2022 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen andrew is off today. let's look at what is happening with the u.s. equities at this hour last week was a down week for the markets. down on friday for the week. dow down 1.6%. nasdaq off 2%. the dow futures up 83. s&p up 12 and nasdaq up 46 here we go we're headed into the end of the year >> we were with that cooler than expected cpi number. s&p went through 4,000

headed higher. >> it came back. >> we said at the time -- will he really -- will this really disturb the fed with wealth effect and counter productive of what it wants to accomplish in slowing down demand? will he really be that mean? >> yes >> yes, he was really that mean. >> jay powell. >> we're 3,850 we did not stay above 4,000 foad it had significant declines. you did not see that reflected in the yield curve yields are going down. it seems like it is working. i understand maybe you need to do less if you jaw bone a lot if you talk tough, the market works for you. maybe we don't end up with 6% or 7%

maybe we end up at 5% with all of this. >> we have been edging up. hoping for 5.1 10-year treasury at 3.522% we do have breaking news the eu accusing meta of breaking anti-trust rules the ad rules distorts competition. it may not seem like a huge deal,but read the headlines. meta shares are trading. one of the things they say is they could go after 10% of global revenue if they find, once meta has had a chance to defend itself, they can adopt the decision to prohibit the conduct and up to 10% of the global turnover if there it was infringement that company earned $118 billion for the year ending september 30th that is $11.8 billion.

>> the revenue they didn't earn $118 billion? >> global turnover >> that would have been a hell of a bottom line >> the top line is $118 billion. >> there's no way. they can't do that of course, the eu. >> the eu can do things you might not think. i had to look it up. 10% of global revenue? >> they are not kicking the stock when it's down 350. when i first saw it, i saw 118 bid. now 117. someone -- >> reading the headlines this is really just headlines hitting at this moment the eu commission is concerned meta is imposing unfair trading conditions on facebook marketplace and competitors for its business they take issue with tying online ad service to the personal social network. >> wasn't meta in the trillion

dollar club? >> it was briefly. is it 500 or below >> no, no, no. 270. whoa >> it was down more than 60% this year? year to date. >> yearly high >> 65 year to date >> are all of the shares accounted for? that 350 -- it would 119 times 2 is 238 350. yeah, yeah, yeah it was billion dollar market cap. people that bought, they absorbed -- >> that's the argument from analysts who liked the name. it has taken pain and turned around mark zuckerberg is paringi back on the spending.

that is the argument if the eu is serious and that will raise another concern that people haven't been on the look out for it. >> it did trade as high as 380 i guess it really was. developing in the collapse of ftx sam bankman-fried is changing strategy over the weekend. kate rooney is joining us with more we had a guy come on last week i don't know if he necessarily was in tune with everything specific to this first he said he would fight extradition and then he changed his mind >> it has been a few days in a bahamian jail. >> changed his mind to the legal strategy for sam bankman-fried he had reason for fighting extradition may be a legal strategy >> i'll tell you why we will hear more today. guys, sam bankman-fried is back in a bahamian court today.

a source says the former ftx ceo w will be released for extradition. he did plan to fight extradition and now he has been in the correctional facility since last tuesday and denied bail. he was supposed to be held until february 8th this will speed up the pace of the trial. the extradition fight could have added months to the process. n next step is get back to the u.s. and plead sam bankman-fried was indict in the new york federal court on criminal charges that included securities fraud and wire fraud and money laundering he is facing suits from the s.e.c. we should learn more from the hearing today which is scheduled

for 9:00 a.m becky, prison conditions may be a big part of this >> the other thing i wondered is if you served time in a u.s. prison, you often get credit for that time served if you are serving overseas, would you get credit for that? >> one school of thought is his legal team said we will not win this fight for extradition he is looking to appeal his bail he is looking to get out on bail the other thing i hear from legal experts is fox hill correctional facility with the human rights report. to put it politely, quite different. it's a tough report. unsanitary conditions. >> extremely crowded >> they delivered meals and they don't know if the meals made their way to sam bankman-fried vegan meals. there's a netflix series

