charlie munger on elon musk and china and the ftx collapse it is november 15th, 2022 and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site from times square. i'm rebecca quick along with joe kernen and andrew ross sorkin. if you look at the equities at this arrows. dow futures up 165 points. nasdaq up 141. that it comes after a down day for the markets. dow yesterday down 211 points. that broke a two-day winning streak s&p down 1%.

the nasdaq was down over 1%. if you are watching treasury yields, you see the 10-year treasury is yielding 3.087%. we have the ppi number coming today. producer prices. we will see if that is cooler like the cpi number was last week >> start the show. ppi. new data from china overnight. retail sales in october fell 5.5% year over year. the first decline since may. industrial production growing. metrics missing expectations joe. >> i love posing a question. it is answered immediately no it is not effected by higher mortgage rates let's talk home depot. that is the question we saw masko and 3m with housing. the numbers at first blush look like the company is able

up four points already do whatever it does. the business model works at home depot. the estimate was $4.12 the number was $4.24 the revenue number $38.9 billion for sales. that is above. same-store sales forecast 3% n. the u.s., up 4.5%. u.s. same-store sales 4.5% for fiscal year, they see 3% they beat currently reaffirming guidance and the quarter and year and operating margins the company sees 15.4% let's talk about brian nagel who may explain. senior research analyst at oppenheimer. that's what we ask 7% mortgage rates.

just a bad sentiment or bad feeling in housing does it affect home depot? people were worried it might there were other companies involved in that market differently. home depot seems to shake things off and keep rolling, right, brian? >> good morning, joe i think so i'm digging through the results now. they are very boring which is quite good as you laid out. it is an easy beat for home depot. this is coming despite the concerns of housing slowdown in the united states. i think it shows how well positioned home depot is and well run the company is putting up these numbers despite clearly housing pressures out there. i think there is more housing concerns within the market home depot is performing well here >> it's just odd in a -- we're not in a recession, hopefully, but slowing economy and

inflationary environment people might not choose to do remodelling. they may not take a loan with rates higher it seems they would get less aggressive about making improvements that has not been the case yet, brian, or are they managing it well >> it is an interesting dynamic right now. clearly if you look at the housing data housing turnover is slow home sales are slower. that in and of itself is a small piece of home depot's business home depot really plays in more of the fix of existing homes right now, despite a lot of concerns, i think the consumer is in good shape in a way, home depot is mentioning this. i talk to our clients. i think the higher rates are a benefit for home depot because they are keeping people in existing homes they are making people less likely to change to new homes.

those people are basically enhancing existing homes that is a benefit to home depot. we are in the spot where council c consumer confidence is good particularly among core home consumers. if the economy were to go into recession or slower spending environment, that would be bad right now, we are in a slower housing environment, but consumer is holding up well. >> how can you tell the difference between something like analysis pointed to paint or 3m involved in building materials. both with a soft demand in moment improvement is that a different business mix with those companies or are they not managing through this as well as home depot what is the difference why do they see weakness >> a bit of both idon't know those companies. i watch them with my work with home depot those companies are probably

reflecting the slowdown in new home building. housing starts home depot, again, the vast majority of business is to existing homeowners enhancing or maintaining momhomes. that is different from other suppliers. >> they sell their stuff in home depot and said demand -- delta faucets and behr house paint and 3m command hooks. scotch guard flooring products. softening in the home improvement group. all of this sold at home depot staggering they are able to do that do you have a buy on the stock or price target? >> we all out performer which is our equal to a buy $476 price target. the call i make on home depot is tough to say we're headed in the next few months.

trends we're discussing are good on the other side of whatever we're heading into, home depot remains extraordinarily well positioned and the stock is cheap on that basis. >> it is down a lot. down from $420 obviously, the stock itself has been anticipating some kind of issue with housing >> that's right. that's what we're seeing i cover a number of retail and consumer stocks. that's what we're seeing the market concerns with the coming market recession. that's the conversation i'm having how deep is the recession going to be? most people are positioning their portfolios for that. i tend to be more of an optimism home depot and other names my view is what happens if the recession is not that bad? what happens if it is barely a recession? at that point, home depot is

well priced. that's where we are. >> joe, apologize if you mentioned this i was reading something. third quarter transactions down, but the average ticket up 8.8% that is just an inflationary concern? >> we have seen that for a while. the answer to the question is primarily. what that basically shows is home depot has continued to successfully pass along inflation to consumers that is a sales driver when you think about the transaction or ticket versus transaction, it is inflationary. also there is a mix shift. home depot consumers are buying higher ticket and more expensive products, but primarily inflation. you can look at that as a negative inflation is driving the business i also view that as a positive it shows how good home depot is at passing costs along to the

consumers. >> what about lowe's >> tomorrow morning, we get lowe's 24 hours from now. i think we will see a similar dynamic. there is a bit of a mix. home depot is focused on the professional customer. lowe's is focused on the diy customer lowe's is more susceptible to weath weather, if you will this category, home improvement category, continues to perform well as we discuss it, all of the concerns for the for thcoming slowdown i don't think they called down the release. they'll have that in the conference call. typically with the major storms, home depot and lowe's are very good at being there for

customers. over time, this is a sales mix all of that rebuilding in parts of florida, home depot is there. that is a sales driver over time they have not said anything specifically here. i have studied this company for a while. that is typically a percentage to comps >> are you coming on tomorrow? >> i think so. >> you wear one of those jackets? what happened? is that blue is that navy that is not you at all you are expressing yourself through ties now you got a plan for tomorrow? seriously, i look forward to see what you come up with tomorrow >> i'm do something better tomorrow i promise you. >> one of the jackets. the couch fabric all right. >> one of your favorites. >> i do. thanks, brian. coming up on "squawk

planner. we heard from home depot next up on the docket. we hear from walmart at 7:00 a.m. we get october price index at 8:30 eastern time. patrick harker and fed governor lisa cook have speakingplans. >> what happened to home depot it was up four and now down five. >> i asked about the transactions i did not see anything negative. i was trying to find out. >> they are not talking yet. >> not that i'm aware of i'm reading through. i don't understand why that flipped. that was why i asked that question to brian. what happened? >> it was down at that point >> it was down when i asked. down by 30 cents now down when i asked him. >> i guess we should point that out. that's a ten-point swing not that much on a percentage. >> early trading

>> i couldn't figure that out. when we come back, whale watching we tell you about the position that berkshire hathaway just disclosed. that's next. later, don't miss the interview with charlie munger. he doesn't hold back on the crtoolpsyp clae. you are watching "squawk box" and this is cnbc >> announcer: this cnbc program is sponsored by baird. visit bairddifference.com.

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whale watching this morning. warren buffett built a stake in taiwan semi conductors in the third quarter. 60 million shares worth $4.1 billion. that makes this berkshire hathaway's tenth biggest holding. the stock up 10.5% berkshire hathaway took positions in louisiana pacific and jefferies. later this hour, we have a wide ranging interview with charlie munger on ftx and the crypto collapse and more >> interesting how long before yesterday maybe things look -- do we look better about things in taiwan

after yesterday or not >> good question >> trying to figure out. we don't feel any better >> no. >> what happens if that were to happen what happens to the big investment in taiwan semi? >> not a big investment. >> you have to think about all these things now not just that. chips are a great place to be. made in taiwan >> certainly a bet on global situation easing >> i don't know. media reports now amazon is planning to layoff 10,000 employees beginning this week. the cuts would be the largest in the company's history and would primarily impact amazon's devices organization, retail division and human resources the company has been in cost cutting mode it shutdown telehealth service

discontinued the video calling project for kids closed all but one call center and shut under performing brick and mortar stores. >> alexa >> devices is alexa and all of the others ring all of it. election update. we have nbc news projecting that katie hobbs won the governor's race she defeated kari lake who embraced former president trump's denial of the 20 election after the race was called. lake tweeted no bs coming up when we come back, the department of transportation

punishing a u.s. airline for delays in refunding customers. we will have details next. as we head to break, look at the biggest pre-market winners and losers in the s&p 500.

