is one data point. >> brenda, i want to thank you we're up against a hard break, and we're going to be handing off to our friends at "squawk on the street" in just a moment let's take a quick final check on the markets, a half an hour before they're set to open dow up about 160 points, nasdaq up, and the s&p 500 looking to open 20 points higher. what a week it's been, folks join us next week. "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at the new york stock exchange bulls look to tack on additional gains after the best day for equities in two and a half years. dollar weakness definitely helps now with its biggest two-day loss in over a decade, and bond markets are closed on this veterans day our road map begins with, quote, one month of data does not a victory make fed officials sounding off over yesterday's positive inflation print. >> plus, fxt is still, i guess,

scrambling for funds, although, good luck with that. it has been a collapse of sam bankman-fried's crypto empire. >> predicted by you. >> well. soft bank returns to a quarterly profit, jim, first time in three quarters still a lot of alibaba to do it. they did have a lot more pain at the vision fund, masa son saying, i'm going to focus on arm. let's begin with the markets trying to extend yesterday's historic rally jim, it does sound like you think the cpi print is the beginning of something >> yeah, ppi had always been better, although a lot of those commodities are up today, but what was important about the cpi when you got really granular was many aspects of it will create other aspects of weakness in the economy and weakness in numbers. you had to be -- you had to do it with a stiletto you couldn't do it with a meat axe. but you saw things that are going to indicate things are going to get even weaker and

lower in price, particularly logistics, which were really bad. you know, the note that you published about ch robinson, that was all about layoffs, all about prices coming down, all about a radical decline in commerce and david, what we saw on that cpi was very much like that. we got the signal that things are slowing from the pieces of the pi that caused that decline. >> and the question i have, jim, is, and i think others as we continue to see signs of a slowdown, including lower corporate earnings, as a result of it, in most areas, not all, what will the market reaction be will it be, we're already discounted the fact that those earnings are going to be lower than we had even anticipated or the street had anticipated, and we don't care, we're looking through it or are we going to have another leg down >> we said to club members that

it's wrong that everything goes up that you're going to discover that many of these companies' earnings are not good, and if they're not doing something about it, if they're not doing what mark zuckerberg is doing. >> or amazon >> or amazon, apparently amazon then you're just going to -- you're not going to have a great stock. i think the market is going to be very selective in what works. for instance, the semiconductors don't work they don't because they're included in the world of pcs, and there's nothing about the pc industry that is good and we're not even annual -- anniversary. there's a lot of industries that are involved with transportation that are going to do quite poorly, and yet people are buying those stocks. a lot of stocks -- the question is, can you buy the auto stocks? it's not clear at all to me. you have to take a larger view >> we got downgrades today of intel and oxy, but what's going on the differentiator? rates? does that mean that home builders do work >> i thought the most

important -- i mentioned to david that the key to the market on hump day was what the market's reaction would be to horton, and the reaction was extraordinarily positive, which was amazing. it was a stock that was up gigantic we have a picture of horton's rally. it was incredible. >> i'm laughing because the nail etf, the three times levered home builders and supplies was up 35% yesterday >> you need to see that's the -- that's horton who. there's dr. seuss. look at that i mean, this is on a -- huge number of cancellations, everybody was focused on that, and i just thought these were -- that was the bell. >> what'd you make of the fed speak that followed? and some of the nuance now that we're getting from, like, logan that somehow the pace of rates is not as important as the terminal things that powell suggested in the presser.

>> the bonds are always telling -- have been telling the truth the whole way, and when they went -- when the two-year went below 4.5, what that said was, okay, it's not going to 5 we're not taking the rates to 5, or else that piece was -- that piece of paper is headed to 5, 5 all over it. so i think these people can talk all they want about negatives. if they look at the data -- october was an incredibly weak month but it will be november that you start seeing the wages go down. the problem is, we're not used to seeing the wages go down at tech we're used to seeing layoffs at caterpillar. that's not going to happen >> right, no layoffs at caterpillar, but layoffs at meta, layoffs at amazon, lot of layoffs at twitter, obviously. >> twitter -- >> and on and on from there. certainly not a lot of hiring at most of these companies. >> but david, what do you think about the idea that you get such a huge benefits package if you're at meta >> you've really been taken by that benefits package.

>> severance >> it seemed generous. >> there's a tv show about it called "severance. >> 16 weeks and 2 weeks for every year okay you're still losing your job, jim. >> if you've been there for a couple years, you got five years to go all the places you wanted to go. i think you can go surfing off indonesia if you want to i don't know i just say that the idea that you have to go back into the job market right now after you've been given this pass is insane i think you take -- and here's why. it was a reduction in force for heaven's sake. typically happens, you have your resume and you're trying to figure out why that person was fired. here, it's like a golden fire. it's a golden fire >> again, if you're one of those people who is unfortunately losing their job, i'm not sure you see it that way. >> no, no, no. no one -- i don't want anyone to lose their job i'm saying if you're going to lose your job, lose your job in the way that zuckerberg got rid of you >> meanwhile -- >> what? >> you got -- you had solomon on your show last night

>> do you have any clip of that? >> we do >> oh, you don't want to show it >> little of this, little of that take a listen. >> you're saying it doesn't even matter don't play it. don't play it. >> we lost our chance? >> i don't want it i got the horton killed the who thing. i don't want the darn -- no. >> i like the horton with the elephant that was my favorite >> that was one of the good ones >> sam i am sam bankman-fried. >> you don't want to play it i feel like solomon says the obvious thing, whereas jamie dimon -- >> hurricane dimon we're not showing the clip let's move on. we're not going to show the clip >> it's important what he told you, though. he said, we're going to see some reopening in capital markets, that cpi is a reflection of the fed's work >> the ipo queue is big. >> yep >> and you're going to see it happen >> crypto's volatile >> crypto is, again, i think everyone who's big in business

the reluctant to say it, but i asked him point-blank if he would go into crypto now that it's so low. he said, on the one hand -- >> well, first of all, that was not what we had in terms of the interesting things that he said. >> no. >> you want to run it or not >> this is positive but we're on a journey. i don't mean to -- i love david solomon. >> i saw journey get inducted into the hall of fame but it wasn't perry it wasn't steve perry. >> they're not getting back together >> jamie dimon's still worried about the storm. he's got his al roker hat on he's getting blown around. you don't want to be back in the same studio, i'm out here. >> what letter are we up to? hurricane jamie? >> global tightening, quantitative tightening, the effect of the war, oil prices, food prices, supply chain. he's worried still, and he's saying we're not done dealing with this. >> listen good, jamie.

if you feel that way, let's get someone else at the bank, maybe someone a little bit more positive >> really? that's your answer >> well, i just think that that's that kind of negative stuff that doesn't fly with me that's like the whole country's like that. we need, like, brian moynihan, comes on, seems pretty good. i think jamie is too negative. >> you think with inflation, with the print we got this week, we're going to talk about the china reopening, ukraine is moving back into kherson you think a lot of his complaints are becoming less valid? >> i want jamie one, not jamie two. jamie one, who was on a script, and it was a darn good script, talking about all the positives. do you know that he did jamie one? the scripted jamie one and then he did off the cuff jamie two. let's get jamie one back here. jamie one was positive, talking about the greatness of the country. jamie two is just, i mean, i don't know, lex luthor

>> he's holding california hostage? now, that said, i don't understand so, you prefer the cryscripted jamie, as opposed to jamie from the heart telling you what he actually thinks. >> that's all i have to say about it >> you want a jamie who's just making stuff up and saying positive things even though he doesn't believe them >> the written comments were -- this is like the fed where they put out the blurb and then the presser. the blurb says, things are okay, lag, and then the presser was just explosion and the worst part of that presser was when the guy said, are you aware that the stock market's up? and then he went nuts, but the stock market was down, because the guy who asked the question wasn't aware that the stock market was down. and you're fine with that? >> i'm fine with what? which part of it the discrepancy between the statement in powell's comments we're back on that again >> yes, that again can we make some -- let's make

some money >> the real jamie dimon. >> i want the real one china -- i think this is the beginning. >> yep >> sounds like you could do some business in china. the rules are just soft enough that it sounds like that you don't are thave to stay in yourl room anymore, that you can do some business. this is the beginning of how he's going to do it. and i mean, he's been looking for an out, president xi, and start it today, and it started, of course, on what day, david? >> singles day >> no, actually, veterans day. but he's making fun of veterans by having singles day. >> no. 11/11. >> that's just innate. >> eight years ago is when i went and interviewed jack ma >> how was the smog? >> the smog was horrible >> how was your phone? did it work? >> you use a burner phone. that was eight years ago >> a burner. that's why you like "the wire" so much. >> i did love "the wire," greatest show of all

