times ahead and ending remote work it is thursday, november 10th, 2022 "squawk box" starts right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. u.s. yequities are waiting to se what the cpi holds today s&p futures up 10. nasdaq up 45 that comes after stocks dropped in yesterday's session the dow off 650 points that was a decline of 2% s&p off 2% nasdaq off 2.5%.

a lot of the risk off trade associated with cryptocurrency and we will get into that story in a few minutes that was a huge issue that has a lot of people questioning and wondering what contagion is out there. you will see the treasury yields 10-year treasury at 4.1% 2-year treasury at 4.6%. tamer yields at this point as we have been talking about the squawk planner inflation in focus the consumer price index is expected to show a monthly increase of .60% or if you look at it from the year over year basis, that is a gain of 7.9%. if we get the numbers, that is a slowdown from 8.2% nobody will be running victory laps based on 7.9% the fed will have more work to do. >> you wonder the standard deviation on that number 8.6?

>> you would be within .20%. >> we know about what goes into it you can look at your individual constituent. used car all that stuff we'll get it it's coming. we can't stop it >> two and a half hours. now the latest on the midterms republicans are looking for a slim majority of the house control of the senate is far from decided georgia senate race headed for a runoff in december votes are still being counted in arizona and nevada and results too early to call. the wall street board is not pulling punches. calling former president trump the republican party is the biggest loser. arizona senate candidate trailing in the polls and his georgia candidate heading for a runoff we will have more fromfrank luntz at 6:30 a.m. >> that is what the wall street journal said

post said trumpty dumpty and trump's big fail >> murdock land is desantis land not just murdock a lot of conservatives and republicans. a cat has nine lives he has hit nine. what will be interesting is november 15th. >> you mean what he says >> whether he still does that. he's in a box. he said he would do it if he doesn't do it, it means ess he senses there's damage if he does do it, it may be an exciting event. >> i have a hard time seeing him back down. >> we'll talk to frank about all these things >> isn't the good news of all

this and this is based on the conversations i've had with ceos >> we don't have to talk to other people >> in terms of the -- everybody likes stability, right i think that, if you take that off the table, which is what i think is being done here unyou might be able to >> youngkin. desantis >> does desantis move to the middle >> he may be populous, but i would not call him ultra maga. his results show you can win a swing state like florida you can win in a landslide through being an effective governor everything he did was effective. >> especially after the hurricane. >> hurricane, pandemic whatever you want. you saw his speech he is not backing off. this is where woke comes to die.

florida. it will stay that way. i don't know new this morning, bloomberg, not the guy, the news service. musk emailed workers yesterday to prepare them for difficult times ahead. what have they had the past six months he also abandoned remote work unless he personally approves it that will be hard. he expects employees to be in the office for 40 hours a week there is no way to sugarcoat this message about the economic outlook and how it would affect the company like twitter it relies on advertising twitter's new pay for verification system already facing a wave of fake accounts for high profile people and brands rolled out the $8 a month version of the blue service yesterday, but so far, spoof accounts of high profile

athletes including lebron james have all been suspended. as well as one account claiming to be nintendo of america. the spokesperson for twitter did not respond to a request for comment by nbc news. >> that's the issue. anybody can pretend for $8 they are anyone or any place. >> crazy >> joe kernen's hair still tweets. >> there are several others. interesting. people's ties. >> you got something no >> for me? a bunch of those those are priority accounts. >> you specifically have an account? >> my hair i'm sure i'm sure someone will make one >> mark cuban was tweeting as one entrepreneur to another, when you wear your twitter complaint hat and looking at things, he spent the last couple hours going through and trying to mutual of these people with

new blue check marks for authentication or verify users it jumped that up and made it hard to get through and listen to any of those. he said it in a nice way >> the conundrum with the system is i used to look at the blue check mark as a verification not that they were a human being, but somebody said and this is part of what elon musk is trying to get at. he wants to flatten the world with experts and not experts and people of a certain ilk. i get it i enjoyed during certain times where you figure out which doctors are saying stuff that could be real or not i know people have issues with that, too. knowing somebody has said that is actually somebody somebody rather than, you know, the muck >> can you imagine -- >> some of the greatest experts.

>> that's why i said i understand the idea of flattening the system. you know, whether i have a blue check mark or not i don't care >> really? >> i don't care personally at all. >> you don't want somebody else -- >> well, i actually enjoy being able to read through the things and spot not who is who, but what is what it helps give you -- it is a signal something is going on here. >> by the way, you may not care if you have a blue check mark, you don't want somebody else impersonating you and saying crazy things >> i don't think you want people impersonating you. >> can you imagine asking elon musk to work from home >> there is someone @joesquawk running around saying crazy things. >> that would be you >> that would be me. that is happening as you have

pointed out. separately, president biden questioning elon musk's relationship with other countries. speaking at the white house yesterday, the president was asked if musk was a potential threat to national security and if saudi arabia helping him buy twitter should be investigated biden saying the tesla ceo and twitter cooperation or technical relationships with other countries is worthy of being looked at. he is not suggesting musk did anything inappropriate musk has a number of business ties through tesla and twitter and spacex. and coming up on the other side of the break, we will talk about the turmoil taking place in the world of cryptocurrency as binance backing out of the deal to buy ftx to try to help prevent a liquidity crisis what happens next? what happens to the price of crypto what happens to the other exchanges? we breakdown all of it

we get reaction from gary gensler at 8:00 a.m. beautiful shot of new york city. >> an important interview. >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com. if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen...

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welcome back

shockwaves in the cryptocurrency world. binance ceo calling off the deal to buy ftx he tweeted in the beginning our hope was to support ftx customers to provide liquidity, but the issues are beyond our control or ability to help in an email to employees, he did master plan the collapse of ftx. he wrote, ftx going down is not good for anyone in the industry. do not view it as a win for us user confidence is shaken. it is unclear if there are other buyers in line to buy ftx. sam bankman-fried says they are facing a shortfall of $8 billion of withdrawal requests and needs emergency funding. in the last 15 minutes, ftx said all onboarding of new clients has been suspended until further

notice there is a question if the company would file for bankruptcy and where it would file for bankruptcy. a u.s. arm protected from the rest of it since it is based in the bahamas. there is the department of justice looking use it the idea of a potentially comingling of funds. you start to think about ponzi seem schemes and bernie madoff or if this happened recently if you think about the capital debacle the. there was a lot of movement where firms were steadying themselves he is trying to steady the industry as some point, he may have combined funds and levered them using their own currency

>> even if you are not talking a ponzi scheme or bernie madoff, that gets you back to the mf global with theing of funds. we have seen it where people are good at technology and are good at risk assessment we saw that with robinhood last year >> the second order group of questions. you have big funds like sequoia. >> blackrock >> they put out a memorandum saying they do due dildiligence. talk about a red flag. ftx. doesn't have a cfo a financial company and no cfo nobody seemed to walk around saying where is the cfo? how is this possible i think there are so many questions we are asking and

raises the next order and question if ftx no longer survives, what happens to binance and others are the other firms as leveraged? do they go after -- >> let's get to whether it is systemic the market cap of bitcoin. $300 billion. >> systemic beyond crypto? >> scott minerd. ltcm >> there are two pieces to this. valuation of bitcoin and valuation of ethereum. >> it's not like the bond market mortgage backed securities. >> think about the ecosystem and all of the corporate valuations of the businesses that were built around this. this was a business that was supposedly worth $32 billion

then all of the pension funds and venture capital that poured into building the ecosystem. you add on top of that the employees that had been working on this said ecosystem >> which is why this is insane that this is an area not regulated. that is something we will talk about with gary gensler. >> the new start up reporting that the hours between binance offer and legal and compliance staff quit, including the general counsel. joining us right now is the journalist reporting the resignations is liz hoffman. i can only hope, liz, he put up his money already. liz, nice to see you >> thank you for acknowledging

that up front. we had a couple of comments about that we are a fiat enterprise at semafor. we did get the investment in cash >> let's talk about the state of play what is really happening here? >> i think you don't have to really understand or care that much of crypto to understand and care about what happened here. it was a run on the bank i think crypto pioneers in the last decade talked a big game about achieving the philosophy from the financial system. they haven't there is one sure fire way to get in trouble on wall street over decades and centuries to have assets not match liabilities and run out of money. that is what happened here >> what do you think the liability is at this point i think there is real questions of a bankruptcy and if there is, as we talked about, potential cri criminality and the department of justice looking at the

co-mingling of funds. >> we talked on tuesday about the assets which was the size of the hole and by midday it was 5 or 6 latest reports were the journal reporting at $7 billion or $8 billion. the biggest bank failure was washington mutual in 2008. they lost $15 billion in a week and a half this is huge and i think frankly existential. it passed the liquidity problem and into solvency territory. binance looked at it and said no, thank you. to the extent that ftx customers are not scarred by this, they will go to the last man standing binance. >> the last man standing would

be binance if enough people wanted out of binance, do they have liquidity? is the whole thing quick sand or is there something undergirding? >> this is a confidence game there is a reason airlines don't compete on safety. god forbid a problem with delta. in 2008, there were traders on the floor cheering when lehman went down. their bosses told them to knock it off quickly you saw this is not a good day for the industry keep your mouth shut keep your head down. this could be existential for the industry the flip argument, as much as we talked about it, crypto is in the early years. that's when this stuff happens and the shenanigans get washed

out and serious investors remain. >> how do you gamble on that we were in a crypto winter someone said we may go into the ice age. >> yeah. look, if i was a prognosticator in the market, i would be in a different business the comparison to 2001 is an interesting one because people lost money, but the frenzy around the dot-com bubble with the investment made in broadband and fiber optic and all of the money spent to lay the rails is the next chapter in the economy. the digital decade that we're in for the moment, becky was saying crypto, by definition, was a parallel financial system. i don't see where it is plugged in to the broader economy. some people will lose money. by definition, it was a world

apart. this is not systemic for the broader economy. >> we keep talking about binance. the big player in this the big public player in this is coi coinbase their stock has fallen precipitously as well. are they the winner in this in the end? >> i think so. two points there one is being public is just a certain mechanism for diligence and disclosdisclosure if i give jpmorgan chase my deposits, they don't have to tell me what they are doing with that, but i can look at the public filings and make a judgment for myself how liquid that is. similarly with coinbase. note they are just an exchange the peculiar thing about ftx, it was a lot of different things. market maker and principal agent and affiliates with assets coinbase is just an exchange if you give them a dollar, they

apply bitcoin and hold it. as long as bitcoin is solvent, you will get your dollar back. >> liz hoffman, thank you. sam bankman-fried said he was giving away his money. looks like he just did that. >> the angels in heaven? >> the angels in money heaven. >> we will have more on the cryptocurrency crisis later in the show we will speak with s.e.c. chair gary gensler we are speaking with him at 8:00 a.m. eastern. up next, a rare interview with nike co-founder phil ni knight cutting its partnership with suspended basketball star kyrie irving we will talk about that and more when "squawk box" comes right back look!