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welcome back to "squawk box. the d.o.t. is fining frontier airlines and five others were prone to delays in paying refunds from flights that were

canceled or escheduled frontier disagreed and did not believe the practices were unfair or deceptive. other carriers were air india and air portugal and mexico. when we come back, we will talk about the earnings we have this morning and some that are still being awaited. home depot numbers out we have been watching that stock. it was down a little bit after the knee jerk reaction of higher dow is indicated up over 100 points s&p up 28. nasdaq up 137. all of the futures picking up speed over the course of the la last 20 minutes. after this, charlie munger doesn't mince words with crypto or ftx or his favorite innovation >> it charlie, i know you zoom this is evidence of that we're talking right now via zoom do you tweet

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good morning welcome back to "squawk box. we are live at the nasdaq market site in times square we have earnings reports home depot out already we will hear from walmart in a bit. dow up 107 points. s&p up 29. nasdaq up 137. the dow compocomponent. home depot out in last half hour reported quarterly profit of $4.24 a share. 12 cents above estimate. revenue at $38.87 billion. above the $39 billion. comp store sales rose 4.3%

home depot did merely reaffirm year guidance despite the earnings beeat it was up 5 and now down 6 up 2.5%. now down >> if you were digging through looking for something to ding them on. the customer transactions were down 4.3% although the average ticket up 8.8% the 8.8% is explained by inflation. you are looking for issues >> total number. >> that would be the issue that is a little bit of knit picking. the company is raising guidance. berkshire hathaway vice chair charlie munger used a lot of words for cryptocurrency. stupid and evil. rat poison he compared to venereal disease.

i spoke to him over zoom after the collapse of ftx. he did not hold back on sam bankman-fried or those who worked with ftx. >> it pains me in my own country i see people are regarded as reputable people doing these things this is a very, very bad thing the country did not need ap nkis and so on. >> there are people who think they have to be on every deal that's hot they don't care if it is child prostitution or otherwise. if it is hot, they want to be in

on it. i think that's totally crazy reputation is very helpful in financial life to destroy your reputation by associating with scum balls and scum ball promotions is a huge mistake. >> do you think the companies did any due diligence? what happened? >> i think they actually mean well, although you are seeing a lot of delusion. it's partly fraud and partly delusion i don't like fraud or delusion the delusion may be more extreme than the fraud. >> delusion? how so >> getting on every new thing that 12-year-old can be a

millionaire. he calls it mungercoin and starts trading it. it's crazy >> munger is not quick to accept the technology like the bl blockchain or risky currency >> you have a good idea. it is easier to push that excess that is why it becomes bad ideas. once you get that concept in your mind, of course, it will be some good idea nobody is going to say i have [ bleep ] i want to sell you the block cchain. bloc blockchain say new good thing like fairy dust.

>> you do have a way of putting it precisely, charlie. >> what he said, you didn't hear it because they bleeped it out they would not let it run. you can only curse when you are live nobody will tell you they will sell you shit. this is what comes up with these things >> i figured he said that. >> it caught me off guard. >> i was caught off guard you said it now. >> you are a laoud allowed to sy it. >> i hope my kids don't use those words. that's how i like to think about the world. >> i don't think -- i don't know i disagree with charlie. >> charlie will tell it you he has never been a fan he said he would not take the risk that comes with it for those things associated with it.

he said he admires some of the people he is surprised. >> you don't need to like bitcoin. but uses for blockchain. >> charlie will be conservative. he will not jump into new things like that. he doesn't like the excesses he said it was a good idea that got carried to excess. those ideas are dangerous because of rigid excess. cryptocurrency has taken a hit bitcoin down 60% this year i asked what role they had to take and ftx crisis on the ability to navigate difficult situations >> i think the authorities are confused by the whole damn thing. a bunch of elderly people. they have done it a certain way for a long time. they know how to deal with a tsa standard it is like a mosquito catcher. they can't handle gnats.

>> they slip through the net >> regulators behave -- it is insane none of this stuff should have ever been allowed. >> what do you think the hold up is when i see it, it is a big turf battle with the s.e.c. and ftc. >> it doesn't fit into the existing of course it is hard of course it is hard for the regulators to deal with a new -- a new activity the whole internet was new this whole business is new the danger flags are wagging so clearly. i'm going to sell you nothing and nothing is plenty for you. how can you hear that? this is a big joke

people think this is a real asset. it's not a real asset. >> okay. i think he was particularly talking about what you see in ftx. some of the coins they where holding. two coins they invented and marked up. then it disappeared. ftx and coin and serum they were supposedly worth billions of dollars on their sheets those are completely gone at this point that is what you are talking about with these issues. we talked with munger about other issues elon musk and referring to a lunch that charlie had with elon in 2014. he made comments, elon musk commented on it over the weekend. we'll play that later in the show if you want to hear the full interview, you can do that in the daily podcast. follow squawk pod on your favorite podcast app and listen

anytime. coming up, a rail strike looking more likely now in the united states. that's after the break later, we talk to the ceo of crypto.com for the latest on the fallout in digital assets. you can watch or listen to us live or anytime on the cnbc app. we're coming right back. ♪ ♪ mercedes-benz is turning electric... completely... on its head. bringing legendary design... and state-of-the-art technology... to a fully-electric suv. the all-new, all-electric eqb from mercedes-benz.

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welcome back we moderated the dow up 123 we do have the nasdaqstill strong up 130 points on the session. pre-market session the third railroad union voted to reject the tentative contract agreement raising odds of the strike this was the international brotherhood of boilermakers which represents 300 members last week, two other unions voted down the contract agreed to extend the potential strike deadline until december 4th. >> wow i keep thinking we're out of the woods. >> i thought it was done and so good for everybody >> you have to get more

perspective on it. you have to get the members to vote on it when you have 300 employees vote it down. in the last half hour, we told you about berkshire hathaway's buy of taiwan semiconductor. we have tepper pulling back exposure to stocks it exited coal and objeccidenta and micron and the largest position is in constellation energy and followed by alphabet and amazon. bill ackman's pershing square from 2011? he sold out of that after the stock jumped now a stake valued at $1 billion in canadian pacific.

and dan loeb's position in bath & body works now $265 million in the stake in bath & body. andrew we learned about ftx >> who >> dan >> i think they did. they did >> now it is really a little bit. coming up, the inside story of the collapse of ge. bill cohen will join us at the table to talk about the new book "power failure." we're right back after this. i may be close to retirement but i'm as busy as ever. and thanks to voya, i'm confident about my future. voya provides guidance for the right investments.

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the latest headlines and the collapse of ftx. the crypto exchange has been in contact with the s.e.c. and u.s. attorney's office and dozens of state and federal and international regulators in the past few days. the company said it appointed five new independent directors at each of the marin companies including alameda. >> reporter: research. ftx filed bankruptcy on friday and binance abandoned the deal to buy them out. it could end up having more than 1 million creditors in the bankruptcy and former ceo sbafz w sam bankman-fried expanded too f fast and failed to notice signs of trouble he said had i been concentrated on what i was doing, i would

have been thorough when ftx was using funds to prop up alameda, alameda had a large position on ftx without offering details. we will talk to the ceo of crypto.com about everything. even the plunge in digital assets at large. >> you read matt levine? he is amazing. he has nailed this every potential situation that has come out of this he takes the complicated stuff and spells it all out. i know we're not supposed to talk about competitors, but he is great >> good. >> our next guest has a tell-all which is great actually. chronicling the success and collapse of ge william cohen and now author of "power failure."

ge, we should note, the former parent company of cnbc so, folks in the building have experience with this company >> and ge started this network >> it very well did. it is an amazing endeavor you went on in part because you got to speak with jack welsh before he passed away >> that's usually preferable >> he said stuff to you that is kind of off the charts why don't you tell us? give us a little bit of a taste of it all. >> well, of course, andrew, as you know, the biggest responsibility of a ceo, especially a ceo as heralded as jack was to choose his successor. even before i could sit down at the lunch we were having in nantucket on the first time we met in the fall of 2018, he just

blurted out an expletive that i can't say about his decision to choose -- >> how did he do that? that's a separate issue. >> i won't go for it you can imagine. he basically said he had completely messed up the selection of his successor muffed up. >> close to what you want to say. >> exactly that shocked me. when you are the greatest ceo of all time or as norm pearlstein named him the manager of the sev century. to make that mistake was breathtaking to me. >> now we have perspective you look at jack welsh and what he did >> yes. >> you look at jeffery and what he did there's lots of monday morning quarterbacking about all of it about how much responsibility

jeff has for what happened and how much responsibility jack welsh has for what happened. a whole book about what jack did not just do to ge, but corporate america. how do you see it? >> look, i've done this autopsy on this company. you know, essentially a dead body on the floor and i wanted to know how it got there i talked to everybody i possibly could. jack and jeff and all sorts of top executives david and people who i respected. dave calhoun all the daves. to a man, they have incredible respect for jack don't forget when he took over, ge was worth $12 billion. not nothing. when he left, it was worth, as high as $650 billion $600 the bbillion. that is incredible increase in

shareholder value. >> westinghouse was identical. that went away ge went to $600 billion. >> and the apple, microsoft, google, you know, all wrapped into one the incredible technology. you know, incredible technology, and obviously the biggest nonbank bank in the company, and that became the achilles hill. >> jack got drunk -- jones saw jack at a party, and -- >> jack would like to have a good time. >> and there for what? >> and therefore jack created incredib incredible value, and jack thinks he left jeff with a royal flush, and jeff decided he wanted to remake the company the way he wanted, not the way jack had it and he decided to very

quickly -- don't forget, andrew, the world -- jeff became the ceo september 7th, 2001. and ge had the jet engines on the planes and the buildings -- >> the criticism of jack was that he managed earnings and always had a couple pennies in the drawer, and jack would say i don't manage the earnings but i manage the businesses that were able to generate -- >> the second thing out of jack's mouth was don't fall for it when you own ge capital and it's filled with assets and warrants and equity stakes and loans, and you would be irresponsible as a contr ceo to sell the assets >> that was one of the very first things, and the benefit of the doubt, maybe it will work,

that didn't work but the sale of nbc for pennies on the dollar to buy high and sell low, and getting into the mortgage business -- how about the mortgage business? >> you want to keep steering it to where jack is responsible >> no, i am not, i am just trying to understand -- >> we have talked about it before >> the man spent years working on this book and it would be a counter fact that you would know, if jack was still running the company, what would have happened? because of -- >> a great risk manager. >> do you think he would have figured out a way out of ge capital pre 2008 >> well, jack understood ge capital. >> if it was not the right thing to do, he would have been in the same soup as everybody else.