number one >> let's get to ftx this morning as the fallout continues regarding the firm and sam bankman-fried struggling to obtain billions in aid regulators in the bahamas have frozen assets of the company's digital markets unit and appointed a provisional liquidator remarkable piece in the "times" from cz warning of a cascading effect out of all this, and that we've not seen the damage from ftx by a long shot >> i think that the damage from ftx is what the fed wants. i've always felt that the fed hated crypto because it's speculative. and when you have speculation, it's very hard to rein in inflation. he doesn't talk as much as i think he should about speculation, because it's always been accompanied -- it's always accompanied inflation. so, david, i think that when the speculators leave the building, it's very positive for the economy. >> the fed did not want

cross-collateralization. they did not want a company using company funds. they did not want people unable to take out their own money. that's not what they were looking for. >> they were looking for scandal. they were looking for crypto to go down. >> taking the air out of the crypto bubble. >> that is being taken care of by the market. david, have you ever seen the 200 coins? the coins. have you ever looked at coinbase's 200 coins >> i have rarely i may have done that once. >> you ever looked at the cramer coin down like 70% in a couple days they made up coins they have their own currency forget it. this is just -- it's a fanciful world. it smacks more of fiction than of fact. >> well, one fact here is that a lot of people are losing a lot of money when it comes to ftx. we know that the idea that this was a $35 billion company only a short time ago, perhaps somewhat fanciful, but that is where the company was. i talked to a number of people who were approached about a billion dollar fund-raising round only a couple of months

ago, very much unclear whether they closed on any of it they were looking for hundred million dollar increments in terms of investments a billion at $35 billion that was going to be a flat round, not up. they were going to use that money, imagine this, just for padding. they said they had $2.4 billion in cash on hand. this was people who were doing some due diligence that i have spoken to at that time when they were looking for this latest round. they also were talking about doing as much as $500 million in ebitda in 2023 and i'm told binance thought the entire company, when they were talking to them for that brief period there, was worth half a billion dollars. so, $35 billion to half a billion to what is now most likely, without a doubt, a zero. and we've talked a lot about these celebrity backers, guys, but they weren't all just paid in cash.

so, they're going to be amongst people who are also -- tom brady and gisele bought warrants at very low prices but put out cash steph curry paid in cash, in stock, in coin naomi osaka, paid in stock so, there are a lot of losers out there. >> steph curry is a big watcher of our show. >> is he >> yeah, he loves cnbc >> he may have been the smartest, because apparently he was paid -- a lot of it was in cash but they were handing out a lot of compensation that was not necessarily just, here you go. here's the cash. and many people were happy to take it because, obvf course, $35 billion value, you think you're getting it at a discount or a lower number and you think it's going higher, you're going to do it >> one of the things that is for certain is that every company that depended on advertising, particularly on the web, that was the root of the shortfall, was crypto and make two ways about it

the comparison between quarters last year, the crypto companies were very much like the street.com i got the money. raised the money the first thing i did was bought the 9:30 spot on cnbc, and i flooded the zone, and i had -- i can't even reveal -- the ad, you can't use now. it was sexist. but i'll tell you, the money that went in from the dot coms to advertising was nothing compared to what these companies did. i mean, that's why alphabet -- i'm telling you, alphabet missed the quarter because of crypto. >> youtube said their crypto ads were down sharply. >> they all missed the quarter because of crypto. remember the crypto, there wasn't anything other than advertising and incredibly high rates. one of the companies that was bought by sbf -- >> by the way, guys. >> i was getting 8.5%. >> it did appear they are filing chapter 11 at ftx.

>> that's to protect -- >> apropos of our conversation right now. i'm looking at a press release announced -- sorry, services, alameda research, 130 additional affiliated companies, the ftx group have commenced voluntary proceedings under chapter 11 of the u.s. bankruptcy code >> wiped out total wipeout. >> in delaware, what they're calling an orderly process to review and monetize assets so -- >> and bankman-fried has resigned his role and will remain to assist in an orderly transition >> unbelievable. >> so, there it is >> unbelievable. >> at this moment. you know, it is interesting. any number of people i've spoken to who dealt with bankman-fried all describe him in very nice ways they say, it was accidental. >> he was on my show a lot >> this company did not have a board of directors it's unclear how this -- there's

so much we don't know. there's so much we don't know. >> here's what we know he's broke >> and he's in big trouble he's in big trouble. >> what are you, like the government or something? >> no, i'm not, but i've been reporting for 35 years, and even though henry silverman said fraud by its very nature is hard to detect -- >> i got bagged by that one. >> i remember reporting on that one. >> i testified against a donor >> there's definitely parts of this that seem to rise to the possibility of fraud >> do you believe that there's going to be a big spillover from the bankruptcy, chapter 11 >> i don't know. >> i think if you were in there, you were doing it in part because you got a great return on your cash, and how many times did gensler have to come on our show and say, did you really think that is reasonable logical? do you think it's safe now, what they dndidn't do -- >> there are going to be a lot of creditors, by the way,

including the famous people we just had up. a lot of creditors in a lot of different ways we'll have to see what we can get. >> i think, you know, those guys that put this up, they're very wealthy, and let's just go the opposite let's talk about all the people who really were drawn to this as moths to flame, and it was such a high return to keep your money there versus, say, if you kept your money in jpmorgan and you could never get the stuff out and send it to jpmorgan, because they wouldn't take it. >> you get 6% on your deposits >> i got 8.5%. >> you pointed this out many times, but also questioning. but again, to remind people, this was one of the biggest -- was regarded only a week ago as one of the safest. we kid, but he was referred to as the jpmorgan of the industry. he was coming to the aid of others, and it collapsed in a matter of days >> this is one of the great formats. this is the jay gould -- >> only a couple of months ago,

his even more recently and his net worth, carl, seen at $16 billion, completely evaporated and now perhaps looking at a real problem with fraud. >> we're going to talk more about it in a few moments. in the meantime, the new york stock exchange is about to observe a two-minute moment of silence on this veterans day when we're thinking of those wh have served this country.

>> always an important day if you see a veteran today or know of one, thank them for their service. jim, i know this is important to you too. >> i also want people to go to the world war ii museum in new orleans. if you really want to know, they just did the pacific, they had the -- it's really amazing >> yesterday, the world war ii veterans being here was unbelievable unbelievable >> i just can't salute them

enough i had mark claus, a west point veteran, was the ceo of campbell's soup. he turned it it around and basically credited the toughness that he learned in the army for being able to fix what, you know, david, was a terrible balance sheet. fixed it and it's growing, and he said it took all of his learning about how to make tough decisions that were really tough that saved the company, basically, but basically how to reorganize, how to fire. >> meantime, back to our discussion about crypto. jim, morgan stanley's point this morning was that in terms of the actual bitcoin trading, it's mostly been institutional selling so far, and they think that retail doesn't really start to hit the sell button until maybe 10 k >> what i really am worried about is fidelity offered it as a way for retirement they took the money. they took the crypto my bank did not take the crypto, basically trying to look out for

me, i think. anyone who's in crypto, ethereum, bitcoin, should know that bitcoin is very high versus where it was two years ago it may be low from 68,000, but david, bitcoin is up gigantically from where it was and i don't think that's the standard >> you don't >> no, because everybody's going to be trying to get out. >> michael saylor would tell you it's a story of value. >> jpmorgan today says it's going to accelerate regulation, which could be a net positive for blockchain and that technology >> i think the regulators are -- i think the regulators always thought it was caveat emptor, never going to change. caveat emptor. you came to the nuisance and lost >> that fireplace behind gensler is where they burned up $35 billion in value >> lem did the same thing on the shield let's just be a little more

granular here, this note that we got, the bankruptcy. the ftx group has valuable assets that can only be effectively administered in an organized joint process. this is from john j. ray, he's been appointed ceo david, you chronicled a tremendous piece about condos. >> yes >> that were owned they should be seized, and you thought that would work well >> yeah. apparently, again, at the albany club, mr. bankman-fried owns a lot. it's very, very high end, developed by tiger woods and i'm forgetting the other person who was involved with the development. very high-end club where he's got a lot of his people and he apparently stepped up to buy what i was told is 14 separate c condos sometime back >> needs to be an orderly liquidation. >> that could be an asset for sure >> i just think, look, if you're in there, you have to understand

the likelihood that you'll get some money back may not be as great. some money, maybe. but there were people who were pulling money out. anyone who's familiar with these organizations knows that they always -- the ones i was involved in always made it very difficult to get your money out. and that's when they were in their heyday, so this is certainly a moment where, if you were in one of these joke coins, of which there are many joke coins, i'm urging you right now, sell the joke coins, because they're not worth anything >> tiger woods and joe lewis developed the albany club. which, by the way, is not a part of this in any way and is apparently a place that a lot of people would like to buy and may now have an opportunity to buy new units that are going to be available because potentially they'll be sold. >> units that are backed by absolutely nothing other than fanciful courage of some people. stupidity. this is your chance. this is your chance. and you know what? it's a little like the bailey

building and loan. you want to be first you don't want to be uncle billy here no uncle billy and you don't want potter. >> now it's an orderly unwind, because they filed for bankruptcy >> the other guys. the other currencies go to coinbase and look at those joke currencies, and of course, no one will ever admit that they're jokes because that's insulting. so, let's say, look at the ill-advised currencies and try to get something out before you realize that you're stopping at tjx and not nordstrom. now, my -- >> there are going to be a lot of clients -- people who invested in ftx, people who obviously still have their money there that they can't get out. >> look, a week ago, it was the safest one a week ago, it was the one you wanted to be in. >> wealth managers who took opportunities to put their clients in ftx in, again, as private investors in the company. >> really? >> yeah. i think your old firm.