"world's worst prisons." i don't know if this made it i've watched a few of them i don't think prison is great anywhere i think you would rather be here. >> reports of rats >> yeah. awful. the other legal strategy is to turn this around and move quickly and try to catch federal prosecutors on their heels it is not clear. it seems like they are ready to go to trial based on the evidence evidence that is the strategy >> the question is does the bahamas fight the extradition? >> there has been a back and forth with bahamian regulators and the u.s. they have an extradition treaty. i'm told by legal experts they would not have brought the charges if they thought they would run into charges the bahamas said we are willing to work with him and that is why they brought him into kustcusto. they are investigating sam

bankman-fried for fraud in the bahamas. we have had the back and forth on the jurisdictions especially early on with the bankruptcy hearings. and then -- kate, thank you. and then this. oh, you will talk about it. >> we will talk about elon musk as we have wanted to do recently if you haven't heard, the twitter ceo is asking users in he should step down as head of twitter. steve kovach is joining us >> so far, there is a clear majority, becky, voting in favor of musk stepping down as twitter ceo. musk thrives on saying one thing and doing the opposite tesla shareholders believe it. shares are up 4% right now in the pre-market

look, they have fallen 30% since musk took over he cashed out $30 million in stock. musk has used polls to make decisions at twitter the last few weeks. granting amnesty to those previously banned like former president trump. he will use polls to inform othr policy decisions in the future the question now is who takes over there is no one in line to succeed him. he said since the beginning he doesn't plan to run twitter permanently. on the on-the-fly content decisions is upsetting journalists and users who tweet to rival networks. >> steve, this is getting interesting. the calls from twitter and calls from tesla shareholders asking him to come back to tesla may be a big one. there is no one who can do anything about this as twitter

there is no board. he owns it outright. when it comes to tesla, it is sticky if you have big shareholders like we heard over the weekend, who are concerned about that because he sold in their stake, it makes it a tougher situation. they want him there and focused on it. >> on top of that, becky, he is selling shares he is seeking outside funding. it is clear he doesn't have a grasp on how to keep funding twitter as advertisers abandon look, shares right now of tesla say it all as this poll ends in eight minutes, they believe he will step down and that's why we're seeing the shares lift. >> interesting twitter users may not want him, but tesla shareholders do. >> exactly look, the valuation of tesla is intrinsically ally tied to musk his behavior that is his greatest marketing

tool for tesla and the marketing tool can behoove tesla investors. we are reading the market here they want him out and focused on tesla and spacex >> steve, thank you. >> thanks, becky >> the one thing i'm wondering you know who i like to talk to about this >> trump >> walter isaacson ron barron as well he has been resolute in support of elon musk i doubt he changed his mind. >> i still like twitter better now than before. nine trading days left in 2022 futures indicated up under 80 points we will talk strategy after the

break after the terrible last two weeks. later, "avatar" box office haul falling are short of expectation. did you see the tom cruise advertisement? talking to the director. while he is talking, he pushes back and tumbles out >> he does all his had own stunts amazing. >> he is really great or crazy analysts are optimistic. this is not anime. we will talk about the big bet at the bottom of the hour. bcngsqwkoxonhi "ua b" cn h again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done.

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welcome back to "squawk box. let's talk to sylvia jablonski and lisa erikson sylvia, i don't think anyone is enamored with stocks right now when we stop worrying about inflation, that means we are worrying of the rescission we are out of the frying pan into the fire. neither one is a great environment for stocks >> yeah.

it is true it is hard to get excited about any kind of risk exposure and getting into stocks with the last week. we started off with good news with cpi we see inflation is falling. logic is inflation peaks and 12 months out you see s&p returns 13% up since the 1950s it seems like a good case to think about getting back into the market as you said in the opener today, the fed was just mean. higher for longer. 5.1% terminal rate doesn't go higher than that and that confused markets. there is a tug-of-war with the fed and markets. there is good news here. inflation is giving. yes, we know growth will probably slow. it will definitely slow. if you think about what that means, a year out from the peak of inflation is essentially next june of 2023 markets recover five months before recessions end.