>> what is the same soup as everybody else, andrew one of the performing industries is financial sectors, and ge, instead of staying in the financial services sector, which was making tons of profits, it abandoned it, and it didn't like it and too much regulation and the government was starting to intrude, and jack would have keptge capital and jeff would not have had the problem that he had when he couldn't replace the earnings that he lost when he lost ge capital -- >> you go into this wanting to confirm the narrative that -- >> were you converted? obviously i always thought this, and i knew jack from day one >> i went where the facts took me, and the facts took me to

where he made a lot of mistakes made, and he over paid and getting out of ge capital and getting into the oil and gas business at the wrong time the most valuable company on the earth, to disappear, you know, apple, google, all of these companies we revere today could disappear -- >> and apple almost disappeared until steve -- >> yeah, steve came back >> and generally i am in agreement with you, but there are so many critics of jack -- >> of course >> it's fun. >> it's not just fun, but i want to understand what you think of the larger critique that what he did, not about what he did and what may or may not have impacted the future of ge, but how you think it's impacting

corporate america, and even for the better or worse and the critics would say for the worse. >> what are you talking about? how did he hurt the management or the way that the businesses are managed? >> the argument -- it's not my argument >> spell it out. i don't know what you are talking about? >> he put such a issue on -- >> profits that's what we do in capitalism. >> no, i am just saying you can tell me i am wrong, and i am asking the question because that's what -- there are so many people -- i am not the first person that raised the question and i am raising the question because other people raised the question here. >> the system is we have to report earnings on a quarterly basis. you tell wall street analysts what you expect to make in every

quarter, and if you don't make it you are kind of a fool as a ceo. when jeff missed earnings in the first quarter of 2008 -- he came on to this network and said if he missed earnings again -- it was not a nice thing to say on television, but you can't miss earnings -- >> i started in '91. >> when did jack takeover? '91, right >> '81 >> that's right. i don't think jack did anything -- he played the system better he had the media eating out of his hands. he had the wall street analysts eating out of his hands that did not understand the finance side of ge very well at all, and he produced -- >> and that is great for him, but not necessarily great. >> it was great for shareholders

what is his job as a ceo it's to increase shareholder value. >> you can follow jack instead of wanting to push the guy into the front lines. >> the people that worked for him, and people we respect, all the daves, they loved him. >> you were working for those people at "the times" then >> i think there's a lot of esonab that have a lot of qutis out jack -- >> yeah --

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good morning walmart set to report. we will bring you the numbers and market reaction. can you trust crypto the ceo of crypto.com joins us on the first cnbc interview on what his exchange is doing to ensure clients their money is safe plus, an interview with cha charlie monger the second hour of "squawk box" begins right now

good morning and welcome back to "squawk box" here on cnbc we are live from times square. andrew ross sorkin, along with joe kernen and becky quick a lot going on we have walmart coming up in a moment dow looking like it will open 115 points higher, and nasdaq up about 140 points the treasury yields as well, and the ten-year note has come down a little bit, and two-year at 4.345. and oil, you can buy it by the barrel, crude sitting at 3581. and crypto, we are seeing bitcoin at $16,736 >> a look at other premarket movers, let's get to kristina

partsinevelos. >> are you still working on that home renovation project? you are not alone, because home depot saw revenue increase at 6%, and you could see that stock is down over 1% right now after seeing customer transactions drop 4% in the quarter, and we are paying more per transaction, and it reaffirmed its full year guidance speaking of homes, shoals tech is soaring right now 17% after the supplier for solar projects reported q3 earnings as it raised the low end of its forecast, and shares are up 17%, but still down 28% on the year let's talk about shares of netflix right now moving over 2.5% higher after a double upgrade from bank of america, and that's at least a 24%

upside, or maybe 21 at this point. but what we are seeing is netflix still has growth potential outside of the u.s. and can benefit from advertising video on demand but their valuation doesn't account from revenue loss from password sharing. you all do it. and then a big stake in simi conductor, and it's the tenth largest holder in berkshire's portfolio. the stock is up 10% right now on the news joe? >> thanks. we are trying to figure out how lowe's is going to do tomorrow, and you mentioned do it yourself, and they just said, maybe people at home depot may make it intimidating -- >> hard to do? >> home depot, i walk in there

and i am just quivering out of fear i don't know where to find anything, and i don't know what half the stuff is, and he said lowe's may be better for somebody like me, the do it yourself, but there's just no way. can you do it yourself in your home >> do i look like i can do it myself come on. come on. >> we're both in a place where maybe we should be -- i don't know >> the home depot numbers were solid and the immediate reaction was one that traded up it reaffirmed guidance >> right >> and that's part of the issue there. the other issue, as we talked about before, was the average ticket was up 8.8%, and the customer reactions overall were down, and inflation playing a big role in this it was the cooler than

anticipated cpi numbers that turned this whole tide if inflation was starting to come under control, that would be great news and the fed wouldn't have to act as harshly. >> i will be right about that. >> less volume come into the store, even though you can actually move your margin higher on each customer over time, can you still pull that -- is that a magic trip you can still pulling off or do you need more people coming into the store? people have liked starbucks, for example, because more show people have shown up at the store and not less, and once you start getting into a less people coming into the store by default, that gets nerve-racking -- >> you know seagull is coming on brainard yesterday, and goldman sacks, saying it's going to be

much lower inflation, it's time. >> and headline ppi is supposed to be the consensus estimate, and core is 0.3%, and so this is going to be a big issue. further up the pipeline with the -- >> 4% ten-year >> we are waiting on walmart's numbers, and that's a question people are going to be asking, are the inflationary pressurers, are they able to stem the tide with some of this stuff. >> you read about volker -- >> yeah, i interviewed him right here on "squawk. >> that was a contributor. >> no. >> on "squawk box" >> i am pretty sure we did that. >> i don't think it's the same i think that the risk is that

they killed this -- we work hard to get jobless rate down to 3.5% try to get it back to seven. >> we'll see retail earnings are in focus, and we are waiting for walmart. on the data front we will get the october producer price index. i like to say the entire name of it, and that's at 8:30, the producer price index and then lisa cook has speaking events today and michael barr will testify before the senate banking committee on over tsight of financial regulators >> and then pulling back, and tepper trimmed some of his

holdings take a look at this. dan loeb's third point, owns roughly $265 million stake in bath & body, making the retailer its sixth largest holding at the end of september when we come back, we will talk about the collapse of the digital currency turmoil, and later, alan patrocof he just walked the marathon, and i give him credit for taking that trek. p d nasdaq up 140 points, and s&up 32 points we're coming right back.

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let's take a look at shares of walmart that company just out with it's quarterly numbers. the stock is up by 5.5%. adjusted earnings come in 18 cents better than the street was expecting, and revenue reaching

estimates. if you are looking at some of the numbers here, it looks like the -- sorry, i just lost the line in the sales. international sales, $25.3 billion. revenue was up by 9.8% in constant currency. if you are talking about the comp store sales, they were up by 18.2% and the company's ceo talking to us and giving us guidance of what happened here inventory levels are getting to the point where they are under control and feel good about what happened there in the first quarter, inventory levels were in the 30% range, and now it's at 13%. by the way, 70% of that is inflation. from a unit perspective, things are going great. that's because of canceled orders, and more markdowns to clear the inventory and they are in a better place on the inventory front. and there was a story that suggested walmart was putting

the squeeze on its suppliers, and i asked john david rainy about that, and he said we always work with the suppliers to make sure that we're being competitive around cost and price for our customers. and as for what they are seeing with consumers, they are seeing a shift in purchases and purchasing habits, and he said there's less money to spend on general merchandise, and they have seen a shift to food, and general merchandise has higher margins, and food and consumables are responsible for their margins dropping year over year, and when things like televisions and air fryers are going on sales in the holidays, they are seeing that, and a lot of cheaper proteins being bought, things like beans, hot

dogs and peanut butter, and the market share they have gained in the food business, 75% of it is coming from households that makeover $100,000, and people making over $100,000 are feeling the pinch right now, and they are making sure the basket it takes to make your thanksgiving dinner will not cost more than last year, and they are talking about the turkey and cranberries, and the price point is somewhere between 70 and $80. and that stock up right now at a little 6%. >> you figure walmart says all this stuff, and maybe we have to rethink home depot, which is now up >> in positive territory >> it's weird, up 5, and down 5 -- >> yeah, and the dow up by 181 points >> they are both big box, i

guess. it's similar >> it tells you a lot about the health of the u.s. consumer. >> exactly >> meantime, let's talk about the fallout of ftx, and it came to light the exchange made an error in transferring a large sum of ether, and they sent it to their accounts on another exchange called gate, and their cryptocurrency went down and joining us now on cnbc, kris marszalek is joining us on the future of crypto let's start with crypto.com, specifically, and speak, if you could, to the issue of this

