founder sam bankman-fried lost nearly $15 billion worth of wealth in a day. he's only 30 he'll make it back we'll see. it's wednesday, november 9th, 2022, and "squawk on the street" begins right now ♪ good morning, everybody. welcome to "squawk box" here on cnbc we're live from the nasdaq market site at times square. i'm becky quick along with joe kernen and andrew ross sorkin. it's the morning after and we're watching the fallout on wall street right now do see some red arrows, although, the losses have been paired in the last hour or so. right now the dow futures are down, but by less than 100 points

the s&p futures off by 9 the nasdaq down 19 still, a lot of people are questioning what this all means. we're going to talk about disney n a few moments, but disney alone is responsible for the loss with the dow. we're also watching treasury yields right now it looks like the 10-year is yeeling just around 4.61%. it's below the 4.7% we saw yesterday. and we're keeping an eye on crypto prices, too, after binance stepped in to bail out ftx amid the liquidity crisis yesterday. we'll have a lot more coming up with andrew ross sorkin in a few minutes. solano is down 25% bitcoin is trading at 17,600 andrew >> meanwhile the races are too close to call. ylan mao joins us at the table with the latest.

what's the latest? it's hangs in the blass after republican splits key seats in the house and democrats scored an upset in the senate the latest nbc projection does show that republicans would capture 220 seats in the house compared the 215 for democrats nbc has not made an official calls, but gop leader kevin mccarthy made a call for his people early this morning. >> it will offer a new direction, that will put america back on track. republicans are ready to deliver. it's a new direction toward an economy that is strong where you can fill up your tank, feed your family, and paychecks grow, not shrink. lieutenant governor john fetterman defeats dr. mehmet oz. >> we held the line!

i never expected that we were going to turn the red counties blue, but we did what we needed to do, and we had that conversation across every one of those counties and tonight that's why i'll be the next u.s. senator for pennsylvania >> republicans held onto the senate seat in ohio with jd vance advancing tim ryan but many are still too close to call including wisconsin, nevada, georgia. in arizona, the marquee races there are too early to call. election officials in the state say they're prepared to work through thanksgiving and possibly christmas as well guys >> christmas >> possibly christmas as well if the margin of victory in arizona is less than half a percentage point, it automatically goes to a recount. they cannot start recounting the

ballots until december there's a lot of procedure real steps. >> not even fox called arizona they had much less to work on last time when they called it. >> to the extent we can take anything away from this a and to the exstent barry stiller calls it the pregame to the game, what does this say about former president donald trump and what he may do or not do and ultimately what the country does an ron desantis. play this out a little bit i think the stockmarket is playing this out in real time. >> i think there's a lot to consider we have to see which way the senate is going to go. i said yesterday we were looking at some of these two house races. of course, one of the house races was flipped by the republicans and the other house race was held onto by the democrats so it almost seems like, yes, the country is polarized and we've become more hardened in those polarized

conditions, and the democrats won by moving to the center, in some cases courting the republicans, but the republicans who won ran by running as conservatives. >> it's not maga. >> it may shift all the way from the may da -- there are still options out there. >> pennsylvania, clearly not maga. >> georgia with herschel walker a great candidate. this is my first thoughts, and i haven't spoken to you. >> oh, boy. >> two years ago, why did the republicans lose the senate two years ago? because of trump and georgia if they don't win this time, trump and georgia, i think and i think 2024 is totally wide open totally wide open. >> for a republican nominee. >> other than trump, you're suggesting. >> yes. >> yes. >> and if trump is not the nominee, who does that hurt

more >> democrats by a mile. >> yes that's what i mean this is very strairj and the election starts today. i can't believe it, but it really does. >> this is good for republicans in 2024, bad for democrats in 2024 yes, i think that's true. >> no one said, god, i love the way things are going i think americans -- i'm going out on a limb. i think they get their wish. it's not going to be trump or biden in 2024, i don't think and as a result, i think it gets pretty interesting, but i also -- once again going out on a limb -- i think the donald is defanged i don't think retribution is going to be scary for normal republicans at this point. this, i couldn't believe i was messaging my kid i said the big winner of the night. >> the future? >> the future. i said, did you see the cover of the post

she said, i saw it online. the future, the future no, i meant "the post. >> i'm on your turf now. don't you think that the reason that jd vance won ohio is because of trump >> i think he was a good candidate. >> you have to look at quality candidates don't you think it would have been easy to beat fetterman? don't you think it would have been easy to beat fetterman? >> perhaps with a different candidate. >> yes. >> i thought what was different in the exit polling that nbc did was that one of the reasons that voters did not like mehmet oz is because they did not believe he was really from pennsylvania it had nothing to do with -- >> mccormack was not a maga/trump guy. >> the reason he got to where hi did in the polls, despite the fact he may or may not actually be a pennsylvania resident in the eyes of voters is because of trump supports

i think it's still kind of an open question. and i think arizona is going to be very telling. >> and kari lake was surprising because she may still pull this out. >> the vote count is ongoing >> super she's make ga. there's a lot of cross-current i think we have to look at the pollsters. kill the pollsters >> kill the lawyers. >> is it the phones? how can they not know what's happening right up to the election how can they be so far off every time >> i think the answer to that is the voters are the ones who determine the elections and not at the pollsters. >> a significantly statistical amount of pollsters who get

called should give a true answer. >> we look at what happens when the company comes out with their earnings and then they say they missed their expectation, and every analyst is right or every analyst is wrong. >> are you talking about the intro in disney? >> that's one way to do it. >> most of them called 1,760 people. >> you should call enough -- >> that becomes an election. that becomes an election. >> people lie, i think, maybe they don't call mobile phones, they just call land lines. i don't know what they do. they do something wrong. they're plus or minus five points on these things. >> i don't think we should kill anybody seriously. don't kill anyone. >> i don't mean kill that's an old expression, kill the bankers, kill the lawyers. no in this day and age, you probably shouldn't say that. you're right i take it back in this day and age. i mean get it together one of these days

>> ylan, thank you. >> thank you. when we come back, we're going to get to the big three stock stories including drop in shares of disney and meta just announcing layoffs we have those stories next you can see tesla up by 1.5%, disney down by 7.8%, meta, up by 2.81%. later we'll dig through the election results with jay clayton and jerry comb you're watching "squawk box," and this is cnbc

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we've got breaking news. meta will begin laying off workers this morning mark zuckerberg said he was accountable for his missteps, announcing moments ago the workforce will be reduced by about 13%. that equates to about 11,000 workers, and the hiring freeze will be extended through the first quarter of 2023. it's the latest in a big tech company lays off employees and executives it does explain what's going on in our economy and the big picture there and perhaps more importantly, a lot of the folks in silicon valley and elsewhere, whether they're going to be able to find jobs we talk about how there's a big jobs market and there has been, but a lot of these companies are

all happening at the same time if you leave meta, you end up going to a stripe or amazon, but if those places are laying people off or not hiring, that changes the dynamic. >> i wonder if some testify industrial companies -- >> -- pick them up. >> -- if they can finally start to hire some of that top technology talent who hadn't wanted to go there because they were chasing hot stoxx. >> it's a very smart point we'll see what happens. >> it may require moves for a lot of people and disruption. >> given that meta was allowing employees to spread across the country. >> what the hell is lunds. >> we were on the broadcast last night. tesla selling at least another -- i say tesla elon musk selling another $3.95 billion worth oftesla shares this is according to s.e.c. filings

yesterday. musk sold almost $22 billion worth of tesla shares last year. this year he sold $8 billion worth in april then he sold $7 billion worth in august musk tweeted after the august sale he was done selling, and tesla shares to fund the acquisition said that was to avoid an emergency sale. i don't know if this is an emergency sale perhaps it's to replace a bridge loan or perhaps replace some of the other private investors who he had brought into this, whether he was doing this to shore up or protect himself. he was saying earlier this week the company is losing $4 million a day. if that's the case, there's $500 million in debt payment that comes in april i think originally the thought was the money would come out of cash from the company. we don't know where they'll have that cash from the company maybe he'll have to use his own money. we don't know what happens lchlt

they have to put up more money to erase dilution? it races additional questions about just what's going to happen to his own stake in tesla, not his commitment to tesla because i think he's as committed as ever. we've seen the price of tesla come downer of the last week. >> i think this is because of it, because he was selling the days he was selling, i think he started on november 4th it stafted last week, an over the five-day period, the stock went from $220 to 195 we were talking about the list of equity partners and wondering if it was going to be something like that. binance is one of the partners in there. >> they seem to be the more stable of the group. there's some speculation -- again, i don't know.

this could -- we've seen this before where there's a filing and more filings is this a one and done, we don't know could there be another failing today and tomorrow, we don't know. >> we should talk about shares of disney. they're down pretty sharply. down 7.7%, 7.8% last i checked this came down after 30 cents down a share revenue fell short of what the street was expecting too the theme parks division there were margin issues there those are margin issues that a lot of people say are temporary, that those will be fixed the bige biggest is disney streg now people want to see numbers not numbers of subscribers, but what you can do in sturming the losses that didn't come 12 million subscribers came at a

heavy lost they lost nearly $1.5 billion in the quarter. on the call executives said they expected those losses start to narrow in the current quarter. they also warned it could grow bob chapek said he predicted growth in the coming year. disney is a dow component and that loss of 7.8% adds up. >> not a great day either for third point, dan loeb's firm i was trying to see when dan got in he had been in the summer, come out -- he might have actually gotten in in the summer. he might be flattish if you look at the chart right there. >> he had wanted to see big changes. he was happy when they talked about not spinning out espn as recommended. he mentioned profits down the road if you get involved with sports dam guy two

joining us right now with queen elizabeth quick reaction is sylvia jablonski sylvia, let's talk disney first? what about expectations where the street wants to see streaming, whether they'll see losses to build subscriber growth at this point. >> good morning, becky with disney, on the one hand, people come in because of the outlook. 2024 isn't long to wait. to your point, i think it's a much bigger hurdle to jump over to basically grab some subscribers, and i think the cost of grabbing subscribers is a lot higher disney needs to learn how to clean up house and cut cost

