. if if the fed pivots, it's because we have either an economic accident or an market accident we should not be wishing for that the journey to a pivot would be painful i'm not surprised seeing -- let's not forget how horrible are you confident that the fed can balance control of incongratulations and employment but also financial stability because what the uk has told you is keep an eye on the fed issue

as well. which makes it much harder in terms of what the fed has to do. >> we don't want to pretend that the elephant in the room, obviously, everybody knows you won this bet but i'm going to say if you win this bet by one day, if we -- if we're under 3600 and go back up to day and if we don't -- i don't see how can you really accept a jets game on me from that but i will say this. we are going i don't want people showing up, you know, for autographs and stuff like that from you it could be a mob scene. but tell me about zach yesterday. just quickly do you believe -- i mean, my eyes are open. he may be something special i think. was that -- i don't want to be too soon the game on sunday is going to be, good right sorry, andrew. then can you go back to it >> so you jinxed my mets and we got swept.

so please don'tjinx my jets two interceptions is not a great thing. but zach was great everybody should know that immediately let me know that i won my bet you immediately arranged to meet to settle the wager. i'm very impressed because of that, i will also make sure you get your taco bell >> i think that we should have some taco bell at the db robert salam i'm starting to like as well. >> taxes in uk i believe you're in the uk now and you probably pay pretty high taxes already. what do you make of what is happening there? >> so in addition no what rick said, i'll tell you two things, reminder that politics cannot dominate economics all the time. and second, the reminder that the bond vigilantes to use a 1980s phrase aren't dead there is still life to them. both these things asserted

themselves and resulted in a very embarrassing u-turn for the government don't underestimate how embarrassing this u-turn is. >> was it the right decision >> yes, absolutely i think even -- even the economist that's were advising the government said that the tax cuts went too far. led the other element of the program gain traction. the growth enhances on the supply side. the energy stabilization and then just like margaret thatcher did, just like ronald reagan did, once that happened and inflation is not such an issue, bring in the tax cuts don't do it all immediately. and the marketplace sort of reminded them how much can be done. >> just bring rick back into the conversation rick, you were at least seeming optimistic when it comes to credit suisse. in terms of what you're looking for, we're hearing from them about the restructuring plan of course, there is some questions about whether they're going to have to bring that

reconstruction plan forward just to create a little more confidence in the system but what are the numbers that you're paying attention to >> no. i'm not optimistic on credit suisse what i'm trying to get at is that if you throw a brick off the skyscraper, don't be surprised atthat it doesn't gli to the ground. credit suisse is not something we should be shocked at. it is not anything we should be surprised at if there was no major issues at the bank of england didn't do a u-turn, even if the inflation crisis wasn't as bad, even if the energy crisis in europe wasn't as bad, credit suisse's future would still be cloudy is my point and we shouldn't make too much of this. we have richard fisher on earlier. he cautioned us in the media not to make too big of a deal with certain issues i would put credit suisse in

that category. i agree with him with respect of who what the bank of england's u-turn means tax cuts are not popular everybody is nervous the political class especially and i think it was optics and timing but i don't have any serious problem with her plan whatsoever the debt to gdp in the uk is lower than ours. and i think certain aspects of reigniting margaret thatcher moment isn't necessarily a bad idea maybe outside the timing and it wasn't presented in a guidance fashion that was very clear. >> we got to run on that note. thank you. rick, thank you. i'm sure we'll be talking to both of you very, very soon. jim's coming up. >> this was not about kim kardashian that is about gary gensler fascinating what they went after her and what is an ad and not

being able to say what is an ad, any guidelines >> perhaps even more fascinating part of this is security part. >> right >> the fact that he said it is a security >> it's a grab from the power struggle between the sec and -- >> and had nothing to do kim kardashian >> got a lot of attention. >> whether they're supposed to be broker/dealers or not it changes the whole dynamic "squk x"b ghbaawbo rlit ck wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq power e*trade's award-winning trading app makes trading easier. with its customizable options chain,

easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market. what if you were a global energy company? with operations in scotland, technologists in india, and customers all on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world. mornings are our time, and i couldn't let stiff joints slow me down. so i started taking osteo bi-flex every day

because it has joint shield... ...clinically shown to improve joint comfort within 7 days. osteo bi-flex - available at your local retailer and club. that's it, jim, i'm not

talking about the stock market. >> who is the jipt quarterback snt kicker for the the bears is now out. i mean just a lot of things happening that are right >> it was -- they got hit and they just came right back. and does anybody else on the field? i was just trying to check >> nobody else undefeated. bengals play they had a bye i forget they had a bye >> talk about the market >>, no they played >> talk about -- >> he's get ting me seven every week i dropped goff and played mariota. that just crushed me >> who is going to win tonight are they going to go over? >> if the niners only get six, then i'll win and be 4-0 in my league which is really important. this is the "mad money" league and i like the treasuries here >> you like treasuries >> okay. i like the two year.

the pressure seems to be over. >> hey, jim. >> what about kim kardashian >> credit suisse credit suisse, jim >> you got it so wrong you know why you got it wrong? gary gensler is back at the office it changed everything. no fireplace behind that man >> right >> oh, okay. >> am i right, andrew? >> that part is true that part is true. what do you make though, real quick, credit suisse you have a take? >> they have the right amount of common equity. i'm going with picker against the bears. >> okay. >> picker is my pick main stay. m,e' s right ji wllee you in a couple minutes. "squawk box" will be right back.