errant move in ether, and more importantly what it says just about your own controls and what you can tell customers >> first of all, thanks for having me, andrew. i am happy to be here. this happened around a month ago, and we moved a large some of ether to a pre approved address, our corporate account we quickly noticed our error and drew it back to the cold storage so the funds were returned we proceeded to improve our assistance so such errors don't occur in the future. and for us it was business as usual afterwards, and this was not connected with what is happening lately with ftx. >> this is your own currency,

and ftx had its own currency and was using that currency to effectively make trades and loan itself money >> right, the way you could think about it, it's a smaller version of a theater we were the ones starting it a couple years ago and now it's an open decentralized products -- >> you are referring to cron just to be specific. >> yes we never utilized it in a way that ftx did, and we run a very simple business. we give users global access to currencies and take a fee for that we are a regulated business. we have the license from the u.s. to do business in europe and australia and it's a completely different nature of

the business versus ftx running a hedge fund and an offshore unregulated derivative exchange and losing some in the process >> what allowed this to happen, and there has been blame casts on them, and there's an issue of whether these types of tokens are considered registered securities do you consider cron a security? >> no, i don't, and if you look at the theory, there's disinterested networks, and a number of developers could build on it and the transfer of value and secure a network, these are clearly not securities so we do not -- >> what about the tokens traded

on your exchange >> again, we have a very strict process of selecting coins picked on our exchange as a company we take bride in compliance and security in the foundational core of our business, and that's how you build it, and we have more registrations and licenses around the world in tier one jurisdictions than any other business, so we feel quite confident with our policies and how we go about this having said that, i think that right now after this collapse, the liquidity in the market is poor and it may be that a number of the smaller coins will have to be listed in an effort to protect the consumers. >> say that again. you said what is going to have to happen? >> if you see the liquidity

evaporate in the market, what is going to happen is the smaller currencies that are liquid are facing a risk of being delisted from the different exchanges in an effort to protect the consumers. >> talking about protecting consumers, do you see a need to raise money yourself >> no, no, we are very well capitalized. again, we are very transparent with our reserves, and also we have a bond sheet and we have zero debt and zero leverage in the business and we are cash flow positive, and the business generated over a billion dollars last year, and almost generated a billion in revenue this year we feel quite good about where we are as a company and our operations what worries me is the impact of this collapse in the whole industry, and i think it goes back a couple years in terms of the industry's representation,

and the players have to collectively work on regulators around the world make sure consumers are protected, and that's what we have been doing for the last seven days since this shocking news broke, we engaged with ten different regulators in conversations about how are we going to prevent such a shocking thing have happening again >> do you hold any of these currencies on your balance sheet, and if so how much? >> we are a conservatively run business, and we hold stable coins, and we are preparing for the bear market. we kind of assumed that it may be a couple years of a slowdown,

given the monthly policy >> how much? that was a big problem with ftx, and they had billions of dollars in the tokens they made up how many tokens and what is the amount on your balance sheet for them >> we are a privately held company, and i am not going to be -- >> somebody said it was fine >> it's very robust. everybody has done taking anybody's word for anything. we focus on demonstrating our strength and stability on our actions, and it has faced levels of withdrawals our platform performed extremely well, and we have seen it stabilize. everything is business as usual. >> what do you think happened at

ftx? you have talked to sam >> i never met sam, never spoken to him over the phone, and i don't know what happened on the inside, but i would have assumed that the rumors, and the scale and the losses is in the range of $10 billion i can't possibly imagine how that could come to be. >> and then finally on the regulatory front, all of these exchanges are based offshore, including your own i am trying to understand how you think regulators and people talk about whether the u.s. should have done a better job of regulating this space, how you would argue that should ultimately happen. is there something that regulators in the u.s. could do, should do, that would have put you under their purview in a meaningful way and effectively put you onshore and made you a u.s.-regulated company >> andrew, we are onshore in all

predictions, and we are regulated in europe, and we have registrations in the uk, in france, and a number of other european markets, and we have a license, one of the first of the companies in singapore, which is one of the most stringent regulators, and took it us two years to get it, and we have an acquisition in australia, and we are the first international player in canada we have proven with our actions over the last two years, we want to be local and regulated and safe and we want to be trusted >> it's a longer conversation, and we hope to have you back so we can continue it thank you. >> i would love to come back thank you for having me. >> thank you coming up, a noted crypto

skeptic, charlie munger, his comments straight ahead. as we head to break, the nasdaq closed down more than 27% from 52-week highs. "squawk box" will be right back.

out with its quarterly numbers and came in with adjusted earnings better than the street was expecting. that stock up now by 7%. and revenue beat wall street's estimates and the retailer announced a new share program, and the company is leaving its fourth quarter numbers as things stand. it's the same story over at home depot this morning that company also beating expectations but not raising for the fourth quarter and as a result that stock was down earlier this morning and now down about 1%, and it fluctuated between up and down and home depot, they talked about customer transactions, and we are watching these stocks home depot bounced around, but

walmart up about 8%. the futures, both are dow components, and both dow components, one up and one down. and the dow up 123 points, and that's significantly up from where we started this morning. still to come, we have much more from our exclusive interview with charlie munger, including what he has to say about the fed and elon musk. later, the ceo of lucid motors joins us, and it's unveiling it's ev lineup "squawk box" will be right back.

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as you probably know, berkshire vice chair, charlie munger is not one to mix words >> i basically like the existence of the fed i think in a world of bit currencies, we need central banks. if you look at japan today, you would find that the secentral bk

has made our senate bank a little mouse that hardly tries to do anything, and you can find the central bank is really important. so by and large i like central bankers, and by and large i hate bitcoin promoters. >> when you say that, we look like a mouse compared to japan's central bank, is that a good thing? look what has happened to japan. >> yeah, we have not had to try it, and if we get in the kind of trouble japan was in, of course we will do the same thing. >> also got the chance to ask him about elon musk. over the weekend there was a twitter account that tweets out quotes supposedly from elon musk this one said i was at a lunch with munger in 2009, and he told

us all the ways tesla would fail, and i asked charlie munger about that, and he doesn't recall that lunch. it was in 2009, and probably made a bigger impression on elon musk than charlie munger, and when you talk about it, he doesn't remember giving that diagnosis, and he had kind things to say about elon musk. >> i was certainly surprised that tesla did as well as it did. i do not equate tesla with bitcoin. >> good. >> tesla has made some real contributions to -- elon musk has done good things that other people couldn't do >> in fact, about musk's work at tesla, he was very complimentary. >> we have not had a new

successful auto company in a long, long time. what tesla has done in the car business is a minor miracle. >> we will have more of charlie's thoughts later in the show got the chance to ask him about what was happening with china yesterday, because china has been somebody who is a big believer in china for a long time, and yesterday was the first meeting with biden and xi jinping, and we talked to him about that but not about the holding on the simi conductor because that did not come out until after the interview. you can get the full interview if you check out our podcast, and that's squawkpod and then alan patricof next, and as we head to this morning's biggest winners and losers on the nasdaq jd up about 8% right now

"squawk box," coming right back. on closing bell, impact on consumer trends, and opportunities for growth, today at 3:00 p.m. eastern watch or listen live on the cnbc app. this is real time insights thank you for being here given the recent tax policy changes, how should companies be preparing for 2023 >> there are two things i want companies focusing on, the inflation reduction act and the chips act. and we are looking at the operations and supply chain. >> inflation reduction act what do companies need to know >> the key is the corporate

minimum tax, 15% and applies with companies of income over a billion for three consecutive years. >> how can companies benefit from the chips act >> it's about the u.s. supply chain resiliency and ecosystems, and it's like credits and loans and what i love is the private equity sources of capital come into this space. the behavioral change we are looking around that is securing our digital future, and it's about the ease of the supply chain challenges in that space and u.s. competitiveness >> thank you for breaking that down for us. appreciate it. >> thank you

amazon announced plans to lay off 10,000 workers the latest tech company that has been cutting jobs, after cuts at meta and twitter more than 24,000 tech employees this month alone have been laid off. and the legendary vc has helped launch companies like apple and aol. alan, thank you for being here today. >> thanks for inviting me, becky. >> have you seen up cycles and down cycles, and in terms of layoffs, what do you think of it and compare it to? >> your words are exactly perfect and well chosen. we're seeing a cycle, and what i have commented on recently is

there are so many people in the business that have not lived through a down cycle, really, and sure there are blips along the way, and having been in the business as long as i have, i have seen so many cycles everything doesn't go straight up i think a lot of people who are making investment decisions, both in private and public, have seen up markets that are, you know, you can only go one way, which is up. now we are seeing the reality set in that every once in a while we do have a setback, and i must say the layoffs that we are seeing out in california probably are long overdue, but the sizes are kind of overwhelming to lay off half your company in one felt swoop is remarkable, and it's pretty extraordinary at meta and other companies considering these are companies

