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tv   Squawk Box  CNBC  November 23, 2022 6:00am-9:00am EST

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up we'll talk all things holiday retail on this wednesday, november 23rd as "squawk box" begins right now all right, good wednesday morning, everybody welcome to "squawk box" here on cnbc live from the nasdaq market site in times square i am not joe nor am i becky i am brian sullivan. i'm along with andrew ross sorkin good morning. >> how are you doing, my friend? >> i'm doing well. i'm just -- i just want to get in early line for black friday deals. i decided to show up here. i'll sleep under the desk and friday -- ready to go? >> a lot going on. >> yeah. we do. all right, andrew, good to be with you let's talk about the markets here probably not a huge market move today. u.s. equity futures, they're up
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maybe .1%. we got markets, half day on friday, no trading tomorrow. thank goodness treasury yields, they're not moving as well just because the markets are not moving, folks, does not mean there is not a lot of news out there and certainly is you got europe news, domestic news, ftx, all kinds of stuff. europe, energy prices, they're talking about natural gas price caps, oil price caps 65 and $70 a barrel on russian oil. wti crude back below 80 to $79.65 natural gas, it has been ticking up again lately. back above 7 bucks as well cold weather is ahead, and cold weather as we know is the enemy of energy prices >> that it is. that it is talking about another way to look, though, at the world bitcoin prices this morning, because they are bouncing now off two-year lows today. take a look at the screen right now. we'll show you where things stand. bitcoin now at $16,584
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talked about sort of what the low could be katie stockman told us she thinks it could come down as low as $12,000 there seems to be some upward momentum here as folks are trying to figure up what is happening in the aftermath of this ftx collapse. traders cautious, closely monitoring contagion from that collapse among the latest headlines on the failed exchange, a lot to tell you about ftx's attorney telling the bankruptcy court that the firm was run as a personal fiefdom of sam bankman-fried. they plan to sell off healthy business units but the firm has been hit by cyberattacks and has, quote, substantial assets missing. the new ftx ceo john ray accused bankman of working with regulators in the bahamas to undermine the u.s. case. there seems to be a battle
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taking place between john ray and what ultimately could be the u.s. courts and the bahamian courts and other international courts so it is going to be fascinating to watch all this play out, brian. >> it is and you wonder the complexity of this bankruptcy, will it dwarf something like enron i found something that mr. ray, who, by the way, i know you said, if the audience missed, john ray -- >> worked on the enron case. >> he was the trustee, winding down enron and his comments the other day, andrew, he said basically irresponsible, immature people, and then he also called them, quote, potentially compromised individuals, and i'm surprised nobody has dug more into that. compromised morally, just principles or compromised by something else that was a very interesting and specific choice of words by mr. ray. >> do you think -- you think he's being compromised by international something or other business
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>> or morally compromised. it was an interesting -- i think he called him -- immature and, you know, and basically messy, but then also he said and potentially compromised individuals, very specific words. >> i don't think it would be unfair to say, right, the generous view is that this was a kid who got completely and utterly over his skis, and the less generous view, this is a ponzi scheme and at some point we'll find out which one it was, right? >> i wonder if the kid couldn't ski. and i think we're learning a lot about poor risk management and i think the -- i'm sure this is a fascinating story, you probably talk about it at home, i do as much as my family will allow me, which is how did he -- how did they get this much money that quickly from institutions? i think that is the -- is it just that there was so much hype
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and hope around the business that people were -- this is your world, andrew. this is his deal book. the pitch book -- >> i have an answer for you. an unsatisfying answer if you're in the -- no, no, if you're in the venture capital business, your business is to support the entrepreneur it is why you found for years and we have seen this story play out over and over again, venture capitalists supported elizabeth holmes, supported so many startups that have ultimately failed because, a, part of the business model is in their minds, you know what, we're actually going to strike out, frankly more than we're going to hit the -- we have to hope we hit the ball enough and hit a couple of home runs to win so, venture capitalists, unlike private equity, even, unlike so many other investors, the level of diligence, the types of questions that are being asked, the repeated not just once the money is in, but what is
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happening afterwards, that is just not happening at the same level in the venture capital world. it never has and i don't know, maybe this will force the issue, maybe it will >> i think those are all fair points and i myself referred to it compared to enron and that's probably a bad analogy i think this is far more -- theranosian than enronian. you had a similar thing, you had a dropout, bankman freed gra graduated, but holmes, they both had their brand, they had their brand, and people bought in. with theranos, there wasn't ever a workable product let's not forget with enron, as much fraud and everything that was going on, kender morgan was built out of enron richard kender took the best parts and left there was a real business at enron. i wonder when this is all said and done, andrew, will there be
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any semblance of any real business or money left at ftx? >> i think it will be very hard for there to be a real recoup. unlike mf global or some of the other firms there. >> that's another good example >> that's a different one. and similar because it is the co-mingling of funds, right? that's what that was but those funds were still there. as we talked about with -- on this show just yesterday, we used the phrase, money heaven, the money may have gone to money heaven or money hell. >> we have more time to talk about this let's move on to other news. hp will cut 10% of its workforce, about 6,100 jobs. company is looking to save about $1.4 billion as it deals with weak pc demand the announcement came as hp posted better than expected earnings and revenues in its latest quarter, but did give
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weak guidance going into the full year. that's the problem there in other corporate news, shares of nordstrom down sharply this morning. the retailer, again, posting better than expected earnings and revenues that's in the past nordstrom is cautiousing sales have slowed in the last couple of months and it is trimming its full year profit forecast. that stock down 10%. nordstrom warning also that markdowns to inventory are hurting margins, also dealing with rising material and rising labor costs as well as, you guessed it, continued supply chain disruptions. >> credit suisse updating investors on its plans for a massive strategic overhaul the european financial giant projecting a $1.6 billion loss they have been experiencing net asset flows saying the flows were approximately 6% of assets under management at the end of the third quarter. earlier this fall, we had a lot of report questioning the positioning and default swaps at
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that time had spiked in other news today, credit suisse shareholders have given the green light to a $4.2 billion capital raise. saudi national bank will take a 9.9% stake, making it the bank's largest shareholder. >> moving on to a story we have been covering extensively, energy u.s. and european allies are set to reach a deal, maybe as soon as today, on a price cap level for russian oil. t that cap could be set between 65 and $70 a barrel the development companying as europe approaches the first winter since moscow launched the war in ukraine julianna tatelbaum joins us live from greece. where do we stand? because just a couple of weeks away from a potential eu sanctions on almost all russian oil. >> well, brian, europe stands in a much better position than many had feared heading into these
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cold winter months europe has been racing to fill its gas storage so that it can have enough energy supplies to heat homes and power businesses throughout the winter. and it has done a pretty good job, thanks in large part to lng. in particular, lng from the united states, the u.s. is now the biggest supplier of lng into europe lng imports are up 60% this year so this is why i'm here in greece this is the only lng term uinali the country. europe's pivot to lng comes with two main challenges. the first import capacity, and the second supply itself in terms of import capacity, europe has 29 operational lng terminals right now. they hadn't been investing in lng in recent years because they were so reliant on russian pipeline gas but we know, of course, that has been cut off for the most part now. so they're quickly racing to build new terminals like the one on this island and invest in
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more storage the second piece here is supply itself and this is where the conversation around gas price caps comes in. europe has been paying top dollar for this lng. and it is because it is incredibly competitive and europe is struggling to find ways to make this gas more affordable and in the months ahead, if china, for example, becomes a bigger buyer of lng once again, if the country opens up and covid restrictions ease, it could become even more competitive. so lng has been the unsung hero of the european energy crisis so far. but key challenges remain. especially when it comes to ensuring supplies for next winter. >> yeah, and next winter, by the way, you're right about the storage levels but i'm just telling you, people are saying, we're fine, everything is fine, no, it's not. about half of all their stonrage was filled with russian gas. that's gone almost all of next year they never filled not with
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russian gas. we'll be telling that story in a couple of weeks as well when we head over your way there is an unsung hero here that is i heard you mention earlier, that ship behind you came from algeria. what is interesting about this is the rise of north africa. algeria, morocco, egypt, they're not getting a lot of love here but their gas supplies may be helping to, quote, save southern europe as much as u.s. is helping to, quote, save the netherlands, germany and the uk. >> brian, you make an excellent point. this tanker just arrived this morning fresh from algeria algeria has been a crucial source of supply for the likes of italy before this crisis. italy and germany were particularly exposed to russia in terms of their gas supply italy has the benefit of being able to get that gas from algeria through a pipeline germany on the other hand, doesn't have that luxury and this brings me to the gas
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price cap that has been proposed yesterday by the european commission many european member states want to see a gas price cap imposed germany, however, has been very skeptical of this. germany doesn't have a lot of options when it comes to gas supply now and they're very weary of a gas price cap because they don't want to lose out these critical lng flows to countries in asia, the likes of china, who might be willing to pay more on that front, we're now waiting for energy ministers to meet in brussels this week to debate this new gas price cap. that is certainly a space to watch. >> yeah, and this natural gas price cap, they're proposing, is sky high the irony is they're putting a price cap at levels that are exponentially higher than two years ago. an interesting twist julianna tatelbaum from greece, thank you very much. andrew >> okay. coming up, will consumers shop or drop this holiday season? we head to a break, check out this morning's biggest premarket
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winners and losers stay tuned you're watching "squawk box" on cnbc
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welcome back to "squawk box. an estimated 114 million customers are expected to make purchases this black friday, including apparently my co-host today, brian, getting ready for the holiday shopping season.