finding global investment opportunities requires experience across asset classes and markets. it demands an active, long-term approach focused on the potential for creating wealth and generating income. learn more at federatedhermesinc.com you love closing a deal. but hate managing your business from afar.

you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

reports say opec and its allies are considering an oil production cut of over 1 million barls a day. if so, that would be the biggest reduction since the outset of the pandemic joining us is jeff currie. i think wti is up by over 4.5% brent's up by about 4.3% on this

news do you think opec actually goes ahead with a cut like this >> well, they're inseptcentivizt do it right now. they're the only producer in the world with spare capacity. i like to argue that the old oil order is back. opec is probably more powerful than it's ever been in its 60-year history since its inception and one of the key reasons, really, is the fact that we have not been investing in alternative energy sources, so they're really the only game in town. now, why would they want to do that in the context of really low inventories have a record tight market is that the prices are down upwards of 40% because investors are fleeing this market in and one way to attract capital back into the sector is kick up the back gradation, the roll yield on the front end of that curve and right now you have cash paying 5% 12-month libor and the question is what can they get oil to pay on that

roll yield and if they risk adjust it and get it high enough, you're going to attract capital back. and one last point i want to make on that is that you can think about the financial story and the fundamental story for oil being two different stories. the financial story is controlled by the fed. they're reducing liquidity but the fundamental story is being driven by opec, and they're taking oil -- potentially taking oil supply out of the market. so, it's opec versus the fed at this point right now >> you know, the one thing is they could be pushing at the wrong time i mean, smart if you're playing checkers, not if you're playing chess, if you think through, by ty trying to take advantage of all of these developed nations that have relied on them for so long at a time when russia is pulling the strings and benefitting from this ukrainian war that they've set off. if opec looks like it is in league with russia, that it is going to be tone deaf to any needs of its customers, then you

really just push all of these other places to start producing more oil and become more independent from them. >> but that's the whole point. there's nobody else out there that can produce that oil. so, they're in a very unique position that's my point, saying, the old oil order is back. core opec is stronger than it's probably ever been because there's been no other investment elsewhere in the world and also on that point -- >> but if they continue to turn the screws at such a time like this, doesn't it only strengthen our resolve to get away from them and get back to where we're producing our own fossil fuels >> you got to get to that point. you're already at price levels that should be doing that. the returns are phenomenal exxon had the same free cash flow as microsoft did last quarter. nobodywants the share price anymore. so, i think the key point is, you got to -- what are we going to incentivize to get the production to occur in the developed markets?

you made the point that the emerging markets are the ones that suffering here. it's the developed markets like europe and japan that are likely to suffer. look at the commodity price in brazilian real it's 10% versus japanese yen at 51 >> i was trying to figure out what you meant by, we're in this opec's back in charge because we haven't invested in alternatives that's all europe did was invest in new-age alternatives. >> no, because we didn't -- >> are you saying natural gas and nuclear and coal are alternatives or do you mean pie in the sky wind -- >> alternative to opec production fossil fuel alternatives, whether it's gas, oil, solar, wind, you name it. >> nuclear, coal, all of the above. it just sounded like you were saying -- sound like you were saying we haven't transitioned quick enough to the green stuff, and that's not what you were saying >> but let's look at how much did the green investment give us here's a stat for you as of

january of this year at the end of last year, overall fossil fuels represented 81% of overall energy consumption ten years ago, they were at 82%. so, all of that investment in renewables you're talking about, $3.8 trillion, let me repeat that $3.8 trillion of investment in renewables moved fossil fuel consumption from 82% to 81% of the overall energy consumption but you know, given the recent events and what's happened with the loss in gas and replacing it with coal, that number is likely above 82%. so, when we think about what those renewables have added, because remember, you're adding capacity, but the capacity utilization factor is quite low on them, and then you have europe making the investment in there, but china making further investments. the net of it is clearly we haven't made any progress.

and i think the key point that i was saying is that why opec is in the driver's seat in an unprecedented level is because we, inclusively of everybody outside of opec have not adequately invested in overall energy production, infrastructure, and the ability to supply and deliver it and by the way, the countries like brazil, you know, what's funny about who's going to be exposed to this, because they raised interest rates really early in this cycle, they're actually less exposed to what's hamg happening right now than, let's say, japan or europe >> let's get your prediction >> we're on average $100 a barrel, which is about $12 higher from where we are at this point in time. but i want to emphasize, you know, they go through this cut, that cut is not put into our fundamentals, you know as they're discussing 500 to a

million barrel herper day cut. but to make it be really bullish prices, you need movie to move back into this sector and right now, money is parked on the sideline in cash, earning 5% so what they're likely to do is try to attract capital back. what is the definition of inflation? too much money chasing too few goods. so, we're taking the money out of the system, but you still have the too few goods, so you're shrinking the amount of money available to prices of oil. so, the only way the price of oil can go up as money supply is shrinking is the returns have to be greater in oil to attract capital that is sidelined or in other places >> jeff, want to thank you always good talking to you, and i'm sure we'll see you again very soon. let's take a very quick final check on the markets this morning. the futures are solidly in the

green. dow futures now up by about 340 points, quite a bit higher than where we started the show. nasdaq has flipped to positive territory. and the s&p is indicated up by about 38 of course, this is after a pretty lousy end to the month and end to the quarter last year anyway, that does it for us today. make sure you join us tomorrow right now, it's time for "squawk on the street. ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim fcramr and david faber. got the ten-year below 3.7 a road map begins with the new month, new quarter, but will it come with a new outlook for equities c dow and the s&p coming off the biggest monthly loss since march of 2020. >> credit suisse is seeking to calm investors and client fears about it