margins before they get the confidence of investors back. >> and tesla shares, hearing that elon muffing had been selling after hearing in august he was done selling, do you first of all own teslas and what do you think at this point this is after being down the last five days. >> i do own the roller coaster that has been tesla, you know, all the way up and down 40%. with tesla, the issue there is there is so much noise coming in from all sides, whether it's twitter, how that field will be financed and i think, you know, with tesla, what we really need to see is elon musk continues to make tan ownership with the company, continues with the growth is finished with these big sales to fund what might be the twitter project, and then we need to see a cleanup in the supply chain i think the china reopening to get them back on trap, increased deliveries, get the company back on track tesla as a leader in the election space, the direction of

automobile buying is certainly going in that way, and i think tesla can maintain their leadership there, but the sort of noise around twister and elon musk selling shares has to die down for tesla to gain confidence in the stock. >> you own shares of meta and you watch the kind of ghoulish wall street parlor game and they're leading higher. >> i was an owner of meta. i ended up selling meta. that was earlier in the year when i saw that the focus was going more into the metaverse and focusing on what was the advertising side, sort of advertising on facebook and instagram, albeit slow, but they would capitalize there i think the mistake that is being made there, sort of focusing on what should be an r & d project and not making it the core focus of the company right now. i think until investors see some

sort of potential profit story coming out of metaverse or hear, yes, we will go back and focus on this massive subscriber base that we have within the ad base as we recover within the economy, i think it's going to be a tricky stock to own i sold my shares. >> by the way, do you own shares of disney? >> thank you i -- >> whoops. >> well, we will wait for that answer maybe after the break or next time. we'll see. >> she did that pretty well. it almost looked like it was technical. >> can you do it >> when you're talking -- -- >> the blinking doesn't help. >> no, the blinking. >> we're going to dig into the crypto crisis. it is the other story of the morning, finance bailing out the liquidity crunchle call it the jpmorgan, bear stearns, i don't know, takeover,

what is it we'll talk about what it means we saw the market. almost like there might be a meltdown former leader arraign cantor will join us with his beat takeaways in the midterm election "squawk box" coming back with all of it and more in just a moment .. well, us... a fortune. no matter how much we paid it was always just... there. you know? ♪♪ so, i broke up with my bad student loan debt and refinanced with sofi. turns out we could save thousands. break up with bad student loan debt. refi and you could save thousands. plus, we're paying off up to a million dollars of student debt. enter at sofi.com/million sofi get your money right.

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salute to veterans veterans day terry bradshaw: hi, i'm terry bradshaw rocky bleier: and i'm rocky bleier. col. greg gadson: and i'm col. greg gadson. terry bradshaw: on this veterans day, our heartfelt thanks, to all of our military veterans for their service. col. greg gadson: we honor our veterans, and those who are no longer with us.

rocky bleier: to all of our military serving around the world, thank you for defending the many freedoms we enjoy. terry bradshaw: tune in to salute to veterans for discussions about the issues our military veterans face daily. salute to veterans presented by sap, navy federal credit union, verizon, visit us online at www.salutetoveterans.org a developing story ftx founder sam bankman fried stweeting out binance would be financing the company ftx. he said, we're assessing the situation in real time binance has the discretion to pull out from the deal at any time joining us now is crypto reporter help us understand what's happening. we're looking at bitcoin trading down again this morning. lots of questions, not a lot of answers. >> yeah, so i think the crux of it is that $6 million came out

of ftx really fast and didn't expect it. dialing back a little further, this does seem like a crisis that finance founder known as cz tweeted out a bounce of concerns and his plans to lick question dade this token, which is crucial to ftx's business called ftt, an exchange token. >> i get that, and so i get that it may be a cat-and-mouse game and maybe he's trying to push it into a bad place i get all that the idea that these companies and the idea that ftx was this unstable, that department have the liquidity, i mean, what does that say about where we are in the world of crypto? >> this surprised everyone, including me they had a reputation of being a

responsible actor up there, but i think it shows that, you know, this is a market where everyone is addicted to gains and, you know, sam bankman fried has always made it clear that the only reason he was in for it was to make a giant pile of money. he thought the best place to do that and all he cared about was generating more of that. there were two parts to the story, right it was the alameda trading desk that looks like it was the problem. i was exposed to ftx alameda trading is older than ftx itself this is -- on some level you can argue -- and, again, this was talked about -- this is what happens when you a trading operation inextricably linked with finance you know, fundamentally, the company that it is, it's a trading company.

>> brady, let's go backward just a little bit. >> sure. >> i read this aloud on television last night, this tweet to winstein. i'm going to read it to you. it says every day i read about crypto every day i understand it less and less ftx was in talks two months ago to raise equity a at a $32 billion estimation there were smart people at a table who thought this company was worth $32 billion. it wasn't just these guys. you're suggesting it created a little bit of a problem here and the whole thing collapses. he explains it like a 5-year-old explain this to a 65-year-old. >> what we don't really know is, you know, it's hard to overstate how rapidly ftx was growing and i thought people had a thought

they had a chance of overtaking binance. nys came out that al may da trading was overexposed and ftt and cz seemed very smart, he saw a weakness, and he pounced he lick question dades his ftt, does it on the open market, forces ftx to try to defend that and everyone else does that. folks in crypto have seen liquidations many times before it doesn't take much to spook them cd doesn't know that he spooked the market, people ran, and he had one less competitor on the table. the man is really -- he's the apex predator of crypto. he proved it this week nobody saw it coming. >> look, does this give us any faith in how sturdy the balance sheet is at binance?

how safe do you feel in any of these valuations in any of these balance sheets >> that's the billion dollar question last week i would have told you ftx was fine and nothing bad would happen to them remember, binance has been around a little longer and it's been through more cycles than ftx has. it has this gigantic savings account that's just built up from the money it's been printing for five years. that's always been there to defend it. who knows. binance many times larger than many of its competitors, so it would take a much bigger h it to take it out. but, yeah, who knows. >> i think that's the question, brady. you know, there was a moment yesterday when binance announced they were acquiring ftx and bitcoin briefly moved up, not

down, because all of a sudden there was aview, oh, everything is so stable and then there was a view, oh, if this could happen, maybe nothing's stable at all. which is it? >> i think nothing in terms of centralized companies is stable. remember, the original idea of crypto was to try to eliminate companies like ftx and finance, but, you know, people like the convenience of those operations. this incident is going to ripple out for a long time, you know. investment's going to dry up, other companies are going to shut down. yeah, so in terms of the traditional companies operating this this untraditional market, they're all in danger. you know, it's funny sam said a few weeks ago there are multiple exchanges out there that are already insolvent we just don't know it. it turns out, i guess, one of them was his. >> brady, we appreciate it coinbase is down 11% this morning as well.

we're going to keep our eyes all over this story because it's not just a crypto story. for a brief moment it looks like it was having a moment in the larger stockmarket as well. coming up, the reaction to what we know about the election results from former senator gregg and former chief of staff at the white house and here's a look at yesterday's s&p 500's nnwiers and losers >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable, and secure 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.

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good morning and welcome back to "squawk box" live at the nasdaq market square dow futures less than 100. that's an improvement. a lot of things swirling around. i would say less election an more crypto. that is definitely disconcerting to see -- what was the size of that it was 21,000 really. >> across the board. >> a crypto drop now we're dealing with the disney drop. >> disney debacle that and the question is whether it's a political drop that could -- >> look, gridlock is gridlock.

>> yesterday everybody was saying when it was moving higher -- >> gridlock was gridlock then it would be down a lot today if that was it. >> 50 points of the 82. >> a quick recap of what we know and what we don't know about the midterm results and the closely watched pennsylvania senate race john fetterman defeated mehmet oz in ohio, jd vance is expected to defeat tim ryan. in georgia, the race between raphael warnock and herschel walker is too close to call. we could be back toa runoff, which we saw a couple of years ago. i think that's in december, i think. here's a look at the balance of power in the senate so far it does not -- greg is not there, but he's here here's a look at the house nbc news projecting republicans will win enough seats to control the house, but nbc has not yet

made an official call on control of the house. okay joining us right now is judd gregg. he's the former governor of new hampshire and current staff member and bill daly is here. good morning to both of you. >> good morning. >> we're still trying to figure out what actually happened and may not know for many, many days or longer. i'm curious what your immediate reaction is relative to when you went to sleep last night and when you woke up this morning. >> i would say from two days ago, the thought that there was some great wave coming and polling was once again prove on the be rather inaccurate, and, two, shocking. we have a divided country, so these close races, no one should be surprised somehow we got believing that there was going to be some big wave, and it's not going to happen so as you look at the numbers, if the republicans do get control by that small of a

number, governing is going to be awfully difficult for whoever the speaker is, assuming it's speaker mccarthy it will be awfully difficult for him to get anything done. >> judd, how surprised are you >> i'm surprised i've never been a big fan of polls. i think joe said it earlier, we should take them all out and shoot them. >> that was shakehakespeare. i wasn't recommending we shoot anybody. >> shoot the pollsters. >> lawyers. >> but what do you think of the takeaway that has been presented this morning -- it's not in terrell o what happens in the next two years but what happens in 2024, what happens with trump, what happens in 2024. >> it has a huge -- >> it has a big impact on desantis and maybe actually very bad for democrats longer term in

2024 it could be good for republicans then i don't know. >> my opinion is i think -- i think the wave everybody seemed to feel about a month ago was real i do believe that president trump then got very visible, much more than he had been two months before that, and i think he had an impact whether it was a point or two, who knows. he's going to announce he's going to drive the agenda, at least for the foreseeable future, and the republican leadership has got to figure out how to deal with it. >> how is the republican leadership going to deal with it >> i think the loss deals with three things, trump, abortion, and this cult of conspiracy, which a lot of republicans bought into. people went to the polls they didn't vote economy they voted people. as a result, a lot of republicans lost who shouldn't have been running to begin with. i think this hurts trump fundamentally. i would be very surprised if trump were the republican nominee in 2024, and he won't.