>> really? >> there are going to be a -- it's just the beginning. it's moved so quickly. >> you want to make it sound like it's going to cascade into the regular market >> no, no, no. >> that money's going to go into real things. >> at some point, people will have a lot of losses they can use against their taxes. >> how about the foreigners who wanted to get their money out of joke currencies? remember, there are whole countries that have been hacked. i don't know >> we had scaramucci on about an hour ago on "squawk box" talking about trying to unwind the transaction he made with them earlier in the year, and of course, yesterday, we heard from other industry players and observers, namely michael saylor, as we mentioned, and carl icahn take a listen. >> if you look at crypto, you look at ethereum, look at these companies, there's really absolutely -- governance is bad enough i tried to figure out, i asked people, what do you do if you don't like the way it's being managed? it's a lawless area as far as i

was concerned. there was no accountability at all. in fairness, i'm no expert on it it may well be that there really is stuff there but i just looked at it and decided, it's not for me a lot of guys brought me stuff about it and so therefore, i never had to do it, but i'm not surprised that this happened >> of course, icahn also mentioned to wapner that he thinks this is another pole in a bear rally >> if you're a rich person, you say it no rich person comes on air and says the market's good name me some maybe dave tepper. i've never see a rich person say, now's the time. >> meanwhile, we're coming off a historic rally we're 30 seconds from opening today. >> look, there are -- the bonds are closed the dollar being down is maybe the single most important thing

for our companies. and i have to encourage people to realize that the dollar has hurt every international company. now, we also had singles day yesterday. i want to point out that the cosmetics companies did very well in the first hour wow. okay and i do think that the beginning of singles day was very good. i was surprised. i thought singles day would be horrendous, so i think that we have to accept the fact that there's a lot of weakness in the economy, but it has to do with technology >> usa, usa, usa >> pretty nice chant there this morning here at the big board. u.s. armed forces marking veterans day that's the rear admiral, commander of the u.s. coast guard's first district doing the honors at the nasdaq, focused on acquiring and developing non-opioid pain management >> a lot of companies are trying to do a pain management without

opioid, and it is interesting to see. david, it's very hard. very hard to develop non-opioid, which is one of the problems with how the dark side hooks so many people. it's just -- but the only thing that, you know, cannabis does work, but cannabis is a class 1 felony in our country so it's not been used for what it probably would be best at. >> what stock are we talking about right now? >> i was talking about opioid -- the company that rang the bell >> oh, the company that rang the bell that's all i just wanted to -- >> i don't want to be here i like constellation brands because they own a piece of canopy i think owning -- other than tilray, it's a little bit suspect. i think it's interesting the nasdaq's down. nasdaq is the place where -- is the least likelihood that you're buying a company that will be up by the end of the day, because the earnings are not there that's where everybody's being hurt you got a lot of short squeezes there in the cloud stocks.

there's not an overlap with sam bankman-fried, just those companies aren't doing that well do we have any film of sam bankman-fried? >> we do we've shown it a lot of him walking around in nassau. >> the reason i wanted to say that is the gap stores, 8-7. that look is not -- boss pushes lulu that's not lulu. citi cuts foot locker. i'm trying to get a little out of him maybe he's going to a walgreens, which was a buy. >> got an upgrade over at di deutsche bank. >> if they can open and get something rather than have to call someone, that could be very good >> meanwhile, we're going to get to retailers walmart next week. but to your point that october was weak, jim, and what i have, again, also been hearing, i am

curious to see what the commentary's going to be like from some of these retailers, obviously, moving into christmas but even next year, given what i'm told was a real falloff in consumer demand towards the end of the third quarter >> ell, i think that the -- something happened in the country in october, and it could be that people ran out of money. could be they had to start to borrow money could be the main stores we deal with, kohl's, bed bath, best buy having a huge amount of inventory. the inventory in the system is incredibly high. costco would tell you that the prices are very inflated because of the inflation itself. and there's going to be some bargains, but they're not going to be found at the regular stores they're going to be found, as voss said, in dollar general, tjx. i like the list. i thought it was very good and i think that people have to

recognize that you want to own -- even though you may feel good about the stock market, it's had very little to do with the economy and the layoffs are concentrated amazon, i think, is going to lay off a lot of people. and i do feel badly. i'm not -- and i think alphabets that too many people the amazon note today is about some of their other bets that may not be working out i think these are great companies, and just be mindful that meta did not say it was going to stop spending on the black hole >> guys, i mentioned softbank at the top of the program we're going into the numbers a bit. stock's not reacting badly they sold a lot more alibaba at softbank wherever you sell it at, you're going to have a huge profit. that said, if you look at alibaba over the last couple years, they would have been a lot better off selling sometime

back, given the shellacking that company's stock has taken. >> that's an unbelievably bad move how much of it was the government's decision to really frown on billionaires and focus on -- >> you're talking about alibaba? >> yes >> yeah. well, i mean, the government has done any number of things. obviously, most recently, last year, the covid lockdowns or more than a year, which we did talk about briefly they are actually taking concrete steps to lift some of them that has resulted -- you're seeing, alibaba is up. chinese shares in general were very strong. >> but did you ever think you'd see china have growth slower than the united states >> no. i mean, it's surprising to see china's growth slow. some people talking about, remember when the chinese economy would pass our own in terms of gdp that's not quite looking as certain any longer but there's a look at the china adr index. that's a response to the lifting

of certain covid lockdown protocols. as for softbank, kraneshares, you know, look, it's reflected, guys, of everything we talk about. the vision fund has not done well at all. they've taken huge markdowns on the portfolio. 334 companies, 34.5 billion markdowns, some mark-ups as well 40 companies have been marked up, but for the most part, when they take their marks at softbank, it leads us to questions about other funds that have been invested in the privates ftx is just one. where are the marks? have they been taken effectively? have they been waiting >> are they fungible >> no. >> i know but a lot of these hedge funds, they have a bid they claim to have a bid >> they do, and they base it on what you should, right recent transactions, portfolio

companies, public comps, you know, a recent transaction would be, obviously, raising money at a different valuation. but masa -- again, the gain was from the alibaba shares. they lost money in the vision fund and then masa said, looking at the current situation, regardless of public securities or private securities, almost all the investments we've made are not showing good performance. our vision fund suffered but not only us, investors around the world are also seeing the same situation because of the damage in the equity market went on to say during the call, i'm going to be focusing on arm holdings, which they own because they couldn't get that deal past regulators to sell to nvidia >> nvidia, i believe that the inventory of excess graphics cards that were used chiefly for gaming has almost been worked off. nvidia remains in a position for my travel trust. i do believe that this is a quarter that they can say, we have gotten the inventory behind us that was -- unfortunately, a lot

of other companies like intel are not going to be able to say that, because they make chip for pcs, and they have not been able to get the inventory behind it >> that's the reasoning behind the double downgrade today of intel over at jpmorgan they say, look, it took several years of server cpu loss to amd to happen and an amazing chart of that process over the past years, and then in order to get it back, it will take years, and as they say, flawless execution. so, they go to underweight 32 target >> look, genoa, lisa su, the ceo of amd, likes to name her iterations after italian cities, and genoa came out this week and it's faster than anything intel has, and more importantly, it burns less she has been uniquely focused on how hot a chip is in order to be able to go to all the companies that are -- david, all the companies that do cloud are just

gripped by how much energy they're using, and if you have a chip that runs cooler, you're just going to put it in for your servers. i think it's extraordinary how much people think about these things it's terrific. >> no, i -- using less energy is very important >> i think people have to understand that throughout the food chain, if you're gm, you're going to call new core and say, we need your steel because your steel is zero carbon, even though it's a carbon company they know how to make it they totally recycle it. anybody, carl, who knows how to keep heat down, anybody who is doing a cleaner product is going to get the business, in this new world that we're in, that's the most important thing nucore can sell all the steel in the world because they're -- they don't pollute, and i think we have to recognize in this new world, we have to be thinking, who is using less energy