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joining us right now to share their retail outlook, dana telsi, how are you >> good, how are you, andrew >> and ceo of the national retail federation. if this is like an annual reunion, guys, it is here we are. and the holidays are upon us so, tell us what to look for go to the upside and give us the downside at this point >> the upside is that we're going to have a christmas and a holiday season that looks more normal in terms of in person gathering and people are going to be out there, i think this will be a busy black friday weekend. so you have that and celebrations with families being together we haven't had that in two years. what is different, we're going to see promotions like we haven't seen in a long time. retailers need to move inventory. it is going to be a late christmas given that the christmas is on a sunday people feel they can wait, because they have that friday and saturday
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typically when christmas is on a sunday, you get an extra 50 basis points to sales and retails are going to feel margin pressure good values for the consumer, but margin pressure for the retailers. >> matt, do you agree with that? and let's talk about the margin pressure and just all of these deals. is it a function of the fact that the consumer has less buying power than we thought is it a function of too many retailers buying up too much inventory in advance thinking that consumers had too much buying power what is the explanation? >> i think your lead in about our consumers are they going to shop or drop our expectation is they're going to shop in record numbers. 166 million, that's more than we have ever seen, that's almost 10 million more than last year. and our forecast is 6 to 8% growth for the holiday season, which is tracking our annual forecast i think the issues of inventory have largely rationalized, there
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is some outliers there, of course, but late spring, early summer, we really had the headlines about what inventory levels were like and when i talked to ceos of retail companies in general merchandise, specialty, across categories, i think they generally feel that they have got not too much, not too little, it is about right. but it is certainly not what we have seen the last two years when we clearly had too little and we didn't see shoppers out in the same ways in 2020 last year we started earlier, and we really held full price. i think this year as dana said, there will be much more p prom promotion, more value because of inflationary pressures and people are going to wait a bit longer than the last two years because they expect they're going to be better deals later in the holiday season. >> okay, dana, you know i like a deal i like a deal. tell me on the selfish side of where i'm going to get said deal, and where the deal will be, tell me about that but then also tell me who you
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think the winners and losers are in terms of the retailers themselves >> you'll get a deal at department stores, you do get some type of deal at department stores so macy's will be up for that. and they're really positioned well this holiday season you're not going to get a deal at the luxury brands and certainly luxury brands like lvmh, they're selling at full price and goods are moving out the door i also think that when we think about the retailers overall, where we see some of the weakness, some of the retailers given the teens basically have not -- don't have the same buying power as their parents. so they have been a little bit more cautious in their spending that is out there. and i think the other place where you get deals, new products, is anywhere where there is innovation. you look at on running, you should get a pair, those are the popular shoes. you look at uggs which reinvented themselves with new platform shoes and i think you
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still see cosmetics win. and i think ulta is going to be one of the winners there. >> 20 seconds to you, electronics, for a long time, everybody said i'm not buying fashion, i'm buying a iphone what about this year >> you had best buy reporting yesterday. i think people are looking for great deals on electronics one thing we're watching is what is happening with potential rail strike that was with the labor secretary marty walsh yesterday, expressed our concerns about that we talked with the administration we hope we can get a deal. if we can't, we expect congress to step in and get this resolved so we can keep freight moving and make sure we have a smooth holiday for the whole consumers across the country >> that unto itself is about to become the next big story. matt, appreciate it. dana, appreciate it. happy thanksgiving to both of you. look forward to talking to you a lot between now and christmas. >> happy thanksgiving. >> thank you, bye-bye. >> bye coming up on "squawk box,"
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is china finally reaching a breaking point protests erupting at apple's big iphone plant and we have workers and citizens that have frustratwi tion thhe constant covid lockdowns we'll have a report next
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and welcome back to "squawk box. good morning it is time for this morning's executive edge and today we're going to focus on china. covid cases, lockdowns and growing frustrations who can blame them it seems like in some parts of the country, the people -- some people are starting to push back >> absolutely, brian it is looking increasingly as
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though the covid situation here is becoming a national outbreak. chongqing is now on effective lockdown chengdu which just emerged from a lockdown in september has announced mass testing shanghai canceled an auto event and then manufacturing in shenzhen said it is going to require a negative 48-hour covid test as of thursday, similar to what we're seeing here in beijing. and in fact, this all comes as beijing and the sur rrounding areas have been imposing tighter restriction and as they tighten controls for major districts capital economics says it is fearing that the covid situation in china could eventually head toward what we saw here back in the early days of the pandemic in 2020, when hundreds of millions of people were put under lockdown with disastrous consequences to the economy.
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the firm says while there is little prospect of the authorities opting to step back from the zero covid policy during the winter, there is a significant risk that containment efforts failed we had some fleeting good news out of china's iphone city yesterday that the cases were falling. but, today, videos emerged online that were obtained by ap, not verified by nbc, but it would appear to show people who claimed to be foxconn workers clashing with authorities in hazmat suits and yelling give us our pay. this comes as foxconn had promised to new recruits they would give them extra bonuses and higher pay if they agreed to live under the covid controls. brian? >> yeah, it is so hard to get any clear video out. just to have that little video of it is pretty amazing,
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considering the fact that it is so tightly controlled. again, you and i have been speaking for two and a half years and we're colleagues and friends as well. and there is a lot of things you can't say. what is it like for you? what is your day to day living there? our viewers watch and see you there and it is nighttime in a mask outside by yourself, very different than here. what is it like for your day to day? >> day to day, especially these days, it is very much disrupted. you have one plan to send something to a building, for example, and then find out that building is in lockdown or several friends of mine now are in lockdown or in home quarantine or and, again, it is quite -- it is probably really different from in the u.s. i can't even imagine it. i don't still know anybody who has had covid personally, who got it here as opposed to people
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who traveled in. and so that's a lot of the cases here you just hear about people getting locked up, and pretty much nobody knows anybody or had close contact with people who have had covid one other thing, though, that we talked about a lot is this pushback we're seeing. and we are seeing more pushback. it is interesting to see these videos emerge. we are seeing more and more cases of videos emerging just yesterday there was an interesting post which eventually was sensored, but it asked a series of questions to the national health authority. one of the main ones was why does china need to have lockdowns when the rest of the world doesn't? and it is because people are watching what's going on, say, for example, at the world cup. notice people are not wearing masks. like the way we wear them here and so they have been asking a lot of questions and demanding answers, but, again, those posts quickly get deleted.
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>> yeah. and you wonder how much longer the people can deal with it given they're being told to support, quote, their good i'm doing air quotes in reality you talk years in now. people are -- it is eating their life in certain ways that they may not be willing to sacrifice for much longer. eunice yoon, thank you andrew >> coming up on the other side of this, americans hitting the road or sky this holiday, bracing for some of the busiest travel days of the year. we'll join phil lebeau in a moment, live from chicago's o'hare airport already getting busy at this hour first, as we head to a break, a look at yesterday's s&p 500 winners and losers
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welcome back to "squawk box. if you're heading to an airport today, you're not alone. phil lebeau joins us live with lots of other people who are doing the same he's in chicago's o'hare airport this morning good morning, phil >> good morning, andrew. the good news is that it is a relatively quiet morning here. i say relatively quiet because yes there are a lot of people here at o'hare but we're not seeing long lines and that's the expectation not just here at o'hare, but around the country. this will be not the busiest day of this week, but one of the busiest. two sundays before and after thanksgiving are the busiest total 4.51 million people are expected to fly this week. that is just a hair below what we saw in 2019, when it was 4.59 million. there are 1 million fewer seats. the airlines much more judicious about their capacity look at this only southwest has increased its capacity in the fourth quarter, relative to 2019
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american, united and delta, they dropped it or the capacity is flat for the transportation secretary who was here earlier this week, he says the -- he's pretty optimistic that this should be a relatively smooth holiday travel season >> we have seen a lot of improvement from this summer when i called on the airlines to step up their game we have seen more hiring, better pay. we have seen more realistic schedules. but i think we're still many months away from getting to a level where we're all confident that the system would fully absorb a major weather event >> look at shares of american, delta, united and southwest. the key thing to keep in mind with which is really the driver of whether or not this will be a smooth thanksgiving travel week is the weather and the good news is, guys, we have relatively clear weather across the country so, if you have relatively clear weather, you're off to the races for what should be a smooth travel week and at this point,
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it is relatively quiet here at united and here at o'hare that's good news for people. >> okay. phil lebeau, chicago o'hare, good luck to everybody playing the road warrior game this weekend. happy thanksgiving to you. i'm sure we'll be talking a lot more. >> you too >> you bet >> yeah. coming up, we're going to switch gears hp is the latest big tech company to announce big time layoffs. we're going to talk about the prospects for the industry and the value the companies with investor bradley tusk. to break, let's check currencies this morning as well hope you're having a great start to your day wherever you're going, wherever you may end up glad you're with us now. we're back after this.