he won't be the nominee in 2024. this is going to be a very open field on the republican side i suspect it is on the democratic side too. i think the president said he's going to run that's to avoid being a lame duck. >> you don't think he's going to run. >> i don't think there's any way he can run. >> bill do, you think? >> he said he hasn't decided. >> but privately -- >> well, i believe he wants to run, but i think there is an opportunity here with what's happened over the last 24 hours for him to take the next two years and see whether or not he can actually do something with the republican leadership and democrats to get a few things done. >> is there a democrat you think that could emerge? >> well, i think if the president steps -- >> yeah, who, though >> you've got a handful. i think you've got whitmer,

oosen. >> buttigieg there are people who love him. >> he's going to have to leave the cabinet real quick. >> you know why they like, the new governor of pennsylvania they like him a lot. >> i don't think it will be trump or biden, and i think the american people are going to get their wish, i really do. i think last night was -- i don't know i'm with judd on, that don't you think? >> absolutely. the big loser last night -- >> 35%, you're not going to win an election with 35% unless you're italy. >> what happened was people like in new hampshire, we nominated two people who couldn't win in seats we should have won. >> you have this real fear, mcconnell -- everybody feared retribution. now they've defaanged it. >> we've gone beyond the -- >> we're going to go beyond trump as a party

there are some quality people out there talking about it and obviously thinking about it on the front page of "the post" as you mentioned earlier. there are a lot more than just desantis. >> the republicans believes they can throw them off. >> there's a big base, as is the democratic party, which is socialist. our base is a problem for us in nominating people who can win in the general election, and i think that's become very obvious to everyone. and so i think this mutes that, the intensity of the conspiracy -- >> this goes back to what barry was talking about the other day. he said, i think people are going to vote based on the economy, but i wish and hope they vote based on character. >> that's exactly what happened. our governor rolled up a huge margin on character, and then two seats we should have picked

up rk and the polls said we were dead to even, we lost by very large margins, and it was a vote on character people are very upset about the economy. very upset about the economy but they're more upset about the way the government functions in washington they're really upset. >> every time a party wins, no matter how big or slight the margin is, they take it that their entire platform needs to run and that they can run on all kinds of things. >> no party won this time. >> no. >> the problem for both parties is they can't loose their base in a general election. romney didn't get the make ga vo maga voters in '12 romney was going to beat them, but he didn't get his basement he didn't get the maga voter they have to hold those as the

democrats have to hold the progressives not an easy thing to do after you go through a primary, to try to be a moderate and go through as a democrat and take back the stands. >> is the problem the primary or is the problem this country is very divide and you can't win -- >> there's two problems. number one is gerrymandering where 65% of the districts are one-party districts, so the furthest left rider is going to win that district, and they cannot compromise. if they cross the aisle, they get challenged the second problem is the shouting on social media it's undermining thoughtful dialogue, any dialogue i think social media is the biggest single threat to our democratic system right now. you had someone on earlier this week, and i thought he was dead on. >> you said it's going to be a lot harder to govern over the state of play.

what does that mean for debt ceilings what does that mean for various wreck lag regulations that may or may not try to be put into effect? what does that mean for practice >> you have to look at the lame duck situation if they can get the three things done third quarter can get through next year without an actual leap. i don't think you're going to see any major legislation beyond those three. the regulators will try to act very aggressively, but you've got a series of cases going up through the court system that are going to get to the supreme court, that are going to be really the place where the action is, not in the legislature. >> i agree with bill, but i think the other regulators who are extremely aggressive are going to drive a truck through this because they know there's going to be chaos on the hill and they can do just about whatever they want it's going to be impossible to govern the house. >> if you ontario have a

three-votemajority -- >> what about drilling as recent as this weekend biden said he doesn't want to drill. can he through executive orders keep his promise on that, no federal lands? >> he can through executive orders do so much, but as we found out with the last couple of presidencies, executive orders come and go. >> he's got two years. >> they'll try to be afwres irv. >> i wish we could keep you here for another 20 minutes, 30 minutes to talk this through it's so nice to have you here on set. >> thank you. >> appreciate it. when we come back, more on last night's election results. what we know, what we don't know michelle caruso-cabrera will have more. st> a reminder you can get the

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the control of congress is in question this morning as we await some results from key races. the balance could have a big impact on a number of geopolitical issues that are important to businesses and to investors. joining us right now to talk about that is michelle caruso-cabrera, our cnbc contributor. michelle, i don't know if you could hear that conversation we just had, but they set up how difficult it is going to be to govern because no one is going to have a strong lead in this. it looks like at least at this point that the republicans will take control, but not by much. what does that mean from a governing perspective? >> yeah, certainly the polls

have predicted a republican wave were not accurate. and so to their point, what's interesting when it comes to one particular piece of legislation that could affect investors, it's far more likely to pass now with a new congress for the simple reason that a key member of the senate has retired and now that that person is gone, regardless of who replaces him -- and i'm talked about pat toomey there's this piece of legislation that many believe could actually happen. it's a reverse cfius process it's when an an entity in the foreign country wants to buy something in the u.s there's a review process what if you did that in the reverse. if a company in the u.s. wants to invest in china -- >> meaning you couldn't invest until you got permission to invest --

>> exactly exactly. exactly. so this has broad bipartisan support. sherrod brown out of ohio. the holdup has been, according to people i've spoken to on the hill is pat toomey senator from pennsylvania who is retired. we see that john fetterman is going to take his place. but simply him not being there could mean that we're going to see this legislation pass. so that would be significant it's going to be significant areas that the u.s. is concerned about related to national security if it were to pass. things like large capacity batteries, ai, quantum computing and, of course, semiconductors which has already received a lot of scrutiny from the biden administration the relationship with china has been pretty fraught for quite

awhile we know that if kevin mccarthy is the speaker of the house that he has said he will travel to taiwan nancy pelosi just did that how is this any different? >> i don't think it is different. i just think it could be one of those moments that the chinese try to make, you know, a moment of even though we should point out that there have been five delegations of congressional legislators that have gone to taiwan but certainly mccarthy has made very clear that he wants to make china an issue there's lots of other political issues that we're going to hear about when it comes to hearings, et cetera. when it comes to foreign policy, definitely, taiwan, him making an issue of taiwan, even bigger than perhaps nancy pelosi did and she made it a really big issue and he's also talking about creating a new committee that would be investigating various things related to china, whether it's the creation of the -- what caused the virus, what are the chinese doing when

it comes to stealing intellectual property from the united states. even though it's a small majority, the heat on china will be higher and hotter because we have a republican majority now that will be able to do investigations in a way that they haven't been able to do before >> michelle, thank you great to see you this morning. >> you too coming up, we have a lot more election reaction this morning. we're going to dig through the results with jay clayton and also former nec director gary cohn and eric cantor is going to be with us. you're watching "squawk box" only on cnbc

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to be lonely at the top. join the millions to find success - on their own terms. start your journey with a free trial today. good morning the midterms and your money. futures moving a little lower this morning as investor await key results. congressional power hanging in the balance. meta laying off more than 11,000 employees that stock is on the move this morning. we have the details straight ahead. and the crypto world is in shock after binance bailed out ftx from a liquidity crisis. ftx founder losing nearly

$15 billion of wealth in a day the second hour of "squawk box" begins right now ♪ good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equities at this hour. the day after election day we're still getting those results. but right now the dow looks like it would open down about 75 points nasdaq off 2 1/2 points. s&p 500 off 5 points we can debate whether that's the result of the election or results that we've seen from big dow components, including disney, and some issues surrounding crypto but take a look at treasuries right now. you're looking at the ten-year note sitting just at about

4.130. you're looking at the two-year note at 1.670. oil right now is $88.19. and crypto which has been the topic of the day in the last 24 hours. liquidity crisis raises all sorts of questions, bitcoin standing at $17,777. >> we were up 1500 in three days on the dow and we've got bitcoin at 17,000. disney down seven points, and we've got all that happening we're talking about less than a 100 points i don't think anything is happening unless we -- just like everyone else, the stock market still wondering what is it going look like? what does 220 mean do we know if it is 220?

i thought that the senate was at best 50-50 there's a chance it's 51-49, i guess. but we don't know at this point. we may not know until december with warnock meta is going to begin laying off workers this morning. ceo mark zuckerberg told hundreds of executives yesterday that he's personally accountable for the company's missteps layoffs will not affect him. his overoptimism he pointed to about growth has led to overstaffing just in the last hour he announced that the workforce would be reduced by 13%. companies hiring freeze will be extended as a result, the first quarter of 2023. let's get to the markets mike santoli joins us now this

morning. why wasn't disney more apparent? >> look, i don't know if it was a huge miss what was going to be happening there just because of the pressures on a lot of the nonstreaming businesses that you might have been able to infer. and the stock i find interesting, but it's right down to a level where it's trading in the low 90s. i do think it was an outright miss, but maybe one that was too surprising in the grand scheme the broader market, holding on to the recent gains for the most part it seems like the midterm results are enough in the middle zone of the likely expected probability going into the vote that it's not something that's going to require too much of an adjustment in terms of policy and price and there was a huge economic swing factor at stake in the vote necessarily given it was going to be split government at some point. we're still below 3900 that would be 390 on the s&p 500 index fund this has been trading all night, much more in line with what

bitcoin was up to as opposed to election results there's a big loss in the financial system that seems to be shouldered somewhere. we want to make sure there's not real chaos there take a look at the industrial sector this is policy relevant. industrials have outperformed nicely as a broad group, down less than 10%. where's the strength coming from aerospace and defense. i don't think there's been necessarily a sense out there that the makeup of congress is going to affect the defense budget which is is -- the contractors always win that's been really strong as opposed to transports also within industrials which have lagged much more tied to goods volumes in the united states take a look at a five-year chart of disney relative to netflix. it's gone back and forth in terms of which one was considered to have an inside track on the streaming world clearly netflix with the huge outperformance for both of this period here in 2020 and 2021, there was

that sense out there that the pie was growing big enough for everybody in streaming and the two top players were going to have, you know, a pretty good advantage. but disney, of course, is so much more. you have netflix outperforming, once again you point out the low 90s price in disney. it goes all the way back to early 2015 where you've actually had that stock find some kind of support in that area we'll see if that works again. >> disney was 200, right at one point -- >> at the highs, yeah. >> at the highs. so the market cap looked like it was going to the moon, alice almost 400 now going to be below 180. 180 billion this morning and then you look at netflix who is winning you wonder who is winning. >> netflix is now the incumbent, right? that's the way you have to view it in terms of total revenue from streaming -- >> the stock price down -- which

stock, which media stock is the winner none of them. >> it looks like too much capital being burned to try to be the top two or three. >> and they were up there because money was cheap i think and free flowing and pandemic-related and the fed. >> the pandemic related excitement over sitting at home and having everything you want >> we're going to watch netflix on our peloton forever, in between zoom calls all right. thanks, mike >> yeah. the morning after the midterm elections and control of congress still hangs in turbulence after republicans flipped key seats in the house and democrats scored an upset in the senate the latest nbc projection does show republicans capturing 220 seats in the house compared to 215 for democrats. that would be enough to give the gop a very narrow majority

nbc has not made an official call for the house it requires a little more absolute right now they're looking at 220 votes for the republicans. meantime in pennsylvania, lieutenant governor john fetterman beating celebrity dr. mehmet oz. republicans held onto the senate seat in ohio with jd vance beating tim ryan, but many of the other toss-up races in the senate are too close to call in arizona, the marquee races there are too early to call. election officials said they're prepared to work through thanksgiving and possibly christmas if need be >> okay. joining us right now with some key takeaways from the midterms and what it could mean for your money, head of the u.s. public policy at pimco. we talked about how a lot of the polls thus far have gotten it wrong. a lot of folks i think surprised this morning about just how close things have come >> yeah, that's right, andrew.