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nike founder and chairman phil knight was the largest political donor to the gubernatorial campaign i spoke with him about his impact on the race he put more than $4 million in the race behind two candidates in the three-way race in the effort to defeat democrat tina kotak. she had an edge which she still holds in a race that has not been called. now phil knight calls himself an intr introvert. he said an extrovert calls somebody's shoes >> i'm an oregonian. by birth and emotion the joke is i have webs between

my toes. i didn't like the way the state was going. i thought a change was needed. i took an active role in this one. i'm active in others never to the scale >> this was the most any individual has ever donated. i think the gubernatorial race itself brought in more donations on all sides than it ever had before you gave something around $3.5 million if you count the two candidates and the pac am i off on that >> no, i was actually -- i gave the most to dbetsy johnson. i gave $3.5 million to her when it became clear she couldn't win, but a republican could, i gave $1.5 million to christine. right now, it looks to me teina

is going to win. >> so are you disappointed that you gave money to begin with or got involved or it sends a message? >> i don't think it really sends a message. i'm disappointed in the result i'm not disappointed i tried. >> what was it you saw in your home state that made you think this is not the direction i should be heading? >> this is a state that obviously i lived in my whole life growing up here and the public schools were excellent my wife and i were products of public schools i lived in the suburb of portland you left the doors unlocked at night. it was a safe and really great place. it had a small town mentality for everybody although portland was a big town that changed to a three or six-month period where portland was the murder capital of the u.s. per capita.

it has huge drug addiction problems it passed a law that cocaine and heroin are legal they have a huge homeless problem and drug addiction problem. it is really funny tina is the most far left democrat of the 11 have been elected. she is one of the two most powerful politicians in the state over of the last ten years sdplc years. >> it wasn't wealthy individuals. just phil knight founded nike more than 50 years ago a company he built over many decades. he was closely associated. his identity became entwined with nike. when phil knight speaks, you think of nike just like warren

buffett. i asked if he was concerned about the impact on the nike brand with the public involvement in the political race >> i separated the two john donahogue is the ceo of nike he is the best ceo in the industry and one or two of the best in the world of any industry as i say, there is an ocean of difference nike contributed money to tina we're not going -- nike has a lot of diverse opinions. it is a creative place the creativity columbusmes frome diversity of opinions. i don't expect everybody to agree with me. i'm fine the way things are. >> you feel weird you are donating money to two candidates and your company is donating to

the third in the race? >> a little. that's the way it works. >> that's phil knight. we have more with him coming up later in the program we talked to him about kyrie irving and that separation also spoke with him about our relationship with china. the united states relationship with china and how that has really soured. nike is a company that was founded with this new idea he personally went to china and found ways to make shoes cheaper there and bring them back. if you want to catch the full conversation, you can do that on the podcast squawk pod >> great i wonder what it says about the mess and all of the problems >> very expensive team >> and still lost. >> the knicks? >> yeah. coach is gone.

kyrie's gone still lost >> the nets? >> the knicks. the nets beat them. >> oh. i didn't see the game. i saw a movie last night for the first time first time i have been to a movie theater sdp >> did you get popcorn. >> i did >> did you bring salt? >> no. butter. >> what movie? >> this was a colin. reaction from pollster frank luntz. his message on what happened to washington and the fallout from president trump. e. don't know what the numbers ar we don't know if it is close yet. we'll be back. >> announcer: executive edge is

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. we're green. an ugly session yesterday. mostly crypto, i would think, it sold off throughout the session. we have the cpi coming up today.

someone tweeted, becky, that's not why you are dressed in black. you don't know anything about the cpi. >> i'm dressed in black because i was cold and this went with pants. >> we may end in the black >> i dressed in black because it was cold out and i can wear this shirt with pants >> nothing to do with the cpi. conspiracy theories. too many of them we saw the futures let's get to frank republicans are inching forward and the senate is hanging in the balance. let's bring in frank luntz frank, i missed you yesterday. i was going to ask what pollsters do call too many cell phones? some were better than others we're back to wondering how we can think one thing and something so surprising can happen when we had so many people calling and asking what they

will do and the standard deviation is so big. what do you know about the house? i saw 230 to 240 most people in the mid 220s? >> i'm actually low to mid 220s. i think when all the seats are counted, it will end up within two seats of what you show right now. we have it at 223 and 224 republican when all of the votes are counted. there were significant failures and successes on tuesday night the successes in florida and ohio the fact those two states are no longer purple states they are absolutely republican states the republican states did well among hispanic and latino. gains from 2018 were significant among men. however, the republicans did badly among independents

independents cared more about abortion than the rest of the population they did badly among those who observe or volume trump in a negative way joe, what i have been hearing over the last 24 hours in the senate and senators is they want donald trump to go away. >> i woke up that's all i was thinking when i woke up yesterday. i've been thinking it ever since. that's why november 15th will be so interesting because he can't put it off that would telegraph the self knowledge there was damage done. if he does it, it will be a fizzle i don't know let's get to the senate. i don't understand why nevada -- isn't he still ahead, the republican in nevada the predicted is 90% it stays or that the democrat is going to

win. that would be 49 before the runoff in georgia and then if herschel walker did win, it would be 50/50 which is right where we were. and arizona doesn't look like it is close there's a lot of urban areas coming in to favor the democrat. there are other one withes where blake masters could do well. it doesn't seem like he can close that gap >> i don't see the gap being closed in arizona or nevada. the votes out -- here is what is interesting. the votes out in nevada are democratic counties, but republican areas in democratic counties it is too close to call. as we said on election day, we knew we would not know the final result until today on tomorrow if the republican wins in arizona, that means georgia, for the second straight --

>> you mean nevada >> nevada. if the roughepublican stays ahen nevada, then georgia and the runoff determines who wins or loses. a former staff member said if trump wants to prove he is an actual vote getter, get off your butt and move to georgia and work through the state put in the work rather than flying in on his private jet and flying out. >> people want him to stay away from georgia i did see people say when an incumbent and this doesn't hold true david perdue was an incumbent and did lose in the runoff some people say if an incumbent loses or forced in a runoff, the challenger has a good chance in the runoff in this time around, brian kemp would be on herschel walker's side all of the republicans would galvanize around herschel

walker that would be 51/49. that is a huge change because republicans would take the senate it all rests on nevada, which is the predicted of 90% it ends up with the democrat. you don't believe that >> i'm not convinced because they are democratic counties where the votes have not been cou counted. new york is a democratic state, but there are republican pockets. i want to go back to georgia the whole reason why this is happening is because trump told georgians their vote didn't matter the reason why this is happening is that republicans for the first time in modern georgia history stayed home in the runoff in 2020 because trump came in the state and said your vote doesn't matter he spent the time complaining about himself rather than focusing on the candidates running for office so a lot of this now, all you

have to do is walk among the senate and listen to those people they believe they would have won the senate if trump stayed out >> think of what would not have been passed if you are a republican and basically a generic republican think about what happened since then it could happen again in georgia. >> people have had enough. >> frank, in terms of the and a halftive and narrative and this midterm moved the country closer to the senator center, do you ts is something that holds when you look at the rise of desantis he had a fiery speech. do you think over time he and others even move more to the center do they take the place of where trump was or more more to the margins? what do you think happens?

>> andrew, i think so many people are misreading what is happening. you have the republicans moving more trump you have democrats moving nmore progressive. you have an even number so it seems it is evenly balanced. when you look at both political parties, it is frightening as it is more and more difficult to find cooperation and common ground it is a 50/50 country. you would think that people would move to the center it is not. they extend their differences. the problem solvers caucus has the potential to be the most important organization in washington d.c. for the next two years on both sides of the aisle. >> that's what we said two years ago. >> and in the house. they actually have the majority right now if they work together. >> frank, you don't think this election at all suggests there's any movement if you look at the candidates who lost and some of the candidates who were expected to win who seemed a little bit more

on the fringes of both sides >> i'll answer that. look at the primaries. look at who got the nomination it was so often it wasn't the centrist or the most electable candidate. >> the one who is getting in office is less fringy, no? >> that requires the primary system to be fixed it requires open primaries it requires non-partisan redistricting so we don't create districts that coverage or reward extremism andrew, i'm not optimistic, i can tell you are, as i look at the numbers. >> i'm trying to be. maybe i'm misguided. >> that's what it is about it is not about intention. it is about what really is >> frank, desantis is on the betting sites. he made a move you think trump would do a

third-party run or would he still win the nomination based where the republicans are right now? i'm not convinced it would look like 2016 this time around >> if the nomination would help today, donald trump would win in a landslide. that's the truth. >> not after tuesday i don't think so >> it takes a while for the information to filter in by the way, almost all of the candidates that the democrats tried to mess up with the republican primaries almost all of the candidates were defeated in the general election donald trump is still the most popular republican among independents that's the vote i urge viewers to focus on. independents >> you will have to come on again and have a different tune. that's what i predict. you will do some polling we talked about shakespeare yesterday. he said do something nasty to the pollsters. you have to get a new method

1 1,700 people is not enough >> joe, they say the same thing about wall street predictors no one is asking you to go >> right that's true. all right. we'll see you. thank you. >> thank you. >> some people are coming up, we will talk about the latest moves from adidas after cutting ties with kanye west that's straight ahead. >> announcer: currency check is sponsored by interactive brokers. the professionals gateway to the world's markets.