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welcome back to "squawk box" this morning high interest rates and fears of an economic slowdown have put a lot of pressure on tech companies in both the private and public markets, and joining us now is bradley tusk, ceo of tusk ventures. good morning we're all trying to figure out what's going on in the aftermath of the ftx collapse. what that means to the world of crypto, to private markets, venture capital, the whole tech space. connect the dots for us. what do you think is happening
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here >> i think in a way the same kind of all in extreme world that we have come to get used to in media and in politics has come to business to wall street as well, which is rather than saying, okay, you know, crypto might have some interesting applications and might be some value here it either crypto is the entire future and everyone is all in on it or crypto is -- everyone is all out on it. or you mentioned the hp layoff before break, i think a lot of the big tech companies coming out of can covid said our growth has been tremendous and we're going to double down hire even more people and assume whatever good times are happening now will continue forever and the times never last forever. in a world where moderation used to impact how we made decisions on hiring, on investing, on politics, on what we say, that work seems to be gone. >> is this a fundamental shift this feels to me at least for silicon valley on a relative
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basis to the last time i remember this was obviously 2001 to some degree, where we had a pullback, the cultures of these firms, the facebooks, the googles, the apples, amazon, always growth, growth, growth, growth, growth, and that allowed free food, you know, talk about work from home, or all of these things, you know, say whatever you want at the workplace, i mean, all of that was -- was that all just a boom time phenomena? >> it was a combination of that and also they were different kinds of companies, right? they were companies that we all lovediveexcessively. these are now the biggest companies in the world, and they are subject to the same economic reality as everyone else and so, whether or not they still give out free food as the market shifts and these giant companies are now feeling
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significant decreases in their hiring and in their revenue, it leads to them having to sort of start cutting back the world changed in part because these companies got so big, so successful that they now have to function in a different way than they used to. >> but let me ask you about the private markets then as a function of all this have the private markets, have the valuations actually come down are all of these venture capitalists and private equity folks marking their books properly to reflect this new world. >> great question. i can tell you what we do which is we mark whatever the last valuation was, but if a portfolio company of ours hasn't raised in the last 12 months, we mark it down because the assumption is they most like haven't gone to market because they're not confident in what they would get in terms of offers so, yeah, i know we have certainly done a pretty conservative markdown on our portfolio. but overall, as you see --
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coming in and series a and seed investors, early stage, are valuations lower, more reasonable than 2021 yes. but exponentially lower? no in 2021, when things were really crazy, i would get on the phone with a founder and be told when the call was ended, if i was interested, i had to submit a sheet in 20 minutes. now we have more and we can do our diligence. >> can we talk about that? let's talk about that idea that you would have to file a term sheet or submit a term sheet in 20 minutes to me, the idea of that in a way connects and i know you're not connected to it, but connects to ftx. connects to the collapse of some of these firms and brian asked at the top of the 6:00 hour, you know what about all the venture capitalists? can they see what is going on and on the truth is, most venture capitalists aren't doing meaningful diligence because part of the business model for better or worse is we're going
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to strike out a lot, and we're going to hope we hit a couple of home runs along the way. and as part of that strikeout process, we're going to miss some stuff and that's the cost of the way our model works don't look at us to be the policeman. i'm not saying that's right. but i think that that's what's happening. >> yes, that's definitely the mentality, especially for early stage investors. just rule of thumb is a third goes to zero, a third will be significant hits and a third will get you your money back that's what makes the math work. part of the problem is that that is the type of business they're in the other problem is so much venture money has been raised that they have got to deploy it. not only do they have to deploy it, if you have a $600 million series a fund, you can't write $2 million checks, you have to write $15 million check, so of that, it continues all the way down the line into the growth equity funds and everyone else and the only time reality sets
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in is when the companies go public and the markets generally, rightly, cut the valuation significantly back around to what it could be >> so help me with this. the public is, i think, rightly upset, frustrated, mad, angry, at what has happened at ftx, but they also believe that the venture capitalist firms and the financiers around it were complicit and therefore were responsible for all of this. inside those firms, however, they look at it as a write-off and something that say tiny part of a larger fund and so i don't think that they see it the way perhaps the public or the customer sees it >> well, yes and no. so, yes, i think you're right, the business model is just kind of -- you got to shake it off and keep shooting, for sure. but, look, sequoia has significant egg on their face over ftx investments and the way they talked about sam bankman-fried. you saw them apologize to
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investors. i suspect on the next deal like this they'll do more dill gen diligence and be more careful about it that trickles down to everybody else i think we'll see better diligence. but you're right, this is a business that is taking shot after shot after shot and hoping a few hit and knowing ftxs of the world are going to happen. >> final question because i know we're running out of time, we haven't said the word, the two words, elon musk this morning yet. >> amazing we made it this long. >> what do you think >> i think he's got to be a little careful tesla's market cap, couple of days ago, $564 billion, general motors is $566 billion a lot of tesla's valuation is based on hype. it is based on promise and potential. but it is based on this belief that elon musk can't fail, right? and all of a sudden if he does fail, he can't rescue twitter
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and it seems like he's having a hard time doing so, will you have to worry about investors saying, you know what, is tesla a house of cards should spacex be valued as high, starlink, hyperloop? he benefits from the hype machine more than any business person in history. and as a result, he is doing something really public right now. if it fails, he runs the risk of it bleeding into everything else he does. >> would you bet he succeeds or fails? >> i so far would bet fail, only because i have yet to see a new idea come out of him or his team that is particularly interesting. every idea they had for monetizing twitter is, well, we'll do more e-commerce or we'll sell more ads. it is the same old stuff if they come up with something new and inventive, sure i bet on elon musk. they need better ideas than they do so far. >> bradley, that's a brave thing to say a lot of people -- >> i say what i think.
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>> happy thanksgiving, sir hope to see you very soon. >> thank you for having me on. coming up, it is an annual "squawk box" tradition, a visit with the talented folks at the butterball turkey talk line. if you're cooking tomorrow, you cannot afford to miss it this is practical news youan e. c wee back after this. at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.
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it is time to talk turkey. it is the day before thanksgiving, i'm told if you are feeling stressed about prepping the holiday feast, do not sweat it maybe have a couple of adult beverages. but also the folks at butterball are going to help you avoid fowl play the supervisor of the butterball
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talk line in naperville, illinois bill, let's talk about this. hey, let's be real a lot of families may be getting together for the first time in a couple of years for thanksgiving or maybe getting together in a big way. obviously, coming out of the pandemic so there may be a lot of newbies out there. what's your best starting piece of advice for a newb in the kitchen. >> first of all, thanks for having me on pleasure to be with you again. my first piece of advice is be prepared be like a boy scout. be prepared. have your turkey thawed. if you have any questions, give butterball a call. 1-800-butterball we can walk you through taking your turkey from this in the package to this in front of me cooked to perfection, golden
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brown. we can walk you through the entire process. >> yeah, okay, so the most common mistakes, i would imagine, are drying it out, keeping it in the oven to long, not letting it sit and don't throw a completely frozen turkey into a deep fat fryer. that's number one. don't do that. >> that's a bad thing. when you got to be careful it's a great way to cook a turkey, great flavor. but never put a frozen turkey in the oil. a lot of people don't have the turkey fully thawed. this is a problem. it's not going to turn out it's going to be overcooked and under cooked drying out the turkey, here's your secret. reliable meat thermometer. have it ready for the cook
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when you take the turkey out of the oven, 170 degrees in the breast and 180 degrees in the thigh for optimum eating quality and food safety. it's dry because it's overcooked maybe they took it up to 180 and that's too much. >> what is the right temp, bill, in general there's size differences for the turkeys. what's a good temp >> the best temp is 170 in the breast when you check it, have your thermometer. go into the breast, down until you hit bone pull it halfway out. check the temperature. you want to hit 170. in the thigh, 180 degrees. same thing put it down into the turkey,
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pull it halfway out and check the temperature. and do it in a couple of places. you're going to find different temperatures in the turkey those are the two numbers you need to remember if you stuff your turkey, you need to check the temperature of the stuffing and that needs to be 165 degrees >> do you have any temp recommendations on a turducken we'll do that in a different segment. i know you're going to be really busy we appreciate you being out there for us good luck to you and your team and everybody. thanks very much have a happy thanksgiving, bill. >> happy thanksgiving to you as well. >> thank you very much. coming up, this morning's big stock movers stay tuned you're watching "squk x" ghhe on cnbc
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thanksgiving and they're in a shortened session on friday. all right. that doesn't mean there's nothing going on on today's agenda, you're beginning to get minutes on the last fed meeting also, cleaning up the mess left by sam bankman-fried. the latest on what is next for the crypto investor. airlines and airports around america are getting ready for the holiday rush in what could be the highest trading in three years. we'll get an outlook for the sector and what is shaping up to be a very busy holiday season for investors all as the second hour of "squawk box" begins right now. ♪ good morning welcome back to "squawk box" right here on cnbc right here -- or i should say,
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good morning you i'm andrew ross sorkin if i am remember my own name -- >> easy for you here to say. >> i'm here with brian sul vin who is here for joe and becky. >> it's the wednesday before thanksgiving i'm also hosting a 6:00 p.m. special tonight. >> wow. >> that's just the cheap plug. >> you're doing double duty. >> who is left it's just us a couple others. >> we got to get to the markets, we'll talk about -- >> do we >> we'll talk about what you're buying for christmas on this black friday i've been looking up stuff to buy. u.s. equity futures at this hour, let's show you where things stand, dow looks like it would open up 20 points higher the s&p 500 up a little over 3
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1/2, close to four points. you're looking at the ten-year note it's sitting just at about 3.765. the two-year at 4.535. and oil, brian's favorite subject, it will cost you wti $79.35 but just under $80 right now and crypto, as we've been continuing to watch the fallout from ftx, a little of a bump here ether sitting at 1,174 dollars i don't know if we want to say it's staging a comeback, but on a relative basis, i think that's a fair thing to say for this morning, brian >> yeah, certainly we're going to talk more about the potential price cap or sanctions on oil and gas i think the technical term is squat. but we'll get more on that coming up. among the stories making headlines this morning, workers at the biggest iphone assembly
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plant clashed with police last night. the plant has been under a covid lock county in recent weeks. the protests erupted after the workers learned the promised bonus payments may be delayed. i heard from some viewers, when we started to do that segment, it got blacked out in china. we got whacked on this one the white house has announced an extension to a mo moratorium on student loan payments if the litigation is not resolved by june 30th, patients will be resumed 60 days later. and good news for disney,
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"the wall street journal" reports that chinese authorities have approved the release of disney's avatar, the way of water in that country. it's a sequel to the 2009 hit movie and it will be released globally on december 16th. studios have seen a number of movies banned by the chinese sensors. everybody can sleep easy >> i'm going to it and a lot of people have to. to get that $2 billion back, it needs to be -- >> what was supposed -- what was the controversy in the movie just sign off on all the movies. serious question >> i don't know the detail but, by the way, this movie to make money, it needs to be, i think, the third or fourth largest grossing film in history. that's the bar to clear. meantime, want to get over to dom chu who clears the bar every morning, looking at this morning's premarket movers. >> that's very nice of you to
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say, andrew. i appreciate that. let's start with the big earnings story of the morning here that's deere those shares are up big. it was around 8% now it's up 5.5% in the premarket trade. just around 3 to 5,000 shares of trading volume not huge yet it's after they reported earnings and revenue that topped estimates and consensus. it also said it sees tailwinds in the coming year due to positive farm fundamentals and increased investment in infrastructure all on balance leading to a 5% bump nordstrom down profit and is revenues topped consensus estimates and it did reaffirm its full-year forecast. nonetheless, some of that leading to negativity to the tune of around 8% for nordstrom.
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and we'll end on shares of hp which are bettgetting a bid. they said it would reduce its workforce by around 4 to 6,000 people by the end of fiscal year 2025 the company has around 50,000-plus total employees overall. brian, andrew, some news there on that front. i would also say here that i am filling in for brian this week on his show at 5:00 a.m. he's filling in for joe and becky. i'm filling in for scott wapner in the noon hour you know it's the holiday season when we have a lot of moving parts for people -- >> i was filling in for kelly. so now somebody is filling in for me who is filling in for kelly as i fill in -- this is so meta pretty soon i'm going to be filling in for dom, but he'll still be there. >> musical chairs all over.