that are supposedly superstars >> that's what is so surprising about it, alan, is this is not just new startups and to see the likes of amazon having to deal with this, and meta, and is this because they got carried away by an up cycle that was fueled by all the money out there and then the pandemic where you thought there were shifts and consumer behavior that were never going to change again? >> you know, i invested in virtual reality in 1984 when i backed sharon lawn e., and i found the manipulating gloves to show new technology, and the reason i mention that, that was 40 years ago, and now we are seeing virtual reality supposedly become a business so it has taken a long time to get here and yet isn't yet

proven, and yet meta spent a heck of a lot of money for technology that has lots of promise, but it could be another ten years before it's there. obviously he's had to correct and layoff people to adjust to what the current realities are >> doesn't sound like the layoffs are coming in the metaverse, but in other areas of the company and they are still investing in the metaverse, and sounds like you are pretty skeptical. >> yeah, the amount of money he's putting in is extraordinary in the metaverse, and that's his reasons for cutting back on expenses >> alan, having seen the up cycles and down cycles in the past, and where do you think we are in the down cycle and what do you do as investors is it time to look at the stocks down by more than 50%, or do you think there's still pain to come >> one thing i wouldn't do is

sell and run for the hills those are the ones that get caught in the bear trap. i think this is the time you ride through it, and it's too late to sell you want to give it time to settle here, and watch as facts develop, whether it's the consumer price index or employment and hiring, and i wouldn't try and be a market timer and run in, but wait for the fundamentalist put a more stable environment in there, and pick your choice lots of companies have declined dramatically in the last six months or so i think you are going to find there are opportunities that are going to be all over the place if you keep your eyes open and read the fundamentals. >> alan, we have been talking to charlie munger, and i think he's 98 you must be like early 60s to do

the marathon, i would think, and i don't know your actual age but i see the medal -- >> i wore the medal. joe, i advertised this i ran it at 88 i was the oldest finisher. >> that's amazing. what i am trying to get around to, you have seen a lot and charlie has seen a lot you have been a tech guy all along. i don't know whether warren and charlie were embracing new technology i want to get your thought on crypto and maybe bitcoin we have seen the implosion of that exchange. back during the internet days, we saw collapses, too, and the internet is our lives today. i can't imagine it without that. is crypto similar to that, where you can have some of these situations but it doesn't -- the

underlying technology itself isn't necessarily going to zero? where are you on crypto and bitcoin and block chain, is it something that will last and become something or is this the harvester of the collapse? >> it's interesting you bring it up i have not thought about it in that context when you think about laying railroad lines provided a fundamental way of transportation in this company, and i don't think you jump to that, and you talked about the internet, and this is a fun way of moving data, voice, communications, that is the underlying technology can't go away it's there, and there are applications on top of it. crypto, it's not really crypto, it's a block chain, and the block chain is attempting to become something similar to what you brought up, which is

fundamental technology rails on which crypto and other new forms of digital currencies will run, so i don't think it's yet established itself in that position, but as you say it, as you mention it, i think that's the direction they would like to be going in, and it will be the block chain, and not crypto specifically >> i was trying to figure out who is the old dog with new tricks sometimes people are never going to embrace new things. you are very young compared to charlie, and young compared to a lot of people, and i was wondering if that would preclude you from embracing this new stuff, and i figured it would not because you embraced new things throughout your entire life >> i have taken the position it's too late in my life to start knowing enough about crypto to start trading it or buying it and holding it, so i sat on the sidelines

i am fascinated with block chain and how it can be used in not just commercial -- >> to that point, though, and i have been talking about this for a long, long time, do you think the currencies, the cryptocurrencies and tokens themselves need to be viewed with value, and i thought bitcoin was supposed to be a store of value clearly it's not a store of value, just by default anybody who had it prior has not stored the value >> it stored $16,000 worth of value up from -- >> but the point is -- >> well, neither is any stock or currency >> here's the point. when it comes to currency, the utility, going to the idea of a block chain, utility value only works when it's actually stable. if it's actually an investment and if it is going to keep going up you don't want to use it because people will try and buy it, and if you think it's going

down people will try and sell it >> right, but you started -- >> it therefore has no utility >> you started talking about it as a store of value and then you switched if it's going to be used -- maybe -- >> bitcoin's utility is supposed to be a store of value and it's proven it's not a store of value -- >> no, the store value -- >> bitcoin -- eth -- >> i feel like i am refereeing something here >> alan, what do you think >> choose a side, alan >> i am on the side that it's not proven to be it's a store value. i think one of the great things that has happened, where elon musk was taking bit coins in payment, or some cryptocurrency in payment for tesla, and the currency went down by 20%, and he stopped taking bitcoins

the question is would you accept for a piece of real estate you had crypto and hold it, or would you, you know, sell it as fast as you got it in your hand i don't think it's yet proven that it's long term, that somebody wants to sit and put it away like they put away gold or gold coins, and rest easy, even though the price fluctuates. they feel that there is value there, and there's something there that can rely on, and that's why the u.s. currency has been so powerful for so many years, and people accept that as a store of value around the world, and gold is similar to that, and there are very few things that people say, you know, we'll except long term -- >> it's a little like a bitcoin. >> the distributor ledger aspect of it, as you said, allen, it has a lot of sim hilarities, it

can be transferred throughout the history of time, money has meant different things it used to be shells, and shells were no good but you would use it because it kept track of your work, and the whole distributor ledger idea has got me thinking, it has a store value eventually. we will see. or it's a tool to hold one or the other >> that's long term. block chain, people are talking about it in every industry in terms of using it, and -- >> right if they had a cell phone, they can have a bank right there where they can send and receive money, and it could be utilitarian as well. >> it certainly has lots of promise. i was surprised some of the

currencies did not -- you would have thought something like bitcoin would have really collapsed. >> exactly it somehow stored 16,000, and maybe only 12,000. who knows? i don't know i think we have gotta go >> congratulations on the marathon >> i will not be wearing one of those medals ever. p coming up, phil lebeau. >> hey, joe, talk about lower priced lucids. you might be saying what it is over $150,000. there is a lower price model coming , 'll talk about that with the ceo peter raw linson next on "squawk box. welcome. you've got sales! i do? i do! you've got sales!

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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. as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts. saving you up to $500 a year.

and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities. ™ the la auto show kicks oaf later in week. but we have an unveil for you this morning here on "squawk box. take it away, phil. >> we're talking about the lucid air touring with peter rawlinson. touring in the background but let's talk about -- since your q3 financial report. wider than expected loss the reservations the number is dropping and there is a question among investors after you do a capital raise of $1.5 billion about the pathway to profitability. do you understand why investors are nervous about lucid. >> i think people realize this is a capital intensive business. we've always said we need to

raise more money and the reason is that we're generating all of this technology in house, we're manufacturing it in house, we're vertically integrated the true value proposition is long-term whether it committed to the long-term vision. >> how many more capital raises might there be nobody expected this $1.5 billion are you confident this is the last one you need on the road to profitability. >> we need a number of raises. we need to raise billions of dollars to get you there >> before you talk about the touring, if you're an investor you're looking at lucid and saying how do i know how much delusion is coming in the future >> i think the path has been made very clear in terms of the raises that we needed and i think it is a very clear value proposition. we have a long-term value proposition based upon

integrated technology, a ten-year plan. >> let's talk about the touring. this is the first chance people are having to see the lucid air touring. now this is the lower priced plodd - model that is coming you have the pure coming in at $87,400 and i know you're saying it is a lower price, how much more can you push the price out as you roll out new models. >> i think we're looking at laid to mid decade when we bring out our mid-size platform and then i think we could get closer to a $50,000 price point. but this is a incredible value proposition in that place in the market for a luxury automobile with incredible performance and incredible range if you look at the touring behind me here, this has an epa estimated range of 425 miles only a lucid has more range. and even the pure at $87,400 has

an epa certified of 410 miles. only a lucid has more range. >> i want to ask you where we are in the industry as far as ev start-ups. you bristled when you walked in and met and said quit calling us an ev start-up but people are looking at you and rivian and others. >> there are historical precedences within the auto industry for consolidation i don't recall many of them working very well. what i really think and i'm a great proponent, we have the best technology and we could license that technology that don't have the position on the ev train that is about to leave the station. >> vapor wear as you would say >> some of them, yes. >> any would you like to name? >> no. far too kind. >> we'll leave it there.

by the way, of sapphire, 1.89 seconds to 60. >> 1.89 to 60 and it is a superb driving machine and i'm satisfied with the performance. >> founder and ceo of lucid when they do announce the sapphire goes 1.89 seconds to 60. how is that. >> very cool, phil we'll see you in just a little bit. coming up on the other side, we're talking to cynthia lumis for everything from midterms to the cryptocurrency fallout and the latest pii data is coming up. squawk coming up with a big hour ahead.