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he stepped over the line it's that simple he made some statements that we just can't abide by. >> that was nike co-founder phil knight speaking with us yesterday about nike's decision

to end its relationship with kyrie irving both nike and adidas have recently ended deals with big stars connected to their brands after those stars made anti-semitic comments. a few weeks ago, adidas decided to end its partnership with kanye west the company said yesterday that the end of the partnership will hurt its bottom line and it will hurt significantly adidas is joining with the anti-defamation league in a new ad condemning it jonathan, you are everywhere lately that's a great thing that you're making progress on all of these fronts, but maybe it's a bad thing because you have to be everywhere lately. >> it's a sign of the times. we know that anti-semitism is on the rise in ways we haven't seen in over 45 years we know hate crimes are up against all different minorities

and there's something in the air i think. you see it when you travel people are on edge it shouldn't surprise us that intolerance is on the rise. >> maybe social media being a way to promote these things and really amplify that message. >> absolutely. becky, i think social media is a superspreader of all kinds of stereotypes and it gins people up it doesn't calm them down, it raises the stress level everywhere let's talk about adidas and what you have worked out with them. i think this was a really closely watched issue because adidas took a very long time to separate itself from kanye west. we can understand why now. yesterday they came outand explained exactly how much it's going to cost them and it's significant. >> for a company that had soft earnings that was already on the ropes, this hit them in the pocketbook the but the companies that talk about values actually live those values while it took awhile

i'm glad they got to the right place. and that's what we're going to be talking about today adl is hosting the largest summitin the world on anti-semitism and hate and we're announcing a partnership with adidas i wish they had gotten to a place sooner, said something sooner but where they are is going to allow us to create new anti-hate column for school athletes it's going to help us with our leadership council, and it will scale up some of our anti-semitism education programs around the country. >> is their partnership money or more than just money >> more than just money. there will be a financial component. there will be a brand component. and now i'm wearing adidas sneakers there's a just looking good component too. i got them on right now. >> what did you find when you spoke with them?

you spoke with elon musk and you were impressed by him saying the right things what did adidas say and why do you think it took them this long to get to this point >> i spoke to the chairman of their supervisory board a few weeks ago, before they had said anything, and i told him, if you get this right, we will lift you up, but until you do, we are going to hammer you every single day. and then i spoke to not only the nba and the nets, but i spoke the institutional investors. there was a great deal of shame. the company has a complicated history. to see them being quiet in the face of clear anti-semitism is really problematic >> what's the response you get from the league? adam silver was outspoken on kyrie too. >> he met with kyrie earlier this week.

there's an action by the players association. these remediation steps that were announced but, look, i want kyrie to get this right the way i see it, i don't believe in cancel culture. i believe in counsel culture we all make mistakes if people are willing to be accountable and knowledge it, i think it's up to us to embrace them i can't wait to meet with kyrie. i'm ready to do it today to move forward. >> the only thing i'll say about kyrie is terrible book and movie that he's been focusing on how about no one is yelling at amazon and jeff bezos talking about buying an nfl team how come he gets off scot-free. >> i don't think he does i wrote them a letter on friday pushing them to remove that piece of propaganda. >> how do you feel about all of their books being taken on or off this platform, though? this is the central issue of why amazon has approached it this

way. >> here's the thing, if you're going to make choices to put up that kind of material, you at least need to qualify it and help people understand what it's about. that's why adl worked with amazon to create a qualifier >> this is going to be a hard question i'm jewish i hate anti-semitism and i love when you're out the there talking about these things but what i don't like, i'll be honest with you, i think there are people who look at what you're doing where you criticize and say i'm going to hammer you until you give me money. that's what people think i'm just -- >> i hear you. >> you go after adidas and you keep going after adidas, not until they shut up or until they do what they want, until they start contributing to adl. what do you say to those people? >> i wish more of the people i criticized donated to us the reality is, it's my job to cast a light on anti-semitism and all forms of hate. what i'm encouraged is when some

companies or individuals say we're not only going to apologize, we want to engage and solve this problem it's not just a jewish issue of -- or the christian ethos it's all of us working together to make society better if everyone supported adl i would be much, much, wealthier -- the organization would be much richer we would always be much better off. >> i was shocked, you heard what i said, that he's much better looking in person, i asked him if that would be conspiracy theory if i tweeted that out, but he said that would be an actual fact. >> i hope you would tweet that. >> okay. as long as it's factual. >> andrew, i think this is a criticism. i've worked with nick cannon and

whoopie goldberg and others because it's the right thing to do >> and i want to just ask you about that so we can get an answer on the record -- >> that was a new one on me. a shakedown? >> i've been watching this fight for a long time. i root for the fight that he's fighting for, but i also know that there's a critique about it and i wanted to address it. >> a good example is kyrie when kyrie wanted to give us money, i said, no, if you're not really accountable, if you're not honest about it -- >> it doesn't work jonathan, thanks for coming in. >> we're going to get you ady re for the big inflation predictions after the break. >> announcer: this is cnbc program is sponsored by baird. visit bairddifference.com.

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good morning, everybody. investors in a holding pattern as we all await the results of the key midterm races and even sooner than that we're going to get the numbers on inflation cpi coming out in less than an hour and a half. and we've been watching everything ahead of it on the brink of collapse with binance backing out of its deal to rescue ftx, what is next for digital currencies we're going to speak to a crypto investor. and elon musk sending a stark message to employees and warning of tough times ahead that story and other corporate headlines as 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. let's show you u.s. equity futures at this hour moving up a little bit i don't know if that's a sense that maybe the crypto market -- i don't know what we're going to explain this away for right now. dow up about 50 points nasdaq up about 51 points. s&p 500 up about nine points we'll show you treasury yields you're looking at the ten-year note, down marginally there. the oil, right now, wti, it's going to cost you $85.28 that's come down just marginally and then the story of the morning, the story of the week given all of the trauma around ftx and the future of that exchange bitcoin sitting at $16,315

made a bit of a round trip to sometime in 2020 it's like being in a time machine of sorts eth down to 1,189 dollars. >> let's get to frank. hey, frank. >> we're going to start things off with rivian. shares of rivian they're moving higher this morning after the ev maker reported a smaller loss. stock up 7% right now. also revenue came in below expectations as well however, rivian did reaffirm its full-year production guide jp morgan saying canadian pacific is a top pick. the rail has retained pricing power even with the freight slowdown right now no movement in canada pacific, however. meta shares, speaking of a big story of the week, moving higher this morning after the social media platform confirmed

it was laying off 11,000 employees. mark zuckerberg said cuts would be made in almost every department and a hiring freeze would continue into the first quarter. laid off employees will get 16 weeks of pay and six months of insurance. and looking at social connections this morning, two stocks reporting earnings, let's start with bumble. a dating app for adults. shares of bumble down double digits they offered soft forward guidance match lower this morning raiding in sympathy here r roblox reported a bigger loss. you can see shares are up almost a percent. looking at activision blizzard up 0.75% becky, back over to you. >> we're both -- dating site for

adults we're both thinking about that, frank. i'm drawing the line dating app for toddlers. >> what i was saying, it's opposite ends, roblox is kids, teens and tweens joe, you got to catch up >> dating apps for toddlers, no. >> i'm glad you had an answer to that, we were both like what >> we need to keep kids probably off social media but there are dating apps for adults i didn't work. but -- >> roblox -- >> frank, you know we're listening to every word. >> you guys -- >> hanging on everywhere it's good. all good >> always great to see you guys. just to be clear, no dating apps for kids. >> thank you right now we want to talk about the markets as we brace for that key inflation data. the october consumer price index is going to be released in less than than an hour and a half

right now, we want to bring in the president of a research company. what are you anticipating? what happens if it's hotter, what happens if it's cooler? >> well, 7.9% is clearly biased to the optimistic side because in september we had an increase of 8.2%. i think the consensus is clearly looking for more signs of a peak in the cpi i think we've had some but just not compelling enough. we could see the cpi peak and just kind of stall out at this kind of level higher longer in which case the fed would be higher and longer. but i think that 7.9 would actually rally the market if it comes in as expected because that's a good number >> it's a good number relatively speaking.

>> relatively. >> as you mentioned -- >> everything is relative these days. >> that's a lot of wood to chop for the fed. >> absolutely. well, look -- i think there's actually an internal debate doing on right now at the fed. we saw that about a week ago when the fmoc came out with its statement that said, you know, we have to factor in that the monetary policy is cumulative and we have to factor in lags. the market got excited about that and we had a press conference with powell and he turned even more hawkish we had peak hawkishness out of powell i think there are fed officials who think they need to do one more big one, maybe 75 basis points in december, and give it a rest, pause for a little while and let this all catch up and see how it's working on the economy. >> you know what, though, that

hawkishness was sparked by a question asking what he thought about the markets reacting positively to the whole thing. if that tells you anything as a market watcher t, the fed does t want to see higher equities, does not want to see people relaxing on any of these counts and that's a long-term issue too. >> well, there are a lot of bearish issues out there i think the market has discounted a tremendous amount of the bearish issues up ahead here the question is, how much more downside is there. for awhile, we were arguing, you know, what the upside was following this sell-off. now we're all kind of debating about the downside look, i think we're in a rolling recession right now. there's different industries that are in recessions, housing is just kind of in a free fall right now. that's what happens when mortgage rates go from 3% to every 7% and the auto industry i think is

going to start having -- seeing an impact from higher auto loan rates. we have services still pretty good but retailers are stuck with a lot of inventories that they're trying to unload by cutting prices which is i think what we're -- where the prices are going to be on the good side for good and good side for the cpi i think we're going to see a more moderate goods inflation. but the other side of it is rent inflation. and everybody knows these facts. the question is, how is the fed going to process it all. as you said, there is sort of a view that they don't want the market to go up. but i don't think they want the market to go down. >> i wanted to ask someone else this question. maybe you can give me an idea. we don't set mortgage rates, they sort of go where they need to go based on what people think the terminal rate is going to be does seven reflect the terminal rate of what's expected?

what if it were to go higher are we talking 8 or 9% mortgage rates? >> i would find that hard to imagine. we're at the terminal rate on housing going from 3% to over 7% reflects not just the increase in the ten-year bond yield, but reflects the fact that quantitative tightening is, in fact -- we have to add that to the equation here and that's blown out the mortgage rate pretty dramatically. i would say that quantitative tightening is at least equivalent to an increase in the fed funds rate and the impact of the strong dollar is 50 basis points i hope folks are factoring in it's not just about the feds fund rate. >> then maybe we're near top in mortgage rates. >> i think so. i think -- all you have to do is look at the weekly mortgage data and it's in a free fall. people are not applying for mortgages because they know they can't qualify or they can't

afford it. >> great to see you. it's been awhile >> thank you. we're going to continue our conversation about ftx after binance backed out of its plan to acquire the crypto exchange what a drama it's been jon fortt is going to join us to tell us whether or not the crypto revolution is a scam. galaxy digital's mike novogratz is going to be with us to discuss the floalut we'll get the latest in just a little bit don't go anywhere. we'll be right back. >> announcer: stocks to watch is brought to you by cla. business takes balance we'll get you there. between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance.