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>> and it's going to get worse into december. >> and i'm a hologram anyway i'm not eveneven here. dom, thank you. we've got some mortgage data let's go to diana olick for this and i'm assuming some real bad numbers? >> not so bad, but they are real and i am here and i'm filling in for no one mortgage rates are down. almost half a percentage point from their recent peak and it's lighting a tiny little fire under mortgage demand. it rose 2.2% last week and that's according to the seasonally adjusted index. the average rate on the 30-year fix felled to 6.7% from 6.9% that's for loans with 20% down it was 3% in january so refinance applications rose 2% for the week, still down 86% than the same week one year ago,
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even with interest rates recent back from their recent high, there's few who can benefit from a refi mortgage applications to buy a home rose 3%, but we're still down 41% from a year ago when the decline in rates, the arm share of applications decreased to 8.8% of loans that was down from 10 and 12% during the last two months so mortgage rates haven't move at all this week as the upcoming thanksgiving holiday tends to lessen the volumes we'll have to wait for cpi and see what happens to rates. >> mortgage demand up. it's amazing how sensitive people are to minute moves in the mortgage market. and i mean that sincerely, i'm shocked. >> well, especially for buyers who might have been sitting on
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the sidelines and they're worried that rates are going to go back up over 7. they see them below 7, 6.6, 6.7. maybe they jump in and see there's not so much competition in the market right now. there's more negotiating power, boom >> that's it boom and now 6 1/2 apparently is the new 3 1/2. everybody is happy to see 6 1/2. it's amazing thank you very much. let's go from one market to the macro markets. joining us now is kevin simpson. kevin, i'm going to kind of pivot at the start here. i don't want to throw you under the knowledge bus on real estate, but i will say this, the real estate market is a lot bigger than the stock market real estate matters to far many more americans than the price of a stock does it's the biggest single market in the united states if real estate were to take a severe downturn next year, just kind of seize up as everybody is
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locked in and can't afford to move, what happens to the equity markets? can the equity markets persevere even if real estate markets do not? >> it can, but it won't be as east the good thing about this economy versus the 2007 financial crisis, we're not overextended with subprime mortgages. people who can't own one home aren't owners of four, five or six. i'm not looking at this scenario as being disastrous as what we saw back then. and i think a lot of the damage has already been done. refi is down 86% year over year. the values of our homes are coming down. i think that's what the fed wants. they want the gas down on the pedal because they want these valuations to come down. would it have an effect on the stock market, brian? absolutely the bond market it is tells us it will. if we look at the inversion,
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it's at the deepest, steepest part that we've seen in over 40 years. they're flashing a little bit of red. and i think your point is well taken. it doesn't mean the stock market has to go through a massive correction it delays the return to normalcy >> what's the next major thing, then, on your radar? everybody -- we're watching the fed meeting, i get it. i'm going to say something that i probably shouldn't, i don't care i don't think the market says. 75 basis points or 50, it's what they say and what happens next year do you agree with that or am i just being tired and grumpy? >> no, you're tired and grumpy but totally right. ebenezer scrooge is the new face of the fed what they say on february 14th, not what they do, is so important, where's the terminal rate we'll see how far they want to push it. i could make a case that the fed
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has already pushed the u.s. consumer too far here we are in front of thanksgiving, black friday, cyber monday, this is the time that retail sales take front and center black friday is not the same it used to see. i saw sales before halloween but it's still really, really important. because the u.s. consumer, they've been the pillar of strength since the depths of the pandemic and what we're seeing now is the consumer sentiment is breaking down a little bit it was up in august. it was up in september but it was down in october we'll get another read for november today at 10:00, but i would expect that their views on the economy are tepid at best. so i don't know. is santa claus coming to town this year? >> well, yeah, santa claus -- my son may be washing the show. who knows. santa claus is coming. everything is fine what about 2023, though, kevin we've remarked many times that stock markets can go up even as
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rates rise 94, rates soared, 95, the dow soared do you have an early read on next year? >> it's tough to predict next year because we still have six or nine months to sort out what the fed is going to do and how the economy and inflation will react to what they've already done if i'm talking about next year, i'm thinking the first half is still going to be range bound, the bottoming process, there's by no means an all-clear signal. there's not a fundamental reason for a bull market to start for an extended basis just yet but the second half of the year can certainly be a much better story. and i think in truth, as we sit here next thanksgiving together, you won't be grumpy, the markets won't be nervous we'll be celebrating a much, much better outlook for 2024 2023 is another year where we're going to have to sort through a lot of data. i don't see a big sell-off but i think next thanksgiving we'll have a lot more to be
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thankful for. >> let's hope. that would feel very good. thank you very much and happy thanksgiving to you and yours. >> thank you, brian. >> all right coming up, with the holiday season upon us, we're going to speak to the co-founder of warby parker about inflation, the state of the consumer and so much more. let's get a check on the markets. "squawk box" coming rit ckghba >> announcer: this is cnbc program is sponsored by baird. visit bairddifference.com.
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welcome back to "squawk box. multiple forecasts for holiday spending signaling a robust season ahead joined by warby parker's co-founder neil blumenthal it's great to see you. happy thanksgiving. >> happy thanksgiving. >> we're all trying to understand what's going on with the consumer and what you're seeing and really how much strength the consumer really has at this point. what are you seeing in the stores and on the site >> so we're still seeing sort of traffic impaired relative to 2019 levels. we're seeing consumers get back into normal routines, particularly we're seeing more tourism, more tourist traffic,
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we're seeing more folks get into daily patterns and sort of going into their office with -- which helps a lot of our urban stores in particular. it's not necessarily consistent across the country we found that on the east coast, for example, more office workers are back in the office, at least three days a week, than on the west coast >> how much of your business was or is dependent on the sort of foot traffic, the tourist piece, the impulse buy of somebody who is at the office and there's a store nearby, relative to those who were literally going there because they needed a pair of glasses? >> so we find that the split between, for example, urban and suburban productivity is about ten points we're comparing to pre-covid 2019 levels and we're seeing sort of improvement over the course of q-3.
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our stores were averaging going into q-3 about 80% of their 2019 levels from a sales perspective and exited the quarter at 85%. we're seeing positive developments when i'm visiting our stores, they're busy but many stores are not. our stores tend to be a busy along with apple and lululemon and our store teams are doing a fantastic job with the traffic that is there, that traffic tends to be more intentional and we've seen conversion rates increase dramatically. >> so let's talk a little bit longer term the stock. you came on our broadcast when the company had its ipo. it is down along with the rest of the market. but it's been down perhaps more than that. help us understand what you're telling investors at this point and what they should expect. >> i think they should expect a continued commitment to sustainable growth and what we mean by that is sort of
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aggressive, ambitious growth coupled with expanding profitability. in q-3, for example, we grew 8% while all of our optical peers saw declining sales. similarly, we expanded profitability unlike a lot of other companies, and sort of that 2021 cohort of public listings we get lumped in with we saw the adjusted ebitda expand, more than double quarter over quarter to 8% of revenue. so you're going to see that continue to be the baseline that we expand from so we're one of the few companies that are going to continue to grow through this challenging period and expand profitability. >> what's that look like in terms of spending for new store and is what do you think longer term i don't want to say that business will ever plateau, when you start to think long term of what a pie chart looks like versus sales coming off the
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business model that we talked about earlier on and what has turned largely into a massive brick and mortar business as well. >> we'll end the year with 200 stores across the u.s. and canada there are over 43,000 optical shops in the u.s we have a long way to go 90% of americans buy their glasses in stores. so we'll continue to expand. we'll have opened 40 stores this year those stores pay back within 20 months and have a four-wall ebitda of 35-plus percent. we continue to be very excited particularly about the category. by 2050, 50% of the world will need glasses and, you know, folks like us that are able to provide exceptional value and fashion for a half or a fourth of what people are paying elsewhere just puts us in sort of -- what we
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think is a very enviable position >> contact lenses, up 50%. >> it's going to be a major growth driver over the next ten years. it's typically about 20% of a retailer's business and it's actually shown more durability during the dislocation of the last couple of years if you're wearing contacts, you need to buy those every single year if you have a pair of glasses, you can potentially delay that purchase by six or 12 months which is what we believe happens in the first half of this year because of omicron and what we started to see as some economic dislocation. >> i want to thank you we need to have a conversation about the metaverse and whether you think those goggles are going to start to compete with you and people are going to solve for vision by changing
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what we're actually seeing in our goggles. that's a -- >> i think we have -- >> happy thanksgiving to you and your family. >> thank you, happy thanksgiving coming up t beginning of the bankruptcy process for ftx, marking the latest turn in the ongoing saga the fallout continues to grow. there are so many questions still out there. many investors have been searching for answers and also where the heck is their money? we're going to speak to the ceo, the chamber of digital commerce about the situation and what it means for crypto right now we're seeing the price of bitcoin, it's up a little bit. we're at 16,500. it's higher across the board dow futures up 16 points we're back right after this. >> announcer: time now for today's aflac trivia question.
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today's aflac trivia question. according to the american farm bureau federation, what is the average price of a 16-pound turkey this year the answer, $28.96 that's up from $23.99 last year. >> still to come after the break, bitcoin higher after hitting a two-year low just yesterday. we're going to get a check on crypto and the latest from the ftx saga next. airlines prepping for a busy travel weekend can they keep up we'll answer that question stay tuned, you're watching "squawk box" and this is cnbc.
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♪ welcome, everybody, to "squawk box" on this n thanksgiving eve andrew ross sorkin is with us as well it's his show, by the way, i'm filling in this morning. >> good morning to you, my friend. >> thayou live here, i know, bui don't spend a lot of time in the
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city the city feels alive >> it's alive. the city is coming back. i'm rooting for new york city. it's coming back not everybody is going to the office every day, but it's coming back. >> yeah, christmas lights out, people are smiling, go downtown, just nice stuff. i'm trying to be in the holiday mood let's get a quick check on futures and see if they're in the holiday mood they are they're up not a lot. but, at least they're in the green. fed minutes, by the way, i know you're waiting i've got a countdown clock on my phone to when the fed minutes come out they do matter, but we know this, the fed is going to raise rates december 14th. will they indicate more rate hikes down the road as well? i don't know if you are as, quote, fed up as i am because we talk about it every day. but it certainly does matter fed minutes out today, 2:00 p.m. eastern, andrew, get pumped.