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welcome back to "squawk box. p bank and tech earnings are done now it is time for retailers we have brand-new results coming in this morning from walmart and home depot exclusive comments from berkshire hathaway vice chairman charlie munger unloading on bitcoin and crypto evangelists. >> in my own country, i think

people are reputable people helping these things exist and so forth. >> and we'll speak with one of congress's top crypto voices, cynthia lumis, and breaking economic data, only 30 minutes to go before we get new inflation numbers. final hour of "squawk box" begins right now ♪ good morning and welcome to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe concern canand along with becky quick and andrew. the dow up triple-digits i know walmart is one of the big reasons and home depot has been all over the place

been down five and up four or five but at this point i think walmart certainly adding to the firm tone that we're seeing. and then the nasdaq up almost 200 points as well treasuries, the ten-year has remained under 4% since that cpi number that we saw we'll get more inflation data today and that should be interesting from the producer price side. >> and mentioned warm earnings out. we'll start with what we saw the stock looks like it is trading up significantly up by 7% right now to $148.10. this came after the company beat third quarter analyst expectations by a lot. by about 18 cents on the adjusted earnings line per share and revenue better than expected and same-store sales above 8%. and $20 billion share repurchase program and part of the news is that they've dealt well with the inventory. back in the first quarter they have inventory in the mid-30%

range and by the second quarter in the mid 20% and now it is 13% for the most recent quarter. an a lot of that is explained, i think something like 70% because of inflation they did about everything they can. they canceled orders on issues and brought steep sales. that stock up about by 7%. >> home depot also out with third quarter earnings posting better than expected profit and revenue and same store sales. despite that, left the forecast unchanged signaling a tougher holiday season ahead and transactions fell, average ticket jumped 9% likely due to surging inflation. so the big question for investors is less people coming up into the store and make it up in the other end and that is the inflationary piece of it what does that look like long-term. >> same store sales at 4.3 but for the year, they had said 3. >> right. >> and then they stayed at three for the year and other guidance wasn't

raised let's get to some other premarket movers kristina partsinevelos joins us with more. hello again. >> hello again, i'm going to follow you because you were talking about walmart and home depot. let's take a look at target. it is moving up higher but the volume is low right now, it is up 4%. costco was moving in unison, not so much any more before i came to set and best buy up 1.7% but i want to focus on bath and body works after the dan lobe's third point revealed a $265 million purchase in the company according to the 13-f filing so it is up 2.8% but still down 54% year-to-date. and let's talk about china and k web. that is up almost 7% on pace for the best month ever. helped by beijing measures and constructive spin surrounding

the meeting between president biden and president xi and then one of the components of the k web, that would be sen cents music, it is up over 9% after reporting better than expected service the music streaming service benefited from a increase in paying subscribers and a new note from morgan stanley saying tesla is over weight they say the controversy around musk's ownership of twitter has made a negative sentiment toward tesla and that is the reason you need to get in and it could be a buying opportunity they have a price target of 330 but it is up over 1.4% right now. guys. >> kristina, thank you. and we'll watching charlie munger and a stake in taiwan semiconductor in the third quarter. that is according to ania regular tory filing that say says that berkshire bought enough worth $4.1 billion. that makes taiwan semi's the

tenth largest holding as of end of september berkshire took positions in lumber maker, it is hard to do that ive think only god could make lumber but lumber producer, the louisiana pacific and investment bank jeffries, also increasing its stake in paramount global. >> very clever. >> am i right? >> well god makes the trees, sure >> god made the trees. that is nice it sounds like we're back in elementary school. coming up, which we are many times. coming up an interview -- you don't want to miss with one of the top crypto voices in the entire u.s. congress wyoming senate cynthia lumis and we're going to talk markets with the one and only professor jeremy siegel from wharton's school stay tuned, you're watching "squawk box" on cnbc

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kinda like this. welcome to 30 rock! join xfinity rewards for free on the xfinity app today. our thanks, your rewards. in the latest on the collapse of crypto exchange ftx and a new bankruptcy filing, the company said that it may have more than a million creditors. it will be submitting a list of the top 50 by friday in addition

as ftx contacts regulators in the u.s. and over seas, the filing said five new independent directors have been appointed at each of the main parent companies. joining us now, one of the chief crypto lawmakers in congress, wyoming senator cynthia lum is and this morning will be speaking with top financial regulators just let's start, senator, with your appraisal after what we've seen in the past week and what it means. >> ftx's bankruptcy is the tenth largest in u.s. history. we've been functioning in the wild west of cryptocurrency, unregulated and it is time for us to address regulation senator kirsten gillibrand of new york and i have the bill, which if it were in effect west virginia prevented the

activities of ftx and would have saved customers a lot of money because it would require the segregation of customer assets from noncustomer assets and require 100% backing of customer assets so if there are a million creditors, there could be a million less unhappy people this week if lumis/gillibrand had been in effect. >> you would have thought maybe that something like that would have already -- there would have been a framework already in place, that would have done that and give me three or four other things that we could do right now and that we should do in a bipartisan way and why aren't we? >> kirsten gillibrand and i have been talking to both regulators and the regulated community for almost a full year now, floating

our draft, getting ideas and getting them incorporated into our bill that bill is now in the senate finance committee. it is big and it is comprehensive. so, next steps are to get that bill moving, or at least get the priority concepts in that bill moving in various senate committees i think it is going to happen in 2023 so to suggest that we could do something very quickly, very flee-jerk, very temporary is not going to assist the problem. federal regulators and investigators are just going to have to plow through the debris that the ftx bankruptcy. >> senator, we spoke together on this broadcast on june 11th. you were with senator gillibrand at the time. and i asked you quite directly

about the idea that fidelity was allowing its corporate customers to allow employees to invest in bitcoin and whether you thought that was a good idea given that the labor department thought it was a terrible idea. at the time you thought and said it was a very good idea. bitcoin at the time was trading at $28,406 so if you were an owner that day, you had $28,406 today you have $16,832 do you stand by what you said on june 11th? >> absolutely. do you know how many bitcoin ftx had when it declared bankruptcy on friday? zero none bitcoin is unique among cryptocurrencies bitcoin is a commodity the other currencies with which ftx was operating, especially their own proprietary ftt, this

is clearly a security. this should have fallen under the s.e.c. this should be where consumer protections and disclosure laws apply. this was a murky company with 130 or month affiliated companies. a very complicated situation where customer assets were allowed to be commingled with other assets and because of that, customers lost their money so you're dealing with actually two different entities commodities, which is bitcoin, and securities, which is almost every other cryptocurrency out there. >> i think andrew as with making the point that luckily you weren't invested in meta or netflix and you have more after the bitcoin. was that the point you were making you had more than -- that wasn't

the point. >> that wasn't the point and you're trying to make a point. >> everything moves around: some stocks are down -- >> most people in their 401(k) plans are invested in mutual funds. leapt's start is there and then separately, senator, if the point of bitcoin is to be a store of value by default i think we could agree that $28,000 becoming $16,000 is hardly a store of value. >> this is the long-term investment no one has ever said that bitcoin is something that you should day trade and it is not like a stock it is a commodity. it is going to have a long-term value. gold's value over the millennium have gone up and down. that may be the case with bitcoin as well. so i still think it is a great store of value >> but you understand, i mean,

there are many -- >> i disagree tlat stock market has moved up and down. >> and individual stocks could move much -- >> correct most people are not day trading stocks in their 401(k) plan. >> maybe not in the 401(k) >> there is a lot of 401(k) that down 30% or 40% from the nasdaq. >> there is no question. >> but if something is being added as a store of value. >> it is worth 16,500 worm of value. >> i don't think anybody who had $30,000 thought this is a great store value. >> if you bought it at 4,000, your thinking that. >> god bless you i don't think people had done that unfortunately if you look at the majority of people who bought. >> it is a better store value than the last few years than gold coy give you 20 stocks that have had a better store value than the stocks >> let's have this conversation -- >> well in hindsight. >> in 50 years from now.

>> senator, i guess one of the main questions is, is this an indictment of crypto, of the entire space or is it specific to ftx and you say people want to buy this for the long-term i hesitate to use the word bullish with a senator, but you think that bitcoin has a bright future for example >> i believe bitcoin -- bitcoin right now has a bright future. i'm not willing to say that about other cryptocurrencies i just think bitcoin is unique in that regard because it is a commodity. the point here is we need to regulate in this space because the wild west aspect of it has inadequate consumer protections. and that is why the lumis/jilly

brand bill needs to start in january when congress convenes. >> this is a company based in the bahamas. most of the exchanges, the big ones with the exception of coin base are based off shore what would you have done regular tor illy. >> well we need to make sure we're balancing innovation with consumer protections so these -- >> how would you do that with a company based in the bahamas how rou regulate -- the reason that regulators have such trouble regulating all of this and i think arestruggle being what to do is because if you have these exchanges and you have these currencies that are global, and they're being operated in all sorts of other places with completely other rules, they have an impact back here, right. so the question is you could either block them, meaning people can't trade them, that is one option, you could create all sorts of kyc rules and other things what would you have done to prevent this collapse?