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welcome back to "squawk box. the crypto market reeling after what has been a category five hurricane against the largest exchange binance will not be buying ftx and we're going to talk about what happened here t. floundering arrival ftx has no buyer right now. some are asking has all of this been a scam? guess who is here to weigh in, jon fortt. what do you think? >> the crypto revolution isn't a scam i know it feels that way when ftx is probably going under and getting investigated after the

hack and so many others. but now is a good time to remember what cryptocurrencies were about in the first place, a better way to do transactions. a decentralized finance system where you own and control your assets they can reduce friction, increase access and accelerate progress the web comparison is intentional. 20 years ago, a lot of people were saying the internet revolution was a scam after the dot com bust companies went public prerevenue and crashed just like crypto tokens are crashing today. but the important thing is, the internet revolution wasn't a scam it was really. and investors who thoughtfully separated the investors were handsomely rewarded. we're in that moment or approaching it for crypto. >> but, but, but, but, but the technology itself may be promising, but was that really what the hype was about?

i'm not sure about that. >> well, on the other hand if the crypto revolution were about technology, this wouldn't be a problem. too much of it has been about getting rich and that's why it is a scam. this crypto debacle is different from the dot com boom. from the beginning, the internet had popular products and services, it would email, chat rooms where you could find interesting people, a nice bookstore, and it had access to data that could make you a smarter buyer or seller. the argument for the internet wasn't that owning a piece of the internet will make you rich, except for the gold rush for domain names which was mostly a scam and that's the problem with today's crypto revolution. 15 15 years in, we're making the same arguments for crypto, great for sheltering your assets, just as long as the crypto isn't losing value faster than your country's money, which this week it probably is the crypto revolution is a scam

for the same way the metaverse resolution is a scam right now no one you know uses crypto in their everyday life. >> no one is using gold. >> but they're wearing it. >> that's not why -- it's a store of value that's why gold is worth what it's worth. >> but it's embedded in the culture -- >> what's going to happen to the crypto revolution? for so long everything was supposed to be decentralized because we were going to be able to trust everybody that's what the point of this whole thing was about, and we don't need a central bank, right? guess what, you might need a central bank after all -- >> the exchanges aren't decentralized. it's one thing if you keep your bitcoin in a wallet under your pillow, right? you can -- >> how how you use that at the border to get out of a country look what i've got. >> it's a case full of cash. >> when there's a bank -- what do you want?

you want a central bank. you want somebody who can step in. >> if you're somebody who has your money there you want an fdic. >> we can discuss what you think has been the underlying -- >> cpi number, it's big. coming up, in, what, 15 minutes. those risk assets, watch out. >> jon fortt we're going to be hearing from galaxy digital founder and ceo mike novogratz we'll get his take on what he thinks is happening here back after this. >> announcer: time now for today's aflac trivia question. what was the first publicly traded indian company to be added to the nasdaq 100 index? the answer when cnbc's "squawk x"onnues ga-a-a-ap! oh... hi. what's this, a hospital bill? mm-hmm. for 1,100 bucks? ga-a-a-ap! looks like your wallet may need a sling too. tell me about it. did that goat say "gap"? he's talking about expenses

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>> announcer: now the answer to today's aflac trivia question. what was the first publicly traded indian company to be added to the nasdaq 100 index? the answer, infosys. the company was added in december of 2006 new this morning, bloomberg is reporting that elon musk emailed twitter workers for the first time late yesterday to prepare them for, in his words, difficult times ahead. he also banned remote work unless he personally approved it saying he expects employees to be in the office for at least 40

hours a week musk said that there's no way to sugarcoat the message about the economic outlook and how it would affect the company like twitter that relies on advertising. still to come,more from becky's exclusive interview with phil knight including his comments on china. plus mike novogratz on this week's crypto drama. what it means for the future of digital assets stay tuned, you're watching "squawk box. this is cnbc can he stand on his own...

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phil knight is in the headlines right now because the nike founder was the single largest political donor in the race for oregon governor in 2022 that race is still too close to call i talked with him about why he got involved his answer was crime, homelessness and drug issues those were the top issues in his state. we talked about other issues that will be determined by the midterm elections, including the united states' relationship with china. knight revolutionized manufacturing and expanded the supply chain to china. it's why nike became such a force to begin with. i asked him about the importance of the u.s. relationship with china. >> it's not going as well as it was four years ago but i still remain optimistic. i think that china will -- china and the united states will find ways to get together over the

long run and i stay optimistic on that. >> i mean, you've got to have a lot of friends that you've built up over the years there. >> absolutely. but they remain friends and as i say, i remain optimistic that the two nations will grow closer together. >> the nike board recently voted down a proposal that would have ended all sourcing in china. it would be impossible for the company to do. they're rooted in having manufacturing in china it was how the company really became a huge power to begin with i don't know if you guys have read shoe dog, it's phil knight's book, where it talks about how he went over to china himself and made these relationships and struggled to find cheaper ways to make sneakers and bring them back anyway, it's a huge issue facing nike and a lot of other companies. his thought is that he's optimistic, but it is going to

be a difficult channel to continue to negotiate. we talked with him about a lot of different issues and we'll run more of that sound later this morning, including his first comments on nike severing its relationship with kyrie irving you can check out the squawk pod. it is available wherever you listen to podcasts. >> howard schultz, in his lifetime to do that, phil knight, biggest apparel company -- jeff bezos. >> bill gates. >> dow components that were created in the lifetimes of these people. >> some of them chose to go out there. jeff was in new york he was a hedge fund manager getting in a car to go there a lot of it was actually after microsoft, some of the -- >> nike was kind of its own thing. it just happened >> starbucks. >> he described himself as having webbed toes, basic, webs between his toe. he's an oregon duck.

>> good for swimming. >> we're going to talk more about this big drama that is impacting the markets across the board. crypto investor and galaxy digital founder mike novogratz is going to talk to us about ftx and what it could mean for the industry and rob portman is going to join us to talk about the midterms and the state of the economy e e. ith we have the chair of ths.c.n e 8:00 hour. we're back after this. [announcer] marc benioff [announcer] and bret taylor! you excited to be here? this is going to be huge. [michael] i want my daughter to have a livable world. [marquita] i just try to keep a [marquita] growth mindset. and the sky's the limit. [manish] you are capable [manish] of anything. [manish] the only limitation is [manish] in your mind. ooh, i hope you all are getting this.

binance backing out of plans to buy ftx staying, quote, as a result of corporate due diligence as well as the latest news reports about m mishandling customers' funds, we will not pursue the acquisition of ftx it's become a drama in the crypto world beyond questions about how will it affect the larger markets joining us right now is galaxy digital ceo mike novogratz mike, it's great to have you on the broadcast. help us understand what you understand what do you think actually happened underneath the covers here >> listen, the facts will come out in time. what it appears happened is, you know, sam and probably a small group at a big firm decided to use customer funds that were at ftx, loan them to his family

office and make large investments in liquid stuff, mining, rescue finance for voyager, all these big ill liquid investments team to have been funded with customer funds from ftx and so, you know, does it feel illegal? we'll see. it certainly feels immoral either way, it is been a body blow to trust, right, markets are all about trust. and trust in the system. trust in other counterparts. and so it's -- i'm furious, actually macro guys try not to get angry. try to stay rational but this is just so frustrating in that you've got thousands and thousands of people working their tail off to build these new ecosystems and, you know, this is a tale as old as time. some young guy in bermuda shorts

with the floppy hair charmed the 20 best investors in the world as equity investors. charmed regulators he was kind of the front man of the whole system >> did he charm you, mike? >> i met him plenty of times and he's charming and thoughtful listen, we're in the business of providing liquidity over 850 institutional customers. and so we have money on all of these exchanges. we have a really thorough process of vetting the exchanges, having meetings every week and how much risk we should have we got half our risk off before the gates went up. it's unbelievably frustrating that, you know, we basically have a situation that looks like theranos. >> when you think, though, about the diligence that you've done relative to the diligence --

other funds said they did diligence. were there red flags >> yeah, looking back there are always red flags i kept asking myself where is he getting all of this money? where is he getting all of this money to be buying these things? and, you know, they were one of the biggest yield farmers which was very profitable last year. it fit into the alameda dna of being quantitative and being traders. they had a huge stake in a protocol which went from cents to big, big dollars. you know, theoretically, could have made 5, 6, $7 billion and so that was probably the failure of people not saying where is he getting all of this money? ftx was making a billion in revenue. you're not, you know, launching these naming rights and the big

mlb sponsorship and giving $50 million away to the democratic election, and so i think with hindsight, we should have dug in there a little more and figure out where the money was coming out as it turned out, the money was ours and thousands of other investors are participants >> mike, how much exposure do you have to ftx? >> we're a public company. we -- luckily, we had our earnings call. i say luckily, yesterday, we announced that we have $77 million there. i am not optimistic at getting a lot of that back i prepared for the worse and hope for the best. it's a mess. i don't think it's easily taken over, there's so much liability that comes with a company like that, so there will be some drawnout bankruptcy proceeding there was a rumor that justin son is looking at it

justin is probably the one guy in the crypto ecosystem wealthy enough with another liquidity that if he wanted to do something he could -- does he really have that much money? because i wondered the same thing about him. >> justin has done stunningly well he's savvy as a cat. >> oekay. let me ask you one more question you made your way on wall street you knew this stuff inside out you see how markets are made you're used to working in a regulated industry the biggest problem with all of this is it's not regulated how much harder does that make it to navigate things? how much more unclear does it make it about how things will settle out and whether any of this money will ever be -- >> it's one of the great frustrations of how slow our regulators have been we're a public company in canada we have a billion dollars in cash and i said on the earnings call we still have a billion dollars. and so if i'm lying, i'm going to jail, right i'm not lying.

we -- having transparency is really important in centralized companies. it's all about building trust, what we do with our customers, what goldman sachs did when i was there. crypto came about -- we want to have -- we have complete transparency and so the fun part is, the on-chain stuff, the real disruptive stuff isn't ready for prime time yet because of knowing your customer. soon enough, protocols will make that possible and you'll see the real kind of disruptive revolution but until that, when we have trade by companies centralized dealing with crypto, you need guardrails and regulation. >> mike, how concerned are you that we're not just talking about this one instance that when you get sort of under the hood of other firms, other exchanges or just starting to think about sort of, the leverage and the system and

other funds and other places, how much of that could emerge? >> we had it already with celsius. we had it with block-fy. i don't want to call someone fraudulent without all the facts, but the idea that people are lying to you, we're not used to that, right and we saw that with that and now we're seeing it with -- it appears we're seeing it with ftx. >> what about the whole idea -- i mean, the problem i have with this is, the whole concept of crypto was that it was supposed to be a trusted system it was supposed to be such a trusted system that not only did it need a central bank, but i didn't really need regulators. you talked about the need for regulation but conceptually, if everything is on the chain, everybody can see everything and the truth is, that that has turned out to be

one of the great myths of our time >> that's not necessarily fair why these organizations, like ours showed up, and all of these others to get other people into crypto was that everything on chain from a regulatory -- from a legal perspective is hard to do because you have to know your customer and so until these protocols show up, we've invested in one called sea lance that do on chain analytics, do on chain compliance that regulators trust and that participants trust. that having the whole world move on chain is just not happening right, it will happen. if you notice in all of these crises, it's not make or die, it's not any of these protocols where everything is transparent, right? the crypto ecosystem in its purest form is working as advertised