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>> i'm ready i'm ready. i don't know what you think you're going to see, though? >> i'm not going to see anything because i'm going to be prepping for the 6:00 p.m. special. have i mentioned the 6:00 p.m. special. that is 6:00 p.m and it will be special tune in. >> eyes on the prize eyes on the prize. >> live. crypto prices, by the way, remain volatile, that's an understatement after the fallout of ftx now former ftx ceo sam bankman-fried is telling his former employees his own mismanagement of company assets and risk positions is what led to the sudden collapse he wrote a letter to his staff it's bizarre like so much of this it's very long, by the way and part of it he says that he, quote, did not realize the full extent of the margin position nor did i realize the magnitude
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of the risk posed by a hyper-correlated crash the letter comes after sam bankman-fried's management was blasted in bankruptcy court saying he ran the company as a personal fiefdom before we bring in our guest, i want to say something. we call him former billionaire he was never a billionaire i think we all know now it was just leverage and fake money, right? how do we know he was ever a billionaire? >> i mean this, goes to a question of what is money? but if you decide the crypto is not money, but at some point, you were able to get money with crypto and so, was he a billionaire? i don't know is elon musk a billionaire i think he is. >> he's got it in tesla stock. he can take that stock and sell it to you and me and get real
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money for that i just don't know if sam bankman-fried was -- >> this goes to the question of whether any of the crypto market is actually liquid enough so when you look -- and we can talk about this, but when you look at the market caps of all of these cryptocurrencies, what the liquidity of those market caps are such that when you base a valuation of a -- of a person or a company on them and allow people to leverage based on that, whether those are real numbers. and that's i think what's happened here. >> i'm not going to say former billionaire anymore. it's like if you said, remember when i said we had $8,000 in credit card debt what i meant was 800,000 in credit card debt that's basically what happened running a business like a lemonade stand
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listening in to all of this probably champing at the bit to jump in here what's your take do you think that mr. sam bankman-fried was ever truly a billionaire or was just a house of fake cards the entire time? >> hey, good morning, and happy thanksgiving eve the hearing, as well as the letter that you mentioned, it brought more to light of what we already know spf and ftx, it was a fraud and it needed to be shut down. but it wasn't the regulators, it wasn't the law enforcement, it wasn't the cops on the beat that brought this down, it was the crypto industry itself that exposed ftx and brought it to its demise it's clear this is a huge mess the bigger question is, how could this have happened right under the nose of all the regulators how could this have happened right under the nose of all the banks. we learned yesterday -- >> half the regulators ended up working for ftx.
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you had people that were tired and resigned and went to work -- one person, a high-level regulator on the board again, we get into this messy-type relationship which is, i think, fair to say ticks people off on a macrolevel and we have an op-ed from senator elizabeth warren her words, not mine, regulate crypto or it will take down the economy. again, maybe that's a little bit hyperbole. do you think crypto has the ability to, quote, take down the economy? >> it's completely ridiculous. this is just trying to catch headlines. first off, we've seen statements from secretary yellen who said there's been very little pillover from the takedown into the larger financial system. the industry is very much committed to keeping crypto and the larger financials --
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financial services industry separate, preventing contagion and stability to the markets the industry today is valued under $1 trillion. this is nowhere near the level of systemic -- senator warren has this wrong and she's going to go down on history on the wrong side of this >> help us understand this we were talking about just the valuations of all of these different coins. what's really behind them. frankly, in many cases, very, very little, except what might be described as a faith in them. that's kind of what's going on in them and how liquid they are. when you look at an ftt token or -- so many of the coins that ultimately seemed to be backing the valuation of what ftx and alameda were doing was based on this idea that they had market caps in the tens of billions of dollars and yet the truth is,
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that on any one day, there was no other -- it wasn't like a company could buy another company for a let amount of money and because -- and there was also this issue of sort of a -- not the largest float in the world. it was sort of potentially artificially inflating the price of these assets. >> yeah, that's absolutely right. ftx issued they're own token they created their own cryptocurrency out of thin air they used it as collateral that is not a best practice in the industry and it absolutely impacted the level of issues under the hood at ftx. i think it's important to note that despite the ftx scandal, that this really brings us back to the fundamentals of crypto, the original cryptocurrency is bitcoin and its fundamentals are strong everything is at all-time highs expect the price so it's important to know the total hash rate wallet, measure
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of adoption, network difficulty, these are all at or near record highs. you have to dig a little bit deeper than the price, understand how these cryptocurrencies work and a lot of them were created out of thin air. >> okay, all the other stuff you mentioned, it is fair to say that ftx is not bitcoin and bitcoin is not ftx what i want our audience to understand is the point you just made they created a token out of thin air. they're not the only ones who did it binance, others have them. i want to ask you right now, why would any sane investor, smart, whatever, accept ftt the token as real collateral to fund a multibillion dollar hedge fund when i leave the show, i'm going to go into a car dealer, i'm going to print up sully bucks on the printer here at the nasdaq
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and i'm going to say, these are perfectly good this is sully bucks and they're backed by nothing, but you should give me a card. that's what happened it's like the scene from dumb and dumber where jim carrey has a bag full of ious who could do this? >> this isn't a lot different than government money. government money is backed by nothing. we used to be on a gold standard all money -- >> we do pay taxes. >> you do pay taxes. >> a lot. >> but the monetary policy is absolutely broken. fix the monetary policy, fix the money. currencies that steal from their people through inflation is not a moral system this is why we need bitcoin and why we need blockchain technology. >> it's a good discussion. i have a feeling it's not the last one on this topic. >> thanks so much. andrew >> airlines and airports preparing for a surge in
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passengers over the busy oholida season with a number of travelers expected to hit the highest number in three years. the lines seem to be moving. is that tsa precheck we're going to get an outlook for the sector and talk about what to expect before heading to grandmas after this. >> announcer: squawk coin is sponsored by bitwise the world's leader in crypto index funds.
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all right. it's a live look, by the way, at o'hare airport in chicago. you can see there, 6:44 in the morning there and it's already packed if you're flying in o'hare later today, you might want to get to the airport now. airlines are preparing for a surge over thanksgiving. expected to be the highest levels in three years, if not more joining us now with more is steve trent, citigroup airline analyst. what are we expecting from volumes? i've got to imagine they're going to be well above obviously the last few years for obvious reasons. can we see absolute records? >> yeah, great to be here. thank you for having me on and happy thanksgiving to you. so absolutely for the
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thanksgiving travel period we could get beyond 2019 levels so we have had a couple of days over the past several weeks where we've surpassed prepandemic levels this thanksgiving period looks to be robust and i would say it's so far -- no news is good news we're not really hearing much at all about big cancellations or anything like that so just a lot of throughput. and we could see some high numbers come the end of the weekend. >> do we end up buying any stocks because we go to the airport and every plane i've been on has been 100% sold out 100% of the time does that mean i need to own that airline stock >> great question. so i think when we look forward, you know, what are going to be the places where we see momentum the u.s. market leisure side looks good what we are seeing in our
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surveys, for example, maybe some of the corporate demand is looking a little light we've had a number of interest rates and some companies reducing staff but those international corridors are starting to look really good. so transatlantic, even some transpacific is looking very strong so i think you want to own one of those big network airlines like a delta that has a lot of metal on those international corridor if you're on the u.s. market, you want to capture that throughput with a frontier airlines, for example. >> i was speaking with a ship broker yesterday about shipping and lng and he said something that shocked me. he said all the flows of diesel are going to south america south america seems to be booming. and i notice you've got copa airlines are we missing an entire continent of potential
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opportunity? and i said continent, not continental. >> well, continental was a piece of copa back in the day. you do have some interesting opportunities south of the border so you look at a cope airlines, for example, they reported in 3q an ebita margin of 17.8% for the court quarter, guiding to a 22% margin most airlines don't do that without a pandemic and it looks like they are really prime to show some very strong numbers within the space kind of south of the border, you do have some pockets here and there where traffic is spooling up where you've got a lot of low density route flow revenues are very high and then you have the refleeting aspect of things which is driving the train in the right
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direction. so, you know, the u.s. big three get, you know -- 75, 70 to 75 some odd available seat miles per gallon some of these newer airlines with newer fleets get over 100 miles per gallon. >> you had me nervous. you said continental was a piece of copa. for that last word i was a little bit scared of where you might be going have a great thanksgiving. do appreciate that >> pleasure. happy thanksgiving thanks. >> coming up, the challenges another disney after the return of bob iger as ceo we're going to break down some of the moves being made and what the magic kingdom will look like under iger's return to the helm. later, galaxy digital founder mike novogratz is going to join us much me "ua b" eaoronsqwkoxahd. luxury exemplified.
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welcome back to "squawk box. going to talk a little disney right now. disney's new ceo bob iger making moves in his new role. with a restructuring and distribution for more on all of this, i want to welcome cynthia littleton, she's "variety's"co- editor in teef and what is bob iger going to do and what it means for the company, it's valuation and everything else. what are you expecting in terms of first moves at this point >> well, it's been an interesting couple of days, certainly, for disney that has had no shortage of drama in the last couple years. i think bob iger, you know, day one literally of his ceo job 2.0, he made a big move.
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he announced that a restructuring that had been implemented in the fall of 2020, that had been controversial from day one, he basically said in a memo that that was over. >> right >> and that a key executive that had been part of that left the same day, one of bob chapek's top lieutenants, kareem daniel that was a strong signal, not 24 hours after he announce head was going to make that big change. that right now, we'll know there is more change to come >> cynthia, one of the things that happened, as you know, investors cheered this decision. and you saw the stock move up in a material way and one of the things i wonder is whether he is going to have to reset expectations? whether he's going to have to come public and say, look, i got into this thing. i got into this thing, look at this mess over here. there's a mess behind me, and maybe you throw everything in
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the kitchen sink at that point but at some point, if you're going to have to both talk about the mess that is behind you and even talk about level-setting expectations going forward, what does that really look like and how should investors think about that >> i think that's a great question i think disney looked around and looked at these big questions, looked at the numbers on its balance sheet and realized that there was going to be a lot of -- excuse me, a lot of communication. and a lot of discussion with the investment community, with consumers around pricing they looked around and realized there was going to be a lot of difficult conversations and was bob chapek the right person to lead them. and they had bob iger right there, available he was right on the precipice of doing some bigger deals that would have made him not available for this extraordinary return and i think they looked around and thought, these are choppy
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waters, do we want it go through these with bob iger at the helm? and i think the answer was yes and i just want to point out there is an aspect here that bob iger is returning really to see through the execution of a plan that he set up in 2017 and 2018. so this is really interesting. >> that's good joanne, i want to talk about the governance of this joanne whitman is here, editor d joanne, the intelligence that allowed this to happen the first time around, how you think about that and how you think about this other piece, thus, to turn around the company and find a successor, he's got a lot to do in the course of two years, if you believe that's what this is. you know, people have been comparing this to howard schultz returning temporarily to starbucks. i don't know, do you think this
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is a bigger challenge? less of a challenge than what howard schultz endeavored to do? >> yeah, andrew, you're absolutely right about this succession issue so, iger, we know has had an absolutely legendary career, 15 years, absolute, you know, huge success. but in that time, he had one major miss, one big failure, and that was the end of succession planning that coming back, you look at what is his number one job, he's got a lot of things to fix but at the end of the day, the number one job in two years is a do-over, to find the correct successor to train that successor. and there's a big question, you're right, harold schultz came back, this is a syndrome now of a boomerang of ceos that we're seeing more of howard schultz came back, steve jobs, michael bloomberg. and there's research done on
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this with management reviews from academics, that in general, it's very spotty when these ceos do return. they found that actually -- >> right, right. >> -- for the most part, shareholders returned and the stock value is significantly lower. >> cynthia, real quick, who do you think is the successor i mean, i'm looking at the name, sandy waldman, alan bergman. jimmy at espn. some people talk about tom satches coming back. >> i'm not about to commit career suicide here, by picking i will say, i believe, it will be somebody, once again, internal >> internal. and the final exit, the final exit is a successor, or sale of the whole company?