that's who wins. >> it even comes to natural gas. there's going to be potentially this effort to be made of -- was this natural gas produced with no methane getting released? >> you know that exxon -- >> and you'll pay more for that natural gas. >> you saw the new regulations the president's doubling down against methane >> those that are already on top of the situation -- you can basically stop flaring, for the most part. you don't have to produce any methane when you are -- natural gas. >> the great companies have gotten flaring down to a level that everybody should be at. and it should be the government that just says, if this guy can do this level of flaring, you should that's what the government should do. but they're not smart enough damn, they're not smart enough what does it take? you can sit down with the top oil people you can sit down with mike wirth from chevron, but the president won't do it. he doesn't want to be in a picture with mike wirth because that says that he's pro-carbon sit down and say, listen, if

pioneer can do x, everyone should do x. pioneer is pretty good are you with me? >> sure, i'm with you, jim >> why won't he sit down with them >> i don't know. i don't speak to the president with any regulatory, or actually at all >> you just need to speak to the people he won't sit down with. >> i have spoken with them, but they don't have an answer. >> no, they don't. you know why >> you keep asking the question. >> if you're in a picture with the president, it's regarded as -- the president's afraid that he's endorsing. someone at -- a candidate asked me to say hello. and i politely declined. i didn't want to endorse that candidate with a picture on instagram. >> that was a good idea, because he lost. guys, tesla's down 3.3%. tesla shares are down again. >> oh, god, is he still selling? >> i don't know that he's selling. i'll go to carl on this. what's going on at twitter is

fascinating, to say the least, in the almost two weeks that mr. musk has been running the company. obviously, he did sell shares of tesla. it was apparently to help potentially more of a cash cushion for twitter and what he needs to do. he said, i did it to save the social network he talked openly about the possibility, remote as it may be, of bankruptcy. by the way, if you're morgan stanley, and you led that $13 billion financing with all those other banks, the sponsor's talking about bankruptcy that's -- that's just not good you just are never going to sell thatdebt as unlikely as that scenario might really be. >> right meanwhile, more senior departures last night, including the head of safety reenstating official badges after a slew of impersonations that victimized lilly and

lockheed and nintendo. >> chiquita banana was my favorite >> there was an outfit bought by lone star. >> okay. >> and they immediately had to liquidate it because it wasn't worth as much as -- there had been a big change. >> yeah. >> i mean, it feels like that he feels, well, maybe it was a big change and he has to liquidate it >> that's crazy. he's not going to do that. >> well, i mean, if he closes it -- >> he's not going to close it. he put up $25 billion, even for musk, that's a lot of money. he's not just saying, oh, okay >> i'm saying -- why does he say this stuff, to make people feel more nervous, less secure? why do you say stuff like that because you're rich? >> maybe maybe all those things are true. >> i'm rich, i can say whatever i want >> no. you can't. people's lives >> are you surprised that no one has tried to quickly assemble some kind of rival product i mean, a big player >> i was thinking of asking

zuckerberg, like, isn't this your chance? >> i just wonder, technologically, how engineering -- how hard it would be >> well, they don't really care for the engineering of twitter, but they also don't want -- they don't care for the free-for-all. the free-for-all is upsetting. that's one of the reasons why they like instagram. you know, instagram is a friendlier -- >> i know, but they do have connections with so many people. there might be a real opportunity to establish a new platform and potentially create value, although twitter never really managed to create much value, which is why musk bought it in the first place because he thought he could and maybe he still will. it's early it's really early. >> i post. i don't look at my mentions. i'm sorry for people who put nice things in my mentions, but my kids say, one thing we urge you never to do is look at your mentions, and we know i'm a top ten most hated person on twitter, which, you know, i mean, there's putin.

>> yeah. he's big, for sure >> why sometimes -- >> guys, by the way, sam bankman-fried may not be getting a lot of love on twitter these days he steps down as the ceo of ftx. the company has filed for chapter 11 of course, we've been talking about this all morning >> david, if he steps down, does that mean that he's already been contacted by the government? >> i have no idea. no idea. >> i think it does >> you know, in terms of jurisdiction, regulation, so many different questions we have here, but a bigger question is, what the fallout is. we just don't know who's going to end up here as a creditor and how broad this is. you're talking, obviously, about a lot of private investment that was made over time in this company at a valuation that got as high as $35 billion >> i love that graphic that we have >> we do you're also talking about customer accounts that are frozen, where it's just your money. there's a look at the press release announcing this bankruptcy >> that is lehman. remember, that was lehman.

>> yeah. you're also talking about a domino effect and what's connected to -- we don't know, jim. we don't know. i'm not saying there is, but we don't know >> the only reason i say it's not a domino effect is that this is not -- this is a corner of the market that wasn't part of the market okay it was in the same way that if you went to caesar's and you beat caesar's -- i'm not encouraging you to beat caesar's >> there was cross-collateralization right at ftx with alameda we simply don't know >> remember, if you were a client, jpmorgan, and you said, listen, i've got a million dollars worth of ethereum, and i want to put it with jpmorgan, they would say, we won't take that, because we don't regard that as an asset >> so then go to ftx now you're looking at not

getting the million bucks. >> you couldn't get your money out. >> yeah. >> to put it anywhere else what does that say >> binance, you know >> it explains why all the billionaires in the space are the intermediaries, right? >> look, it was really a nightmare to get your money out. nightmare. >> it's even more of a nightmare, and the "journal" had a story today, people who have lost a year's salary, young people who are so disproportionately involved, i think, in crypto >> but how many warnings did they have? how many warnings? how many times did we sit here and say, listen, get the hell out of it? what did you have to do? i mean, honestly i mean, go look at those joke coins that are being traded right now. and ask yourself, why? why are you in them? i mean, i'd rather -- i think powerball is worth more. i want to know why people are in those made-up coins. >> i mean, munger, rat poison, buffett, i wouldn't buy all of it in the world for $25.

it's all documented. it's all there >> yeah, it is that said, we put the coins up on our screens, and during the pandemic, it became a real area of focus for a lot of particularly younger people, using the robin hood platform. >> it's so tragic. please, let's stop putting up -- let's just stop putting it up. let's just stop. we dignify it. let's not dignify it >> i think it's -- >> i think we dignify. i'm criticizing our in the morning network. i don't mean to. i love our network but we didn't usually have those and i think you might say, i want to be in that coin, that's a hot coin well, that's not acceptable to me that's not an acceptable thing that i want to talk about as what i think as a responsible journalist, i do not want to >> it is price action, right >> well, there's price action in timber, in lumber.

there's price action in aluminum but you get something. you have something there's no "there" there >> gertrude stein said that about oakland. >> it's alchemy. i did it i bought a farm with it. it's fantastic you can take your money out and buy a farm >> so you have a farm. >> it was great. great. >> all right >> but what did i do i did it, forgot about it, got popped >> did you get lucky do you think >> oh, man, i got lucky. probably the luckiest -- no. i got very lucky >> we did lose the gains, obviously, at the open, but the s&p with a slight gain this morning back to 3,960. let's get to bob pisani. >> flattish open, but we were higher until the ftx bankruptcy announcement was done just before the open. so, the effect of that was it put a little bit of damper on

some of the risk-on, riskier assets, particularly in the tech area, so ark, for example, there's your good indicator, was briefly down it's now on the upside, it's turned around a little bit but semis were open and were positive all throughout the open in fact, they have had a great run this week. up nicely about % and the other sectors are commodity sectors that have done really well. materials, for example, had a great week it's up about 8% energy wasn't as strong as it used to, but it's having a very good week. the reason we're holding up well, a lot of cynics said we should probably sell into this because it's not real but we've had three positive macro announcements. i'm not sure it's a home run, but the markets are interpreting positively we've had progress on the fed and inflation. we've had reductions in the covid lockdowns in china, which looks like they're going to continue they'll incrementally reduce the lockdowns. and we have the russians

retreating from the strategically important city of kherson. there's talk about negotiations. nothing has happened, but certainly those are positive developments overall, and i think that's one of the reasons we're seeing the markets move. the stocks are moving on this news look at the s&p leadership g group. sands is up, wynn, freeport. we're seeing other groups out there doing well the energy stocks, like exxon are all moving to the upside look what's down today well, defense stocks have had a really great run guess what they're among the losers on the s&p 500. what does that tell you? doesn't that tell you there's some kind of movement by the market on this russian news, this retreat from kherson meaning something? just looking at the markets and how these things are moving and how they were moving before. let's take a look here on the major indices and what's going on the last few days here's the s&p 500