the problem is, we have this halfway in between where you have centralized organizations run by people that aren't regulated, right, that aren't transparent. if sam had to disclose his holdings and if he had sold them or not like i have to with galaxy, right, if people that own giant stakes in companies were transparent with what they were doing with them, we would have a lot less of this kind of shenanigans that are going on. >> let me ask you one more question here's my problem with all of this, again, the lack of regulation, this is a question for gary gensler, not for you. but as a player who is getting whipped around in this market and watching what's happening, i think it's crazy that binance says they're going to step in and the markets take off, backs out of it and everything collapses. now you got this justin son thing saying he's putting together solutions without any

details. ftx surged 4,000% after he said that all the tokens resumed trading at higher prices they're staying stuff that is not binding, that is not out there, that moves markets massively 4,000% in some of these cases. we don't anything about justin son or the deals he might have on this. again, it feels like it's whipsawing to allow big players to get in and out of some of the stuff where they were really in trouble on some of these issues. >> listen, i think in this case justin was trying to be good and say, hey, i'll make you whole if you move over to my system every smart person said i'll buy something on binance and get my money that way but your point is fair we need a set of rules i said if you don't self-regulate, the industry is not going to do well and the regulators are going to come

and we've done a horrific job of self-regulating. there's common things, people that are founders of protocols should have to post when they're selling and how much they're selling, right like every founder of any company that goes public in the u.s. does. >> mike, for those crypto investors out there that are still holding or have cash on the sideline or thinking, maybe i should be buying, what are you telling them >> ftx is not bitcoin. ftx is not crypto anymore that has -- was the internet back in 1999 there's an inevitability of this bitcoin has 180 million people who have participated in its ecosystem. it's decentralized people buying and selling will come and go. but bitcoin will stay. a i'm certain about that we got a cpi number in an hour that will have some impact

this is going to take weeks to play out if not months it's going to be a tougher period for crypto companies. you're going to see a lot, unfortunately, go under because their money got stuck. any big liquidity provider had to have lots of money on ftx that's where the pain is going to be. i think if it's true that the el salvadoren government crypto was on ftx and they were calling for extradition of sam the fallout will be far, but it's not going to stop the underlying community from holding together certainly in bitcoin in ethereum there are too many people invested in the success of these communities. those communities are decentralized. if michael sailor gets proven to be something he's not or whoever, bitcoin doesn't matter, right? the centralized tokens, sam was

ftx. it's a very different ecosystem. >> mike, we will see where this all heads. we hope to have you back as this drama unfolds. thanks so much >> thanks, guys. coming up, that key inflation data is due out at 8:30 45 minutes from now. we'll give you the numbers and the instant reaction could be one to watch and wait for. 8:30 plus, senator rob portman on the midterm elections and the balance of power in washington at the top of the hour, s.e.c. chair gary gensler is going to join us to talk about the ftx fallout. "squawk box" will be right back.

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♪ the race for a senate seat was a battle to the end. not quite like some of the others, though but republican jd vance did secure the senate seat fairly comfortably, i would say republicans did that and our next guest is bidding farewell to capitol hill, but not to the "squawk box," i hope. u.s. senator representing ohio, the best -- in fact, the best area of ohio, rob portman. >> spoken as a true cincinnatian. >> why can't i believe that the bengals -- it might be those outfits that burrow keeps wearing. you ask about the inflation number, it is at 8:30.

and pollsters said it's going to be a friendly number so run pollsters, god almighty. what are you hearing about -- what's going to happen with the house? low 220s is that what the scuttlebutt is right now? >> i do think the country is divided and the american people are divided, kind of right down the middle it will be a republican majority but it be a bear majority to hold together. in the senate, you know, it's still up in the air -- >> do you think it's possible that laxalt stays -- >> it's possible that he keeps his lead if he keeps his lead, tand then we win georgia, and then we win majority when joe biden ran for president, he actually talked about bringing people together he won a primary saying i'm going to be the adult in the room, work with republicans as i always have and his inaugural

stress he used the word unifier 19 times and he's never done it in my view this is an opportunity now if republicans had won big, which a lot of people expected, frankly, i think it would have been harder for him -- >> they should have won big. abortion was definitely a factor, but so were crappy candidates quality matters. >> quality matters. >> is herschel walker a quality candidate? >> well he came very close to winning -- >> you didn't answer -- >> in the general. he's -- he can certainly win he can certainly win. >> do you think he's a quality candidate? >> i think he -- let the people of georgia decide that i don't know what you mean by quality -- >> football players -- i guess there's been in the past where they've done -- some people might question, you know, a celebrity doctor, a -- although he's not just a celebrity doctor, he was a pretty good surgeon, oz, but i don't know if

he would be a good senator could georgia -- i love sea island we know about georgia. you probably know -- have some insight down there could it be different this time if donald trump doesn't get involved >> absolutely. >> brian kemp -- the -- he could get the georgia republican establishment behind him -- >> everybody is in and he's got, you know, some momentum right now. everybody is going to be helping. i do think what happened last time was donald trump convinced a lot of republicans not to vote. >> so we could lose the senate twice because of one person -- the republicans could -- >> i don't think he'll do that >> i don't mean we i kind of do >> we had the lowest turnout, we're the best republican district in the state. that's what happened last time. >> franklin just came on and said that trump is a shoo-in for the nomination i think everything changed -- >> i disagree.

frank is a smart guy but i disagree on that one i don't think that donald trump is going to run. >> what do you think he's going to say >> we'll see he's hyped it before and not come through what i think he's going to do is look at the polls and the polls show that his approval rating is high among hard-core republicans. but when the second question is asked, do you think he ought to run for president, the numbers are less compelling for him. head to head with governor desantis he's losing in some of these polls. >> i mean, i think that -- i don't know who could lose to president biden. probably if you're -- if you have a hard-core 30% or 25% in the republican party you're going to lose in to 24 co could he be a spoiler? >> i don't think so. i don't think so >> you don't think he will be a scorched earth -- >> he's likely to look at the

polling data -- he doesn't want to lose. and so i don't think he goes through with it at the end of the day. he's still a powerful force in the party. his favorability rating is high. he can play a constructive roll. what he did on regulatory policy, foreign policy, even building up the military, i mean a lot of good things he can talk about. that's what the role is that he ought to be playing. if he does, it will really help him. >> you got a truly unifying guy here so you can ask some questions about whether the country could be closer to -- i think -- democrats did so well, you're ready to -- >> that's what -- that's what frank says -- >> the republicans who were in the most populous of the trumpian camp didn't do well -- >> you think it's a real fringe candidate. >> and the question about desantis is whether -- >> does he move to the center -- >> look, a year ago, 12 months ago, 18 months ago, he was probably closer to being more centered

he's actually moved more populist over the past 12 months the question is, and did that to replace sort of the trumpism to some degree. does he move back? you may -- >> that might be in the eye of the beholder. >> you may disagree with that analysis -- >> he won with big numbers and part of it is the policies and part of it is competence people are looking for people who know how to manage things competently. >> but the question about desantis is whether you think he moves more -- >> i don't think he has to -- >> disney -- >> you think that's populist -- >> 18 months ago and where it is -- >> immigration is the same kind of thing >> i put it in a different category i think you focus on crime, you focus on the border, immigration, generally, you

focus on the economy, inflation. those are the issues when you look at what happened in this election, candidates need to talk about those issues, including jd, by the way that's what he talked about. all of those ads were about those issues every one of them. they'll do well -- >> here's the question, though you can disagree with people and have completely opposite ends of the spectrum in terms of what needs to be done on each of these i, do you do it in a trolling way or do you do it in a way that says, hey, i agree with you, i think we should do this or do you do it and say i disagree with yours and up yours. >> i totally agree when you look at what happened with the independent vote, republicans did not do well. that's where we lost ground. it wasn't turnout. it was among independents. in place like ohio, we did well. jd advance won by eight points in other states we didn't appeal to independents and i think a lot of it is style >> how did independents get over the populist -- let's say you do

perceive desantis as a populist or someone who trolls. how did he win by such a margin in what had been a swing state competency >> he was shown to be a competent manager. >> when it comes down to it, we're in an election season, did you know that? >> 2024. here we are already. >> after labor day it's like we're in the holiday season, i think. what do you see -- how do you see it playing out do you think joe biden is a candidate? >> i think if republicans had done as well as expected, he would have been getting a lot of pressure from the left because he would have had some challengers. you would have heard a lot of his potential presidential contenders talking today about how it's time to move on because he did pretty well and the country is so divided, i think he's probably likely to run and i don't think he has to shift so

far to the left. i don't think he's as weak as he would have been. >> and then on the other side, you think that -- someone other than trump, you would say desantis has the -- >> i think it's so darn early -- >> mike pence, mike pompeo -- >> when when mayor ghiuliani wa the top pick things shift >> what about you? >> it's early. >> would you think about it? >> i think i'm fine. >> there's no way you would ever think about that >> i don't think so, joe >> favorite son from ohio. >> well, i mean, ohio is a state that used to be the bellwether state. we've shifted a little more republican >> i think so. >> and jd vance is an example of that >> yeah. >> we're using populous as a new mega term.

what would you call jd vance i'm trying to get all of our terminology -- >> he was in the maga camp does he stay in that camp? part of it is, whether there was a group of republicans that moved into the maga camp because of the pressure from president trump. >> and they may be liberated at this point because you don't have to worry -- >> and that's the question -- >> i thought it would be bad for democrats. >> by the way, it may be very bad for democrats. >> if he's out -- >> all right

