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 official.

the company is laying off 111,00 employees and mark zuckerberg offering a mea culpa disney is among the biggest decliners we're going to see in the premarket. with its quarterly results, it missed what analysts were estimating it was hurt by higher costs for content at disney plus >> which line was -- i found a line that was a beat go ahead i'm sorry. >> we'll start with the markets and the midterms control of congress still up in the air as democrats did outperform expectations. nbc has not made a call on control of the house or the senate but democrats did pick up a senate seat in pennsylvania with other key races like those in georgia, arizona, nevada, and wisconsin still undecided. meantime, battle for the house remains too close to call. the latest nbc news model forecasts that if the gop wins the chamber, the majority may be smaller than many had expected i think it's evercore this morning, jim, thinks could be

five to seven. it will be interesting if mccarthy chooses to run for leader, what kind of deal he could put together >> no red wave i mean, given the scope of what the gop had, i mean, think about it in their favor, they had biden inflation, they had democrats on crime, immigration, the fact that we thought that biden was disliked and schumer and pelosi, they had everything. and i'm wondering whether it isn't women who hate the gop my friend helps me on this this was, i think, a stunning nonvictory for the gop i mean, i thought we'd come in here this morning and be like, the red wave >> the expectations were that they would take the house and perhaps handily so it does appear they are likely to take the house, however, as nbc projected, not by that many seats. and the senate very much a toss-up right now. certainly could come down to a runoff in georgia where we've seen that before, of course, in the last presidential election, where both senate seats went the

way of the democrats >> people were astonished -- i was watching everybody to me, this was supposed to be the critical midterm election. but i was watching, say, the oz race i'm from pennsylvania. and that was supposed to be the end. fetterman was supposed to be failing badly. a lot of people were supposed to be failing badly the governor of new york it just didn't happen. and i wonder, again, it's the woman vote, because i think that that holds the key that's roe v. wade >> of course, there are -- some examples of a red wave, say, south of the florida-georgia line, but michigan's going to hold the governorship and the legislature for the first time in several decades is the market disappointed, do you think, in some of this >> i think the markets will ultimately try to figure out how to deal with whether the republicans actually get the house. but i think the market's not

disappointed as just kind of flummoxed. didn't expect that trying to compute it sometimes that happens you can't compute it fast enough the algorithms don't work when you have -- when you're trying to -- you have a red wave. you get one. >> right >> the algos are not ready >> there's a lot more news today that may have an impact on the market than the election >> i think that's very true. and the election, i expected it to overshadow everything, but i do my what i'm looking at, and the top blanks are bigger than the rest of the stuff i have to say. >> we've got a lot of good, interesting corporate news today. >> we do >> that brings us to meta this morning. it is official, the company laying off 13% of the staff, more than 11,000 employees in a plletter tohis employees, mark said, at the start of covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth unfortunately, this did not turn out the way i expected as the macroeconomic downturn increased competition and signal loss have

caused our revenue to be much lower than i expected. i got this wrong, and i take responsibility for that. jim, you said a moment ago that after that last print, which you were disappointed in, you now believe. >> yeah. i go back and forth with the company a lot, and i think they admit that they got it wrong this is not the end. this is the beginning of the layoffs. they're still not really touching the labs, and while opex is indeed down, that does matter, the reality labs operating losses will grow significantly year over year you need to see that change before you can get as excited as the market is for that that hasn't changed. >> so, this doesn't point necessarily to diminishing the overall spend for his long-term vision for the metaverse >> no, that has to change. he has to get the expenses in line with the revenues not unlike someone we're going

to talk about soon, disney these people have to realize, the revenues have to cover the expenses >> and we're going to talk disney a lot, but you know, jim, i'd love to get your response. towards the end of the letter, i noted one sentence for them. i believe we are deeply underestimated as a company today, mr. zuckerberg wrote, towards the very end of the letter do you agree with that >> i think that the part that is -- yes, and i'll tell you why. i think whatsapp is $10 billion in sales >> in revenue. it's a $10 billion revenue potential. >> potential and that's worth -- you got to put some multiple on it. good business. and that's not included in the vast mosaic that is instagram, that is reels. now, reels, they're very excited about. now, i'm not talking about tiktok being disqualified by the u.s. government, but i think the rest of the business is, indeed, undervalued. it is yet to be seen to me,

carl, that the metaverse, which i have been in, is undervalued that's not at the expense that they're putting in and not getting the kind of feedback from potential advertisers and people who want to be in the mall that it is right now worth being in the meta mall that's still in pain i don't know how much you want to do the exercise yourself. i'd rather do it on mirror i'm a believer in mirror, by the way, david and i just feel like that that part is too much of a question mark, but yeah, the rest of it's u undervalued. >> as for the broader cutback story, it does pair with reporting we've done on crm cutting hundreds on monday party city, 19%. red fin today, zen desk. citi barclay's >> the a.i. real estate, the a.i. loans, no, i mean, these things tended to not lend -- none of these people want to admit that artificial intelligence didn't work as well

as people thought. they want to say the macroenvironment -- i don't see anyone who says, the a.i. didn't work david, it's the macroenvironment i'm sick of that why not just say, listen, it doesn't really lend itself to something that we thought it lended to? that would mean that their businesses are existentially in crisis no one wants to admit the existential crisis that frankly the models don't work. >> everybody's looking for more efficiency, and i think -- i just wonder how many of thoeir employees are actually coming to the of us every day. >> did you see the real estate efficiency note? in zuckerberg's thing? >> yes >> what do you think that means? farley >> yeah. >> is that tom farley? >> no, the farley post office, the building >> what do you think about new york as a place -- by the way, see the layoff package that costs them a great deal the layoff package was extensive. >> what is it, 16 weeks and then

2 weeks for every year >> it was bountiful. no one wants to get laid off, but i'm saying that i was -- if you were -- if you got, you know, you get your time, you get -- if you work there for a couple years >> it's quite generous, but again, we've got a lot of companies looking for efficiencies they are laying people off you've made this point many times. the center of this isn't silicon valley i think it's also interesting to just remember that many of these cases are not having people come to the office that often and you do wonder about productivity, which we have seen, in recent quarters, declining. >> the orders for steel, structural steel for skyscrapers, are down badly. there's no -- nothing -- >> no big surprise there >> i'm saying, there's nothing in the works >> yeah. although, bigger picture here, i do start to wonder whether you're going to see, over time, a reversion to past practices. more people coming in. >> that's too hard to tell >> maybe it is a better way to

do work. >> you know, there are sightings in hawaii of zuckerberg. actually, i have someone who lives next door to him, so that's actually not -- that's factual, maybe you know maybe factual. >> he's walking the beach? >> no, he's working. geez david. >> michael dell is there benioff is there >> no -- >> ellison's there >> he's working 18-hour days to fix the problems of the metaverse. >> the problem is he's spending most of his time in the metaverse in goggles >> before we wrap this up and move on to disney, you indicated that you expect more layoffs >> i do. over time. over time, they got to get -- maybe over the next year, they've got to get the revenues -- expenses in line with the revenues. they have to they know that they know that i'm not saying me know that. they know that >> okay. david mentions disney. that's the other big story

today, down in the market after missing on earnings, warning on streaming growth this is chapek on the call yesterday. >> we are on the path to profitable streaming business that generates shareholder value long into the future and assuming we do not see a meaningful shift in the economic climate, we still expect disney plus to achieve profitability in fiscal 2024 as losses begin to shrink in the first quarter of fiscal 2023. >> got some target cuts, but i got to say, the street's more constructive than you seem to be this morning >> credibility's shot. here's what i told people, members of the investment club we are shocked and stunned -- jeff marks and i -- by the poor performance of disney. the execution here has been so woeful, but we don't want to leave the franchise because nothing has changed in terms of disney's ability to make iconic content and create gigantic

experiences. if we were to compare business to sports and espn, we would say it's time to find another coach. yes. that means it's time for ceo bob chapek -- there it is -- bob chapek to go time for chapek to go. >> you really believe that >> no, i wrote this in a complete -- in a moment of fiction. >> well, maybe i thought maybe in a moment of pique maybe you were emotional >> linear nertworks, miss content licensing, miss. elimination of intrasegment, miss parks and experience, oh, look at that. beat although i could tell you that's not even really true direct-to-consumers, big miss. subscribers, david, global display, miss. espn+, miss. hulu, miss >> i hate to burst your bubble, but my expectation would be that you're not going to see a change in leadership there any time soon >> stags, no >> none of that. first of all, no of course not.