good morning i mean, not only did we not see a red wave or even a red ripple, this really looks much more like a red whisper if that. democrats are poised to have the best midterm of any party in power since 2002 now, again, from a markets perspective as you all have been talking about over the last few minutes, does this really change things probably not again, assuming republicans keep the house, it could, however, mean that fights over the debt ceiling are more volatile if mccarthy does become speaker that actually might be in question as well but presumably, you know, he would have the votes if republicans won the house. but it would be a very narrow majority and so things that could cause some market volatility could be even more volatile with the --

>> is this more volatility or less volatility given that i think, you know, the market, if you will, was hoping for divided government >> yeah, you know, for sure. i think outside of the debt ceiling, you -- you could actually see if the economy were to go into a recession, there might be actually a little bit of a higher chance now that there would be additional fiscal support if democrats keep on the -- retain the senate and not only would they retain the senate, of course, andrew, they look likely to increase that majority, again, if things fall their way. and that -- that's an open question at this point again, i don't think the practical implications are all that different maybe a little bit more volatility around the debt ceiling, maybe a little bit less if the economy goes into recession, but, again, the policy implications not so different this morning. >> are you a believer that this takes donald trump off the table? i got a couple of emails from

ceos overnight who suggested that if that's the case, that's a sigh of relief for corporate america. >> he did not have a good night last night just in terms of -- again, with sort of the caveat that all the ballots have not been counted, but it does not look, obviously, that dr. oz won for pennsylvania, blake masters looks like he's in trouble in arizona. and even jd vance who won in ohio who was one of trump's picked candidates, that was a trump plus eight state that was a pretty red state adds it was some of his candidates not do really well. you know who had a good night was governor desantis, winning florida unequivocally, winning, you know, seats down ballot in an incredibly strong way as well he had a very good night president trump not such a great night. but i also think that the market and folks have learned not to

underestimate president trump either >> extrapolate out to the extent that we look at today and already start thinking about 2024, i could make the argument to you that this is good for -- could be good for republicans in '24 even if it's not good for former president trump, maybe very good for desantis, for example, and last night on fox, the former speech writer for bush was out there saying that this was an indictment of the gop. he said the republican party needs to do a introspective look in the mirror right now because it's a disaster. is it a disaster for maga? is it a disaster for the whole party? what is it is it a disaster given what the outcome ultimately may look like just in terms of pure numbers. >> we should not necessarily prejudge the outcomes. we're still into vote counting i think that the postmortems

will be written when we've closed the books on this -- this election as of now, right, it does not look necessarily great for those who ran on a more extremist -- with more extremist policies, including many of president trump's candidates so i do think in some ways it was a repudiation of president trump, but also it shows you that the roe v. wade dynamic was playing sort of forefront in a lot of voters' minds turnout looks like it was very high some of these likely voter models really did seem to underestimate younger people and women. so i think this is a reflection, sure, on the state of the gop, but it was also in some ways a referendum on abortion rights as well and i think over the last few weeks, that narrative had really subsided but clearly that did play into last night's election outcomes >> thank you for joining us this morning with your perspective on all of it. thanks. >> thanks. when we come back, disney falling short of expectations

for profit and for some key revenue segments we're going to break down the quarter and talk about the company's warning for its disney+ service. before we head to a break, let's get a check on the markets, you're going to see the dow futures off by 114 points. s&p futures down by 12 the nasdaq off by three. yesterday,he t dow was off by 1.3% 1.3% "squawk box" will be right back. >> announcer: this cnbc program is sponsored by bdo. people who know bdo. 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

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welcome back to "squawk. when we come back after this, the cryptocurrency market is tumbling after the world's two biggest crypto exchanges agreed to merge we're going to have a lot more on the ftx fallout in just a bit. "squawk box" coming right back >> announcer: time now for today's aflac trivia question. before taking over at ceo of athl's, michelle gass worked at wh two other publicly traded companies? the answer when "squawk box" continues. mm-hmm. for $1,200? ga-a-a-ap! did you say "gap"? yeah, he did. he's talking about expenses that health insurance doesn't cover. ga-a-a-ap! uh-uh. aflac! that's why there's aflac.

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>> announcer: now the answer to today's aflac trivia question. before taking over at ceo of kohl's, michelle gass worked at what two other publicly traded companies? the answer, procter & gamble and starbucks. yesterday gass announced she was stepping down as ceo of the retailer and joining levi

strauss and taken as ceo in waiting. >> disney is down this morning missed expectations for profit and key revenue. streaming did show growth in terms of subscribers reaching more than 164 million on disney+. that beat estimates. but the addition of 12 million subscribers came at a heavy cost the streaming business lost $1.5 billion in the quarter, 1.47 that was twice last year and much wider, 38% wider than where analysts were projecting joining us now, the former nbc cable president and a cnbc contributor. tom, i think pandemic and theme park cranking, universal theme park cranking. no one is willing to pay at this point for streaming.

it's almost the flip side of what we saw between 2020 and 2021 suddenly theme parks are it. >> well, joe, i guess today's headlines should be desantis wins, disney loses again this time they have nothing to do with each other i've been warning about this disney story for a couple years. the stock now back to where it was in 2014 and one way to interpret that is, yes, they have a streaming business actually going to create more value than the value being lost on the traditional business. that's really the open question. and what you're seeing here is something for the first time, i think, that the market is not reacting to the headline subscriber number of disney which is usually what happens here and having said that, let's give disney some credit

the sub numbers were actually pretty good. they did much better than netflix did in terms of domestic subscribers. they weren't reliable on india subs they did add 7 million or more valuable international subs. they're bundling between hulu, disney+ and espn plus, working pretty well. but what wasn't working is key to really creating value in the business and that is pricing. revenue for streaming was actually down. and the issue for all these streaming services is, they got to get pricing up to much more meaningful levels if these are going to be really value-enhancing assets and pricing for the second quarter in a row for disney+ both domestic and international was down hulu pricing was down.

and they got some price increases coming, some substantial ones but my guess is, in an inflationary, recessionary environment, passing on those price increases is also going to get in the way of subscriber growth so some real challenges there. >> 8 billion in total losses rosy picture about 2024, dennis plus going to be profitable in 2024 because, you'll be able to raise prices on subscription in a recession or if we don't do that, we'll do ad-supported in a recession that no one is buying ads. how confident are you that either one of those things get to the level they need to be profitable in 2024, if the fed keeps raising and advertising hard is harder and streaming is just too crowded and there's too many options >> well, i don't think they have that much confidence they had a major caveat in their

release which said they hope to be profitable in 2024, assuming no major changes in the economic environment. we all see major economic changes in the environment the thing about advertising that just perplexes the hell out of me and i've been pointing to this now for four straight quarters it doesn't get any focus and i don't understand why disney through hulu has been the leader in advertising on a premium streaming service. netflix is now getting into the act. hbo is getting into the act. there's going to be much more of this premium advertising tier offering for other streaming services yet for the four quarters now in a row, hulu advertising revenue per subscriber is down they don't explain it. i can't explain it if it's been the leader in this

and it's actually for four quarters in a row, ad revenue is down for hulu, what does that portend for the rest of the industry now that we're entering into a recessionary environment. that's a real puzzle for me beyond the pricing on the services themselves. >> the days of watching the sub growth and marking it up to $200 a share are over and you can't count -- there could be a down, you could lose subscribers in a really bad environment if you raise prices too much or whatever, tom. we can't even count on that. it's kind of like empty calories they're not generating, they're not being monetized. >> well, i think that's absolutely right look, we saw the netflix -- netflix could lose subscribers it's certainly possible for others to lose subs. what i think disney needs is an investor day where they stand up there and they say, here's the traditional legacy business we

have in terms of the cable bundle here's how much we make per sub in fees from operators, in advertising revenue and here's what the margin looks like on those fees and here's our new streaming business and here's the fees and the advertising and the margin there. let's look five years out. do the losses that we're going to incur -- and iger says the legacy business is going to fall off a cliff, he didn't know when -- let's say five years out, and does the streaming business make up for those losses or not? nobody has ever really stood up there and said, this is what it looks like, this is what we lose, this is the margin dollars, better margins on the legacy business and here's what we gain coming the other way and do the lines cross is this whole business value-enhancing? does it get it back to just par which is what the market is staying now with the stock back where it was in 2014, or is the

legacy business going to be replaced with something more valuable >> and, tom, you can't suddenly say, okay, i'm not going to invest in much -- as much in content. because even with what they're investing now -- and netflix -- i was watching a female body builder who killed her husband that's all i could find on netflix. i mean, it's a wasteland no one is going into metaverse and no one is watching streaming. everybody is going and riding roller coasters, the whole world is going back to the way it used to be. >> and a little bit of footnote there on roller coasters, and i didn't quite understand this one either, it looked like revenue for the domestic parts was down for the big travel summer quarter relative to what it was the quarter before

that's hard to understand unless it was hurricane disruption or some kind -- >> hurricane disruption, the parks in china -- >> just domestic >> the good nurse -- >> that's just a movie. >> fabulous. >> it's just a movie i will be done in one sitting. i need something -- yellow stone is coming back sunday, two hours, two hours >> or "squawk box," three hours every morning. >> "the crown." >> the "the crown" is coming bak jef jeffre jeffrey dahmer 2 i know way too much about that guy. >> coming up, gary cohn and jay clayton join us.