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journey with a free trial today. good morning new inflation numbers on the way. we're just 30 minutes away from what will likely be market-moving data and we have it all covered ftx, not a powerhouse anymore. it is in trouble and binance is not going to be buying it anymore. it needs billions of dollars to stay afloat and the government is investigating gary gensler is going to join us live. and nike's co-founder weighing in on kyrie irving. >> he stepped over the line. he made statements that we can't

abide by >> we're going to bring you the first public comments from phil knight on this story 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 in times square i'm joe kernen along with becky quick and andrew ross sorkin it's a half-hour we're getting closer and closer. 61 points we had three great days friday, monday, tuesday and then a pretty significant pullback yesterday. and we've got this big number, the october cpi coming out in 30 minutes. expected to be year over year 7.9, down from 8.2 did you like my joke about how pollsters are saying it's going to be a friendly number this time so head for the hills

are they any better? >> the pollsters >> men time, i want to get to the breaking story of the morning right now. ftx on the verge of collapse after binance backed out of its plans to acquire the struggling company. according to people familiar with the matter. ftx is facing a shortfall of up to $8 billion from withdrawal requests and needs emergency funding. the s.e.c. is investigating ftx. we want to bring in gary gensler. thank you for joining us lots of questions this morning for you about what is happening and so let's just start with what do you know and what are you investigating. >> i can't speak about any possible investigations but let's step back and see what's happening here when you mix together a bunch of

customer money, nondisclosure and leverage, borrowing against it and inside, you know, these companies trading, investors get hurt and i think just looking at what we see in the press, if i can stay with that, this story has been going on for many months. you remember the collapse of teraluna it looks like in the last few days, this is all interconnected this is a very interconnected world in crypto with a few concentrated players in the middle and one of those concentrated players had the toxic combinations of lack of disclosure, customer money, a lot of leverage, meaning borrowing, and then trying to invest with that and then when markets turned on them, it

appears that a lot of customers lost money and that's where our mission is about those customers. >> let's talk about that, gary critics would say, look, you have been talking about the need for regulating and yet have not. let's been lots of focus -- we had you on last time when you went after kim kardashian. but on a relative basis, going after kim kardashian compared to what is now a massive undoing of ftx isn't enough what do you say about that >> look, i think that investors need better protection in this space. but i would say this, this is a field that's significantly noncompliant, but it is -- it's got regulation and there's regulations that are often very clear. and we have multiple paths one path is working with those

crypto exchanges, crypto landing platform and is to get them properly registered and why that matters is that's so the public's protected but we have another path, which is enforcement we've brought between my predecessor and the teams now at the s.e.c. at least 100 actions in this case, and we've been very clear in these various enforcement actions and we had a big win this week on a crypto token called library where a court clearly said, you've been on fair notice and this is a securities under the securities law -- >> in fairness -- >> there no pass -- >> there are millions if not billions of dollars that are going to get tied up that potentially will get lost in this situation by investors, not just retail investors, but pensions that have given money to venture capitalists that have invested in these things

shouldn't this be more regulated? >> yes, andrew, and the laws are clear and look the runway is running out. i mean, the american public -- and investors around the globe are getting hurt by a field that says they put a lot of fancy talk around it, andrew and the technology is interesting. i taught it at m.i.t. and there's some interest innovations here, but we still need investor protection what i would say is, come in and talk to us you've heard that before the runway is getting shorter. and the laws are clear and it's pretty rich for me when i think about it when -- i mean, look, there's always celebrities you talked about celebrities there's celebrity ceos in this space as well. celebrity crypto entrepreneurs and so the public can fall prey to their promotions, they're marketing and the like

and it's really important -- our third path is also investor education. it's also to say to the public, beware, this is highly speculative, it is regulated, but without prejudging anyone's circumstance, largely noncompliant >> gary, you said people should come in if you will. sam bankman-fried, it appears on your calendar, came in and met with you, do you feel like you were hoodwinked? >> i think we've been clear in these meetings and you can look at my -- my calendar is public many meetings with folks in this industry very clear in these meetings, same message to the public, same

message to them, that non noncompliance is not going to work but we're going to continue on these dual paths if we need to, going to be the cop on the beat, going into court, putting the facts and the law in front of judges >> gary, being the cop on the beat, i guess, if we were looking at your m.o. to dadte, going after kim kardashian because it's a celebrity front, because maybe that sends a signal more broadly. you mentioned there's celebrity ceos here. is it fair to think if you're going to continue in that vein, that you're going to be targeting those celebrity ceos again because it sends a broad message and gets people in line a little more quickly. >> if i could, becky, it's about the platforms or the intermediaries this is not like the new york stock exchange or nasdaq these platforms -- and there's just a handful of lending platforms and a handful of so-called exchanges with

comingle it's another toxic combination where they take people's money, they borrow against it, it's not much disclosure, and then they trade against their customers. so it's getting and focusing on those platforms. building the evidence, building the facts often takes time i'll just use one example which was -- which is public so i can say this, but in teraluna, that legal entity, we filed a -- served a subpoena in september of last year we actually opened the investigation earlier. that's all public. that's why i can say it. and that was challenged in court at the district court, at the appellate court, all the way to a possession at the supreme court. that took a year defendants have appropriately an ability to go into court i think the better path is come in, work with us, get

registered, we can mold some of these registrations, but we're going to continue on these three paths, investor education, trying to get the intermediaries registered properly to protect the public, and also being the cop on the beat. >> so that does -- that's the long answer for, yes, you are going to be targeting them, i think. let me ask you something else that feels wrong to me i don't know if it's illegal, watching how this stuff plays out in the headlines where you see this deal, we've got a deal, a letter of intent, maybe this deal is going to go through. we're looking at it, you see huge moves and all the underlying issues underneath it as a result. now you got justin tron saying he's putting together a solution, trx surged 4,004 after that happened. there's real money at play here and real investors who are

potentially getting defrauded on this stuff is it illegal? >> i couldn't agree with you more it's -- there's 10,000-plus tokens and many as 1,000 coming on every month to quarter. and so many of them have very thin trading and the purported values -- and i say purported values -- might be only on very few trades and then others are sitting with large buckets of these tokens. and we saw this happen with the teraluna tokens early this year and there was a toke no one the middle of this as well what was its value what was making those values secondly, you said disclosure, in our securities laws, if you come to a merger agreement, even a letter of intent, there has to be full and fair and truthful disclosure >> let me ask you another question, gary, which actually relates to tether and

stablecoin tether is under a buck and your former -- your predecessor has called for regulation on stablecoins. i raise the question because here we are, again, don't we need to know whether a bank deposit is a bank deposit or a money market at this point >> look, i've said this for some time, the so-called purported stablecoins, if they're not that stable or if they pay a yield, a reward, an interest directly or indirectly, those are indications that the public is anticipating profits and that these could be securities under the securities laws. but i think that the public has seen that these are very much like the money market funds and they sometimes don't trade at par. and we don't have the proper

disclosure, again, behind what stands behind those claims. >> gary, what do you say to the critic who is say, this is happening on your watch, you are the cop on the beat, you've tried to claim jurisdiction for this arena as there's been, as you know, a battle between the s.e.c. and the cftc over who is in charge -- >> and i was honored to chair the commodity futures trading commission i think very highly, as part of this market, nonsecurity crypto tokens i think it's small in number of tokens that might be significant in size of market cap. so i think there's work for both of us market regulators as well as other regulators around any money-laundering and sanctions i mean, this field really needs to come into compliance and in terms of our efforts of the s.e.c., i can't be prouder of the staff at the s.e.c., but we

too have limited resources we have a hundred trillion dollar capital market to oversee. and that hundred market trillion dollar -- the stock market, bond markets, treasury and the like, that's an important responsibility and we don't want to undermine that -- >> what's the public supposed to think when we have a company that was worth literally $32 billion with some of the biggest venture capital firms out there, supported by pension funds in large part, teachers, fireman and the like, investing in a company that, by the way, didn't have a cfo. >> look, i think it's pretty clear, andrew, and we're going to do what congress and the american public expect we're going to be clear in our voice about the risk, the speculative risk, it appears to be largely noncompliant actors, we're going to continue to be working with the industry to try to get them properly registered.

but also that cop on the beat, these things take time and you would want them to take time so that we build the factles out. i would say the runway is getting shorter. >> if you're a crypto investor today, how much confidence should you have in the system? >> i would say to the american public, be careful, beware there's a lot of noncompliance when you give someone your token and they go down, you're going to stand in line at a bankruptcy court and they may be doing all sorts of things without proper disclosure if it's one to one backed and there's good disclosure and you protected against fraud and manipulation, that's all we're saying, that's what the securities laws are. there's a path forward to these intermediaries. >> for americans who have money on an exchange like a coinbase, which is basically just a publicly traded company, or a

binance, the two biggest ones at this point that are remaining, should they feel confident that they can get their money out of those firms. >> i'm not going to speak to any one platform, but i would say that you have risks, these -- the rules and the laws are clear, but do not assume that these firms are complying with the roles in the laws that the new york stock exchange or the biggest brokerage apps are complying with. >> gary, we appreciate you coming on, especially during what has turned out to be quite a drama and crisis we will continue to keep our eyes on this story and we hope to talk to you again very, very soon as this continues to play out. >> thank you >> thank you so much we should say, coming out of this big interview, we have a programming note about another big interview later today on "closing bell," billionaire investor carl icahn is going to

weigh in on it all. when we come back, diana olick is live at the first fully 3d printed community. >> we're going to show you how they're squeezing out four-bedroom homes from a 3d print and her talk to the chairman coming up on "squawk box. >> announcer: this cnbc program is sponsored by bdo. people who know, know bdo.

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launching its first fully 3d printed community, we saw some shots of that, diana diana olick joins us now with a special guest. good morning. >> good morning. this is a row of massive 3d printers in the first ever large-scale housing development to be fully 3d printed on site 100 homes, three and four bedrooms starting in the mid $400,000 range they claim they can do it two to three times as fast as a regular home and 30% cheaper it's a partnership between a 3d printing company and a major

store builder. stewart miller. >> happy to be here. >> 3d printing, we don't see a lot of it. why is a company as large as lennar getting into this now. >> this is all about innovation. if you go around the country, you speak to officials at local levels, state levels, the single biggest question is how do we provide workforce housing, affordable housing and right now with the economy the way it is, it doesn't seem like it's as important. but it is at the local levels. we've got to find different methods of production that will enable us to bring cost down, to bring cycle time down and to be able to provide that workforce housing that everybody thuirsts for now. >> you invested early in the company. how far are you going to take this is this going to be the first of many in many places? how much will you invest in the

technology >> we continue to invest in a variety of strategies around changing the methods of production, of construction, and we expect to take this all the way through. this is the first 100 homes. but we expect to be able to bring this to scale and at scale, we really bring cycle times down and we also bring costs down. >> okay, now when you start planning this, we were in a very different kind of housing market we have seen a sharp u-turn in this how are you doing it in this current economy? >> look, we still focus on our core business, making the trains run on time, building homes across the country, and as the market cycles up and down, we adjust our business. we know looking forward, there's a housing shortage out there we hear about it across the

country, we're going to continue to focus on how we meet the needs of the country for the long term. we're going to continue to find ways to get better and better at doing exactly this and other initiatives across the country. >> we saw disappointing results from d.r. horton yesterday the builders are coming in well below expectations how deep do you think it's going to get >> for right now, we know that interest rates have moved up and moved up very aggressively that affects affordability and affordability changes the entire landscape of the housing market. that's going to be temporary at some point, the interest rates are going to moderate and the housing market is going to come back. at the end of the day we have a housing shortage, people need a place to live, we're going to be building homes, steady as she goes through the downturn and will come out the other side and demand will return >> okay, stewart miller, thank you so much for joining us

it's actually really fascinating back here. becky, back to you. >> it looks it diana, thank you very much. in the meantime, switching gears back here, nike has suspended its relationship with ky kyrie irving after he posted a link to an anti-semitic movie. i spoke about this story to nike's co-founder and chairman emeritus phil knight over zoom these are his first public comments after irving was dropped by nike. >> i think the biggest question anybody would have recently coming out of there is this decision to separate from kyrie irving i know it was reaching the end of his contract. what do you think? i guess from the company's perspective, but just your own perspective on this too. >> you know, kyrie stepped over the line it's that simple so he made some statement that is we can't abide by and that's why we ended the relationship.

yeah, i was fine with that. >> as you mentioned, it's a diverse place. a lot of different opinions out there. how do you think about it, just in terms of the athletes that you curate, decide to sign. it's been a huge focal point in the marketplace over the last several years, i should say, what have your thoughts been as one of the cofounders of the company and the guy who really built the place? >> well, i think obviously athlete association has been key from the very beginning. and it's still key we worked that very hard we look at who we sign and how much we pay and we look not only how good the athlete is, but what his or her character are and so it's a -- it's not an exact science. but it's a process that we go through with a lot of intensity, with a lot of people sticking their head in it and it's one that -- you know, it goes all the way to the ceo some of the numbers that are

paid are pretty big. >> the decision with kyrie, as you said, he crossed a line. did he have a chance to step back it seems like the nets had given him plenty of opportunities to apologize, was that the same situation? >> same situation. he was dug in. >> is there no going back at this point was that -- >> i would doubt that we would go back. but, yeah, that's -- but i don't know for sure. >> nike, of course, not the only sneaker maker cutting ties adidas slashed its earnings outlook after cutting ties with kanye west adidas says that its net income is going to be half the target that it laid out in late october. nike, of course, has not disclosed revenue details for the kyrie irving collaboration, but knight did say that loss is not going to be material to the business when we come back, we got the number of the morning, cpi stick around we'll be right back. wow, we're crunching tons of polygons here!