>> that contract that he just got? >> i think the board is still solidly a believer listen, some of these decisions -- some of these content decisions were obviously put in by his predecessor. some of the decisions to spend a lot on sports while now you're watching our world, the cable world, shrink by as much as 6% or more a year were put in place prior to that. but you're absolutely right. i mean, linear is declining very quickly. >> it is woeful. >> we talked about that. and at the same time, the amount of money they're spending for direct-to-consumer is enormous, and it continues to be same question he says, yes, they will be profitable in fiscal year 2024 in direct-to-consumer. but the question is, how profitable let's sub work there given churn, given what you're spending a senior media executive mentioned to me recently something that's quite obvious, but so many of these decisions in terms of going all in on

direct-to-consumer were made, jim, at a time when netflix had a multiple of 300 times earnings and now you look at netflix, and the cold light of day, so to speak, and what really this business looks like, and you do wonder whether those same decisions would be made. not -- you had to pivot with linear, clearly, and direct-to-consumer is the way to do that. but to be all-in, in that way. >> what were we looking for in direct-to-consumer what was the consensus >> are you talking about a number or the loss >> $1.1 billion loss, we were looking for, and it came in at $1.474 billion that's a worse than expected loss he's an nfl coach. it's a disaster. we keep him because, what, it's a rebuilding year? >> listen, you know, when i look back to that load letter, the key thing there was cost-cutting and when i talked to chapek and did that interview with him a couple of months ago, his eyes lit up when he talked about cost-cutting

he's known as somebody who can execute particularly on that part of things, on running occupations and/or cut costs we'll see. >> what are you looking for there? >> my eyes just lit up see them light up? you said his eyes lit up. >> you look like a guy from "uncut gems." >> my eyes are lighting up >> you got a diamond i might like what do you want to do here? >> let's use the nfl, okay let's use -- let's use frank reich, greatest comeback of all time in college, devised the philly win for the eagles. goes to the colts, has some problems with the quarterbacks, including andrew luck. >> and he cheats what happens >> winning record. fired. fired. just like that summarily fired. this guy gets to keep his job? i mean, look, i've been a backer >> did he just get fired, frank reich?

isn't he the coach -- >> who's your just saturday, though, jim? >> look, i thought -- i always thought that stags was very smart. >> they're not bringing any of those guys back. not a chance >> oh, yeah? this board iswatching right now. you think christy mccarthy was happy with that quarter? did you hear her on the conference call? >> did you just wave me away >> this is not a cincinnati situation. this is a saturday situation >> we're not done talking about disney by a long shot. >> no. >> lot more to get to. >> sam bankman-fried take that to the bank. >> fallout on ftx and the impact it's had to sbf's personal wealth and crypto at large big show still ahead don't go away. >> like i was saying, it's ftx it's a safe and easy way to get into crypto. >> i don't think so.

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the crypto world is still digesting the fallout from ftx as binance said it has signed that letter of intent for ftx's non-u.s. businesses. i think it's bernstein today, jim, says if the deal goes through, they could have 80% global share, binance. >> and how much -- look, to me, i'm more -- sam doesn't have a

lot left >> doesn't have what >> i don't think sam has a lot left after this. >> sam bankman-fried it is most of the business >> i just want to say. >> let's start with the fact that it's a letter of intent >> doesn't that make it so -- >> absolutely. a letter of intent, is not a deal it's not contractually binding deal of any kind at this point they may get there but they're not there yet. and one would expect that it's up to binance, and its ceo, and if, in fact, they feel as though ftx failing, which seems more likely than not, if there was not this bailout, would hurt them more than it would help them, then they'll do it but if they don't think that, then perhaps this deal never happens. >> well, i think that's the most important thing. it's been left out of all the commentary the idea that it's somehow it's a done deal. >> it's not a done deal.

by the way, we haven't even seen -- there's not even a press release. this was done on twitter yesterday. >> it's twitter. >> a number of comments from binance's ceo. >> you have to spend $3.9 billion just to keep it going. >> jim, let me come to you the level of opacity here, the fact there was a message fund involved that he controlled called alameda that had as much as half of its assets in the ftx coin where are the regulators? >> i told you. jay gould. jay gould when he tried to corner the market. gould and fisk >> your references to the 1890s -- i'm not -- >> i'm not kidding he tried to corner the gold market and grant destroyed him >> what does that have to do with the regulators rights now >> it was totally opaque what gould and fisk were doing, just like this, in their corner of the gold market. do you think that the acquisition of goldman-sachs has been postponed >> by ftx?

>> remember, he did say he was going to buy goldman i'm asking if it's been postponed. what do you believe? >> i believe that's -- yes held in abeyance for some period of time. >> he did say over time, i'm going to buy goldman-sachs, i'm going to see david solomon tomorrow i think that david's job is more secure and the acquisition of goldman-sachs has been postponed. >> i think you have a good chance of that being correct -- a correct prediction >> did your eyes light up when i suggested that >> i love you in those i really do. >> chapek's eyes -- where'd you get that >> cut, clarity, and something else, right? >> carat >> that whole moment where he sounded a lot like warren buffett, i think we have to replay that over and over. >> this is -- you know, we have fun with it, but this is important. >> we're not having fun. people are losing billions >> trillions have been lost. >> $3 trillion this week last year. >> now it's under a trillion dollars. >> so, $2 trillion >> it's not going to hold there.

all the king's horses and king's men cannot keep this -- >> carl, we have so many more questions than answers at this point still. >> you're skipping right over me >> i am. i'm skipping over you. >> i've already made my judgment goldman-sachs is safe. >> you saw the headline from bloomberg. almost $16 billion of his wealth destroyed in a day that's the worst ever one-day destruction in the history of bloomberg's wealth track >> did you see what they left his wealth as? but they questioned even the billion. >> all these wealthy investors, sequoia and soft bank, they've all been in there. >> did he put his wealth on twitter? >> i don't know. remember when he was bailing everyone out that's why we talked about him as the jpmorgan of crypto. this happened so quickly >> sam -- i am sam >> so quickly. and it is not over yet >> green eggs and ham. >> there are a lot of people trying to understand exactly

what is appening we don't really know what binance -- again, when are they going to get to -- when are we going to get a communication indicating that are very close to a deal? an actual deal as opposed to a letter of intent that's going to be a key point here, and you're going to see a great deal of volatility in crypto between now and then. >> have you ever seen a letter of credit or deal announced on twitter? >> not like -- no. it's not a deal. >> but i'm saying, everyone acts as if, oh, it's over have they looked at the books? i mean, there is even less due diligence than musk did on twitter. >> jim, what are the books that you're even looking at what is the relationship between ftx and that hedge fund? and what is the fiduciary duty >> the book of job >> we'll talk about -- >> still holds up. >> yeah. we'll talk about whether coinbase, for example, in transparency there makes a