binance striking a deal to buy ftx. we'll have more on what it means for the crypto world you're watching "squawk box" and this is cnbc

♪ dozens still of midterm races across the country too close to call as president biden's second-half agenda hangs in the balance amid a likely split congress gridlock yesterday, i don't see any difference in the gridlock today. maybe you do, but it looks like gridlock. >> but the counts are still being counted in key races this morning. the latest projections show the gop with control of the house and the senate still up for grabs. overnight, gop leader kevin mccarthy said the country is ready for a new direction. nancy pelosi declared democrats are outperforming in the senate, the projected break down so far is 48 seats for dems, 47 for republicans and five races that

are either too close or too early to call. democrats picked up a crucial seat in pennsylvania where lieutenant governor john fetterman beat out mehmet oz after a bruising and expensive campaign >> i'm proud of what we ran on protecting a women's right to choose [ cheers and applause raising our minimum wage [ cheers and applause fighting the union way of life [ cheers and applause health care as a fundamental human right. [ cheers and applause it saved my life and it should all be there for you if you ever should need it. >> but republicans held on in ohio, jd vance trounced tim ryan as the gop swept state offices. >> we have a solid foundation not just to win races but to actually get to washington and serve the great people of ohio >> there's still no projected winners for the senate races in

alaska, arizona, nevada, wisconsin and georgia. candidates are bracing for legal ballots, potential recounts and in the case of georgia, another runoff election in december. >> oh. there we go. >> you got the totals and -- how many precincts are left in georgia. they're both under 50, aren't they >> so far, both of the candidates are below 50% that 50% threshold that would avoid a runoff i don't know exactly how many precincts or how many counties have been -- have been tabulated so far you thought there would be a runoff even last week. people were talking about it. >> yeah, it's incredibly close there's a third-party candidate out there who could potentially be siphoning away some of the vote that is the -- >> who didn't have a chance. >> i think he got 1% but that 1% matters when you got to get to 50 and you're at 49. >> it's going to be a long year. election year. >> waiting until december,

especially and it could -- that could be the one. that could be the one that either goes 50-50, 51-49. >> last time i think that both parties were somewhat unprepared for the runoff scenario. i think this time both parties are prepared for that potentially bracing for that, waiting for that and i think that, you know, the runoff election may look a little different than it did last time. >> a bigger arms race. >> a lot of money spent. >> thank you. joining us right now is jay clayton. he, of course, is the former s.e.c. chairman and today a nonexecutive chair of apollo, also gary cohn who is former economic council director. guys, let's start with the idea that we're probably going to be facing gridlock. we don't know exactly what's going to happen in the senate. it looks like the house is probably going to go to the republicans but by a very narrow majority gary, that means gridlock and

probably even gridlockier gridlock because the republicans aren't going to be able to put things forward how does that play out from the economy's perspective and the market's perspective >> we clearly have the ultimately divided government here and i think from an economic standpoint, it's going to clearly create a real jump ball, and when you create that jump ball, you're going to have a lot of people on that court. because, you know, everyone is going to try and show leadership on the economic side, the white house is going to try to show leadership, i assume that the house with their small republican control, they're going to want to get involved. and the senate is going to be there. when you've got these very narrow majorities, i think that you've got to also look at some of the preeripheral players, agencies and other players are

going to feel like with these margins, there's an opportunity for them to get involved. >> yeah, we spoke earlier with judd greg and bill daily and they seem to be of the opinion that this is not necessarily going to play out in congress as much as it is going to play out in the agencies and beyond that in the courts. >> yeah, i think they're right you know, it's -- these very slim majorities or controls and the fact that we've got a republican-led house, the house will clearly try and get stuff down they will obviously meet opposition in the white house. we don't know what the senate is going to be. the senate looks -- who knows. it looks like it's heading very close to 50-50 one way or the other. there's going to be gridlock and so i think that the agencies will get the opportunity to play a bigger and bigger role >> jay, let's take a look at this from the policy perspective. we talked yesterday just running

through about what reach side is going to be doing of the this point. is the white house making plans to figure out what they can do from the agency perspective. is mccarthy now trying to make plans at what he can get done if it's going to be a tight majority and he's going to have to listen to parts of the party that he may not have cared to do how does this play out what are going to be the top concerns what will be the areas where they actually can find some agreement either within the party or from a bipartisan perspective? >> becky, gary is right. it's a jump ball so many players on the field none of whom have clear authority to set an overall agenda but let's look at where we are we have the same issues today that we had yesterday from an economic perspective most notably inflation and the pain that we're going to take to tame inflation look, people in their households, they know now that their household, running their household, stocking their

refrigerator, heating their home is costing more and their home is actually worth less people are going to want answers to that. the question is, all of those parties, the agencies, the fed, congress, are they going to get together on a plan for that or are they going to continue to point fingers? that's the big issue i think there are issues where there may be bipartisan agreement. we've talked about one, china. there seems to be bipartisan support for how we deal with china and the deglobalization, the decoupling from china. crypto, crypto is an area where there's bipartisan support and there is a desperate need for the government to come in and regulate as we've seen this week other areas, it's hard to identify them. but, you know, hopefully some bipartisan agreement around those we can get to what i would hope is partisan cooperative

approach to the real problem facing us which is inflation it's not just for the fed. the idea that pushing the inflation problem solely to the fed is going to produce the best solution is ridiculous >> that may be the case. but i don't see a whole lot of room for cooperation i mean we just listened to fetterman saying he wants to see the minimum wage be raised, he wants to see things like that. you're going to have populism take over and suggest if you give more from the spr, if you cut your exports of energy, if you tell companies they can no longer raise prices on things, that that's going to be the populous solution to dealing with inflation and i think all of us would agree that that's not the way to go. gary >> yeah, look, i think we all agree that's not the way to go and i think what you're going to see in the house even with the small majority is you're going to see something completely different. i think the house is going to probably be pretty aggressive on

the republican side of trying to return us back to where we were a couple years ago towards energy independence. i think that the house is going to be very interested in trying to come up with legislation or trying to come up with incentives that create opportunities to drill in the united states, to frack in the united states, to not have us be as depend on foreign imports of oil. we've got abundant natural gas in the united states i think the house is going to want us to use that natural gas, use it domestically, attract industry to the united states, broaden our business and tax base and grow our economy. i think that's going to be their number one premise and that's how they'll see the opportunity to grow the economy. clearly that will meet with opposition in the other legs of the government so we're going to have an interesting area here where for us to get anything done of substance, it is going to have to be brokered and it's going to be a multiparty brokered system to get any of these opportunities done

as jay said, i think the voters have clearly stated what they see as the problems in any poll you saw. you saw that inflation and the cost of products was really the number one driving factor in the vast, vast majority of elections. >> becky, if i could jump in to your question, yes, there were candidates who very much appealed to their base but we saw a lot of split tickets and we saw a lot of voting particularly at the governor -- the governor level i think for competence in government for hope that government are going to tackle these problems in much the way that gary said >> i've got two questions for both gentlemen one related to crypto. gary gary, i wanted to ask you a different question about your former boss, donald trump, and what you think this portends for 2024 a number of ceos texted me overnight saying this was a sigh of relief. they seemed to think that maybe he's now out of the game you think he's out of the game or not

>> you know, andrew, it's -- the paint hasn't even dried last night. i think for anyone to come up with a conclusion that he's out of the game is probably premature. i assume he's like us looking at the results. i think that the extremes had a bad night last night as jay pointed out, we saw the american citizens do a good job of splitting tickets in many parts of the country, they voted republican in the governorship and they switched their vote to a democrat in the senate seat. so i think that the american public is really looking at individual candidates in individual positions and anyone who wants to run in the '24 presidential election, they're going to have to understand that that the citizens are actually looking at the individual issues >> and then separately on the topic of crypto, gentlemen, and this binance/ftx deal, both of

you lived through the financial crisis of 2008 both of you were heavily involved in various rescues and the like what do you make of what's just happened and i want to also specifically ask the former commissioner -- or chairman, rather, of the s.e.c they said ftx has enough to cover all client holdings, he then deleted the tweet is there regulation that covers this kind of thing >> well, andrew, one of the issues that we've spoken about around crypto is that it is a global 24/7 market it does not lend itself well and this is why i do believe we need coordinated action across the federal government it does not lend itself well to one particular regulator that's one of the issues that we've had in regulating kcrypto what you're saying is, in times of stress, you know, when you

speak about a particular situation, the market is going to test what you say gary and i have both been through this we talked about it on numerous occasions. when the market sees stress in a particular entity and the entity speaks, that statement is going to be tested and like i said, i think this is not over yet people are going to test whether the liquidity problems and the capital problems around this exchange have been resolved. >> you think it's a one -- single exchange problem or you think this is a lot more unstable of an entire sector >> i think it's a sector problem. andrew, you and i know this well financial institutions don't run out of equity capital, they run out of liquidity we've seen what happened we saw it with bear stearns. remember, lehman brothers creditors got their money back,

but lehman brothers didn't have the money -- >> do you think these creditors will eventually get paid back? >> i'm not as confident. remember, lehman brothers and bear stearns were highly, highly regulated. >> exactly >> and these are not highly regulated industries. >> there's the fdic for small investors in those cases too we're out of time this morning we appreciate both of you being here. >> thanks for having us. coming up, more about crypto, the crypto world is in shock after binance bailed ftx out of a liquidity crisis. we're going to discuss the turmoil. mo f 90 points on the dow and alstlat on the other coming right back.

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welcome back to "squawk box. elon musk has sold another $3.95 billion worth of tesla shares according to s.e.c. filings published yesterday. sold almost $22 billion worth of tesla shares last year this year, he sold $8 billion in april and $7 billion in august musk tweeted after that august sale that he had been done selling tesla shares saying it was important to avoid an emergency sell of tesla stock. selling more again that stock has been under a bit of pressure over the past week perhaps as a result of that selling.