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welcome back to "squawk box. we are just about to get that cpi number ahead of it things have been muted. dow is up by 60 points the nasdaq up by 46. that number is expected to be 7.9% year over year. rick santoli has that breaking data take it away. >> up 0.4. cooler than expected 1.3 from june of this year was the high watermark going back to 2005 up 0.3 when you strip out food and energy watermark was april of '21 year over year, up 7.7 definitely less than 7.9 expected high watermark there, 9.1 in june of this year. going back to 1981

6.3 on food and energy year over year and that was the one that many were nervous about. last month it was 6.6. that is the high watermark going back to 1982 on initial claims, 225,000, which means it's up 7,000 from a slightly revised 218,000 and on continuing claims, 1,493,000, about exactly expected on the inflation front, a bit tame but it's hard to say that these numbers are cold, especially year over year back to you. >> wow rick, while you were talking, that was pretty unbelievable just to watch the dow futures. i think we had on the chart -- right before this number, the futures for the dow up by 50 points now they're up by 650. and it took off immediately. i don't know if we can take a look at the ten year just to see what was happening with that you were busy reading the headlines. what are your thoughts -- the

ten-year note falling below 4% what do you think? >> the ten-year note below 4% is huge psychologically but i think we get some good insight into the tradingcommut as to what they consider an easing with respect to inflation. so these numbers might look a bit on the warm side, just in general, but to watch the equities, watch the fixed income markets, i think it screams volumes that we are on the right path and investors are going to be piling in if we continue to see these trends. >> every asset class moving. the dollar down, the bitcoin up by over 800 bucks. let's get right to our panel for some instant reaction on this. former council of economic advisers chairman, former acting cea, nancy davis, and our very

own steve liesman. rick is here steve, weigh in on the components that matter here. what changed and what -- >> you had a moderation in shelter. that helped a bit. what am i looking at rent up -- i saw 0.5 ammo g i'm going to check on that. you had a decline in apparel as well you know, i guess i have a hard time getting excited about a 7.7 -- i'm just saying, look, the progress since june when we hit that high of 9.06, do the math we've come down 1.3 percentage points after a massive increase -- >> it's clear that they're going to pivot now >> do people on the radio see the smile on your face, joe? that's what i worry about. let me talk about that, joe. >> the pivot is coming.

>> the pivot is coming -- >> they've done enough. >> there was a big pivot in the fed funds future and the peak rate which i have now at 490 we're down below 5% on the peak rate >> austin, tyler, what does the fed do at this point austin, look, this was not only not as hot -- not as hot as had been anticipated obviously one month doesn't a make a number, doesn't make a trend. man, markets reacting in a big way. >> first, i thought they just loved rick rick talks, there it goes. the thing about this, the most important to come out of this monthly report is not the year over year, it's that monthly core inflation it came down, that's great news. it's not a trend because it's just one month and it's not that low. at 0.3%, it's great that we've made progress, but that still

remains higher than where the fed wants it normally if they're in a period where they're raising 25 basis points per meeting, there's a little more space for cooling off period if you're raising 75 basis points a meeting, we're going to have to figure out what the timing is of the pivot and unless and until you get that core monthly inflation down in a comfortable range, i think the voices that are saying slow down, cool off, are still going to be a little muted. >> the market is not listening to you yet the dow is up by 783 points. >> it was 0.6, not 0.5 it did come down i think that helps a little bit. >> tyler, your take on this. does the fed have any less pressure on it at this moment as a result of these numbers? >> well, i agree with stroeve. it's great that the core came

down it's great that headline came down there's a little bit less to be encouraged about when you think about the details. correct me if i'm wrong, steve, looks like overall shelter was up 0.8 month over month. >> that's correct. >> and this was dragged down by gas, fuel and also used cars pretty much. those are the big drivers. so i think in terms of the fed's thinking, look, the lesson of the 1970s, they tried four times before paul volcker and including early paul volcker, they tried to get inflation under control, and each of those times they paused or pivoted before the job was done. and they didn't pause because of a 20% ektquity correction they paused because there were financial stability concerns, they paused because inflation was coming down, even though it wasn't down below 3% yet, they paused because unemployment was ticking up i think that the lesson of the 1970s is that we can be looking

at a fed that draws some of these different data points as motivation for a pause or pivot. >> investors right now are going la, la, la, la not listening to any of you. the dow futures are up by 800 points nancy, what do you think does that make sense, the market reaction to this >> it does the whisper number was for a softer cpi everyone is so bearish consensus is that we're heading into a recession with market participants it's not surprising that with the softer number, we're going to get a good pop. a lot of people have been weaning the other way. it's good to be contrarian when you see the number they're still incredibly high and the one thing i would remind investors that future inflation expectations are ridiculously low even though we got a slightly lower print if you look at inflation breakevens, they're all in the two handle, one, two, three

years out. the inflation curve is priced to fall and that would be opportunity for investors to say, look, maybe it's a good time to be adding some inflation because the market does have so much confidence that the fed is going to get the job done here. >> nancy, fool he once, fool me twice, three times, previous pivot false starts we saw some pretty good rallies based on the notion that the pivot is coming. is this real this time is this the possibility? or is it buyer beware. we've seen it before why are people so quick to embrace something that's burned them so badly before >> i think it's about expectations just like stocks, the rates markets are about what's expected in the future and the summer had priced in cuts in '23. now we're pricing in more hikes. >> sorry i was asking steve to look at -- >> keep talking.

>> 486 betsy, if you can hear me, make another chart, we'll get that one up thanks >> nancy, go ahead and finish your thought. >> my thought was that the market has priced for more hikes. i think there is room for the fed pivot so to speak. in the summer, the market had priced in cuts going on into '23 and those have been embraced there is room in the rates market for a surprise to the upside >> kathy, let's get you into this conversation too. again, i don't know how this changes your economic outlook, but in terms of what you think it means for the fed, what happens here >> well, it's certainly an encouraging number, becky. but i think we need caution that has been said before, we've been fooled before on numbers and we're going to get another very important inflation print the first day of the two-day meeting for the fed when they meet again for the policy meeting

in terms of the pivot, i see the market jumping to the last pivot. i see several pivots when did they reduce the size of the rate increases and that does -- today's numbers support the idea they go from 75 to 50 in the december meeting. but that is -- chairman powell says they're not done yet. and there's further to go. and then the pivot after that is when do they pause what's the terminal rate and that's what nancy was indicating, it's come down a little bit as steve showed the fed funds futures. i think it's premature just to assume just based on today's data we're not going to get to 5% on the fed funds rate and the last pivot is when the fed starts to ease and we're a alon long way from that. >> the issue becomes of how much you make of a single piece of data and the fed has said they want to see several months or convincing or be confident that this data -- and what the market

wants to do, it wants to keep asking of each single data point to be that multiple month data point and it's not. >> this is the way it would start. >> you're right. we may say -- i'll say -- >> jeremy siegel is somewhere going -- >> i'll say this about the number we have been waiting for something that looked reasonably convincing in terms of the decline in cpi we haven't had anything -- 0.2, 0.3. this looks like a step down. this decline in used car prices, we got to ask phil, i'll be on the phone with him after this session here to ask him what it means for new car prices if we can get some help there. we have some -- >> next time we put him on the panel. >> it's so critical because of the importance of airlines and cars. >> the day after meta said they're laying off thousands of people too the jobs numbers could start cooperating. >> let me get back to rick on this there are so many moves. for people who are listening on

the radio, i want to run through a few of them quickly. bitcoin up by 5% on this you've got the ten-year yield below 2% you have wti up by 1.3%. the dollar down. of all of those, which do you think is the most important right now especially when you think of some of the backdrop and some of the crypto chaos we're dealing with this week. >> i think what's going on with the equities is the most important thing. it's about what's priced we could never tell what's in investors' minds the market has gone straight down and even on those pivot bouts where there was bids in the market that proved the pivot wasn't real and we came back down, we're still keeping the price of equities from going into the basement. and that is a huge positive. the problem i have is, is that inflation data doesn't really trend. to see these moves, they could

come back and pop next month, if we look at the headline number, it was up 0.4. it was up 0.4 in september in july it was 0 if we look at what's going on with respect to the core numbers, we're at 0.3 of 1% in july so i guess the point here is, we look at this data as it's turned so we're going to start to come down anybody who has really studied the data should find out that really isn't the case. i think one other thing that we all know about but we haven't mentioned is that home equivalent rent is two fifths of core cpi many believe the housing market has turned since you make out a lease once a year, it popped up faster, but it's going down slower steve liesman has talked about this and that's giving glitter to the number as well. >> is it possible if the jobs picture starts cooperating and it's sick because that means if

it starts deteriorating, the jobs picture, to stay cooperating, but do we say, wow, we're going into a recession again? and then the flip side, they did cool us off too much it's not going to be soft. it's going to be hard. when do -- when do we change that mind set? >> look, i think not only is that possible, there are a lot of economists who are predicting that's what's going to happen. like i say, when you're raising 75 basis points a meeting, that's happening so rapidly that you don't have the normal margin of error or window to figure out if you've done enough. you're moving. they had to move in an aggressive manner because they felt like the inflation was getting out of control but we'll have to see over these coming months. the question is, how long does it take to work its way through the pipe what they've already

done it's not an easy balance to make this is a good month i think the market reacting as strongly as this, you buy on the rumor, you sell on the news. if there's going to be a trend downward in the monthly core inflation, then you want to buy at the first whiff of that and you saw that happen the last time the core went down to 0.3 >> investors love the flation part of stagflation. >> i'm seeing here this decline in apparel prices and i'm looking for confirmation of the story that was out there about inventories being high, goods to sales ratios being high and that we would see some discounting, especially ahead of the christmas shopping season. do you see any other evidence of that in any other category other

than apparel or is that something we might expect down the road that would be something that would significantly counteract potential increases in service inflation in the months ahead >> yeah, right, the retail inventory to sales ratios are very -- have increased and the increase has -- it's been an unwanted bill. that does encourage discounting as we go into the holiday season you could see that a little bit beyond apparel and other goods, holiday-related goods items. but we've been expecting, you know, goods prices and core goods prices to decelerate and that's good news it will help offset some of those score service pressures. but the core service pressures are still there. when i look at the data, i look at core services year on year. we did get a little bit, you know, of a reprieve.