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>> oh, good question good question. here's what i will say i think those of us that know bob iger read that two years and thought, yeah, maybe two years maybe not. >> okay. joanne, cynthia, happy thanksgiving, we'll talk to you soon appreciate it. >> you too, andrew thanks >> thank you and novogratz going to talk about and ats. and values are up. we're back after this. what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq
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good morning futures point to a slight gain, but oil prices are falling and to the kept of a cap on russian crude, that being considered some of the biggest countries in the world. meanwhile, chaos in crypto land and they're warning about significant assets they say is missing. galaxy digital's mike novogratz is going to join us. it's airport day for so many airports and roads expected to be jammed for travelers for thanksgiving we've got your coverage from the roads to the skies as the final
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hour of "squawk box" begins right now. ♪ ♪ all right. good morning and welcome, or welcome back to "squawk box" here on cnbc, i'm not becky, i'm not ryan, i'm brian here with and drew u.s. equities, they are hire, just a reminder, everything, obviously, thankfully, is closed tomorrow, of course. friday, there is some trading, half day my guess is we're probably not going to see a lot of positioning ahead of it. you never know but it unlikely, everybody is either at the airport or new jersey turnpike. that includes me at some point today. you there go, stock futures higher treasury yields not on the move much as well we do have minutes of the federal reserve meeting coming
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out at 2:00 eastern. their next meeting will be december 14th as well. it's that setup, let's get more with the senior markets commentator, mike santoli. mike, yeah, we've got a holiday tomorrow friday, half day but there's still stuff to watch. >> yep minutes a big one, as you mentioned, brian, it's three weeks old, the minutes from that meeting is three weeks ago, but it sometimes is does move the market a little bit and also i think we had a seasonal minibreakout high that's being held, that's worth watching. we had treasury yields in check over the last few weeks. dollar off its high. even though the fed is out there saying we're not done. the market seems to be absorbed. oversold in october. the 4,000 mark at the s&p 500 as of yesterday those close it takes you back to september before that happened now, keep in mind, this is basically the august peak, that was a hot cpi reading, combined with the jackson hole warning from jay powell. you've got september, the hot
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cpi warning. we've obviously got some tests from the downside from inflation. now, we're kind of dealing with the upside, a potential for peak inflation there. take a look at financials, you want to talk about the field position here, looking like they might be able to break above this let me that has challenged them for a while now the overall market is really looking like it has no net downside for the last six or seven months it's remarkable. the fed hiked by three basis points financials, a steady group along with industrials and some others. now, the mega cap growth names that came into this year with such towering valuations and crowded and popular. take a look at a couple of this, tesla and nvidia, relative to the equal 58 equal weight this goes back 12 months, tesla and nvidia, kind of gone in sync there's a twitter selloff here,
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from this point where it's gotten pretty steep, but it's not really the whole story because you had a lot of those hyper growth names that got huge, back in the runoff that have unwound to a fair degree. and obviously, on a multiyear basis, tech was still up huge, on a one-year, giving up half its value, brian >> all right yeah, mike tesla, we've talked about this, i've said it may be one of the most important stocks in the market, because of all of the activity, derivatives all tied to it as well people you talk to think the market can go up if tesla does not. the market, as you define it as the s&p 500 has a bit of a challenge, i think it has to find other upside excitement in order to offset the unwind in tesla. tesla was the biggest stock in the s&p. now it's down around 10. so it becomes less important to the overall index than it was
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not that long ago, as time goes along. now, to your point of the kind of constant barrage of upside speculation going on, it was actually having kind of a feedback loop that was helping the overall index. that's done for the most part. you have to have organic type buying because that gain seemed to have calm down. >> well said, mike, thank you very much. >> all right let's talk crypto right now, the first bank hearing for collapse of crypto, the attorney saying it's suffered hacks and missing what they're calling, quote, substantial assets. bern bankman-fried said he'd do anything to go back and do things over again. washington may be closing in on his industry a new "wall street journal" op-ed titled regulate crypto, or it will take down the economy.
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joining us, mike novogratz, president of galaxy digital. mike, great to see you, i want to get your reaction from the flood of news what we got out of both the company's new ceo, that oversaw the upending of the bankruptcy for enron, who believes that bankman-fried treated his company like a personal fiefdom and on the other end, i want to talk about the regulatory sfa aspect, and then we're seeing memos coming out from sam bankman-fried, what do you think? >> yeah, it's shocking to me i had young kids break into my apartment three years ago, they stole a couple laptops, within days, nypd arrested them and they were in jail. sam bankman-fried, maybe i'm not a judge or lawyer, certainly did things that are illegal. he's running around the bahamas,
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giving press conferences, going on tv. that whole thing surprises me. i think his day will come. i'm surprised that his father who is a lawyer is letting him talk liars lie and continue to lie. >> when you said he did things with bitcoin that he was not allowed to do, what are you specifically referring to? >> with a contract, when you ghos deposit your coins to him, it's not part of the deal, so nobody that participated in that exchange signed a contract that sam could take your coins and run a hedge fun with them. and so, you know, that's fraud you know, again, i'm not a lawyer, my lawyers will probably yell at me >> i'm going to ask you a very technical question, though, and it's a nuanced question, often times, on a lot of these exchanges as you know, i'm not just talking about crypto, i'm
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talking any exchanges, a lot of exchanges, your share, if you will, get lent to others i'm not saying it should be lent sam bankman-fried's personal hedge fund, but how do you think about that piece of it >> listen, i think coins should be segregated in your account unless you get permission, right? listen, there were businesses like blockbuy or celsius, where in the contract there was permission for them to take your coins and lend them out. so, again, this is about transparency and disclosure in lots of ways and, you know, our industry has failed to self-regulate. i think the money side of crypto, companies like ours, that buy and sell and lend in d derivatives are going to get regulated and should be. on the tech side, while we all started crypto, that has its own series of regulatory challenges,
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kyc, but that can be kept separately this is about building trust with your clients, right now, we're in a deficit of trust. people think there's a black swan around every corner, and that everyone else is, you know, a sociopath, and saying one thing and doing something else >> mike, isn't this an indictment of crypto because the entire premise of crypto was the idea creating trust, actually creating a trust system >> yeah. >> you really didn't have to trust anybody. >> and that still is the goal. why did companies like mine get set up, right? we are a financial company to help bridge people into this new economy, right it accelerates the capital going in, it helps people understand it, so all of the investment capital that's moved into crypto or lots of have come from centralized companies. so centralized companies have played a role in the ecosystem,
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and just like a financial company, they're being transparent, doing things the right way, risk managing, listen, we had lehman brothers that was regulated blow up because they did stupid things this is not an indictment of crypto, it's an indictment of fds or other companies fraudulently run >> well, mike, we're waiting for an indictment, if you know what i mean that said, we saw cathy woods step in, she picked up grayscale trust. do you feel that investors will or are taking advantage of any crisis of confidence in this market and by the way, do we have a crisis of confidence in this market >> we certainly have a crisis of confidence in this market. and we're not out of the woods yet. there's a lot of daisy chain
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effect going on. people that had exposures to three arrows and then ftx, it was a major player it's going to take a few weeks for people to get their balance back bitcoin is not going away. there are 150 million people that have decided to store some of their net worth in boirn into t bitcoin that is verified in cryptography no way is bitcoin going away or blockchain on anything else. i was just in the mideast, in a lot of the cases that i was, i was glad i didn't get in yet, but others, hey, this is my chance so, i do think you'll see people like cathy come in to inject capital in time. i don't think it's going to be a recovery by any stretch. it's going to be a grindout of rebuilding trust, you know,
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centralized companies are going to have to do things differently. >> mike, do you think that people should keep their money, their crypto, in effectively, in storage, a hard wallet >> i think when you keep your money in coin base, most of your money is in a hard wallet, isn't sto in storage when you put money in, the bulk of the money is in cold storage. so you don't think you're taking that much credit risk or exchange risk. i think you're going to see more and more people put their money in very safe and trusted custodians the big winners in this are going to be people like fidelity that just came out with their crypto product that has built a 130-year history of trust with their clients. so, i do think the traditional players -- >> but, mike, how much of this is about the exchange building
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trust, and yet, questions about the currencies, about these tokens, about what these coins really are, are they made up coins. are we talking about three, four, five coins that will exist in the future and that's what we're talking about? are we talking about 100 projects are we talking 1,000 projects? there's sort of an essential question under all of this and the regulatory, for so long, the regulators hadn't wanted to regulate this because they didn't know how to regulate 100 or 1000 coins. >> there are two happening at the same time, it's a little bit of both. we had this wild acceleration of prices in all of these coins including baseball cards and wines and nfts, because the idea of value change when the federal reserve was printing money was an item. so, you had a bubble, right,
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there's no doubt about people's art excelling for $69 million, that made no sense, as much as i love people. at the same time, this lehman moment is, wow, that privilege is overleveraged and asset liability, a system that's interconnected when you come back to it, coins like bitcoin that have a purpose, it's been proven out own 14 years now that are going to exist coins that provide stability, ethereum, a lot of these exchange tokens were set up to get around regulation. it wasn't that they were doing nothing. you've got discount on fees or whatnot. we were never big supporters of them because i didn't think there was enough value there to create -- to create sustainable value. >> right >> and so, a lot will get washed out. and some will continue to grow >> mike novogratz, i want to
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wish you a happy thanksgiving. appreciate you joining us this morning. >> thanks, guys. well, inside this week's oil market volatility, and a look ahead to the key decision for opec on december 4th and what about price caps of oil and natural gas, will they happen at what level, will they be effective? a lot to talk about, helima is joining us stick around time data and business forecasts when you need it. i think it was fine how it was. (air tool sound) to help you stay ahead of the curve... or you could use workday. the finance, hr and planning system that helps cfos make better decisions faster. on the other hand, we had a great fourth quarter. for a accelerate your decision-making world. workday. for a changing world.