>> well, it is looking like they may have violated know your customer rules and other regulatory requirements that the s.e.c. currently has in place. so, the bahamas has taken them into receivership and the bahamas is working on this within their set of laws what you're saying would also apply to a chinese stock they are allowed to sell in the united states and some of them are successful some of them are very murky and fraudulent so, maybe the answer is buyer beware know if you're dealing with a u.s.-base the company that is subject to u.s. laws your consumer protections are in place. if that is not the case, if these companies are operating in another country, than caveat

emtor applies, buyer beware, operating under different countries laws because they're more at van t-- more advantageos to those companies. >> and there is a nice combination that we could learn from to go into politics, you need to do what we do. >> i don't know if certainly gillibrand would have answered the question the same way. >> maybe but at least wkiorng together on maybe -- i don't know why -- it should have probably been done

berkshire hathaway chair charlie munger has used a lot of words to describe cryptocurrency he's called it disgusting and stupid and evil and rat poison and compare it to venereal disease. i spoke about it after the collapse of ftx. did he not hold back on sam bankman fried or those who worked with ftx and ventures like sequoia and others. >> it pains me that in my own country i see people that were once regarded as reputable people helping those things exist and so forth

this is a very, very bad thing the country did not need a currency that is good for kidnappers and so on >> what do you think happened? because there are a lot of big names, a lot of people and firms -- >> well, there are people that think they have to be on every deal that is hot and they don't care whether it is child prostitution or bitcoin. if it is hot, they want to be there it >> i think that is totally crazy. reputation is very helpful in financial life and it will destroy your reputation by associating with scum balls and scum ball promotions it is a huge mistake >> do you think those companies did any due diligence or what happened >> i think that they actually

mean well, though you're seeing a lot of delusion. it is partly fraud and partly delusion and that is a bad combination. i don't like fraud or delusion and the delusion may be more extreme than the fraud >> delusion, how so? >> well nobody could invent a new thing that every 12-year-old kid could be a billionaire or something. you just call it munger coin it starts trading at -- it is crazy. it is demented >> now munger said he is a believer in some innovation. he became a regular user of zoom during the pandemic. he's not against new technology but he is against highly charged risky speculation that he thinks is rampant in the world of cryptocurrency, calls it dangerous.

>> i like the speculative access of the best of the venture capitalists where they give us a new company like zoom or a new company like stripe or something. and i like the new companies they create and i'm glad we have new things being invented. so i'm not against everything that is new. i'm just ahead of everything new that is kind of magic and delusion, it is kind of a chain letter delusion carrying it along. of course, i don't like it these things do enormous damage, they rise and fall and not even -- these things, these big collapses, they could send into depressions. >> do you think that is the case

with this, is this the beginning of a larger unraveling >> that is another subject a very famous man once said that a great civilization has a lot of ruin and you can ruin it. rome took a long time to decline fro from the peak to the bottom. and that will be true with other civilizations that have come on later. but these people that are promoting things, they're promoting the decline of the civilization >> now this was a conversation that took place yesterday morning. i also asked munger about china and president biden's meeting with xi jinping. munger has been a long-term proponent of a strong relationship between the united states and klchina. >> it is very interesting to

have biden meeting with the lead kl china. it hasn't happened in a long time how could that not be a good idea for china and the united states think what we, too, have already created. we have helped china by being so friendly to their imports. we helped them make i would say over a billion people out of poverty. and to a pretty advanced state of civilization. why would we stop. >> i guess the only argument people could give back is because china said they want to run things, they're going to take control, they want to take over taiwan again. >> well the mistake is to envieh other people who are doing well. why do we need to be motivated by envy. there is also somebody that is getting rich faster than you

are. particularly if they start poor. and so, why should a great civilization like ours care if civilization rises we should make a friend out of the new civilization, trying to have win-win transactions. it is so simple. >> charlie munger is 98 years old and in six weeks he turns 99 comments and questions and he was busy and had to get to his next appointment that was right after that. >> by zoom >> i'm not sure. i didn't ask but when we booked it his assistant said are we going to be done by 9:15 for his next meeting. >> busy man. >> you could get the full comments of all this, it will be posted on aour daily podcast, g to squawk pod and follow it on apple or spotify or wherever you

listen, you could just tune in. >> we are seconds away from a new look at producer price index numbers. take a look at futures right now. we're in the green after a couple of earnings reports. nasdaq up at 197 and the s&p up about 44 points higher rick santoli is standing by in chicago. rick, the numbers, sir >> well, let's start out with empire empire is november number expecting minus six, much better than expected, up 4.5. up 4.5 up 4.5 is the first positive number since july. and in july it was well above -- it was 11.1. so that is nice. here we go our october producer price over price index, over 2%, half of what was expected. the high water mark for all metric was in march of this year high water mark there, 1.7%.

if we look at x food and energy, zero we're expecting up .3. and zero and this by far is maybe one the bigger surprises, up 1.3 in march was the high water mark. if you strip out on a monthly basis food and energy and now one more and trade and it is up two tenths and we're up 1% all right, the year-over-year numbers in my opinion, the most important, year-over-year headline, up 8%. that is .3% less than the 8.3 we were expecting and half a percent less than the 8.5 in the rearview mirror and 11.7 was the high water mark. strip out food and energy it is up 6.7%. that is a half a percent below expectations it is a half of a percent below last look at 7.2 and well under 9.7%, three percentage points was the high water mark in march and finally the last

year-over-year x food and trade and energy up 5.4% we're expecting up 5.6% in the rearview mirror 5.6. and 5.4 and high mark was 7.1. we're viehing light revisions trickling in i should highlight them. on the headline, up .4% and it is now up .2% and shouldn't take away from this month, they should just spread it out more aggressively if we take core, it was up .3% and and the rest of the revisions aren't that big of a deal and with regard to yields, well we're at 377 approaching 3 3/4 on a ten-year and at a 1.5 month low should it close here and as we look at the dollar index which continues to fall, it is basically at a three month low if it were to close here and it is on the move as we speak these yields should drop and

anybody who is making the case, oh, hold on, this doesn't mean the feds is going to change course or the fed will pivot there is a world outside of the fed and in our world of facts that are probably outside of the fed's mind because nobody knows the future in the end, it is about what was priced in the markets. what now is being repriced into the markets, and the fact that on cpi last week we ended up with one of the strongest stock rallies in the history it isn't lost on investors who seem to be lining up today to have a repeat performance. andrew >> rick, stay with us. i want to bring in neal rich and steve leaseman steve, your take, sir. >> so, think about this battle against inflation like a wwe match. where a guy is down on the floor and the ref starts counting one, two, and they he gets up and he goes one two and then he gets up we finally got one down, okay.

we not only do have the better than expected cpi number, we now have together with that a better than expected ppi or wholesale number which means the fed could start counting what do i mean by that the fed wants to see several months in a row of improving inflation numbers. and this is a good number from the following standpoint i'll give you three reasons here first we have this trade decline which is the margins of wholesalers and retailers and that suggests some eerzing of pressure when it comes to the supply chain and the same with supply and warehousing and that was negative and the reason why the headline was as high was the 2.7% increase in energy prices. we had a bump up in energy prices in october. it looks like they have been stable at least in november. so that is probably going to go away another reason why this is a flat report as you look up the klain to process goods for immediate demand, they move down they were negative

so getting disinflation. it has a deal. the question becomes will retailers and those on the consumer front pass along lower prices or ease the prices that have been out there. this is a start, andrew, it is not the beginning. it is just the start not the end. >> you do know wwe is like fake, right. >> no. >> you mean like a boxing match where someone goes down and one two and then -- right. >> you're not going to tell me about santa next, are you joe? >> oh, no. there may be kids. kids like -- sorry >> what are you talking about? what are you talking about kneela, what do you think of this and do you think the fed is going to move on this? >> i think it is good going into thanksgiving week to have more good news that suggests that inflation may have peaked. whether they actually change course, i don't think so but many economists use the ppi as a early indicator of what the cpi looks like

much as steve mentioned. so the movement of wholesale prices into retail that actually consumers face, and it may counteract some less than good news that we saw yesterday from the new york fed on consumer inflation expectations which rose on every time interval one year, three year and five year so consumers are expecting higher inflation that is not good news for the fed. so these two reports together i think will be closely watched. >> but a pivot is taking place here i mean, that is the question i think this morning -- >> no, there is going to be a pause before a pivot we may see a slower rate hike in december instead of 75 basis points, 50, i think that is been suggested and may already be priced in. but we, i think, in my opinion, we are far from a pivot. until we get a pause, a timeout on the field, we're not going to see the fed stop hiking. >> rick, what is your reaction to that.

i know you've been calling for a pivot? >> you know, i wouldn't call for a pivot. i would just stop paying so much attention to the fed and start paying attention to markets. especially now that fed is kind of on the contrition route they're trying to do the right thing and reverse some bad decisions and trying to gabe some huge amount of government sending that ceded inflation and i think the better question is do you think ten year note yields have peaked and i would say y-e-s. yes. >> do you think ten year note yields have peaked. >> andrew, i do. i think if you look at the cycle high yield closes, they have peaked and i think that is the question now, the question number two is what are investors going to do with the yield curve because just because i think long dated treasury yields ultimately have the highest in the rear view

moror and i would look a lot of action between the intermedia and three legged spreads going on but in the end i think investors have this one right. you can't win in equities as the professor said unless you're in the game and being in the game doesn't mean you're calling the low every session. what it means is that we don't know when you're going to get days like last week whether we are up four digits in equities which like todays that has another chance to see a four digit dow close today and i think these sessions will be closer together. do that mean all of the bear market could elloff, absolutel not. >> steve jump in for a final word. >> i want to respond real quickly. rick has this exactly right. if we could start to begin to discount the possibility of the fed going over five. and i think you probably agree with that. and if we look at the futures market, we were peaking at 489 and i imagine it is a bit lower

now. maybe they could put it-there it is, 488. and the market seems to have anticipated this so far. and what is fading now is the five-plus trade at the moment. we start to put together another report -- another series of reports with the cpi and the ppi and the pce, which is the fed's preferred indication, we could start to say good-bye to plus five and have a debate about whether or not maybe 4.5 is a place the fed could start. which is if you look at that chart, it means once you get through january, there is a lot less work to do than when we were pricing that number over 5%. >> we're going to leave the conversation there neala and steve and rick, thank you. when we come back, the wharton school professor jeremy siegel will join us to react to the new flination data stay tuned "squawk box" will be right back. all that planning has paid off.