>> that's a lot of shares. trying to add it all up. that's a lot of money. coming up, we're going to talk crypto turmoil and later eric cantor isoi tbe gngo our special guest. "squawk box" coming right back

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it's not the same. what could you do to solve the problem? we could get xfinity? that's actually super adult of you to suggest. i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about. welcome back to "squawk. binance buying crypto ftx

rescuing it from a liquidity crisis suggesting that's what may or may not happen we can see the turmoil in the crypto market causing a sharp selloff. i want to bring in jeremy allaire, founder of circle he's an expert on all things crypto jeremy, a lot of folks looking at this saying this is like the quicksand moment for crypto. what's happening here? >> thanks for having me on, andrew yeah, i mean, it's complex i think for many people this is sort of a shock. i think there was a perception that ftx was one of the strongest firms in the space of course, you know, ftx international, which is i think really what we're talking about here, you know, operating out of another jurisdiction, not subject to u.s. regulations or emerging u.s. regulations so i think at some level not the

visibility that you would typically have in regulated markets context. and i think, you know, there are real questions about, you know, sort of downstream impact and things like that is this another major domino that's going to subsequently knock down a number of other dominos? we've had a number of those happen this year is there a balance sheet hole? is that balance sheet hole, you know, on the ftx side? >> right. >> one thing but there's obviously, you know, kind of interdependent other entities and kind of questions about that as well. so i don't think we have enough information to really evaluate it but certainly a shock for many people and underscores the clear regulatory structure. >> what's your perception of what comes next? i don't want to speculate but let me just say this deal with

b binance is not done. it's subject to approval and it's possible you could get under the hood and say, i'm not doing this, and then what? >> yeah. obviously there's a lot we don't know we don't know what economics look like. we don't know ultimately, you know, whether there is a significant liability, what that is and the value of that from a purchaser's perspective. we don't know the details of the terms sheet. is it something that other potential firms could compete around we also don't know what might emerge in terms of regulatory, you know, inquiries around this as well. there's a lot of unknowns still. >> right. >> like you said, i think there's uncertainty about the deal itself. obviously a scenario where there's a giant hole and is not filled would obviously be kind

of far worse than is even contemplated right now. >> do you look at this and say there's more shoes to drop do you look at this and say, you know, look, a lot of smart people had invested not just in crypto but ftx in particular in sam bankman fried and this was a firm only two months ago that was worth $32 billion. >> yeah, i think, again, without knowing all of the details, it is hard to know. i think one of the key things that people are focused on is sort of what's happening with the ftx exchange token, ftt, that that was actually a kind of core source for a little bit of the kind of tussle that was happening and subsequent market activity you know, i think there is speculation that there are, you know, significant counter parties that, you know, kind of took that as collateral for loans and so that's unknown.

there have been people surmising about the amount of those loans and who are those downstream lenders. >> right. >> those are open questions that could lead to subsequent significant issues for other firms. >> jeremy, we've got to run. hopefully some of those open questions we'll get answers about and hopefully we'll have you back to discuss it all thank you so much. >> thank you. coming up, much more on mid-terms. what it means for your money want to talk to former house majority leader eric cantor on everything from energy to taxes. mohamed el erian will give us his assessment "squawk box" coming right back

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good morning the balance of power in congress still not clear. the morning after the mid-terms, we know some results but not all of them. that red wave, not visible yet we're going to talk about what the makeup of the house and senate could mean for business and your money meantime, meta, now the latest tech giant to downsize as the economy slows. facebook parent cutting 11,000 jobs this morning. bitcoin and other cryptos suffering on the upheaval of the industry one-time giant ftx now looking like a shelf its former self we're going to bring you the latest on the fast-developing drama as the final hour of "squawk box" begins right now.

good morning and welcome to "squawk box" here on cnbc. live from the nasdaq market site i'm joe kernen along with becky quick and andrew ross sorkin did you ever watch like the news -- we're watching three big stories. they always have exactly three that they come to. >> 5 on 5. >> mid-terms, disney, crypto obviously equity futures u.s. equity futures impacted by all three of those, disney, the mid-terms and crypto put it altogether in a blender, quisinart and we're down 90 points after friday, monday, tuesday, big days up so giving back a little. you see the nasdaq down about 11 and the s&p almost flat.

treasury yields, we hit -- watch this fed. is that the first time someone's said that today? >> no, we had a couple -- >> barely. >> tomorrow's cpi, then it's back to the fed all the time >> yeah, we'll forget so quickly. the news cycles pretty fast. crypto prices still talking about this after the ftx takeover by binance. those are yearly lows that we saw in some. bitcoin and probably most of the -- >> the tonight change on the screen. >> yeah, that is here. >> that happens to me all the time here, too i don't know what happens. it just does. >> we are creatures of habit >> we're going to get the update from the latest on crypto and that story in a few minutes. there's four big stories we're watching. >> facebook. you missed facebook. >> that is our top corporate story. >> i think disney. >> disney is too facebook parent meta platforms announcing it's going to be

laying off 13% of its workforce or more than 11,000 people in a letter to staffers ceo mark zuckerberg said meta is cutting discretionary spending and extending a hiring freeze for the first quarter. costs have risen and third quarter operating income dropped by nearly half we talked about this yesterday or the day before. something like 40,000 employees have been hired since the start of the pandemic. that's very quick growth and zuckerberg is now saying he wants to take accountability for those decisions. he's taking accountability not just for the decisions but how we got here too. i know this is a tough day for everyone and i'm especially sorry to those impacted. we're going to be talking more about this story with rich greenfield that stock up by almost 6%. disney shares under pressure this morning dow component and entertainment giant's fourth quarter revenue and profit both below analyst's

expectations disappointing results from streaming, although the theme parks were pretty solid. earnings missed consensus by 45%. disney's worst performance since at least the early 1990s direct to consumer which includes disney+ more than doubled its loss from a year ago and was much wider than the street had been anticipating. meantime, want to get back to the broader markets and get over to cnbc's senior markets analyst, mike santoli. >> my mom calls me michael i answer to it it's no problem at all what we're watching is a market that's stepping kind of lightly into today if you pull back into the last four weeks, s&p 500 absorbed a lot. another hot cpi number a lot of tech earnings blowups more sal voes including from jay

powell we're up 10% from the lows set on october 13th. now obviously through the mid-terms. a lot of focus on the historical pattern where the market does tend to be strong following a mitd term election we're talking about the months following a mid-term election, not necessarily just the day that's the outcome it has to spend a cadence to the electoral seasonal patterns. we got this down trend that's something to keep an eye on above 3900 or 390 on the s&p 500. u.s. dollar index. one of the reasons the market has been able to hold up better, you have had the u.s. dollar back off it's kind of interesting kind of returned to this level a few times there. maybe people feeling like a fed slowdown or pause is not too far in the future. that's definitely taken some of the pressure off clearly a year to date up trend nonetheless. tesla, take a look at this big index weight

it's been tough. we had the news coming out, elon musk, ceo, has sold more shares, 3 plus billion dollars worth this is a two-year chart it's sort of interesting the lows had been around 187 or so, right in here. still above that a little bit. indicated a little bit higher with the sense that perhaps one of the reasons has been musk leaning on the stocks and selling more this is fascinating. that ramp happenedin november into december of 2020 when the s&p said we're going to include tesla in the s&p 500 even though that tends not to be a lasting reason to own the stock. this is where you kind of bought the s&p, about 230 those index funds still underwater point to point. >> okay. mike, we will see you in just a little bit how much -- we were talking about crypto all morning how much do you think that's ultimately going to weigh on things today and potentially

into the future? >> there's no doubt yesterday and overnight it was a big influence. the stock market topped as crypto made another down leg i don't necessarily see it as somewhere that there's a specific reason why you would need to be selling stocks or feeling like the market was vulnerable because crypto had this air pocket under it a lot of people who own crypto own stocks venture capital, private equity backers in ftx they're sitting on a dead weight loss it's one of the holes that's been gouged out of the capital markets. it's significant a sentiment. it's also we don't know what this is about and the opaque nature of crypto and who's exposed as opposed to there being some fundamental driver. >> there it is, michael santoli. we're family we can do that thanks >> no problem. get back to the mid-term

election control of congress up in the air. nbc has not made a call on control of the house or senate democrats picked up a senate seat in pennsylvania other key races like those in georgia, arizona still undecided. markets, potential climate in the next congress. joining us is eric cantor, former house majority leader and now vice chairman and managing director at moelis and company can something be gridlockier or less gridlocky do you know, eric? is this less gridlocky than people thought or if republicans do have the house is it just the same gridlock >> good morning, joe i mean, it's -- look, there's no question the take aways from last night, as you say, we're still trying to count the votes here so i do think the margin in the house is going to end up being more than just what is currently being discussed, one or two votes. it's still going to be close the take away is we are a deeply

divided country. there's no question. the turnout, we've reached a new level of extreme turnout in mid-term elections people are engaged in media, social media, how people want to go out and fight for their team, if you will. this will be the real fight for the governor mccarthy leadership team is to satisfy the urge of the base of the party in order to vindicate their opposition to everything that is happening over the last two years. at the same time, be able to maintain that small sliver of the middle which is reflected in a few of the races and these members who have got to come onto the republican side in order to deliver these wins in the house as they work through their legislation. it's going to be tough >> do you only talk to financial types now? do you still know anyone in politics, eric >> listen, joe, i was in politics for 23 years so, yes, i still know people in politics.