difference we'll also get to oxy and a firm, lucid, horton, wendy's, roblox, not to mention fedex and musk telling -- selling some more tesla and we'll get jim's "mad dash" and countdown to the openg llni n't go away.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right, we got two minutes before we get started in trading on a very busy day carl mentioned so many of the names and we will get to all of them but let's also squeeze in a "mad dash," talk about the home builders >> i'm going to say that the key to this market, unlike all the other stocks we've talked about and crypto, maybe horton america's builder. and david, the book value's increased. book value per common share. they bought back -- this had been a very big issue. they repurchased 3.6 million shares yes, cancellations went up dramatically, but what people are talking about, david, is the multiple expansion of the

housing stocks because we see an end to tightening. >> really? >> no, no, that's what stocks are saying i disagree but that's what the stocks are saying to me, this is just a so -so quarter, but people are liking it fiscal income did increase you have to watch -- >> but home affordability is so different now. >> on the zillow call, they were saying it's a terrible time. horton's numbers by the cancellations represented, frankly, if this is the bottom, so be it increased its quarterly dividend this is not supposed to happen it's supposed to be the opposite this company is supposed to have really bad news, and it did not. cance cancellations were up, but there you go >> yeah.

red fin shuttering the buying business and laying off workers, 13% for the second time, i think, in a few months >> but horton, as you said, down 15 cancellation rate, 32. >> shouldn't be much higher. i mean, the reason i say that is because mortgage rates have jumped so much that i would have thought that everybody walked away but there's a lot of cash buyers okay, let me back up what i'm saying on horton is that, how come this stock isn't down big on the cancellation people were angry they weren't buying back on stock they increased dividend. and people are reacting positively to a number at a point, a juncture, given where interest rates are, where it should be going down that's what i'm following, just following the counterintuitive nature of this stock i'm not saying that the stock is right. i'm just saying it's

counterintuitive to what the news flow would say. >> meanwhile, got the opening bell berkshire hills bank corp. celebrating its tenth anniversary. at the nasdaq, it's a learning management system. what's more important today, meta or disney >> well, obviously, disney in the dow is going to color things you know how i feel about disney little -- one of my idols. disney is a disaster because every, you know, david, the expenses when you have revenues up the way they were and the expenses are like that, you know that's cause for change at the top. i think meta is more a reaction to the fact that people thought he was tone deaf si

disney disney's the most important because people look at the dow and think, is there any accountability in corporate america? this was one of the most disappointing quarters i have come across. >> wouldn't have been a lot worse if they pushed back their direct-to-consumer profit target >> i think those projections are fatuous. the amount of money he's going to lose in the beginning of fiscal year '24. >> because streaming losses get worse? or because linear is -- >> streaming losses are getting worse. look -- >> that entire, you know, the entire equation there is under question >> you've been right the whole time >> thank you >> you questioned it >> we still wonder about the ultimate profitability of the direct-to-consumer business. yes, netflix will always be amongst if not the lead and disney certainly with all those subscribers but given churn, given cost of content, it's not shaping up to be the same business as the linear cable business has been. >> you taught me to look at it from the days you interviewed

malone and the arpu was so horrendous >> they are raising price and the ad tier has only just begun, ad-supported at disney + >> i'm listening >> we have to give it time >> david, theme parks. >> theme parks was strong. theme parks was a record >> also with a hurricane in the middle of it >> okay, hurricane ian all right. linear networks, david, no >> linear networks are in deep trouble, other than our own. >> how is content licensing so bad? >> i don't know. >> that's b of a's question. if you're only guiding to a billion in incremental year-on-year ebit, dtc loss improvement should make up some of that. how bad are linear networks? that's just a good question. >> linear networks are quite bad. jessica, i've always loved her stuff, i think what was most

appalling -- >> by the way, it's -- sorry >> if you read the beginning of the call, it's just about how great they are i mean, sometimes what you should do is be, like zuckerberg, i screwed up but no, it was about how this is good, that's good. everything's great the opening of the conference call was oz. check that oze. honestly, david, the opening of the conference call was, like, this is it we are back and bigger than ever, and i was embarrassed by that we got beat. we got our butts beat. but you know, we're back >> criticism is not to be dismissed. i do think that when it comes to what you're asking for, it's going to take a few more quarters -- bad quarters before you would see any potential. let me move on because we have so many companies we want to get to this morning. >> i'm a little fired up

>> are you fired up about affirm that was a horrible quarter. this stock has been disastrous, like so many others. buy now, pay later >> affirm is -- >> just pay later, pay pay. i don't know what it is. >> he did not like that joke i made >> he was on -- he was a guest last -- was he a guest with you? >> yeah. >> last night on "mad money" >> yeah. maybe we even have a clip that shows you that it happened >> stock is down 16% >> that's an all-time low. >> well, you know -- >> public -- they went public at $49 in early '21 >> people were saying it's peloton. no, it's trying to -- they have to try to find a way to make it so they're profitable. >> another great ipo vintages, 2021 vintage ipos, doing great >> upstart too upstart wasn't that good >> no, upstart wasn't that good either >> should we listen to what he told you last night? let's take a listen. >> sure.

>> we forecast precisely, i like to believe, and obviously, u.s. is in the middle of the beginnings of a downturn it's prudent to take that into consideration. we don't live in a vacuum. that said, we are comparing to situations every day that are changing pretty wildly >> well, he did blame the macro, and upstart blames the macro, and also artificial intelligence they're still trying to -- they're doing a lab of artificial intelligence at upstart, which i just -- i would say, it's not a family -- this is a family program, and i don't want to use certain language >> the amount of market cap that has come out of this group, broadly speaking, is enormous. i mean, they're all down -- the stock is down 91% from the tie >> okay, do you know that the nonperformers have not gone up it wasn't the nonperformers. he did not have that i'm not kidding. >> so, it's just a complete

revision of what the ultimate profitability of the business is >> he dismissed the fact that apple's coming in. i think apple's going to be pretty good. they take away your phone. they have no defaults happening. they have no defaults, like, on the phone. zero defaults. what business has zero defaults? mcdonald's >> say again >> i'm saying, they have no defaults and they do buy now, pay later, and this buy now, pay later business may not be as good as we think, david. david? >> understood. >> and everyone's coming into it paypal is in it. max is good at it. i'm not talking about the peloton. i'm just saying it's -- maybe it's -- it dawned on people, this may not be that good a business, and if you -- if jamie dimon were here, which he's most certainly not, i think he would say, what's new? we have had buy now, pay later forever? we've had that

what is that, suddenly new and i think that's important we got caught up if you look at upstart, remember, they were saying, using artificial intelligence, they can come up with a better system than fico, and they're still experimenting right now at upstart. >> upstart is down 24%, by the way. >> they have $700 million in loans on the balance sheet just to be clear, one of the largest investors who started it didn't think they would have any on the balance sheet everything was supposed to be secured. >> it's very tough right now >> what's happening is that it looks like close to, what, $450 million in loans are to see whether loans work it's a, you know -- >> to see whether it works as a business prospect. >> yeah. it's an experiment >> yeah. i think sufficient to say that buy now, pay later is sort of -- >> and how about this -- >> -- done with as a business that attracts a lot. >> artificial intelligence over fico >> maybe that will work. >> how will that work? >> i don't know. >> he calls them vintages.