we're up about 5.5% since the close. the 2-year treasury yield is down about 6%. talking in terms of the yield. and the dollar index is down all of this is moving in the right direction for where the market wants it to go overall. the question of what's the impact on earnings here. all of this is tentative, but so far the impact on q4 earnings is we're flat now essentially tech and communication services have been taking down these numbers a long time. other sectors like industrials and industries are down. 2023 is a tossup we're up 5%. the consensus right now is earnings will be flat for 2023 not up 5%. but these earnings apocalypse comments, we'll be down 20% in 2023, we're getting a little quieter. the consensus is starting to move more towards the flattish than the earnings apocalypse back to you. >> bob, thank you. quick reminder, you can get in on the cnbc investing club with jim can you sign up and find out

more by going to cnbc.com/jointheclub. >> no crypto. >> no crypto in the club >> no. because we actually want to help you. >> i'm not surprised you can also use the qr code on your screen. dow down 50. don't go away. to adapt in a fast changing world, you could hire a professional pit crew. go, go, go. sorry. nope. okay. fresh donuts - hot coffee! they deliver real time data and business forecasts when you need it. i think it was fine how it was. (air tool sound) to help you stay ahead of the curve... or you could use workday. the finance, hr and planning system that helps cfos make better decisions faster. on the other hand, we had a great fourth quarter. for a accelerate your decision-making world. workday. for a changing world.

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by everyone here, men and women who have done a great job. >> it's a good reminder of what makes the country work the commitment to the ideas. jim, we will see you tonight have a good weekend. >> you, too. once again, the dogecoin, this is your chance, because it's going to be a race. >> fallout is just beginning,

and still a lot of questions about contagion. >> a lot of people on the street said why do you denigrate where my life savings is and the reason is i want them to have life savings. i'm not stopping. "mad money" 6:00 p.m. when we come back, we'll have more on ftx commencing chap chapter 11 proceedings and sam bankman-fried stepping down.

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welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan brennan and david faber at post 9 of the new york stock exchange looking for follow-through to the cpi bounce yesterday but new developments to look at today, including ftx chapter 11 and china reopening on different parameters. >> and the bond market is closed today with veterans day. here are three big movers we're watching

intel, jpmorgan downgrading from overweight to underweight saying the company will benefit from an overall industry rebound but at a slower pace due to competitive pressures. we have more on the chip sector later this hour. you can see shares are down 1%. another blue chip name, walgreens, rallying. upgraded from buy to hold saying it's increasingly confident in walgreens' strategy to transition to a health care services company those there's are up 3.5%. we're watching aerospace and defense stocks l3harris and huntington both getting downgraded l3harris down 5.5%, but defense names in general under pressure as ukrainian forces enter kherson as russia retreats from that city in ukraine yesterday chairman of the joint chiefs of staff mark milley telling me he thinks there are possibilities for diplomatic solutions. so, those stocks under pressure. david? >> one of the big stories of the

week, certainly, and a very big part of it this morning, ftx group companies commencing a voluntary chapter 11 filing in the united states what they say to review and monetize assets for the benefit of global stakeholders announcing, again, what, about a half hour ago, maybe a little more than that, that west realm shir services, alameda research and approximately 130 additional affiliated companies that represent the ftx group. >> that's it >> yeah. 130 have commenced bankruptcy services under the bankruptcy code that is a massive collapse of the ftx empire and, of course, the man who created it, sam bankman-fried, who stepped down as ceo of the company. all of this happening within the space of a week, in which there

was, way to put it, a run on the banks, so to speak, in terms of their coin clearly cross-collateralization which should not have been occurring between alameda and ftx. whatever the hole may ultimately prove to be, morgan, we still don't know much of anything at this point and we also have to keep in mind there conceivably could be, you know, some knock-on effects here not just to the customers of the company that can't get their money out, not just to the company's investors, who have been wiped out, any creditors out there beyond those customers, but other counterparties i'm looking here counterparties that may be levered with a mismatch of duration other intermediaries in the space. and a lot of those other ones that have been issuing coins,

keeping, sends up the coin are price that they can then borrow on their existing coins. and it unwinds >> it unwinds. of course, the key question i know we'll get into this with our guest in a few moments, key question, how much of this is legal versus just raises questions about the ethicalness of it? i'd also just note we're talking about crypto, the possibility of crypto contagion, given how quickly this transpire pd yesterday you had block saying it's halting withdrawals given the travails we're seeing play out in ftx this is more broadly a reflection of what has been a low interest rate environment for so long, the hunt by investors for yields, and what that has done to maybe the quality of assessments of investments. we've seen these pockets, as the fed and other central banks tighten, we've seen these pockets of excess being pulled out and these painful

deflations we're seeing it right now in crypto we're seeing it with ftx you can argue that's been some of the gyrations in credit suisse that played out in the uk with bond surge and the central bank having to step in. it speaks to the excesses coming out of these markets. >> interesting, although bitcoin is low today, not as low as it was earlier in the week as the inflation picture and potential rate picture means maybe real rates are not as negative and maybe we've seen sort of, i don't know, as jim said, maybe an opportunity to get out if you've been looking to get out. >> yeah. certainly many of the other coins. the bitcoin evangelists who believe over time this may actually be an asset that benefits from this turmoil, even with the prospect of more regulation let's dig deeper into the story and the fallout, of course, prompting renewed urgency among investors and lawmakers who believe that regulation in the space is long overdue. here to discuss, howard fisher, former s.e.c. attorney and current partner at moses singer

along with sampson singer, federal prosecutor at department of justice guys, thanks to you both sam, let me start with you lay out for our audience, if you can, what we should sort of expect to see here we've got a chapter 11 filing. we've got a lot of questionable behavior that might rise to the level of fraud, but what's going to happen next >> good morning. thanks for having me on. so, i think a few things are going to play out. first, in the chapter 11 process, you're going to see investors or depositors lining up to lay in their claims to get a recovery i think you'll see a bunch of civil litigation, lawsuits by those who suffered losses. and will try to sue folks like, perhaps, sam bankman-fried or others who they think have exposure for the issues that have brought back ftx's demise and then you're going to have --

there are reports of investigations by the department of justice, where i used to work, the s.e.c., and other regulators who are looking at whether or not ftx had sufficient disclosures, whether they were improperly commingling assets, whether there were conflicts ofinterest that weren't disclosed as far as taking customer deposits and putting them into alameda for other types of risky investments. i'm not saying that's true, that's just in the public swirl. >> a lot of reporting from others, and my own as well as at cnbc from what may have been occurring. howard, let me come to you with a similar question and sort of building on that some are asking, where was the s.e.c. already why wasn't there more regulation why wasn't there more oversight to sort of understand where they may have already been overstepping the lines

>> i think that's an excellent question i think the question points out the legal gray area that crypto operates in. the idea behind crypto originally was that it was going to be free from government oversight, decentralized, not reliant to the central authority. and look, guess what, maybe having a central authority actually makes a lot of sense. the s.e.c. under chairman gensler has been pushing for the last few years for greater regulation of crypto assets. you saw that in the coinbase insider trading case, in the lbyr case in new hampshire in which the s.e.c. just had summary judgment that the coins in issue in that case were actually securities. this is an ongoing process by the s.e.c. the s.e.c. is looking to exact more authority over this space and there are good reasons for that if crypto is a regulated asset,

if these exchanges have to register and the coins and the assets need to be registered, that means regulators would be on hand, would get greater insight into the operations of these companies. and that, i think, is at the core of what has occurred here is that there is a complete lack of transparency into what sam bankman-fried did, what they did with the assets. i echo the comments of the previous commentator who said we don't know exactly what happened, but from all the reporting, it looks like there was a lot of misconduct that was completely unknown to both regulators, to the investing republic as well as to ftx's counterparties >> sam, i want to get your -- i want to get your thoughts on this and what this means in terms of shaping future regulations. the distinction was drawn on our air by michael saylor, a big bitcoin proponent, that this really shines a light on

centralized tokens, which is what we're talking about with ftx, and the decentralized tokens and this notion of transparency your thoughts. >> i'm sorry, go ahead >> i have to say, i respectfully disagree i think this demonstrates a lack of -- a failure by regulators and a success by the free market and a solution here is the free market not more regulation or centralization so, what do i mean by that the s.e.c., according to public reports, has been investigating ftx even before this occurred. they didn't cause the transparency that was needed and they didn't stop this from happening, nor did they stop celsius or voyager which went bankrupt earlier this year they had potentially at least inquiries into those, or at least state regulators did but what did happen here is the press, which is part of the free market, coindesk reported last week on the issues that are now being brought to light with the insolvency at ftx. that demonstrates the free