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welcome back to "squawk box. i want to talk energy right now, the u.s. is set to reach an agreement as soon as today on the level for price cap on russian oil. the cap could be set between $60 and $70 a barrel sanctions will take place in a couple weeks, that's coming as europe approaches its first winter since moscow launched the war in ukraine julianna tatelbaum is joining the story from greece. good morning >> reporter: andrew, good morning. as we head into winter, it seems as though europe has averted a worst case scenario, and that is thanks in large part to lng. here we are, greece's only lng terminal, lng imports to europe are up 60% this year that has come largely from the united states which is now the main, the biggest supplier of lng to the region, as well as algeria, this tanker behind me just arrived this morning with a fresh shipment of lng.
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when it comes to europe pivot to lng there are two key challenges to be aware of one import capacity, and two, supply of lng itself when it comes to input capacity, lng was reliant on gas from russia for years so it wasn't equipped with lng infrastructure there are 29 operational terminals around europe, like the one we're at right now and there are now more than a dozen in development when it comes to the supply itself, europe has been paying through the roof for natural gas to fill up those storage sites now, there are 95% full ahead of this winter. now, as they look at the potential competition increasing from asia to likely china, as they open up, europe is very keen to control just how high they are going to way, but the european commission had this week put out a proposal to cap the natural gas price. it is now moving to brussels where european energy ministers will debate it
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a story to keep a on, brian, back to you. >> julianna tatelbaum, thank you very much. let's talk about that, bringing in helima croft from capital markets. there's a lot to discuss let's first off talk about the national gas i tweeted this out on twitter and linkedin, the eu in all of its conventional wisdom is proposal natural gas at 275 megawatt hour, which is 120% higher than the current price of natural gas. >> right it's only hit that number like six days, this is ridiculous >> i mean, also, brian, you actually have to be at that higher price point for like a significant period of time i think it's two weeks before the actual price cap kicks in. this is effectively not really a cap at all and so i think that this is going to cause a lot of
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consternation among consumers that this is not really a policy that's going to result in lower prices >> yeah. and in my less than stylish graphic that i just put up for the viewers, literally, it's a mark, but the red line is where the price cap theoretically would be, and you can see, if the viewer could see that, how is that price cap when you hit it once and that was an outliar event. it sounds like at least from the natural gas perspective, they may choose to go lower, it's kind of like they're just jumbled. go ahead >> and it's not the performing or virtual signal, it doesn't look like in any way a method that has significance. we can point to oil as well because that's really a russian revenue driver if you look at the prices for oil caps, it's essentially what russia is getting now. >> that's it >> right >> and you're making, of course, this is why we have you on,
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because you always nail the exact point. and i want our listeners and viewers to understand what you're saying very clearly we're talking about an oil price cap of $65 to $75, and russian -- and politicians are going to say, we're taking strong measures. that's what russia is selling its oil for anyway >> right, effectively, what price caps look like for oil is not an avenue to reduce revenue but keep it on the market. russian oil is rebounding so now you have a situation where russia's production is almost level to where it was preinvasion. so you're essentially going to say, russia you get the current price you're getting and you can essentially produce at these high levels. you are not reducing russian revenue. you are potentially averting a market disruption, but you're not defunding vladimir putin >> i want to be very clear on
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sort of -- because, by the way, he helima, even for me who is sort in the world a little more than the average joe, it is confusing. so help us clear it up with gas, we're talk about a price cap, with oil, primary driver, putin's revenue, they're talking about sanctions on shipping which would keep russian oil off the market, or the price cap, correct i don't see how they would do both the whole sanction -- is that going away because they realize, oh, my gosh, we need the oil we just don't want to make putin any money on it? or can they somehow do both? >> well, essentially, they're doing both on december 5, europe will essentially say we are not taking any more oil imports from russia we're not taking pipeline imports from germany and poland. and in addition, there will be no provision of western services, shipping, insurance,
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trade finance, to move russian barrels anywhere else, unless you can attest to the fact that you are paying at the cap or below. so what the price cap is set at 65 or 70 essentially means is that you know what, loyd's of london, underwright that cargo, a tanker can move those barrels anywhere in the world. so essentially, the price cap becomes an offset mechanism that allow russian barrels that weren't going to europe to go into asia. and essentially avert a market disruption and that has been what the primary fear has been, is that we would lose millions of russian barrels. >> by the way, i had a ship broker yesterday send me a document, i can't confirm but it looks real on russia buying up a bunch of really old super tankers that should be scrapped. maybe creating their own oil because they don't need to insure stuff if they use their own ship that sounds like an environmental disaster waiting
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to happen. helima croft, appreciate your views. interesting times. thank you. >> thank you coming up, we are on travel watch, in the run job to thanksgiving, we're going to bring you the headlines and talk the high demand. stay tuned, you're watching cnbc what if you were a global energy company? with operations in scotland, technologists in india, and customers all on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely.
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welcome back to "squawk box. rick santoli here live with some of the last breaks news before the thanksgiving holiday initial jobless claims for the week of november 19th, 240,000, definitely higher than we're looking for. that happens to be the highest level since the second week in august 1.51 million claims on the higher level as well highest since the first week of march. as we look at durable goods orders, october preliminary, up 1% that's the best read since june of this year and if we look at
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ex-transportation, it's up 0.5 which still retains a good chunk of that 1% that's a half percent better than expected better than march. and nondefense, aircraft, a proxy for capital spending it's up a smart 1.3%. that's the second best of the year the best of the year, it was up 0.14 in january. and finally, if we look at shipments versus orders they were also up a smart amount, shipments were up 1.3% 1.3, i take that back, nondefense aircraft up 0.7 it was shipments up 1.3. so, all of these numbers are quite exceptional. and we do see that the entire curve is higher in yield, lower in price although we look at the longer dated treasuries and the dynamic remains the same yields there are up less than short maturity
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and a couple of big issues, andrew, reserve bank of new zealand, a record 75 basis points and all three metrics in the eurozone on pmis, manufacturing, supervise deposit, all under 50, like the u.s., the german yield card, 2 versus 10s, minus 14 basis points, not quite like the 40 years in the u.s back to you. >> rick, thank you for that. don't go anywhere, i want to get your take on this and what it means for the fed, everything else, is this good news, bad news it's also a bit backwards. but we'll talk about it. i want to talk about the data, the markets and what we'll hear later today, we've got chief economist at staples and instead of inststephanie link and we go to steve leisman for his stake on this data
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steve. >> somebody needs to tell the ceos of this country that we're about to have a recession, because apparently, they haven't gotten the news. this number here, rick, by the way, made a fabulous misstatement, he emphasized the right number the right number, i want to make sure i get this right, too which is this idea for what the shipments are for nondefense aircraft and that number is 0.7 is the new orders but 1.3 is the shipments. and that's what folds into the gdp. and that's going to have, again, obviously there's some inflation in this, but i don't think inflation explains it all. you have this very strange phenomenon i think the story is, you have these two very different stories going on in the economy. on the one hand, you have this, call it a cyclical slowing and maybe a cyclical backlog,
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andrew, in the country where you have inflation or a premium or need for some companies to step forward and try to automate some systems and save some money that way. but everybody was expecting this thing to be okay and slow it to the future. and that may be what happens but right now, the idea that you have this slowing economies that is motivated by actions of the c-sweep, it's just not happening in this number plus, you have backlogs on airplanes and backlogs on cars what we are watching there might be some seasonal parts, is, again, softening in the labor market which is really worth watching this idea, up near 240, that gets my attention 220 did not. 240 suggests maybe some softening of the market. which as you suggest, is the softening that the fed is looking for with the hope it doesn't get too soft >> so, steve, that's the question, before we let you go, when you think about the last month, we had a bunch of
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different data points each time we get data points we say we can't just look at that. string a couple of those together in terms of how jay powell now thinks about this >> well, i mean before getting to how jay powell thinks about it, you first have to assess the economy, i've been stringing them together, andrew, and find an economy pretty strong in the fourth quarter, certainly, relative to the forecast i was just thinking this morning about our fed survey which had the early folks calls for the recession to begin in the fourth quarter of 2022, which is this year and i just don't see it happening in the fourth quarter. maybe, again, it's something with the long and variable lags of monetary policy that happens next year. i mean, i think -- i know jay powell's just a human being. you know, whatever you may think of him, he doesn't want the economy to go into recession would love to be able to bring down inflation without a recession. and i think he sees the strength in the economy and says, i have
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cushion here to raise rates, fight inflation, and not create this recession. i think that's the way he looks at things. >> rick, i'm going to go back to rick in a second, but i want to bring lindsey and stephanie in these. what's your take on these numbers and what we made here from the fed minutes later today? >> i think it reinforces the idea that the economy is still on moderate footing. in terms of business investment, that being said, when we look at that core component, that proxy for business investment, this stronger read follows last month's outright decline, the largest decline that we've seen since may of 2021. so we're still seeing a lot of volatility, a lot of businesses are pulling back, pulling back on investment, but they're doing so on a slightly slower clip than expected. so we are seeing this
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underlining decline in terms of momentum but ongoing volatility at the same time turning to the labor mooshgt, the jobless claims data remains volatile as well, still bouncing around in that tight range not necessarily suggesting a further improvement in terms of layoff data, but not necessarily raising a red flag either. so this is pretty much the best case scenario for the fed as they're looking to an economy that continues to point to the need for further rate increases. remember, even with that cooling from top-line price pressures, we're still talking about four-decade highs, in terms of inflation, reinforcing the need for the fed to raise rates agency the chairman said above and beyond what the market is previously anticipating. the fed has said much higher the question is how much higher is that higher point >> so, steph, has this changed anything for you in terms of the equity look, you saw the dow actually turned red on this news?
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you think good news would be good news, but maybe bad news is bad news >> i'm always on the belief that good news is good news these are good numbers today in terms of durable goods the initial claim, the week-to-week numbers are so volatile the four-week moving average is about down 29% year over year in initial claims so that's a really healthy number, even though it's higher than expected. but it's not just durable goods, it's not just jobs retail sales came in better than expected auto sales, you're almost at a 15 million annualized for auto sales. there's a lot of momentum in the economy still, and i get there are lagging effects from the fed from rising rates and we're not going to feel that until 2023, but perhaps maybe we can kind of handle some of these rate increases. and i would just point out the atlanta fed gdp is up 1.4% for fourth quarter in gdp.