i like that. when you got vintage, it's like the, what, i don't know, acorn >> tesla shares are up this after a series of down days in part, perhaps, because of selling pressure from elon musk, sp surprisingly, we've learned he sold as much as $400 billion of stock between november 4 and november 8th we were questioning the downturn, spoke to phil lebeau about it, was it tesla-related, specific to perhaps investors becoming less enthusiastic about its future prospects or was it really related to his ability -- his need to potentially raise more funds to help support the twitter not acquisition but life after acquisition, given what may be growing cash needs at the company. whatever the reason, he raised that money we don't really know

it appears, at least, to be alleviating some of the pressure on the stock right now >> yeah. cracking below 200 in the last few days by the way, speaking of cash, lucid was a big ebitda miss but did say they had enough cash to fund production through q4 of next year. they do reiterate their guide, although lucid air reservations were down a touch from the august print >> yeah, i guess what i saw rolling into the stock was ensconced in the 50s this, like many things involving the tesla enthusiasm for charging, fisker, lordstown, that blooms off the rose, even as the government is giving you some generous breaks by the way, codo you know a lotf the old-line companies keep telling me, we're supposed to have a recession if you knew how much money the federal government is throwing at us to build roads, to build bridges, to build factories, you would say, we can ride out the recession. they're not zuckerberg

not zucky. >> we've talked about the fact that the infrastructure act doesn't have money for advertising. >> no, it doesn't. >> but between the infrastructure act, the chips bill, and the -- and the renewable energy bill, otherwise known as the inflation reduction act, there is, to your point a lot of money >> if you are in the actual business of building something, you are going to be not having -- you're not -- you're seasoned at making layoffs some of these companies, unfortunately, not new corp., because they don't lay off people, but a lot of the companies that typically know how to lay off are hiring. the companies that have never laid off are firing and david, it's very uncomfortable for them >> it is although meta is being rewarded for that reduction of 13% of its workforce. >> the rest of the market is being hurt by sam -- is it hurt by sam i am? >> yes, i think -- i think the ftx story, which, again, is so

opaque at this point but is having an impact overall on psychology, and there is real risk there still >> look at the idiocy. >> you can say it's segregated within this asset class that many people wanted nothing to do with and that was a constant -- constantly receiving criticism from the likes of jamie dimon or cha charlie munger but it's not unimportant. and you know, we still don't know how many other businesses have been built on this thing. it's possible not just ftx, but is binance in some sort of trouble? >> well, be careful. >> okay. >> because remember, behind -- behind ftx, we have blackrock, you know we have softbank >> they all made decisions to invest in some of the companies we were just talking about as well >> it's not just tom and giselle. >> were they investors in buy now, pay later that hasn't gone well either were they investors in many chinese companies that have gone down 95% yes, they were

>> okay. can i just say that now that i have been upbraided by david, that nvidia, they're not using the graphic cards anymore, and yet, the stock -- remember, ethereum went off that and yet, nvidia's down 6 >> you're saying nvidia's going down because of the idea -- >> as collateral damage. >> -- there will be less mining. >> they were cut out they were the ethereum miner in the stock. nvidia reports, i'm not looking for a blowout quarter, and the stock is high, but the collateral damage is extending to companies that aren't collaterally damaged go into the thing that you were doing to me. buy now, pay later, that was a good rant. i thought that you would take on the big companies that were invested but you didn't >> what do you mean? which one? you're talking about -- >> blackrock >> sequoia >> we put a table up to show exactly what they were >> i wasn't looking at the tv.

>> right now, it doesn't look good just to come back to it, the international business is 95% of the overall business so, ftx.com is the business. love to hear from mr. bankman-fried. love to hear from the gentleman who runs binance, which, by the way, is not a chinese company. he's not a chinese national. it's not a chinese company >> he could get out of it the way dupont got out >> he doesn't want to get out of it he wants to do it if it means his company is going to be safe. >> that's gould and fisk >> meanwhile, speaking about companies that have had a tough time, carvana shares are up about 9% >> you're going go there >> i'm going to go there because i have been hearing in the fixed income markets there have been a number of opportunistic buyers >> apollo? you're saying apollo doubling down >> i'm not saying who's buying it but there has been buying

because, if, in fact, there were to be a restructuring, you want to be in the best position and have the most leverage how do you have the most leverage in a potential restructuring? you own the most senior part of the capital structure. keep that in mind with carvana shares, though, obviously having a nice battlrebound this morning >> well, to 8. that doesn't really get you back to even. >> wow really quick, we didn't do oxy with the miss, but they did raise their guide. and we didn't do wendy's, which actually is doing quite well today. >> wendy's is good you know, one -- i had portillos on last night, which is a chicagoland, really fabulous -- it's going nationwide. it's kind of like the bear, david, you know, the sandwich and the bear show >> i love the bear what a great show. >> you did not watch the by the way bear >> i watched every single episode. >> one of the things that he is

saying is that it's now cheaper to go out than in-home, which is very important for tomorrow's cpi, because in the basket of cpi, not the quarter, it's like everything that you would use to make something at home and portillo's is cheaper and i thought that was something i thought the bear was one of the great programs i've ever watched. >> you really stuck with it. you loved "narcos" back in the da day. >> i went to sidney, and i said, it's one of the most meaningful things ever. she basically said, it is a tv show she was fabulous >> very well done show >> anyway. it -- i thought that announcement about going out is cheaper, and that's wendy's. >> we had goldman with the below consensus call on tomorrow's numbers. >> who knows i mean, i know that my wife -- let's skip it. >> we're holding 3,800, as you can see, dow is down 200 let's get to bob pisani. >> holding 3,800, but risk-off

kind of day. disney down 11 that's really weighing on things at the dow cathie wood's ark fund, lower overall. there's a little bit of fallout even though much of her stuff has nothing to do with crypto. semis, another risk on, nvidia down 4%. metals and mining, another one underperforming. energy, very unusual to see that down today you guys just quickly mentioned occidental the numbers were fine, it looked like, maybe 4 cents light, but remember, exxon, chevron, marathon, these have all been at new highs. the s&p energy sector was at an eight-year high yesterday so no surprise we might get a little bit of profit taking you can't think -- help but think housing is definitely slowing from the dr horton report i mean, sales orders will be down 25% to 35% year over year in the current quarter we're in. average selling prices will be down in 2023 there's no full-year 2023

guidance there, so yes, hopefully we are seeing some kind of bottom here, eventually, on mortgages, some high on mortgage rates, but still, pretty tough commentary there overall. as for the crypto debacle, all these people who kept messaging me saying, crypto has nothing to do with the stock market, i'm sorry, but take a look here. there have been a lot of people advocating that people should be getting 1 to 5% of their assets into crypto as an asset class, so when you see coinbase, riot blockchain, marathon digital, microstrategy down 60%, 70%, 80% on the year and a lot of people having 1 to 5% of their assets, it does have a knock-on effect we dropped yesterday when this meltdown was occurring there's a lot of people in crypto etfs. this is bitcoin futures, launched with great fanfare a year ago, down 75%

1 to 5%, even at 75% that's not nothing finally, gijust a comment on th elections and the market we'll get some gridlock in the house but remember something if the democrats hold on to the senate and it looks like there's a chance they will, they still confirm the nominees for regulatory agencies, carl. i mean, that means the fcc and fdic confirmations they still control that. that is very important policy implications for the stock market one winner might be gary gentzler here. remember, gensler has been very vocal about all this i can't help but think he's facing potential harassment in the house for sure from the republicans, carl, but remember, this bitcoin debacle or this debacle yesterday with ftx, you know, he's been calling for much more severe regulation for a long time, and this whole debacle there, a separate issue, may strengthen his hand as well. >> bob pisani, thank you as we go to break, let's check bonds this morning, see how

treasuries are faring. two-year, just out of 4.7. overall as we said, just circulating around 3,800 as we absorb the midterm results still coming in and the companies we have mentioned already we'll be right back.