>> what are you hearing the final makeup of the house is going to be right now? do you have any insight that we don't have or you don't know any better than anyone else? >> i think we're all right in the city we have these very arcane rules. each state is different. when we went through the pandemic, as you know, the rules changed in a lot of different states so the counting and the scrutiny of that is just causing delays so, no, i don't know any more than you do. you probably know more than i given your access to nbc and what they're doing so -- >> okay. let's talk about what the tea leaves said about yesterday. kari lake was trumpy and i guess j.d. vance was trumpy, but so was herschel walker and mehmet oz what would you have seen people send out that he was 174-9 for

trump candidates yet it looks to me like this was a big win for ron desanctimonious or desantis and not a great night for former president trump's prospects for 2024 >> i think it's way too early to be talking about what happened in 2024. if you recall, remember back in the 2010 election when we had the mid-terms -- the first mid-terms of the obama election, that was a wave election we picked up 63 seats as republicans and regained the majority at that point we thought we were on such a roll and then we were going to easily be able to defeat president obama in 2012, and as we know what happened, that was just not the case. so there is going to be some kind of reset now. there's going to be expectations on a republican majority and kevin mccarthy led house to

deliver for the majority and at the same time knowing full well we have a system if there's a democratic senate and certainly the biden white house is not going to go on with the agenda that a republican party wants to push in the house. to your point earlier, it'll be gridlocked it will be, i think importantly, an end to the ambitious spending and tax programs that we've seen over the last couple of years, certainly in the last year, that has run into collision with the monetary policy of the fed i know that we at moelis are seeing a lot of volatility our clients are facing it every day. i think a lot of that comes from the disconnect between the two, between congress and the feds. that will come to an end. >> the inflation rate, the strength of the economy, president biden's approval rating, i mean, go down the list there was a reason pollsters saw a red tsunami.

there is a reason a red tsunami was predicted. now maybe it was abortion, which a month and a half, two months ago it was an issue. something went awry. it's almost as if there was a mass rejection of that ideology, eric that's why i'm saying all bets are off for 2024 >> if he was the shoe-in candidate for 2024, i don't think that's the case. >> candidates matter you're right >> they were his candidates, eric they were his candidates they were hand selected.

mcconnell, he kept saying it everybody at your own risk do you alienate former president trump. you've probably had a problem if you -- >> listen -- >> so even mcconnell said these are crappy candidates and i'm not going to be majority leader after this it looked like that for a long time and now it's probably going to be the case >> listen, it is -- we are so divided. you think about the numbers of turnout we're now sort of at in this country there's no telling that if -- if donald trump wasn't engaged, that we would have had the type of turnout on our side i think this goes to the point, nothing is dispositive no issue is dispositive. the country hasn't decided we are 49-49 and we are fighting over very, very reduced slice of independents. >> eric, republicans should have won the senate and georgia was a problem. if georgia once again is the -- you know, comes out 50-50 or

51-49, it's again georgia and it's again the fingerprints and what happened with georgia are on former president trump. >> listen, it's a -- and, remember, but the candidates last time, they were -- that wasn't necessarily the issue last time. you know, we had two incumbents. >> you know what the issue was last time. >> sure. right. right. it was the sort of doubt cast on the actual process of voting, whether you should even show up. of course that was a negative input. >> eric, if we are such a closely divided country, if this election is a telling sign of all of that, how come both parties when they manage to eke out a win run with it as if they have the biggest mandate they've ever been handed how come there is not more bipartisanship how come there is not more willingness to say, h'm, maybe

people don't want our more extreme positions? >> becky, spot on. who is going to be the candidate to figure out how to motivate the base because we know certainly on my side of the aisle donald trump can do that. who can figure out how to do that and then parlay that to the slice of the independents and win. nobody has figured out how to do that just barely. just barely and in fact donald trump is thebiggest motivator on both sides. i think that ultimately in the 2020 presidential what we saw was he was the one motivating my side as well as the democrats to turn out so, again, that is intuitive, becky, when you say why would people take the message? can't we just try and bridge the gap so you can try and solve some problems rather than focus on your differences? we just haven't gotten there as a system >> is there an up side in that

this is the election that does that i mean, look at even new york state. look at new york state it's fascinating lee zeldin got 46% so far. he clearly didn't win, but the question is does that put pressure on kathy hochul, for example? and does she take away from that and say, okay, actually, maybe we need to think about governing the state differently? >> well, i think that candidates who won or candidates who focused on issues at home and not necessarily national issues and we're so nationalized in new york, i think that was the case in a lot of these different seats. look at virginia look at virginia spamberger -- >> virginia. they're telling us we've got to go would the gop like to move past donald trump if they were going to -- if there was no retribution? do you think the democrats would like the gop to move beyond

donald trump >> i don't think there's any -- >> i can answer that -- i can tell you that with 35% base, you're not going to win a national election probably >> but, joe -- >> it's the worst nightmare for democrats if he doesn't run. >> but it's not. >> it is >> we've got to run. >> it's not because -- >> it's not because i think there's a whole world, including most of corporate america and a large part of the country -- >> you can think for yourself. you don't need to talk to corporate america. >> talk to a single ceo to know -- >> can i say one thing about corporate america? >> go ahead. >> i think what this does is send a message to companies like disney and the rest, understand we are a divided country any time you involve yourselves in politics there is potential peril. that's what i think comes out of this if you want to talk about corporate america. >> eric, you've got to come back i think the debate has actually

shifted again. >> i like that we tied that closely to biden trying to -- >> it's not divided with a big piece on one side or the other closely divided down the middle. evenly divided. >> evenly divided. >> it's been a long night. >> i was trying to figure out if that was a good mixed metaphor. >> look at the debate over abortion -- >> evenly divided. >> you look at the debate over abortion, how corporations reacted. much more in line with the way the country seems to be, than necessarily the politics of the country. this is why with what eric said, can you wade in on issues? the countries are where they have been. >> they've been nervous on the issues about waiting in because you don't want to alienate any part of your constituency. speaking of disney, we are going to have much more talking about the top corporate stories,

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we'll talk about the questions with rich greenfield from lifeshed partners in just a little bit "squawk box" coming back right after this

meta has added 40,000

employees since the pandemic is this a move to get them back on track >> i think this is completely a side show from the fact that the major issue is they're not growing anymore. they can cut jobs and reduce cost structure but the growth of the company is being impacted. their products are not wowing consumers. instagram and facebook blue pale they have to innovate their way out of this. that's the bottom line, becky. cost cuts helps profitability and it helps them with mark's vr and ar long term innovations, they're not innovating products consumers want to use. >> i don't know if it's a risk or up side risk but whether

tiktok gets banned in the united states >> there's been noise in it. since trump was in office we've been talking about this issue. i have no specific knowledge, it certainly seems like tiktok has made a lot of moves working with the biden administration to get to a place of not getting kicked out of the u.s i don't think there's an investable case on meta based on that it would be very good for meta and snap chat, but i don't think it's going to happen i was with the head. tiktok was at the pali center event yesterday. i don't see that happening i think it's very hard to imagine at this point. >> let's pivot if we could to disney and what is now looking leak a disappointing fourth quarter. losses in direct to consumer dtc and disney's earnings call

late last night bob chapek said it would result in short-term losses >> disney+ is well situated to position ourselves for long-term success. >> market doesn't like it. do you >> i mean, look, netflix made $6.5 billion in ebitda over the last year. disney just reported a $4 billion, $3.5 billion loss the market obviously is concerned. they were larger than expected but the real story here is the fact that the linear cable networks media networks for disney, meaning broadcast, tv and cable networks are 8 billion of their

$12 billion of earnings. that's what people are worried about. they're looking at that business because of core cutting and advertising being in secular decline now because of what's happening in cord cutting. that's really the growing fear margin structure on the theme parks was also worse but this is less about streaming and more about everything else. people know that disney's going to close the gap on streaming losses they're raising price next month, they're cutting back on marketing spend. there's no doubt the profitability of streaming will improve. it's everything else from the investors i was talking to last night. it's everything but streaming that was really worrying people heading into fiscal '23. >> if you are disney, do you lean in more do you cannibalize that business even more because you want to get to the other side or do you

slow roll this as soon as possible. >> if we were sitting in bob chapek's shoes, we've been a broken record here he's been pushing to get this to profitability. i think the cable network business that has supported this industry for decades is just in a lot of trouble and, remember, espn versus a lot of other networks has fixed costs it can't justifier -- mark zuckerberg firing 11,000 people. you can't get rid of your cost structure at espn because it's long-term sports contracts where there's step ups ever year i think the smart move, lever it up and punt the asset. get out of all the things you can't fix and whittle down to the good assets. that should be chapek's next move i hope he does that.

i do want him leaning in more and more. >> how important do you think, for example, the abc linear assets are to the long-term viability of hulu? i spend a lot of time on hulu. i think it's a great platform. even the last 12 months. but partially because a lot of the content has obviously moved over you have fx, stuff from abc, some of the movies and originals that they had before it looks like a full offering and i don't know what happens if you start to sort of peel away certain parts of it. >> i don't know. the bear, dropout. dope sick. now you've got "dancing with the stars. those are disney+ and hulu shows. they never air on abc. i think the -- first of all, who is watching abc primetime? nobody turns on abc primetime. there's nothing on it. so if you didn't have abc primetime, other than not having college football games which air across abc and espn, i don't think people would even know

that abc doesn't exist anymore maybe the bachelor you could move that over to disney+ or hulu. >> rich greenfield, telling it like it is nice to see you, sir >> thanks for having me, andrew. >> thank you joseph >> coming up, who's on the hook for losses after that liquidity crunch at crypto mainstay ftx? li rora veept on that coming up when we return we'll be right back. the holidays are here. and dick's sporting goods has all the best gifts for everyone on your list.

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the news in crypto, binance plans on buying ftx. they had a liquidity crunch and customer flaws kate rooney has more on what this means for investors in ftx, crypto at large. ftx, that's good sbf is involved. cz is involved it's all alphabet soup, isn't it, kate >> ftt there's a ton of acronyms here, joe. good morning good to see you. binance's takeover of ftx may clear it up. they say customer assets will be covered. other high profile investors will likely be wiped out they raised money in a $32 billion valuation from some of the biggest names in venture

capital. soft space, tomo bravo sequoia. they're planning to write this off as a loss. the deal hasn't closed it bought the rights to brand ambassadors as well as investors. all of this is spooking crypto markets. bitcoin taking a heit. shares of robinhood down coin base also getting hit even though it had no exposure to

ftx. and they're saying raise cash in the event of any additional draw downs and said based on the number of unknown skeletons that could still be hiding, it could be prudent the story is not over at least for crypto markets. >> contagion is incredible i don't know if people panic or what >> absolutely. the firm is quant hedge fund it will have margin calls to meet obligations it's a huge lender out there the selling pressure that comes with a lot of this margin that you see in crypto markets and debt obligations is the big thing. it's similar to what we saw play out with celsius, three arrows,

voyager and some of the companies that are now bankrupt. tough to see again investors look to that as a model for what happened and are raising cash and getting a little bit more careful. >> when sam bankman fried stepped in to shore them up. >> what was he shoring them up with this is the whole question of whether this was a quicksand situation. >> joining us to talk about the crypto crush and the broader markets coming out of mid-terms is mohamed el erian. he's president of queens college cambridge. mohamed, let's go back to watching runs on banks i remember sitting with you in 2008 in the old building in the studio while we were watching this play out. the difference was those were regulated markets. those were heavily regulated companies. we are talking about an area that has none of that. this is a big, big unknown.