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maybe that comes down to 3, even if it's 2. >> it's going up today >> a lot of people are expecting and negative rhetoric. i'm sorry? >> it's going to go up today, i'm pretty sure on this number >> yeah. for sure >> our cnbc update has the more modest 2%. but after the retail sales numbers, stephanie, we raised it by 0.7%. you're going to do 2%, third quarter, fourth quarter this year that's acceleration of the economy in the second half, not a slowing. >> and you're not hearing that from anybody you're hearing everybody so negative sentiment is negative. people are actually defensively positioned and that's why we're rallying, right? you're rallying because everybody is offside i actually think you can continue to see a rally in the market into the end of the year. let's see about next year. we have to listen to what the fed is going to to say and what they're going to do. there's momentum in the economy stronger than what people are saying and believing and that's
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encouraging. you know why that's good that's good because earnings maybe hold up better, you know >> look, i hope all of those things happen, but when you say the reason the market is moving upwards is because everyone's offsides, there's also this argument that actually the fed is going to pivot and let up and now the question is, are they really -- if things actually are as good as they appear to be >> no, they're not going to let up powell has said it >> at first it was >> yeah, i know. they can raise rates, the economy is so strong i mean it is >> andrew, look at the market -- andrew -- andrew, look at what's baked into the market, look at the fed fund futures, the rate is 511 this morning. whatever you think the fed is going to do, the contract high on that kjune contract is 520
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we're not quite at the high level. but remember, we were down to 488 and change after the cpi report so all of what's happening is happening against the backdrop of a belief in the market, a pricing in the market, whether or not every single investor embraces it, but a belief in the market that the fed is going above 5% i will tell you of all of the things i've heard, i must have covered 42 fed speeches in the last few days, whatever the number is. i hear most folks talking about the 5% or higher funds raise from fed officials themselves. i think the market is internalizing a higher fed for longer >> fair enough we start with rick let's end with rick. rick, 20 seconds to final word here what do you think? >> you know, i think the u.s. economy is like a steam engine, we're doing well, but we are going to slow down we still have the savings left from covid-related issues that's wanie ing its way down and a
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significant lag and financial tightening as long as 16 months. ultimately, the world is going to be in worse shape reversing negative global interest rates ultimately, we're going to have a recession. and we're past peak inflation and the most likely treasury of keeping rates lower is going to be correct >> all right, lindsey, stephanie and steve, happy thanksgiving, folks. >> all right to that fed fight fight to the roads to the skies, phil lebeau is at the airport he's going to join us after the break. all right, phil, what do you got coming up for us >> brian, we are in the thick of the thanksgiving travel rush are the airlines ready to halend the surge of travelers the latest from o'hare when "squawk box" returns
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all right. welcome back millions of you are ready to fly, travel on the roadways, many of you are on the road or at the airport in fact, i can verify that last statement, phil lebeau was on the last hour. he was packed then, seema mody is on the lodging beat as well she's in some in hilton.
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that's not true. phil, what is it like for you? >> we're definitely in the travel mode. the good news for people here and flying around the country actually two good pieces of news clearer weather, so we're not expecting any major storm that would impact the airlines. and airlines have more staffing. how much more staffing well, whether it's flight attendants, mechanics, pilots, staffing is up 6.5% from last year staffing is up compared to 2019, 2.7% and when you look at the schedule, the airlines are flying less than they were earlier this year. in fact, they reduced their schedules considerably they were down 1 smeets according to oag this week compared to last week, flying 14% fewer flights capacity down about that much, compared to the summer peak in july that's one reason why the
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transportation secretary believes we should, we should have a smooth holiday travel season >> the majority of the issues traced back to things that the airlines need to do to be ready for that demand. let me mention, it's good news demand is back we're delighted demand is back that's a good economic sign. the supply has got to be ready to keep up >> and the airlines believe they can keep up with the demand out there. take a look at the airline index, keep in mind one reason it's under pressure is because of expectation we're going to see higher costs from the airlines but they are benefitting from jet fuel prices considerably lower than a year ago. the bottom line is this, the surge is on and so far, everything looks like it's going to be moving as it should, as you would like it to be if you were traveling right now, brian. >> that's the pro tip. you know, phil, do it in the morning, right don't travel later on in the day, just get it done, delays back up. get up early
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sacrifice sleep for time phil, thank you very much. all right. so, now, seema mody, let's take a look at hotel costs. i want you to go into something maybe, i'll tell you what, i travel a lot there's like $100 in taxes and resort fees on every hotel bill. >> right >> it seems like by the way, some resort fees are not resorts. they're like a regular hotel >> no, but it's a great point. it's always been a big concern for consumers. as we look at hotel rates just a like airfare, rates are surging brian, prices up 20% average year over year led by costs in new york city, $338, that's 37% more expensive than the same time last year and also up from 2019 levels john bourque ceo of pebblebrook hotels, he said pricing remains strong he's seen no evidence of cancellations, signs of
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inflation or the broader economy. the real estate trust that has the highest exposure to new york is diamondrock host hotels and park of the three, host hotels is outperforming the stronger than ceos made the point they're not seeing customers trade down. however, that could change next year there's a new survey from expedia that found that 35% of travelers plan to stay in one to three-star hotels in 2023 and nearly a quarter of global travelers intend to be more frugal baird downgrading airbnb, citing concerns about travel budgets being cut as fears of a recession grow louder. so far this year, you'll see that hotels have performed better than vacation rental stocks marriott down just 1% versus airbnb, down 42% that really tells a story, brian.
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>> i get it. they're trying to make up for covid losses, but some of these fees are just ridiculous i mean, it's like resort fee -- >> fees are ridiculous >> you get nothing with it it's almost now 45 to 50% of the hotel bill is just fees and taxes. >> no, it's a great point. it's become a big point of concern for customers as well. here's one hot tip from tpg's brian kelly. if you go to the hotel receptionist and say, hey, i didn't use your pool i didn't use any of the amenities, in some cases they may take off that fee, so next time you travel, keep that in mind, but you're right, the resort fees and making the bill much more expensive for travels, that remains a point of contention it's something that the american hotel lobby association has been picking up down in washington. >> i'm waiting for the nasdaq to start a resort fee for us to anchor here. seema, thank you very much andrew, they charge us $15 for
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the wi-fi. >> you know, that's why -- they always charge more at the luxury hotels it's free at the cheaper hotels. doesn't make any sense coming up, top morning movers and what to watch ahead of the opening bell on wall "sawbo icong quk x"s mi right back after this.
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a little more than half an hour to the opening bell on wall street, want to get to dom >> we'll get a check on an analyst call that's getting a lot of attention on wall street that involves shares of tesla, which are higher by roughly 2%, getting help from analysts at citi group who have upgraded the ev maker to a neutral rating they cited the big pullback in the stock which has created a buying opportunity also this morning, noted morgan stanley autos analyst adam jonas issuing a note to clients, reiterating their overweight call and $330 target price they cite the big pullback in valuations as well, which have now approached what they call their bear case scenario for the stock, which could provide a doubling of the shares from this point if it reaches their target price of $330.
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they also added that some incremental improvement in the elon musk twitter situation could calm investor concerns around tesla, so that's helping to provide a bit for those shares then you got manchester united adding to yesterday's gains, another 9% this morning on roughly 165,000 shares of volume the english soccer club said it was considering strategic alternatives, including a possible sale of the franchise and a quick check of the big earnings story this morning, deere up 3%, 70,000 shares of volume after it reported quarterly results that beat the top and bottomline estimates tailwinds from infrastructure spending, deere, by the way, brian, was able to raise prices for its products without a significant hit to demand so deere shares up 3% right now >> all right, dom, thank you very much. happy thanksgiving joining us for more on the markets is managing partner, portfolio manager at dcla. obviously a cnbc contributor
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happy thanksgiving eve and hope you guys have a wonderful day tomorrow as well ahead of that, maybe we sit around the table and stuff our face and think about market returns in 2023, what do you see in that crystal ball >> well, i think the first half's going to be a little tougher, brian earnings haven't really come down when you look at the earnings for this last quarter, even though they were up almost double digits, if you strip out energy, we were negative earnings so i think the market's still looking at earnings a little too kind of through rose-colored glasses. we do need to bring them down. the question is how fast and how far and that's going to be for the next four to six weeks when we really actually see what's happening in the market, because the focus is obviously going to be on retail and in christmas, but i think as companies see higher wage pressures, higher input pressures and really, at the end of the day, demand, which is what the fed has been trying to get down, that's going to kind of bring earnings estimates down >> yeah, how much, though? and the market's already
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responded to that? >> well, that's the key question i think you have to look at it sector by sector, brian. for us, we want to be overweight the value sectors, the financial sectors, that's already trading at ten times earnings, not 15. you want to be overweight areas that you think a lot of this has already been discounted and be careful. i mean, the tech sector is still -- we see earnings estimates still have to come down there just because so much of the valuation there is priced to sales, and operating leverage that's going to actually hurt them on the downside >> yeah, is there any sector you're watching more than others we know technology runs the show we get that. we all get that. but i feel like technology right now with layoffs and everything, it's going to be off the headlines and there's got to be new leadership oil and gas has been a leader this year. do you think they roll on with that in 2023 >> i do think oil and gas is going to stay the leader
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they've optimized their balance sheets, really looked at how their businesses are run, and even at 60 or $70 a barrel, they're still going to do well but i don't think they're going to lead us out of there. i think financials could lead us out of there i think areas like industrials, certain industrials, you just heard deere, companies that have pricing power that have really optimized balance sheets that have looked to really create operating leverage, i think that's where you're going to see it and it's going to be -- when we say going back to the old playbook, those are some of the sectors that are going to take us out and also the other area to watch here is commodities some of these companies in the metals, nickel, aluminum, copper, that's going to be an area where demand is going to far exceed supply, and if they can price, so the playbook is different, and i think investors have to look at specific sectors, specific companies, not just say, hey, everything is going to ride. >> that's it it's sector by sector, stock by stock, and oil and gas have been the shining star, i think, surprising a lot of people 2022 has been the year of the
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dinosaur juice >> and very unexpected >> have a wonderful thanksgiving >> thank you, brian, you too >> all right, got the verbal hook, andrew i got the -- you know that voice. got to go. >> i know that voice we got to go brian, i want to thank you for hanging out for these three hours. i want to wish everybody a very, very happy thanksgiving. make sure you join us on friday. "squawk on the street" begins right now. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber and mike santoli at the new york stock exchange futures timid on this final trading day of the week. stocks closed for the holiday tomorrow, short session on friday we'll get a full plate of data today. fed minutes this afternoon jobless claims, the highest since august our road map begins with the calm before the retail storm investors digesting the latest economic data ahead of the thanksgiving holiday >> plus sam bankman-fried'

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