market works i think the solution is for the free market to step in and pause what is needed we need more transparency on what is being done with deposits at institutions like ftx we need more transparency whether accounts are commingled or not there needs to be better protections in terms of reserves to back up deposits. and there needs to be better protections in terms of insurance. that can be accomplished by the free market through self-regulatory organizations. i respectfully submit that more regulation is not going to help, it's not going to stop these issues from happening. they happen in other industries as well, in the banking industry and other industries and they still continue despite the s.e.c.'s prominence in those areas. what we need to do as a community, those in the crypto field, come together and fix these issues ourselves and consumers need to be smarter about what they do a lot of this information was available. the blockchain is public anybody who analyzes the blockchain could have seen where

the ftt tokens that were concentrated on ftx's books were located if they had done the homework folks need to take responsibility for that and not look to the government. >> you wait a second, sam, you could not have known about the cross-collateralization going on or the depth of the relationship between alameda and ftx. that was not something you would have known as -- no matter what kind of diligence you were doing based on public information. i have private investors who asked questions and didn't get answers from the company as well >> other than agreeing with the lauding of coinbase, coindesk, i'll disagree with all the comments made by the previous commentator. i think it reflects a need for regulation it's not just that regulation will sometimes protect customers, protect investors, create greater transparency. it's that it creates a level of

trust in the industry that right now the industry can't operate without. i think that's why you see a lot of people who had previously opposed regulation, including a lot of people in regulators like the s.e.c., like s.e.c. commissioner hester perce who are coming around to the idea that in order for people to trust this system, there needs to be greater transparency and that requires a regulator to be there you know, obviously, the fact that an industry like finance is regulated doesn't mean fraud doesn't happen but it does mean that regulators have greater transparency into how companies operate. and that can include transparency about cross-collateralization, about the security of customer assets, about the security of relations with counterparties, and that transparency will go a long way to helping to, if not eliminate at least lower the risk of these kinds of disasters

>> sam, i'm wondering your thoughts on this debate about whether or not this is the beginning of the cascading event, as some of bankman-fried's rivals appear to be promoting i don't know if that's an attempt to bring valuations down so they can go shopping or if you feel this is a pretty big clearing event. >> i feel this is a road clearing we had some earlier this year. it's not the first time in the crypto market that there has been throat clearings. there was a throat clearing, i think, in 2019 as well i think it's healthy for free markets to clear out those that are not doing investments the right way, taking too much risk, not instilling the right consumer protections this is how i think the free market accomplishes these objectives and the fact that bitcoin is still at a state -- relatively stable price demonstrates there really is a core demand there. and i think that you're going to see that continue to rise as

this throat-clearing passes. >> all right guys, interesting conversation and debate we're out of time for now. but we will revisit it soon. thanks to you both >> thanks for having us. i have a sneaking suspicion we'll be talking about this well into next week as we head to a commercial break, here is our road map for the rest of the hour, including a closer look at the chip stocks the smh heading towards best week since march 2020. it is alibaba's singles day. china's biggest shopping day of the year and a real test of exactly where things stand in terms of consumer demand in that economy. we'll take you live to beijing. and ftx commencing voluntary bankruptcy the s&p back to 3980

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ten fed speakers, more than half of the fmoc, have spoken in the past couple of days and revealed some divisions in the outlook for policy our senior economics reporter steve liesman has more on that this morning morning, steve >> yeah. and eight of them, carl, talking about monetary policy and the eco economy. if you take a step back, there's a subtle debate going on in the committee, not whether the federal reserve hikes in december, but whether or not -- how far the federal reserve ultimately goes in hiking rates before it pauses

esther george, she said yesterday the fed has, quote, more work to do and that high household savings could very well require a higher interest rate for some time cleveland's mester repeated a comment by jay powell, quote, i currently view the larger risks as coming from tightening too little and some with a more dovish view, mostly concerned about the risk of doing too much lorie logan, the new dallas fed president, i wouldn't characterize her as a dove or hawk, but she's maybe more attentive to the fallout from tighten tightening she said the fed should try to avoid incurring costs that are higher than necessary. chicago's charlie evans said he was nervous about risks to the economy of higher rates. so, there seems to be agreement on a 50 basis point hike in december but it's next year,

that's about the importance of the debate and how far the fed goes look the peak fed rate down 13 basis points from yesterday. i don't think it's a lot considering how much excitement there was in the stock market. the futures market does see the fed coming down a half point from the peak rate bit end of next year. so, with a sense it's an emerging debate between hawks and doves, a sign to return to normal you've had aggressive fed rate hikes, little disagreement on the committee. that could be about to change as the fed grapples with the unknown question of how high it has to go to fight inflation one other very quick note, which is that i didn't hear any fed official as excited about the beat on inflation as the market appeared to be >> that's a good point, right? you have to wonder whether fed officials in the coming days and weeks are actually going to push back against some enthusiasm we're seeing in the market right now because these moves higher essentially going against the tighter conditions they want to see as they do bring inflation

down it will be curious to see all of this commentary. steve liesman, thank you. jpmorgan chief jamie dimon also weighing in on the recent market action, speaking with the nikkei saying they have all fallen into place. joining us is bob doll great to have you on the show. given the huge moves we saw yesterday and the fact that it's been a pretty relatively resilient start to november, really, be i guess, i should say, going back into october, anyway, can we say that this is still a bear market rally or is this potentially the beginning of a bottom here, something more meaningful >> one of many good questions. we have to remember that bear market rallies are vicious they're stronger than bull market rallies i don't know that we've slain the bear yet we still have inflation that is mid to high single digits.

we still have how much will earnings come down, are we going to have a recession or not, the whole debate about how far the fed is going to go that you just talked about it's hard for me to say that it's an all clear sign but i have to say, yesterday's rally was obviously big in magnitude, but the breadth was pretty impressive as well. i think the jury's out i had been as a portfolio manager slowly adding cyclicals and letting go some of those dependable stocks, hmos, defense stocks, and the question is, do i need to quicken that pace. the jury's out >> okay. so, in light of that, what would you want to be seeing to buy into this notion that inflation has potentially peaked >> well, i think inflation has peaked i think yesterday for anybody that was questioning that, the evidence is in doesn't mean every piece has, but overall it has but we're still stuck with a 6

or 7 handle, which is totally unacceptable the fed has more work to do. i think the debate you just covered is the right debate. they've raised rates at the fastest pace in history, and we know the lag effect on the economy from fed rate changes is long so, we don't know what the impact's going to be i kind of hope they do after 50 in december, take a little pause, assess what they have done and what it does for the economy, and then we'll get some better read. i think earnings estimates have to come down but i'm not convinced this fourth quarter rally is over we had a horrible nine months, perhaps we go back to the 200-day moving average, as we did in the rally mid june to mid-august >> as the russell is doing today, bob back above the 200-day for the first time since august. would you is ittic with that front-runner, i guess you could argue? >> yes down cap portfolios make sense those stocks are a lot cheaper than the big stocks.

their fundamentals are mixed, carl, as you know, but i think leaning down in cap is quite okay for portfolios. >> bob doll, thanks for joining us today. >> thank you coming up after the break, a closer look at semis today, surging despite a double downgrade for intel at jpmorgan. sector is on pace for the best week of e arn e h. ckn a couple of minutes. we all need a rock we can rely on. to be strong. to overcome anything. ♪ ♪ to be... unstoppable. that's why the world's largest companies and over 30 million people rely on prudential's retirement and workplace benefits. who's your rock? thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience.