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welcome back to "squawk box. recapping this hour, price inflation data came in half as high as skpeked in october up .2% versus 4 expects. and futures, and we've been in a solid uptrend for about a month and we saw the move on the kpi last thursday. joining us now to talk more about the markets, i don't -- i'm just going to have to calm

jeremy down. jeremy siegel from the university of pennsylvania wharton school of business it is not attractive to take a victory lap and just say i told you so and all of this stuff but do you want to do any of that right now, jeremy >> well, i think i have been saying to you and others the last four months that inflation was basically over that the fed is using lag data, more seriously on the cpi inde than the ppi index but the danger was being too tight, not too loose the fed rhetoric, you know, higher for longer, it really would guarantee a recession. i think this moves up the pivot. all we need is for them to recognize what prices on the ground are actually doing and they are not going up. and the fed can say -- i mean, their probable going to go 50

basis points but that should be the absolute paus pause. if i were there i would say you could pause right now. but i think the day of recognition is sooner. >> you know, jim, you could say that jay powell is crazy like a fox, though. in a way because it is nicer to let the markets do things for you than you doing it to yourself maybe you don't have to go as far. so on that day when he said maybe we're going to slow down the pace and the market took off. do you remember that day and then he felt the need at that point to say, well we now have a higher terminal rate. you just did that because he doesn't want the wealth effect of the market to make his job harder so do you at least give him credit for doing that or do you think that was a mistake he should just say what he means. >> i think that the pendulum has swung too far. they way underestimated

inflation for so long and it is like, hey, i got religion, oh, all right, now i just got to fight it no matter what. >> no, i agree >> and i don't want to be blamed on the other side. and i think he has to face the facts on the ground. i was shocked at the news conference that followed the september meeting when he said i think now we have to be more aggressive, the november meeting, than we were in the september meeting when the data was actually so much more favorable and i think that that really, during his news -- the market went up on the statement and then during the news conference it all went down. my god, what is he thinking? but, you know, it is a matter of time i was also, as i mentioned before, very surprised, he was confronted with the fact there are two housing indexes, one that is forward looking and one is backward looking. basically he said i look the backward looking one better.

i kind of said oh, my god. >> yeah. i was going to -- i have used your name in vain a lot in the last three weeks not in vain but i don't know whether your ears were burning, but i thought, i felt a lot of empathy for your position on this and i don't think -- i mean you pointed out that m-2 was out of control. but you also pointed out that it totally stopped and it crashed so we have this rail strike looming again. you're talking about prices on, you show, shelter and housing and maybe raw commodities, but we still got a real problem in the labor market so neala, the adp economist, said this is a good data point but it is going to rear its ugly head again and we can't take our eye off the ball and it is not the time to pivot. you're still going to hear that a lot and that may be right.

>> well i think there is too much emphasis on the labor market workers are trying to catch up in -- when we get that cpi data, we get what happened to the real wage, it is down 3% or 4%. i mean, workers have been just trying to catch up it is hard for me to think that is cost push inflation which wages have gone up less than inflation. and powell himself, for several years, said oh, we're going to bury the phillips curve. we don't see the relationship between that unemployment and relationship like we did in the 50s and 60s and he seems to have resurrected and said oh, my god the labor market is too tight. the jolts market was just as tight a year ago when he was saying that inflation was temporary as it is now when he said oh, that is a real problem. um, you know, so, you know, all a sudden the fed is focused on

the wages. and if you listen to him, saying i'm not so sure the wages are the problem and then he went back to saying the jolts are real strong and i didn't know where he was stood at that -- on that matter. vacillated back and forth. >> so do you think that the ten-year is seen the highs >> yeah. >> i mean, i think right now, you know, anything could happen. it could go above -- anything could happen washington could beat the eagles anything could happen. so -- >> i'm sorry about that. but it could go above 4% i do not think it will i think we've seen the highs of the ten-year >> do you think technicians, jeremy, are going to revised their almost dog matic view that

this is a bear market rally or does it matter does it matter whether it is a bear market rally, if a year from now we're back in a secular bull, does it matter if this -- if we go down and -- i guess i don't think we're going to test the 3600 lows again or the 3550 lows on the s&p? >> i don't because i think that, you know, that i've described this market as like coiled up, just waiting for that fed so a, all right, i do actually see you know, that inflation has, you know, been solved and the money supply, last six months has been the biggest six month decline in m2 in history or let's say since world war ii. 75 years and it was the biggest increase in history in 2020 and now they slammed on the brakes, the biggest decrease, well, you know, i didn't think that was the way to run monetary policy

it is what it is but they put on the screws and look at what happened to the dollar, look at what happened to commodity prices now we're beginning to see it is on the ground and actually prices the fed will come to that realization. >> you seem to be a lot of exceptions to a lot exceptions to a lot of rules you seem to be, like, an academic that knows what's going on in the real world i don't know how to interpret that, jeremy >> i've always loved the market. i've always tried to understand it when i got my degree -- >> i just assume you're going to be wrong >> i keep the markets and the theory at the same time. >> amazing >> try to meld them. >> i've got to revise my whole thinking about academics professor segal, i use that in a positive way good to have you on. >> thank you, joe. we'll bring you the very latest details in the implosion of ftx that story changing by the hour. don't go anywhere. "squawk box" coming right back

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fallout from ftx's bankrupt rocking the crypto markets we have an updated court filing that just came out kate has been digging through it kate >> reporter: these are some of the details we have been waiting for. in an updated filing in bankrupt court, lawyers say the crypto giant has roughly a million creditors. when ftx filed paperwork on friday, it said it could have more than 100,000 creditors. we pebgt to get a list of the biggest 50 by friday it's been in contact with dozens of regulators in the u.s. and abroad, including u. s. attorneys' office, sec, and sftc the company says ftx faced a severe liquidity crisis on an

emergency basis last friday. lawyers point out 100 entities involving nontraditional assets as they put it it mentions governance they didn't have a board or a cfo. john ray is the new restructuring officer. this is the same john ray who worked to restructure enron. he is working with an external legal team, cybersecurity, forensic investigators to secure customer money in addition, ftx hired in each of the parent companies to ensure proper governance and new independent board members. the former ftx ceo out with cryptic tweets, saying he is going to talk about what happened and says we haven't gotten details yet there we will keep an eye on that. no concrete details. his market maker and hedge fund

was one of the big of in the industry it's having a market impact. ftx is the second largest exchange clients did add liquidity to the market this past week has marked the largest drop they have seen across any other crypto market crash. they are calling it the alameda gap. the markets tend to have more volatility the coin is up slightly this morning. back to you. >> kate, what do you think the hole is at this point? >> in terms of quantifying >> do you have any idea how much money is -- i mean, that balance sheet is such a mess >> reporter: yeah. i've heard from sources that were involved in the due diligence when it game to the company that looked at it, it was around 8 million others measured it around 10 but in terms of quantifying this, i think we've got to get that final bankruptcy filing that will show exactly how much is missing part of the issue, it is

denominated in cryptocurrency. >> right >> reporter: even if we get a number, it's hard to translate into real dollars. >> exactly great to see you this morning with what obviously is not great news coming up, we'll wrap up and get you ready for the opening bell on wall street. "squawk box" coming up after this

all right. let's look at some of the top movers based on earnings news.

walmart is at the top of the list up 7% after beating third-quarter for profit and revenue. also for same-store sales. walmart is up almost 10 bucks now. target shares tomorrow home depot out this morning too. it posted better than expected profit and revenue despite that, it left its annual forecast unchanged despite the big beat it's on for the third quarter, signaling a tougher holiday or conservative ship considering what's going on in the economy. the stock has been up, down and all over it's off 0.4%. the average ticket price jumped by nearly 9% probably because of surging inflation during that period of time if you want to take a look at where the major averages are, the ppi came in weaker than expected too you have the dow up 382 points s&p up by 74

nasdaq up 338. take a look at yields. the 10-year dropped too. the last i saw was below 3.8%. 3.79% now. that does it for us today. join us back here tomorrow target earnings and a bunch of other news too time for "squawk on the street". ♪ good tuesday morning welcome to "squawk on the street". i'm carl quintanilla cramer has the morning off unchanged month on month 10-year below the 50-day moving average. oil below 85 our road map begins with new signs of easing inflation. wholesale rising less than expected futures point to a sharply higher open. >> retail, we will focus on