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take a look at the dow, down 250 or so, about 75 points of that is disney, which is the worst performing dow component and the worst performing s&p down 11%, down to 88.5 we'll take a break and get "stop trading" with jim in a moment. ♪♪

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let's get to jim and "stop trading. >> roblox reported last night, the daily average users were flat, disappointing bookings i think people are just saying, you know what? it's time to recognize it's a good situation. it's certainly not worth -- like so many other stocks of this era -- speaking of other stocks,

i have amc on tonight. >> you have adam aron on tonight? >> yeah, i have adam aron on tonight. >> mumbling a bit. hard to pick it up. >> what are you going to do with him? >> talk to him. >> dutch bros. i hope he brings the annihilator. i've got to be up until friday i have a lot to do. >> david, it's not on to cincinnati it's accountability time google the name saturday >> i just missed it. i was too busy watching jets highlights all day monday. i missed the news on frank wright >> the coach of the jets that would say this coach needs to be fired. >> robert saleh. we'll see you tonight, "mad money" 6:00 p.m. eastern a lot more on meta and the

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the street." rick santelli here with sale inventories an trade, the september final on inventory, we remove .8% and replace with .6% it's a bit on the light side and consider those are inventories so when you see the sales side, you'd like to see something a bit stronger, not to be up .4% up .4 is actually the strongest since june, up 1.6 in july we head down 1.5, but really does underscore the problem. we have inventories which have grown aggressively we have sales that aren't quite keeping up that seems to be what most are paying attention to. yields are up. midterm results aren't finalized. carl, back to you. >> thanks so much, rick santelli good wednesday morning, welcome to "squawk on the street." the markets looking to put the midterm results behind them once they're completed. in the meantime a lot of

corporate results as we get ready for cpi tomorrow. >> that's right. we're 30 minutes into the trading session. we'll get to disney and meta in a moment first, three other names we're watching starting with affirm, those shares plummeting after a cut to annual guidance the drop in demand for peloton which is a key merger weighing on the results you can see down 17% right now. a big drop for roblox shares as well while daily active users jumped the amount spent on the platform by users, that declined in the gaming platform, reported a wider-than-expected loss, down about 11.5%. finally we're tracking tesla, new filings revealing elon musk sold nearly $4 million shares following his purchase of twitter. those shares are down marginally, about a third of 1%.

since october down like 16%. >> far more than the group overall which tesla is a part, in fact, the dominant part let's move to the election yesterday. dozens of midterm races across the country are still too close to call. this, of course, as president biden's second half jchbtd could hang in the balance. ylan mui joins us with the latest >> control of congress is still up in the air this morning after republicans flipped key seats in the house and democrats scored an upset in the senate the latest nbc projection shows republicans capturing 220 seats in the house compared to 215 for democrats. that would be enough to give the gop a very narrow majority now, nbc has not yet made an official call for control of the house, but gop leader kevin mccarthy declared victory for his party early this morning >> the american people are ready for a majority that will offer a new direction, that will put america back on track.

republicans are ready to deliver it >> enjoying a big win in pennsylvania where john fetterman beat mehmet oz. >> we held the line. i never expected that we were going to turn these red counties blue, but we did what we needed to do. >> -- races could still take days of weeks to call including arizona, wisconsin, nevada and georgia. voters also weighed in on key ballot measures legalizing marijuana in maryland and missouri, rejecting it in north dakota, south dakota and arkansas it's still too early to tell whether a bill to increase the minimum wage in nevada will pass guys, we'll keep you posted on any major calls throughout the day. for now it's hurry up and wait >> yian mui watching the midterm

results. stocks are falling for the first time in about four days. the dow is hanging on to some november gains joining us, wells fargo investment institute's tracy mcmillen and chief equity strategist barry banister. tracy, the midterms under our belt maybe better seasonality there's options activity looking at a potential fed downshift it doesn't sound like that's enough to get you excited about equities right now >> well, that's right. we are not excited about equities yet we think we're still in a bear market, still have a recession to come. we think valuations are also unattractive at this point with the risk-free rate as high as it is, that means the equity risk premium given our earnings expectations for next year is at its low point for the cycle. so we really just don't see the value right now. so we would continue to be cautious investing in the equity markets. >> barry, i wonder if you agree.

even though you have been looking at -- do we call it a tactical bounce into the 4,000 range? >> i think 4,000 and then 4,300 by next april. on the election, i think it was significant. the house controls spending, very a very small majority makes the speaker subject to the freedom caucus which is not going to spend money, even in the event of a recession the recession a possibility next summer, the fed is operating on a high wire without a net. they own the economy now there will be no fiscal backstop the other thing to consider, since the yield curves indicate arecession in the summer of 2023 starting, then you're looking at peak unemployment, on average 14 or 15 months after the start of a recession that's in all 12 recessions, post world war ii average. if that's the case, you'll have peak unemployment in the 2024 election which guarantees a left or right wing populist campaign and outcome.

populism is always a threat to the central bank so i think it would be malpractice if the fed doesn't consider last night to be very tough on them because it puts all the pressure on the fed. >> it's an interesting take. tracie, just to dig into that a little bit more, if you're seeing that much more pressure on the fed, what is the bond market signaling and do equities continue or maybe increasingly take their cue from the bond market >> i think that goes back to my comments earlier about the risk-free rate being high at this point we do think that market yields are probably starting to peak at this point we think they will be peaking over the next few months they do tend to peak ahead of the fed stopping its rate rising cycle. so we are extending duration, and we are recommending a barbell because we think that does two things for investors.

it allows them to lock in those longer yields at the long end, and it also allows them to take advantage of these really high yields at the short end. the highest we've seen since the pre financial crisis so we're fixed income, we're doing a barbell, favoring short term, long term and also staying up in quality still with high quality over high yield. >> barry, what are you recommending to clients and investors right now? >> when the market is going down, you clearly want to be defensive. that's everything from cyclical growth like pharmaceuticals to cyclical value like utilities and staples. in terms of the desieves, pardon me defensives when you look at the cyclical side, i think you'll see a rally in the cyclicals going into the spring this would be the big tech which is cyclical growth as well as

cyclical value which is everything from industrials to financials but one of the things that we're concerned about is it's only a bounce, only about six months. if the fed keeps looking at lagging indicators the way they're doing, they'll lock in a recession in the summer of '23 the market historically plunges about one month before the recession actually starts. it's declared after the facts. the problem is we're looking at a fairly choppy market for at least 12 more months >> that's a good avenue to a final question, tracie, about cpi tomorrow we've spent a lot of the morning talking about corporate lay-offs, used car prices coming down we'll see what offset we get from energy. if cpi does run cold tomorrow, to what degree do you expect the plar market is going to be could? >> if inflation comes in lower than expectations tomorrow, we do think we'll see some

additional upside here once the reality sets in that the inflation rate is still significantly higher than the fed's 2% target, we think that markets will roll over again we just don't think we're out of this bear market yet, and any rebound at this point is probably nothing more than a bear market rally. >> tracie, appreciate it very much market is absorbing a lot of information today. we appreciate your help. thanks meta shares are popping today after the company made it official, announcing plans to lay off more than 11,000 workers. julia boorstin joins us with more >> this was a dramatic move by meta, first mass lay-offs in the 18-year history, laying off 13% of its staff, more than 11,000 employees. a source tells us that meta instructed all the employees to not come into the office today and work from home the stock is up nearly 8% this