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welcome back to "squawk on the street." the s&p 500 and nasdaq both higher the dow down fractionally. chip stocks are rallying despite one semi name getting downgraded kristina partsinevelos has more on that. >> jpmorgan analysts are coming down hard on intel, but not the semiconductor space as a whole they believe the sector could move higher in the next year but, unfortunately, intel will lag behind the rest, which is why they're underweight and lowering their price target to 32 bucks a share and the little red we're seeing with intel's stock right now, but intel is considered the sore thumb of the group because it's exposed to the ever falling pc

market revenue was down this last quarter 20%. it's also dealing with data center competition from amd and failed to execute on certain product launches, even delaying some of them and that's why pat gelsinger, the ceo, recently said they would cut $3 billion in costs for -- throughout 2023 these analysts at jpmorgan don't see any type of turn-around until 2024 or '25 for the company. intel shares do remain 42% lower for the year although they did see relief yesterday due to tumbling bonds and the entire market raising. the sector, on the other hand, is seeing a turn-around. tmc posted a 56% year over year gain in sales for the month of october. asml said it's increasing 2025 forecast nvidia and amd have been some of the best performers on the nasdaq 100 and that's driving the semiconductor etf for best week since november 2020 another semiconductor etf, sox,

coming off its best quarter since march of 2020. >> thank you. got a fresh twitter chain/apology from sam bankman-fried. he talks about the chapter 11 filing in the u.s. and adds, i'm really sorry, again, that we ended up here. hopefully things can find a way to ror hopefully this can bring some amount of transparency, trust and governance to his customers. adds, it doesn't necessarily have to mean the end for the companies or their ability to provide value in funds to their customers. ultimately i'm optimistic that mr. ray and others can help provide whatever is best david, one thing we know for sure is he's vocal on twitter. >> he is he was vocal yesterday, perhaps, painting a more optimistic picture than he otherwise should have given 24 hours later he files everything, including ftx in the u.s. for chapter 11 130 so-called entities that doesn't necessarily mean anything because if you're a

broker/dealer, you certainly have a lot of entities for regulatory purposes. that said, it's a long list. he's in so much trouble. i don't know that he has any sense for it really, judging from the fact that he's still tweeting >> yeah. >> i mean, this is a -- this is bigger losses than theranos. remember how much time we spent on that? now, very different, very different, understood. at the same time, there are a lot of people who potentially are in position to have lost a lot of money, who thought their money was completely safe, treating it like a bank, in a sense. they shouldn't have done that but they did but mr. bankman-fried is going to be facing a long line of litigation, not to mention potential -- who knows if there is fraud here, criminal action this story is going to go on for a long time. right now we're focused on the simple idea, where are the other relationships? is there going to be some c

contagion to other entities. we just don't know so many things. >> it's already raising questions about governance, given the fact that, according to "the wall street journal," this board was comprised of three executives. >> they didn't have a board. there was no board of directors at all. >> exactly it was ftx executives and what that looks like and how investors, and i know we have someone coming up in a short while who perhaps can speak to this, didn't push to have their own directors put in place we didn't see some other governance things in place here, too. i imagine it's going to raise some questions about some of these big, highly valued companies in the private markets and what those compositions will look like going forward as well. >> bitcoin has taken out yesterday's low. we'll watch that. meanwhile, amazon up 4%. best week for the s&p 500 nasdaq since june back in a couple of moments. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep,

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good morning, carl the biden administration has stopped accepting new applications to forgive up to $20,000 for student loans for each borrower after that federal judge in texas struck down the plan calling it unconstitutional after two borrowers who did not qualify for relief sued the government saying it was arbitrary and unlawful the white house press secretary saying the administration disagrees with the district court's ruling and that the department of justice has filed an appeal. the education department three weeks ago had paused dispersionments after a separate judge asked for time to evaluate whether the program should proceed. the president pushed forward with the relief program, which boosted his favorability with voters, despite economists like larry summers warning it would worsen inflation

the white house says 20 million borrowers have applied for forgiveness and 16 million applications have been accepted. >> thank you sam bankman-fried stepping down as ftx's ceo, this as the company and all its related entities file for bankruptcy let's bring in kate rooney she's been following this story from the very beginning. it wasn't even that long ago you were with him, although perhaps for him, it feels like a very different time, kate. >> a lot has happened since august when we sat down, dade. and this week alone. it went from a $32 billion company to bankruptcy, which was in the matter of four days ftx officially filing for chapter 11 ceo sam bankman-fried is stepping down, although the 30-year-old will stay on through the transition he also just tweeted, he says here, i'm really sorry again we ended up here. he says hopefully we can find a way to recover hopefully this can bring some amount of transparency, trust and governance to customers. ultimately, he says, hopefully

it can be better for customers goes on to say that piecing together all of the details right now, but he says, i was shocked to see things unravel the way they did earlier this week and he says he'll soon write up a more complete post on the play-by-play looking through the filing this morning, it includes alameda research and a total of 134 affiliated companies as part of this process west realm shires is the parent company of ftx there are companies all over the world. you've got some in nigeria, uganda, bahama, canada, europe, hong kong, switzerland the list goes on the estimated liabilities, meanwhile, stand at between $10 to $50 billion quite a range there. the statement from the company officially saying the immediate relief is appropriate, will provide ftx the opportunity to assess its situation and develop a process to maximize recovery

for shareholders we are starting to see more collateral damage as well. last night blockfi, a company ftx bailedout, pausing saying they cannot operate as usual other companies in the same situation. we heard from anthony scaramucci, an investor. he said he was in bahamas, in nassau, with bankman-fried when all of this unraveled. here's what he said on "squawk box." >> when i got to the bahamas, it became clear, at least from some that worked on the legal team, the compliance team, that perhaps there was more going on than it being a rescue situation. when i left the bahamas in the afternoon, i was actually distressed i don't want to call it fraud at this moment because that's actually a legal term, and none of us know we have to leave it up to the regulators >> two sources now telling me that the justice department is looking into ftx and sam

bankman-fried. a source i'm talking to says we may see civil litigation you're likely to see lawsuits from investors this company had raised money from an a-list of backers from softbank and sequoia also seeing some action out of the bahamas, the securities commission there late yesterday froze ftx's assets the velocity of this is amazing, guys, david, as you mentioned, but it's still playing out. >> it's just the earliest days and to add to that list, wealth managers who put a lot of their clients in this name in terms of private investments, and a lot of celebrities who didn't just get cash but got stock or coin that liability gap, $10 to $50 billion, what accounts for that? when you get to the higher end, you're talking about one of the largest bankruptcies we've seen. >> it compares to a theranos

might even be bigger a lot of these companies are denominated in cryptocurrencies. their valuation a year ago may not be accurate now. i'm sure that's a moving target in terms of the liability, and the $10 to $50 billion number, we'll probably see that adjust significantly. like you said in terms of the ambassadors, there are people like tom brady, gisele, steph curry. some were investors so they were paid in ftt token in some cases. there's going to be a lot of fallout on the private sector. i think that will take more time to play out, less in the public eye, the investors and the sheer losses they're facing. but the global reach of this company is also really stunning as well. companies in nigeria to hong kong are dealing with the effects of this. it's not just a u.s. story at this point >> yeah. we're going through that list of

130-plus entities, to your point. kate, great reporting. thank you. kate rooney. our next guest is an investor in both ftx and binance. argen seppi joins us you are an investor in ftx i guess just walk me through that investment and everything we're seeing play out in real time and what it means for you as ftx files for bankruptcy. >> sure. good to be back on thanks for having me we're a technology quantum investor through venture capital. less than 3% of our overall holdings in ftx. we're not just in exposure into binance but i'm on the board of kraken the way to think about these investments is a lot of these companies have been growing at high velocity, mostly profitable when you invest in them as well. as minority investors you're

taking sort of con sillary approach and advisory approach to working with these founders and companies and management team for the long duration so when we took a look at the company and its financials and its metrics, they were healthy and, again, it was a combination of an offshore entity, ftx.com as well as ftx u.s >> so, when another investor, anthony scaramucci comes on our air and says he's not going to call it fraud because that's a legal term and that's to be left to the regulators, but to suggest that he felt misled, did you feel misled as well? were there red flags from your standpoint as we've come to this point in time? >> no. i can't speak to anthony's perspective of due diligence there's a set of investors that look at bottoms-up metrics at a company. things we all know who they are, institutional investors, folks

like say quoi yeah, folks like us there's a fomo crowd that says they were surprised. there were no red flags. any time you make an investment outside of u.s. regulatory regime there's always risk, bahamas, even uk and canada, there are certain stipulations that become harder i think rule of law where a company is located, you're taking an inherent risk in making those investments that said, the balance sheet was healthy, we looked at the company, growing at a rapid rate they growed more spots in future volumes than anyone else in the ecosystem. binance still exists today now you have a consortium of exchanges where investors are playing in the u.s. and outside of the united states i think part of making investments in this ecosystem is to support the ecosystem and figure out who the winners and

losers are over time. >> i want to get to what this means in terms of the winners and losers and the ripple effect to the broader cryptocurrency space. first, i want to go back to something we were talking with earlier, and that's the notion of governance at private companies. the fact that bankman-fried was basically the sole director up until summer of 2021, according to "the wall street journal," and even after that brought two directors on and ultimately those directors, up until now, we saw one switch out, but they were ftx executives. is this going to raise more questions around governance of highly valued private companies? was this a red flag? >> no. i think what you see is, a, they're private companies. some of these private companies need a certain amount of cash to subsidize their growth really early. when venture capitalists come in in the early stage, midstage, you have a more perspective on what governance will look like, independents and preferred

investors investing in the company. i do think when it comes to regulated financial products where there's customers, customers' sdmdmofts, you should see more of that we didn't see that with ftx, but part of it was that ftx was based outside of the united states, different jurisdiction if you take a look at coinbase and take a look at kracken, a lot of what we do is regulatory in nature and there's independents as well as preferred investors around the table. i think ftx prgrew very quickly. part offen making an investment there, not just us but many investors was to figure out how to make the company grow up and have accountability and adults in the room. over the last year and a half, it didn't happen as fast as we all wanted o. >> yeah. but you didn't know anything about the relationship between alameda and ftx, the possibility of cross-collateralization, and everything -- you know, all the other things we've yet to fully understand in terms of that relationship