>> the good news is we don't have to worry about the systemic effects. what we're seeing is stunning. the cost ownership of stassets this shouldn't happen. one will contagion go beyond crypto and, two, what will the regulators do? i don't think contagion will go beyond crypto but i will think the regulators will be playing massive catchup because what they're seeing i suspect will keep them up at night. >> as it should. it's shocking we've gotten to this point there's no clear idea which agencies. >> correct that is what we've been talking about. there's been a massive migration of risk from banks to nonbanks and the regulators haven't followed that migration.

i'm worried more generally as to how much we're going to find out exists in the nonbanks as interest rates go up and as people become more cautious. >> not just this you are talking about the overall move to shrink liquidity and what that's going to show us >> right the other thing, keep an eye on is japan japan is going to have control there's massive ownership in japan of u.s. corporates, high yield. what will happen when the pension funds have to deal with the losses on their holdings so that's probably going to play out in four to five months time. >> so you would have been in

agreement with don't be fooled we're into a crisis. >> i think we have overcome inflation risk i think we are starting to understand credit risk recession, et cetera what we haven't got our arms across -- around is a market is market functioning, liquidity, and that's the one thing i keep my eye on. i think that that still has to play out as the fed continues to march on with the interest rates. >> you don't think it should slow the fed's role in terms of what they're doing with higher interest rates >> look, i'd rather the fed not be late. i'd rather the fed not having to increase rates so quickly but given that it's so late i don't think they have a choice i think the alternative of not reacting will be worse for the economy and will be worse for the markets long term. >> we have talked about how the consumer has been really very healthy, how they've had some -- been flush with cash they still have the jobs markets very strong.

wages are up even if they're not up as much as inflation you were tweeting about a few things last night, concerning trends that you're starting to see from consumers and in terms of what they're doing with credit cards >> revolving credit is now at a record high. it's gone up by 9% in the last year keeping up with inflation but it's still at a record high. what we're seeing is a segmentation of the consumer base so what consumers in general have a strong balance sheet, while the labor market in general is strong, once you look at the competition -- so if you are selling to the lower income segments of the population, you're seeing significant declines of sale and that's what's happening is we're seeing a segmented hughes hold sector emerging. >> that's bad news for people who are in peril will there be any relief from politics if the republicans take the house as is anticipated, not

sure what's going to happen with the senate what moves, if any, would washington make to help those in the lowest rungs >> you call it evenly divided, closely divided. there's two views. because they're so evenly divided they'll come together. i don't believe that because they're so evenly divided everyone will focus on the election in two years' time and they won't come together the conventional wisdom is gridlock is good for the markets. in 2010 they were on a similar path to today. without stimulus it was going down the fed could step in and focus on stimulus. this time the fed cannot step in so i don't think it is good news that not anything out of congress for the next two years. i think we need to focus on a new growth model take the supply side much more

seriously. >> none of those scenarios sound all that fantastic, particularly if you worry about the fed doing the initial damage that needs to be done to the economy to bring it to bear >> valuations are a lot more attractive than they have been before risk mitigation is coming back into portfolios. yes, i think we are on this bumpy journey but for investors we are exiting a very artificial environment. we're getting to the ability to build a portfolio that has inherent risk mitigation that longer term is a good thing. >> mohamed, will you stick around with us this morning? it's nice to have you here with us on the set. >> i'd love to, thank you. >> mohamed will continue with us when we come back, we'll talk

with jim cramer and what history tells us about the markets in mid-term election years. maybe more importantly, in the years that come just after that, too. see this morning dow futures off 116. nasdaq down by 45. s&p off by 13. "squawk box" will be right back.

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let's get down to the new york stock exchange with jim cramer i want to talk disney, crypto, meta, i want to talk the elections. go >> all right disney, they have espn if we were on espn, we would say he's got to be fired that, that's pretty cut and dry. >> you're firing bob chapek, is that what you're saying? >> absolutely. absolutely absolutely. >> because >> i felt that he had a couple years. the team's going downhill. i mean, that was incredible. last night was really -- the

team has been going downhill i had faith. i had faith in frank wright and the colts. i still do with frank because he had a winning record there is no doubt that he -- that he has to go. i mean, that was just unconscionable and the quarter itself, the way he handled it. i mean, he made it sound like it was a four star quarter. delusional and i believe it and i was wrong. i was wrong. >> let me just go back for a second do you think -- >> sure. >> -- it's chapek the man or the secular headwinds that are facing -- >> no. no no no do you think he has a bad team he has the same team what happened here is even the stuff he was good at -- it's harder to control team, but the losses here, andrew, were just mind boggling. when you're going over the quarter, it's stunning and that's why i say if this was the nfl where they have

tremendous accountability and we were watching their program on sunday morning, everyone together would say, he should be fired. and then schefter, by the way, would say, you know what, he is going to be fired because he would know what the board is going to do. i don't know. >> would you own he is going tod >> without would you own the stock with bob chapek as the ceo? >> we have him for the travel trust and we called for his firing last night. the franchise is too good to be destroyed by this man. that was one horrible quarter. that may have been a quarter for the ages >> okay. >> and you can't -- you cannot survive. in the nfl, you'd be fired they own espn. they should have the same accountability that you have for the nfl. and i got to tell you, it was imbarrassoing. >> what are you doing with same bankman-fried this morning >> he's jay ghoul, the 1869

scandal. like gold and fisk tried to corner the gold market. that didn't end well >> but does this raise questions for you about the entire space, or is this just an individual single situation how do you think about it? >> well, i think this guy tried to corner the crypto market, basically, the way that gould tried to corner the gold market, and it turned out that in this case, there's no way you can own this stuff i mean, how many people can hold this up? how many people can sit there and support this thing i mean, this was amazing chimerical is the word i use for it >> okay, we're going to run out of time. 20 seconds on meta, 30 on the election >> meta? i think he's real. i think the costs are going to take -- the opex is even going down i'm a believer even though i had been concerned and the election, it was a huge

win for the republicans, but an actual win for the democrats, because the democrats had inflation against them they had, you know, biden, people don't -- crime. and yet, they still won so many different -- they did well given what was against them. i don't know that the meta thing is odd, but i've got to tell you, i believe it this time. i think he's finally getting religion >> mr. cramer, we will see you and the gang in just a couple minutes on "squawk on the street." >> fired, fired. they fired frank they can fire this guy and shows me how to get the most out of my workplace benefits. voya helps me feel like i've got it all under control. voya. well planned. well invested. well protected. ♪♪ i don't accept this. i can't do this anymore. 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.

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we've been talking all morning about the markets and the midterms and here's a stat that might be instructive. since 1950, the worst year for stocks under a new president has been the midterm year with only a 2.4% return for the s&p on average. but in the third year, stocks have returned 20% on average that nugget comes courtesy of our next guest, ryan dietrich, from carson group. mohamed el-erian continues with us we saw some good stats, ryan, about markets after midterms, but the backdrop is, it hasn't always been with a fed that seems so intent on curbing inflation, and that might be a little bit different just to bring it back to the election results, i don't know

if anybody's in charge now, which means jay powell's in charge like, there's going to be no -- nobody can -- nobody's got the credibility or the juice to tell jay powell to cool it at this point. not republicans, not democrats, not the president, nobody. so, it's going to be an independent fed. let's just hope they know what they're doing. >> well, exactly good morning, everyone i love listening to everything you guys have talked about this morning. and you're right, i mean, we've heard it gri gridlock is good there's some truth to that at the same time, though, you mentioned the fed. so much bearishness has been priced in. so much hawkishness has been priced in. when i look at things, joe, like used car prices down over 10%, rents had their largest monthly drop ever last month those are huge parts of inflation. i know we've got inflation data coming very soon, but as we get into the next couple months, we really think inflation is going to start coming down and that's something a lot of people haven't priced in with those

positive seasonals and the one that everyone's talked about, but it is what it is, six months after a midterm year, stocks have never been lower. a year after a midterm election, stocks have never been lower we have that positive seasonals but we need positive news and we think it's going to be with inflation, and it might start sooner than later. >> if you were cynical, mohamed, you might say -- because the incumbent president almost always loses and then the market goes up. it is a little bit cynical viewpoint. what's the cpi going to be tomorrow is ryan right that we could see a slowing of these really hot numbers we see >> so, ryan is right i expect we'll see slowing i think the consensus it will go to 7.9 is correct. keep an eye on coal. that's only expected to go down a tiny bid ryan is also right in saying that certain components of inflation are coming down, but that's not where the story is. the story is in services and wages, and that's what's going

to determine how quickly inflation comes down let me go back to you because i think what joe said was really important. in the past, the fed becomes, if you like, the only game in town after a midterm and the fed can compensate for the lack of good policies coming out of congress, even though they do it imperfect loo. that's what happened in 2010 that's what we got into qe 2, this massive stimulus fund effect this time around, it is not going to happen or it's not going to happen fast enough. how should we then think about this >> did we just lose him? >> ryan? >> i think we just lost him. >> you're back sorry, guys. i can hear you now >> he had a really thoughtful answer >> sorry can you hear me now? i'm sorry. i don't even know what the question was i think it was something about the fed, though, so i'll take it from there mohamed, the fed has been a tail wind or headwinds and i think it comes down to us

what was the fed saying 15 months ago the fed was saying, oh, we're not going to hike. we're only going to hike once this year. the fed's not infallible we just think so much has been priced into things, that six months from now, the fed won't be nearly as hawkish, and that can be a positive for investments. just pull back 25%, your average bear market without a recession pulls back 40% we don't think we're in a recession. >> ryan, we lost you for a while, and lost a few seconds, so they're telling me to wrap. good to have you on. mohamed, good to have you in studio no gloating about anything i'm talking about the jets at this point how does it go j-e-t-s. >> jets, jets, jets. >> so you would have rather beaten the patriots than buffalo? >> absolutely. >> that's just you >> i think it's most of the jets fans we've lost to them 12 or 13 straight times that really hurts.

>> well, that was a pretty good win over buffalo >> it was a great win. >> all right well, good to have you in. let's take a final check on the markets this morning we're now down 200, i saw, on the dow. not quite 184. we'll be back tomorrow, and we may know nothing more than what we know now, or we might, so make sure you join us. "squawk on the street" is next ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer. midterm election sresults still coming in, ftx, crypto, all as we brace for cpi tomorrow. our road map begins with the midterms key races still undecided as control of congress hangs in the blanks >> meta makes it