morning on that news as well as the announcement that meta is taking additional steps to become leaner and more efficient by cutting discretionary spending and extending the hiring freeze through the first quarter. meta slightly lowered the expense outlook for 2023 to the 94 to $100 billion, down from 96 to 100 billion mark zuckerberg saying, quote, i want to take accountability for these decisions and for how we got here i know this is tough for everyone, and i'm especially sorry to those who impacted. rbc capital markets writing, quote, while this announcement does nothing to alleviate the concerns about competition, signal loss and the perception of excessive metaverse investment, it's the first time the ceo has shown a willingness to acquiesce to shareholders' desires for investing more judiciously given the various

headwinds. it warns that revenue growth would decline in the fourth quarter. meta's market cap is now down to about $270 billion it was valued at over $1 trillion in june of 2021 zuckerberg talking in that letter about the need to become more capital efficient and how there will be a meaningful shift in operations and culture including shifting to desk sharing for people who are out of the office most of the time quite a transition here for the company, morgan. >> all right julia boorstin, thank you. we know you and the team have a lot more on all of this in the next hour on "techcheck." so tune in. as we go to break, take a look at the roadmap nor the rest of the hour. disney shares down on the weaker-than-expected result. why one analyst says now is the time to buy. we'll take a look at crypto. the contagion as two of the world's largest crypto exchanges, ftx and binex have a

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shares of disney are down almost 11%, this after the company missed on the top and the bottom line in terms of the

earnings that it put up and what analysts were expecting, higher costs is really where the key was here disney plus, not to mention significant declines in the linear cable business, all taking a hit to profits. here to discuss is barton crockett from rosenblatt securities he does retain a buy on disney, lowering his price target to 120 from 134 barton, first your take on the quarter, particularly when it comes to costs, and give me your take as well on whether this company can get direct-to-consumer profitable in fiscal year '24 as it says it still will. >> look, i think that spending on direct-to-consumer, they flagged it, didn't tell us exactly how much, it came up a bit more than anticipated. a little more cost pressure around the launch of the disney wish cruise ship this is a company that doesn't guide very specifically to the next quarter so it's very common for there to

be meaningful defeivergence. i don't think there's a fin statement about changing anyone's view act the viability of the company the more question what's the trajectory of dtc. how comfortable are we in the theme marks, how to manage linear our belief is that the theme park business is iconic. it's an asset that you want to own when you get an opportunity to buy it at a discount. i think you're being presented with that here, and i think that the dtc ramp is something that's going to work. i think they have the scale. i think there's an obvious kind of corollary where streamers can grow revenues, fix costs, show dramatic recovery and disney has clearly flagged it's going down that road. i think they have the content prowess to get there. >> are you surprised at the

miss, though, in particular because bob chapek is known as a good operator and somebody particularly folcussed on costs it seems surprising to some, they missed so much given it was on the cost side. >> they didn't miss what they had guided to because they don't guide that specifically. clearly they're aware. i don't think they manage to where the consensus comes out. i do think that chapek does run a tight ship i do think that they decided to lean in to dtc, and this was a big spend quarter to kind of start really ramping things up from here i think they're saying they're at scale, and we'll see that flat line out while the revenues grow which has dropped to the bottom line it's darkest before the dawn in dtc and we're at that dark point right now. >> barton, the arpu miss on streaming, does that hold in it

lessons for rival streamers, or does it alter anybody's strategic direction? >> you focus on cost, but i do think -- in the opening question i think the arpu to me was the biggest surprise, the degree to which it came down because people opted into the bundles, hulu, disney plus. i think i would worry about that actually, but for the fact they're putting through this substantial price hike in the u. smt and ramping the adds here in the next month i think what we're going to see is again the darkest before the dawn in dtc play out, in that we've got a substantial setup for really meaningful arpu improvement in coming months, coming quarters. i think in particular their ads here is going to be really well set up hulu gets $3 billion of advertising. disney plus has the opportunity to do something close to that in coming years which i think would be transformational if they manage disney plus like they

have hulu, which i think they can do yeah, i think you can loom past that given the setup >> if we see the u.s. economy or the world economy go into a recession, what does it do to the record revenue for the theme parks? >> a recession is an elephant that's sitting in the room when you talk about theme parks, rides. hopefully there's things they've done to the business where they can manage it with less impact i think if you look at disney, you've got to have one or two views on recession one is that maybe it's a mild slowdown or recession that doesn't totally blow up labor markets. we're seeing that right now. labor is very strong hopefully some of the steps that the fed is putting through and is happening in the supply chain can ease inflation enough that we don't have to have massive lay-offs in that scenario, i think the affluent consumer that can afford to go to the parks will and that will hold up nicely if we go into a brutal recession, we've got to look

through the cycle to the other side where we'll eventually pull out of it. i don't know which way we're going. i'm hoping it's the former >> barton, thanks for your time. >> thank you as votes continue to get counted and investors await the results for the balance of power in congress, outcomes of key ballot measures are in focus particularly cannabis. ticker mj up 1% as the push to legalize marijuana for recreational use met mixed results across states with that on the ballot. arkansas, north dakota, south dakota voted legalization down maryland and missouri voters approved such measures canopy growth reported a smaller q2 loss than expected. that was helped by higher sales and cost cutting measures. shows shares are popping 6% right now. amc falling reporting the 12th consecutive quarter of losses shares are down 80% off the highs for the year

still to come, no consumer slowdown in sight when it comes to travel. we've got more with the ceo of booking holdings as the dow has shaved opening losses, now down 120. stay with us ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

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companies across the board getting hit by a weakening consumer not travel names like booking holdings, reporting a record quarter last week. steam ma modi joins us. >> we're watching this economy very closely, all this talk about a recession. you're not seeing it show up in travel record third quarter, you raise your third quarter outlook however, one of your competitors, trip advisor yesterday said they're starting to see the consumer pull back, shortening their stays, be more thoughtful around their travel budgets. what are you seeing right now? >> we did our earnings call last week we're looking at that data and trying to see, is anybody beginning to pull back

we're not seeing it, not seeing people going for, say, a lower star rating. we're not seeing in terms of people lowering the number of days they're going to be away. we look closely at places like europe, because that means people think that would be the ideal place. so far, so good. hopefully it will keep up. we'll see. >> pricing remains a big topic of discussion. we're waiting for that inflation report tomorrow. if i unpack the september cpi report, airfare inflation up 43% year over year, the highest on record, and more than five times higher than the broader inflation rate is this sustainable, glenn >> well, sustainable is an interesting question i was on a plane over the weekend and it was packed. we're looking at our numbers and looking at people booking, looking at forward bookings. people are still willing to pay these very high rates because they haven't traveled for 2 1/2 years. what will be interesting is, much further ahead will people say, gee, it's just too

expensive. nobody knows that. i do know right now people are booking. >> glenn, it's morgan. what are you seeing looking into 2023 in terms of pricing across your platforms and brands? >> we look at our numbers very carefully. one of the things i like to look is forward book innings for booking.com. looking towards the first quarter of 2023 and comparing that against 2019 same time. i'm saying our gross bookings are up 25% compared to 2019 at this time. that is really interesting showing how much people are booking. i will say it's a smart part of the first quarter. people don't normally book this far ahead. it's really a good indication. of course, it's cancellable, so you don't know what's going to end up being revenue for now i'm feeling good about it. >> glenn, the type of accommodation consumers are booking? i ask because marriott this morning announcing it's launching an apartment-style