>> yeah. i think, you know, at some point there's going to be a complete and total investigation. so the situation isn't entirely clear of what all the relationships are. you know, did we know alameda works with ftx yes. did we know there are entities that made the value proposition of ftx faster? yes. when you took a look at the company, again, at the time, and how they were doing, and not just them. you take a look at a lot of other centralized finance companies. they were fine i think what really came down to is you had a traditional finance company interacting in the decentralized finance and cryptocurrency markets have complete control of the way in which they wanted to operate. and then i think if you want to simplify what happened is they were -- they decided to be overleveraged in certain positions while the market has been continuing to go down this really started, if you think about it, a couple months ago with the terra luna collapse and a couple of other companies like exsels your, et cetera. if you take a look at all the

collapse that happened, it's a, lack of transparency, b, centralized finance instead of decentralized finance, proof of reserves and you can see what's happening in the ecosystem. >> and, of course, overleveraged, like you say. what about these other exchanges. is there credibility impact? and counterparty risks we're not aware of at this point for those that may still have been executing trades or on the other side of ftx? what's the liability there, do you think? >> i think anyone who was working within the realm of ftx and ftx u.s., we didn't use any of those accounts. there's going to be liability, right? so, funds, people's accounts, customer dmeposits, et cetera the first is to figure out how to get customer accounts and their capital back, more than even shareholders. my duty is to the shareholders, so we have to wade through that process. i think liability is what happens in the overall ecosystem

for traditional finance and traditional institution. it's going to take a little more time that said, you have folks like coinbase and kracken that have been here much longer than ftx and have proof of reserves they don't have the issues with the deposts. i'm not speaking to ftx being a bad actor. it's more so there have been a lot of bad actors in the ecosystem. to simplify for ftx, they took a bad bet as a company and now they're paying the price >> so, does everything we're seeing unfold right now, does this -- and over the last couple of months, as you put that context around it, does this change the way that you, moving forward, invest in the space >> so, you know, a lot of what we focused on and where we had larger exposure, so our largest exposure is in cracken and defi and our entities that focus on

crypto you have reserves not since day one but halfway through their life, which is similar to on-chain data you see in defi. similar to the internet, when you had winners and losers, the speed at which crypto adoption is happening all over the world, not just in the united states but southeast asia, et cetera, you want to double down in the places where you have those tailwinds. i think the big fear for u.s. folks is that not that we shouldn't invest in cryptos, that we're losing the battle in innovation in crypto here in the united states. the fact that ftx in offshore entity grew very quickly kind of shows you that we're behind, not moving forward >> okay. arjun sethi, thank you for your insights. talk about the broader market as the stocks aim for their gain in sixth days

highest for nasdaq since september. let's bring in art cashin joins us on the cnbc news line art, wow, i mean, so much has happened let's start with crypto, i guess. i'd love to know sort of how you think -- have you been impressed in the way in which the broader market has absorbed the ftx story? >> right now, carl, it's more kinds of a soft contagion more than direct. it's not intermingling of things like counterparty risks. it's more that the people in the cryptocurrencies, if they need money, if they need funds to shore things up, they probably can't do it in a very weak bitcoin environment. you saw that this morning. we look like we were going extend the equity rally, and then when the bankruptcy announcement came out and bitcoin went down to 16,000, that pulled the legs out from under the equity markets

so, it has interrupted and maybe even detoured that move toward the 200-day moving average the s&p looked like it was going to try for 4,000, 4050, somewhere around there this is an have to wait as we turnover each new leaf here. and see who owes what to whom. you know, it seems from afar that people looking at something and saying, well, that is my dollar, your dollar and our dollar and the language was confusing enough so i think if we can magically resolve the cryptocurrency thing, we could see if we would have one more try at the up side i think that around the 15th next week, we're having a minor cycle change so i think that we need to start the rally before then or run

into some stuttering problems. >> right and we talked a lot during the summer about your craving for big down side volume day, big spike in the vix, sort of classic signals of the bottom. are you getting the sense that maybe the bottom could have come and we wouldn't have gotten those things >> i still think that we'll probably retest the lows certainly -- i mean, yesterday's rally was borderline miraculous. i mean, they kept moving up, there was no retracement, no pause and look back. but not to rain on the parade, you have to remember that rallies in bear markets are short, sharp and die in lowle volumes. so i'll keep watching the vix. if it moves down to around 20 or so,volumes so i'll keep watching the vix. if it moves down to around 20 or so,short, sharp and die in lowle volumes. so i'll keep watching the vix. if it moves down to around 20 or so,e volumes. so i'll keep watching the vix. if it moves down to around 20 or so, volumes. so i'll keep watching the vix. if it moves down to around 20 or so, then i'll see. so far this year when it has

gotten down to around 20, it was like an electric shock and when the vix dipped down there, it ended and rolled ver so to me that is a key indicator. >> the fact that we have quantitative tightening and so much liquidity getting sucked out of the system so quickly, how much is that contributing to just the dramatic size of some of these moves we're seeing in things like the bond market yesterday and of course the subsequent rally in equities >> well, yeah, i think that you are dead on. i think that people are missing some facts about that quantitative tightening. for example, you know, people say, oh, wow, the yield on the 10 year got up to 420, but mortgage rates got up to 7%. and mortgage rates got up to 7% partly because the fed has stopped buying mortgage backed securities so that is one less player there. and not so much that the fed is selling into the bond market as

much as its absence as a buyer so that makes things less liquid and that increases the volatility and it makes it tough for all of us, you know you need to get some motion control pills. and i think unfortunately the volatility will continue and we will see dramatic swings so i'll be looking for the volume to dry up as a sign that the rally might end or retest the lows and the vix will be an important thing to me also >> whether it is drama mmine or ice cubes -- >> you know my preferred medication >> and as we go to break, check out some of the top gainers on the nasdaq

well, we fell in love through gaming. but now the internet lags and it throws the whole thing off. when did you first discover this lag? i signed us up for t-mobile home internet.

ugh! but, we found other interests. i guess we have. [both] finch! let's go! oh yeah! it's not the same. what could you do to solve the problem? we could get xfinity? that's actually super adult of you to suggest. i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about.

welcome back it is alibaba's singles day. china's biggest shopping events of the year and a real test of their economy amidst everything we've seen with the covid lockdowns. y your meunice yoon is live for us >> reporter: and for this singles day, they say that things have been looking relatively quite in the next 10 minutes or so, they will post their numbers for the shopping festival and the numbers are expected to just about match last year. sales across alibaba's sites rising slightly to 60 billion yens so jd likely to perform a little better because of the continued demand for consumer electronics. in fact jd issued a survey of its own saying that it is seeing

people's behavior changing a lot of that reflecting the deterioration ain the economy ad as well as the covid concerns. the folks here have been placing orders and making decisions based on the size of the discount whether or not it can be used practically and then all the delivery delays that we've been seeing here because of the covid restrictions a consulting firm also sees 34% of consumers spending less than last year. live streaming remain as popular way to sell products, but not with the showy celebrities as we've seen in the past just in case they attract the ire of beijing alibaba usually has a celebrity show gala and this year they didn't and a lot of people took notice of that >> it is interesting because you are talking about the softness, right, and you can giving us numbers that are weaker than we've seen in the past

and you are saying that it quiet right now, yet the k web, that etf up 6.5%. a strong start up 25% to the month. and the hang seng rip higher overnight as well. and it really seems like all of these covid headlines are driving the action >> absolutely. because there has been some hope now that maybe beijing is going to ease up on some of its controls so the government here said that it is not easing, they say, but they say that they arement on immunocompromising the covid controls which essentially means that they are getting rid of some of the more excessive curves that we've been seeing. for example they are not going to round up the close contacts of your close contact, only the person who is sick and the close contacts of that person. and then there are also going to try to make things a little easier for people like you to be able to come here so now if you came here, you doyou only have o

guarantee for five days and another three instead of seven >> i was talking about having been there eight years ago, i think you and i would have dinner together. been a long time eunice, thank you. that will do it for us have a great weekend, everybody. tech check starts now. welcome to tech check. and today we continue to follow the collapse of ftx and drop in crypto prices. new this morning ftx commencing volunteer bankruptcy proceedings. [ inaudible ] transition process. and kate rooney is with us to help us kick off the hour. you have been digging through the bankruptcy filing. what have you found even at first glance there is an estimate of a $10 billio