but 6.7% is still very high. >> let me ask tyler one thing. tyler, let's be positive for a second if the jobs hold up and inflation cools we're going to start talking that they've orchestrated a soft landing successfully and maybe what's the market is sniffing out, is that possible? >> that's possible that would be wonderful if that were to happen there are still some last gasps of team transitory for example, with the, oh, the housing market is a lagging indicator when it comes to inflation. i'm a little bit amused by the fact that every time the market gets this oftenism, they're actually complicating and dragging out the fed's task because financial conditions ease we've seen overall throughout 2022, we -- the overall credit in the u.s. economy only just started to come down in september. talk about lags. that is one of the transmission

mechanisms is through financial conditions, through overall credit provision in the u.s. economy and every time the market gets optimistic about a pause or a pivot, financial conditions ease slightly or don't tighten. the more they expect a pause or pivot, the more the dollar eases a little bit and then we're exporting less inflation, we're importing more inflation every time the market gets excited about this, they're actually kind of dragging the process out. >> at some point, the fed is going to be okay with that easing or correcting of financial conditions the concern of the fed about the rally in the summer was different when it was -- i guess, 150 basis points lower on the funds rate than it was right now. and i think when joe asks about a pivot, which is this sort of -- the word that has multiple definitions, right, and the market kind of twists it to its own liking, remember a pivot was a cut in rates and then a pivot was a hold and now a pivot is a pause. a pivot is just a lowering of the pace of increases, when that

happens, at some point, the fed is going to be comfortable with saying, all right, this is a place we can cruise at but i think they're going to incorporate what tyler talked about which was the history of this thing, that they're concerned about having to stop or pause or even cut and come back and do it again they don't want that to happen they're going to err on the side -- >> of being more aggressive. >> i like the idea that joe -- what is it, daydreaming about the possibility that maybe this works out okay are we allowed to do that? >> fantasizing daydreaming. i said, oh, no, now we're going to start worrying about the hard landing -- >> i think that's a rational market action, to look at these numbers and not know exactly what it means. >> i've been fooled before i've been praying for the pivot, you know that. >> maybe you have been fooled, joe. >> everybody has been praying for the pivot and they've lost that dream >> one of these times -- >> it's going to be right, though it's going to be right

>> at some point. >> all i know is this, every fed official has said, every time they have spoken that requirement to pivot or otherwise change policy is several months of data don't ask a piece of data to do that which it by definition cannot it's a single month. we got to do this again and probably again and then maybe -- >> call us in january or february >> then maybe powell will come forward and say, we're all right, we're good here >> nancy, what do you do as an investor today >> well, i think inflation expectations in the future are really cheaply priced because the market is very confident that the fed will bring down inflations i think it's a great time to be looking at inflation-protected bonds, at the interest rate markets, because even though the data is still in a seven handle, inflation expectations in the future, if you look at the five year or even break evens, they're all in the two handle, so i think it's really cheaply priced in the future and doesn't

make a ton of sense because the market is so optimistic that the fed's going to get this job done, it's already priced in, in the future expectations. so, i think that's an opportunity for investors to say, look, this is great this is all good that inflation is lower in this one print, but we're also coming into the winter months. the crisis in europe is still ongoing, and there are a lot of unknowns, especially with energy coming into winter >> okay. i want to thank nancy and the rest of our panel today. austin, toyler, cathy, steve, rick, thanks for being with us we'll see you guys later >> let's get down to the new york stock exchange. jim cramer joins us now. jim, in your view, is this a -- something we should fade, or should we switch and get a little bit more bullish or sell in the strength because it's eventually headed lower? >> i was just going over with jeff marx, who works with me on the travel trust, and we are going to sell some things into the opening. we do like some of the different

lines that are in this but not enough and this kind of reaction has become very typical of an erratic market, and we just don't want to wait -- look, hearing the review with gary gensler was very dispositive you have a trillion dollars basically that's up for grabs in a caveat emptor situation, so take advantage and do some selling. >> bitcoin too, huh? >> bitcoin, i think, it's been revealed, well, let's just say that bitcoin can fall to 12,000, not a problem. and you know, the apologists for bitcoin, it's really getting very thin, and gensler came on and said, look, you're on your own. i don't want to be on my own i candidly did make a lot of money in bitcoin it was fool's gold i just did it to play momentum but i think your interview was very dispositive to getting out of all these things. and this may be a really terrific opportunity >> but so you don't view that

that's -- you know, when you saw some of these, whatever you want to call them in the past, we used all the words, we covered them all, the -- it's madoff-ian or ponzi-ian they were investing in securities but doing a ponzi scheme you don't think the underlying security -- it's not ftx, you think it's the underlying security where there's an actual issue? >> i think they could go higher. they were probably oversold, but i think that gary's point, to me, was very simple, which is that, you know, you can be an unregulated market or regulated market, and i prefer to be in a regulated market and i think that there's 230 coins that have been issued, and they, to me, a lot of those seem like alchemy this can go up look, there's so many people who have so much money invested, they have to try to keep them up but what an opportunity to get out over the next few days, not

all, of knthese things the interview was very -- a lot of people were concerned i felt it was groundbreaking, some of my friends felt it wasn't, but i think the ultimate takeaway from your interview with gensler was, you got to be crazy to be in this stuff. and i was getting 8.5% i remember asking gensler when i was in one of these organizations that was involved with ftx, i said i was getting 8.5% every night, and he goes, don't you think that's too good to be true i worked at goldman. i answered, yeah, it was but boy, was it great getting it but that's, you know, i think that the interview told me that -- enough and i think there's some retailers that stocks are doing too well versus where they're going to trade today, and i saw that there was -- there were five line items that were better that's not enough. you guys just said, as steve made it very clear, it's going to be more than one month. i look at these retailers, and i think, well, it's a good opportunity to lighten up on some of those, but i thought the

gensler interview was extraordinary, and it was a great job by you guys. because it really said, are you nuts are you going to continue to be nuts >> let's get -- i think we're going to go to -- we have katie stockton, cnbc contributor >> get the charts out. >> coming out of this -- thanks, jim, we'll see you on "squawk on the street." let's take a technical look at the charts, both the major averages and crypto. joining us is katie stockton you haven't, you know, you didn't go from the grinch to santa claus, necessarily, but you have been a little bit nicer about things recently. anything constructive you're seeing, especially this morning? >> yeah, for sure, we have the s&p futures up about 3%, so that's constructive. but i would say, more importantly, based on my indicators, we have a set-up that's similar to mid-july, and as you know, we saw the relief rally then over the summer extend higher for another month

or so. we have positive seasonal influences at hand so, we are looking for upside follow through in the coming weeks based on our indicators, solely, not based on any other influences, and that relief rally, we would consider a selling opportunity, because on the back of it, we think that there will be that volatility event. >> okay. a volatility event so, on the s&p, we could -- we would -- would we get back to the august highs in the s&p or not quite? would it be lower highs, lower lows >> i would guess a lower high versus august, maybe a brief sort of clearing that 200-day moving average just shy of 4,100. there is some initial resistance around 3,914, so i would view a couple of daily closes above that level as a nice positive catalyst near term but the action is favorable in the nasdaq 100, which, as you know, has really, really underperformed and exhibited downside momentum. there is a short-term countertrend signal that we have

there. that was just confirmed on tuesday. that's per the demark indicators, and it suggests that we should see a very immediate and about a two-week oversold bounce for the nasdaq 100. naturally, that won't occur without participation from the f.a.n.g. stocks on the mega caps and we highlighted in our research this week that the mega caps are deeply oversold, both in absolute and relative terms also based in part on those demark signals, so while we are deferring to that down trend intermediate to long-term, we think they're a little bit overdone on the downside right now. >> is the ten-year getting near peak yields or another stopping point, backing and filling and then to new highs on the yield, do you think >> i think it's the latter, so we are looking for more corrective action in yields, and that, of course, can be an impetus for more upside for equities here near term. today's action could contribute

to that. we are looking for the ten-year to go back to about 3.5%, perhaps even 3.25% before their steep uptrend resumes, but a previous breakout, that 4% level was a hurdle for it. we got through that decisively, so that breakout did target about 5.25% longer term, and we still think that will become relevant sometime early in the year >> no, katie, no, no, no 5.25 okay you're allowed to say whatever you see. okay so, we may go down you said, 3.5% but then back to 5.25%? is that what you said? >> that's right. we've seen the volatility that it's capable of. i know it sounds like a very big call but that's really steep >> how about bitcoin the bounce could take it back to where it was before all the air-conditioning, excrement, however you want to say it this week sell it again into the strength?

>> bitcoin is going to be a really fascinating case study in terms of the charts because it has a big breakdown pending confirmation, but we suspect it might be left unconfirmed. you probably heard of a shakeout that's basically a false breakdown. so, bitcoin is below long-term support of 18,300. it's based on a long-term fibonacci retracement level. the next support is below 13,900 where a breakdown would be confirmed is weekly consecutive closes below that $18,300. i think that might be avoided near term just based on the fact that we have these countertrend signals that are shared by the positively correlated nasdaq 100 index short-term >> all right, we're going to end it there, katie, thank you we're going to get a final check on the markets but i want to note a quick note from nick in an article from "the journal," says the october report could keep federal officials on track

to approve a 0.5% interest rate as they pencil in slightly higher rates next year than they had anticipated recently he's kind of the axe now so we wanted to bring that right before we turn over the show to "squawk on the street. and you can see, 784,000 bit p-word. swivel swivel pivot make sure you join us tomorrow "squawk on the street" is next ♪ you like this? >> good thursday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange, dow getting an 800-point bounce here on this cooler than expected inflation print. yields are sharply lower, ten-year below 4, markets starting to take 75 basis points off the table for december our road map is going to start right