accommodation as travelers look for a bit more space are you seeing something similar? >> no doubt people like the alternate accommodation, the home, the villa, the place on the beach. we add 3,000 properties for booking.com from the start of the year until the end of the third quarter. we look at our numbers are we getting more share into that area versus hotels. it turns out it's not that much bigger than 2019 about 30% of the business is going through the home area. one of the reasons is people also like hotels so both things are growing really nicely. part of the thing in our view is show people all the different acted datians. let them choose what they want for us right now, we're able to provide whatever they want, and we like that. >> let's talk global for a second your footprint in china, glenn, are you re-evaluating that i talked to the ceo of royal caribbean saying they're exiting

china. yet, general electric ceo larry culp telling me they're there, going to continue to invest in that country. >> there are a couple things to think about that one, we all know there isn't a lot of outbound travel from china right now which is really what our strong suit was before the pandemic that's not happening because of the covid restrictions in china right now. we recognize that in the long run china is going to be a major part of the global travel economy. if you want to have any part of the global economy, you have to think do i want to be in that biggest part we have operations there we're not doing a lot of business right now, but we think that's a great opportunity for the long run so we're going to keep looking at it that way. >> we're waiting for the rebound. glenn fogel, ceo of booking holdings, thanks. >> thank you. >> seema, our thanks to you. a news update with our frank holland. >> here is what's happening at this hour. dr. mehmet oz has conceded the pennsylvania senate race to

lieutenant governor john fetterman. georgia officials say it's saefd that warnock and walker will head to a runoff many republicans focused on inflation and crime as reasons to affect candidates three states passed proposals that protected abortion rights, michigan, california and vermont. anti-abortion measures in montana and kentucky are too close to call according to nbc news, but votes against are leading in both states that's the very latest morgan, back over to you. crypto markets tumbling after two agreed to merge potentially to address what's being called the liquidity crunch don't miss more on the ftx fallout coming out after this break.

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welcome back some new information to share on the ongoing potential deal between binance and the other key crypto exchange, ftx binance ceo, i'll call him c.z, putting out a letter to his staff, now made public on twitter with a number of interesting points here, guys, saying we didn't have a master plan or anything related to it in terms of the events over the last 24 hours. it was less than 24 hours ago, in fact, he said they called for that i had very little knowledge of the internal state of things at ftx. his first reaction was that he wanted to do an over-the-counter deal, but he says here we are. going on to say, due diligence for the deal is on going remember, we made this point, of

course this was a letter of intent. it is not a contract in any way, at least at this point, saying don't buy or sell any coin i asked our team to stop selling as an organization, ftt, being the ftx coin, also saying as well that this is not good for anyone in the industry do not view it, writes c.z, as a win for us regulators will scrutinize exchanges even more. licenses around the globe will be harder to get and people will now think we're the biggest and will attack us more. he says, however, morgan, that's okay as for prices of all the different cryptos, as he says he said many times over the years, ignore the prices. >> we must significantly increase our transparency, proof of reserves, insurance funds, et

cetera it's not just these names, not just the crypto coins, the cryptocurrencies themselves that have trading down in the midst of all of this also coinbase, another rival e change, and certainly does raise the questions around what regulatory scrutiny will look like moving forward. of course, the lessons to be learned here, as we see liquidity in general come out of the markets more broadly, amid the fed and central bank tightening cycle that we're in the excess being run out here and this idea of, as c.z said yesterday on twitter, don't use your own home grown token as collateral the question now is contagion and how all this shakes out in the midst of this due diligence. we'll dig in a little more let's bring in tether and worldwide asset exchange founder william quigley to discuss not only this latest letter, but everything we've seen within the cryptocurrency space in the midst of this potential deal

over the last couple days. williams, i think we'll start right there with you your immediate reaction to the goings-on? >> well, obviously a giant surprise everyone thought that the major exchanges were not susceptible to any kind of serious meltdown. once again we keep going back to this, whether 3 ac or voyager or celsius or luna, it's a matter of debt. debt is toxic with crypto. prior to the bull run in 2021, there was very little debt in the system something happened in 2021, whether it be exchanges or funds or projects. they all took on lots of debt. it just violates a basic principle of finance you don't lever up highly volatile assets. it's quite frustrating to me to see it once again. as c.z pointed out, it is a

grave mistake to use a coke en you create as a form of collateral because it's too susceptible to manipulation. we also, of course, have this transparency issue in the case of ftx where alameda, the investment arm and ftx, the exchange, was never really clear how the balance sheet operated between the two of them. so we've got a big surprise, and the markets didn't like it one bit. of course, you've seen not just the ftx token down 80%, but you see other tokens that sbf owned also going down like seoul off 50%. coinbase itself, the company, off 20% in the last couple days. there's still a lot of questions people want to know. i think this will be tough to dig through. >> it wasn't that long ago

really only just a couple weeks ago that sand bank man freed was being lauded as something of a savior within this broader industry given some of the other companies, which you just mentioned, that have collapsed or come close to collapsing, that ftx was seen as essentially bailing out in recent months >> right. >> to see someone like this and to see a company like this facing such a severe liquidity crunch so quickly, does it raise the risk that we'll see a more severe contagion across the industry right now >> i keep saying this. it all depends on leverage without leverage, you're not forced to sell, right? so, yeah, we don't have enough transparency into it you see a lot of people circle, binance came out and said we didn't use debt and we would never use the token as a form of

collateral coinbase has 3 billion or so of public debt, most of which i think it took on last year that debt is priced at 65. so it's priced substantially below par. by the way, i find it fascinating because that would imply you literally have credit risk there, risk that you're not going to get paid. but the coinbase stock, the market cap is at 11 billion. if the market cap for the common equity is at 11 billion, it's odd to me that the debt itself will be trading at below par it's substantially below par there's just questions i think what it is right now when wall street came into this market last year big time -- they really weren't in it before -- i think one of the things they dragged in was their

fascination with leverage. >> that may be true, william as well, you pointed this out. the lack of transparency, some very big name investors in ftx perhaps didn't fully ask all the questions or didn't understand all the enter relationships. we have more questions than answers here when are we going to get this level of transparency that investors are deserving of >> do you know how we can get it centralized exchanges do have an issue. they are regular businesses. they don't report things on a blockchain decentralized exchanges, what we call dexs, every single transaction and the volume is transparent. it's exposed on a chain that anyone can see i suspect you will see people moving tokens off of the centralized exchanges and starting to favor dexs dexs haven't had the same amount

of liquidity historically. when it's a matter of taking longer to settle my trade versus my tokens being seized, there's lots of questions. i hope the tokens on ftx are okay, but there's a lot of questions about this so dexs might -- c.z is doing a very good job of illustrating his transparency. >> right it's no guarantee that c.z is going to come to the rescue of ftx. i've made this point a number of times. this is simply a letter of intent in his latest communication that we just read prior to you joining us. it's not clear there's any deal in place at this point what happens if sam bank man freed, the man we described occasionally or others did as the jpmorgan of crypto collapses? what will happen >> obviously, a very good question there's only one thing that the

crypto community wants to know are people's tokens able to be withdrawn, and is there sufficient capital in that exchange that nobody who used exchange is harmed i used to audit financial institutions i was an auditor during the "s&l" trading, the collapsing of the "s&l" market it's reminiscent of that no government guaranteed deposits here. this is all equity capital as you pointed out, blackrock, sequoia, a lot of other big names, ontario pension fund are in ftx's investors it's still striking to me that ftx had a $32 billion valuation this year. as you said, very sophisticated investors looked at it i suspect there was not enough

attention being paid to the risk controls in place at ftx this is an area where rudd task force dig in deeply. they want to know about separation of duties and how things are complied with people who are relatively new or young, spf is 30 years old i think the way you learn these lessons about how fast things can go wrong he will come out of this he's a very smart guy. he'll do something big again in this case he's probably learned that leverage is not something to be played with, particularly assets with crypto that move. >> of course this raises the questions about regulation, how regulators are going to assess all of this? what regulators can assess based on what's on the books and the fact that when we talk about

ftx, we're not talking about the u.s. business of ftx, we're talking about everything offshore as well what could that potentially look like how would that evolve? obviously there's jurisdictional issues, you're right the ftx here is not the u.s. exchange it's the one internationally, which is the major one of course whenever i hear the word regulation, i've got to ask what specifically would be done here. remember, all the regulations we have in the financial markets have really been imposed on companies because they're using deposits that are guaranteed ultimately by the government and the taxpayers. there are no government guaranteed deposits in crypto. that's the good news all the money that's lost. it's akin to what happened during the dot-com bubble when it burst i was a vc we lost trillions in the market. there was no financial contagion

because there was no leverage, there was no debt. i would hope the regulators would be careful in this area. their focus is going to be in the case of ensuring in the united states, u.s. depositers on these exchanges being assured that their tokens are able to be withdrawn, money isn't being commingled and used for operational purposes that belongs to customers. regulations that put a spotlight on that would help that's the sort of transparency i would like to see. no exchange should ever be using depositors' accounts to fund operations, and in no way i'm suggesting that ftx has done that, but that's an area where we have a lot more confidence. until we get that, as i said, dexs -- at least you know exactly what's being done with the tokens you put there because it's all in smart context and visible. >> william quigley, we appreciate your insights on a day like today where this story

continues to evolve and continues to be i think very shocking to folks that are focused on the cryptocurrency industry thank you. >> indeed. thank you. another interview that you will not want to miss when it comes to crypto, joining us back here tomorrow at 10:30 a.m. eastern, we'll be joined by micro strategy chairman michael saylor to discuss the impact at his company. well, we mentioned his name and initials many times, of course, the key figure caught up in this saga, ftx ceo sam bankman fried. he was often called the jpmorgan of crypto. well, no longer. he's lost a lot of money over the last 24 hours. just how much? who better to ask than robert frank. robert >> good morning. heading into monday, sam bank man freed had an estimated net worth of $60 billion, the second

largest billionaire donor to democrats in the midterm spending $40 million just 30 years old. at his peak last year worth $26 billion. now he's worth a lot less than a billion dollars. 94% of his wealth zivape orrized overnight. according to bloomberg his wealth was really in two buckets, ftx and alameda his 53% stake in ftx was worth about $6.2 billion that equity basically wiped out now, worth ability out a dollar his stake in alameda, the hedge fund, that was worth even more an 7.4 billion that stake also estimated at zero or a dollar bloomberg saying his wealth now at less than $1 billion. that's maybe because bank man freed still owns the u.s. portion of ftx

c.z of binance was already the richest person in crypto with a worth of $16.4 billion if the ftx deal goes through -- david, you've been talking about the risks there -- c.z's empire could expand it's unclear whether this would add to c.z's fortune or whether he would still stay at 60. c.z clearly the number one in this industry with sbf at less than a billion who knows how much less. >> robert, we've talked a lot about the lack of transparency here certainly for those of us who don't cover this that closely. were you aware of the al meade ka hedge fund that he controlled and how much he had in the coin of ftx and the enter relationship between the two >> no idea i've been skeptical all along about giving billion dollar valuations to any of the crypto guys because of the lack of transparency my take on this is, if someone is worth $16 billion and the

next day is worth zero, they probably weren't worth $16 billion in the first place and the discovery of that token which they created which formed the large part of the valuation of his stake in alameda was a big part of that this is the biggest emperor has no clothes moment wealth that i've seen in the 20 years of covering wealth. >> pretty amazing, robert. we'll keep an eye on that. robert frank, as bitcoin did fall below 16k a few moments ago. keep an eye on tesla as well the sec filings revealing that elon musk sold nearly 4 million. the losses on the indices have reaccelerated meantime dow is down 265. don't go away. i promise to bring you advice that fits your values.

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welcome back, stocks falling as investors work through disappointing results in names like disney, midterm results that continue to roll in just 24 hours from another important read on inflation from the cpi reports. mike santoli joins us now with the breakdown as, mike, we've seen the major averages take a step lower over this past hour, and we're trying to suss out why and whether it has to do with some of the headlines we're starting to get around this cryptocurrency situation where ftx and binance are concerned. >> that seems the most direct

proximate cause of the intraday moves yesterday and today. i think it's a big unknown it's really a challenge to what the market's project has been, i think, for the last four weeks, which is trying to differentiate between the companies and maybe the asset markets that are really vulnerable and are having a rough time and the overall market, which has tried to be resilient and essentially discern what can still hold up so what you've had is like 8 or 9% above the laws from october 13th you've had hawkish fed speed, big blowups from huge tech companies. now you have this kind of crypto meltdown challenge all of it is being held together because industrials are okay, mid caps, energy, they've all done enough. i do think there's still a big question going into the cpi. the two-year note yield has not really given back much of its gains, therefore the fed very much is in the game with the upside risk to what they're going to do. and then you have the consumer finance side of things, which continues to struggle.

you had news from affirm and upstart kind of on the fringes of consumer lending and then look at ally look at rocket mortgage. homes and cars and consumers struggling with inflation remains an undertow in this market, even if overall i think you've seen some resilience at the index level. >> i get it, we're in a perfect storm. we have a lot of different data points, either coming in or poised to come in that are going to affect the moves here in equities in terms of this crypto spillover, i mean, is this a scenario like we've seen at times in the past where you could potentially have the beginnings of some forced selling? >> i'm sure you already are seeing it in crypto. now, i don't know if it's going to spill over into a sell whatever else you can in order to make up the losses that you're taking on that side of things that's always the fear, and it's always a concern when you have kind of what you thought was the safer platform or if you remember or whatever in an area that's all of a sudden vulnerable i think that's why it's about

just cutting risk exposures in general. f again, i think it's a pretty contained response right here. you have seen the relationship between, for example, the nasdaq and bitcoin, prices loosen up a little bit in recent months. it's not to me like it's all of a sudden definitely going to take everything else down, but clearly a pressure point >> what else should we be looking for or thinking about as we sort of head into the meat of the trading session today, michael? >> i mean, you have this pullback in energy i think that's something you want to keep an eye on not because, you know, it's vulnerable to the overall index, but because it has been a leadership group, and the way that, you that, you know, you're seeing differentiation. it's offsetting to some degree what's happening with disney the dispersion is healthy. the having stocks move in different directions is keeping the volatility levels somewhat contained and it's allowing the equity market to hang out here in terms of the hurdles, 3,900

in the s&p unless you get above that, all you're doing is sloshing around the lower end of a six or seven-month trading range. >> all right, so we're doing some sloshing right now. mike santoli, thank you as always that's going to do it for us right here on "squawk on the street." "tech check" starts right now. good wednesday morning, i'm carl quintanilla with deirdre bosa and jon fortt meta cutting 11,000 jobs, disney's dismal quarter, the crypto fallout after ftx and binance and elon musk selling $4 billion worth of tesla. this hour the ceo of ak my, and gen, but our feed begins with new developments out of the ftx and binance deal and the headlines are flying even as we speak. >> they are flying and bitcoin has dipped below that 17,000 mark