if we think we will get the soft landing, next year aris the wort of the next six months you can invest and gather up deals here >> do you go in some type of fixed income, sylvia do you like the two-year note? i guess you can put money there for two years. is that better than high yielding stocks? >> i think in the short term, it is the safer bet take a page from the hedge funds and take the cash instruments. i hear retail investors around me talking about the great cd rates for the next 6 to 12 months if you have a vision beyond 2023, you want to be in stocks stocks are the place to be there has been a big re-rating in the market. valuations have fallen a lot once we get past the higher for

longer set up and looking into 2024 and 2025, looking back at the entry appoinpoints, this is value happens. i would dig into the names and buy them up at a deal. >> i'm not sure what to make of this, lisa the journal wrote a piece that individual investors have been doubling down on stocks. professionals, however, have bailed out small investors stay bullish as the pros unload stocks if you think we eventually, you know, stocks are always the best investment long term, what does that say about the pros? meta down 70% or anything the pros liked a year ago. a lot of things are 50% down why are they not bullish are individual investors bag holders? >> when you see what is going in the markets, it is not that

surprising that institutional investors are cautious we have a more defensive stance. it is on the back of when you look back at 2022, we had a first re-pricing based on higher interest rates and inflation bringing down the multiples that are afforded to equities we haven't seen a second re-pricing as prices continue and consumers continue to slow down spending, those earnings numbers could come down causing further decrease and overall how stocks are priced there are reasons for some pessimism. obviously, we, like everybody else, hopes to see inflation come down at a faster pace than it has been. there are caution signs out there. >> that is a little bit worrisome. the earnings recession is coming that everyone is talking about

margins are squeezed consumers are tapped out and companies are not able to raise prices to keep margins where they were. sales can go down and margins can go down. that will show up in the bottom line on the lower multiple, stocks can go lower with lower earnings >> yeah. to your point, joe, really we're cautiously watching what is going with the data and we're seeing some tiny signs of green shoots in the macro data, they are minor and what we see overall, whether here in the u.s. or globally in europe or overseas or uk or other developed countries is the deceleration and the growth continues to come. what we want to do is continue to monitor the data. at some point it will turn to sylvia's point we think a defensive stance makes more sense where less of an emphasis in the near-term on

u.s. equities as well as to your point earlier, joe, emphasizing the higher fixed income quality makes sense. >> okay. very good. lisa erickson and sylvia jablonski. winding it down. thank you. we're ready for 2023 you know what 2023 brings? >> davos >> yeah. >> it is weighing heavily on me. >> and be this year is over. >> and we go to davos. >> out the of the frying pan into the cooler. >> well said we should note that we have seen the expiration of the twitter poll results are in the poll asking if he should step down from the head of twitter. it is ending with results showing more than 17 million votes.

57.5% say yes he should step down 42% say no he should stay he will abide by the results of the poll we will see. when we come back, we have results of jcnbc's millionaires sa survey. later in the show, we talk to jared bernstein, council of economic adviser at the white house. "squawk box" will be right back.

time now for new results from cnbc's millionaire survey robert frank joins us for that robert, why do we care about milli millionaires >> great yquestion, becky.

millionaires own 90% of all individual stocks. they can move markets. they are bearish stocks will be down double digits in 2023 according to the cnbc millionaire survey. 56% expect the s&p to drop 10% or more next year with one-third expecting declines of 50% or more next year the last time millionaires were this bullish was early 2008 during the financial crisis. when asked about the biggest threat to their wealth, stocks ranked at the top. few plan to buy stocks next year and they are tholding more cash. half have more cash compared to last year. there is a big optimism gap. 81% of millennial millionaires expect their assets to be higher

by the end of 2023 baby boomers say assets will be much lower at the end of 2023. >> the experience says we have been through this before or is it optimism because some of the young er millionaires say it wl come back more quickly what do you write that off to? >> i talked to financial advisers and the company that does the poll, it is all about experience millennial investors have never experienced a rising interest rate environment whereas baby boomers remember the decade in the 1970s and '80s where inflation was high and stocks did not go up. it is the financial landscape and millennials have not seen rising rates when markets go down, that is a good time to buy

>> and maybe the fed put is gone at this point? >> yeah. >> not maybe it is. >> stupid fed. doing the opposite thing >> every time the market goes up, they talk it down intentionally. >> exactly >> they didn't do the put. >> get it out of the way >> nasty coming up, tracking covid outbreaks in china reports say the streets of beijing were quiet last week as we'll sta people stayed home to avoid infection. as we go to break, here's a look at the s&p winners and losers from friday >> announcer: cnbc millionaire survey is sponsored by fidelity

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good morning welcome back to "squawk box" live from the nasdaq market site

in times square. small moves after a bad week two in a row friday was no good it moved off the lows before the session ended and the $4 trillion option expiration did not cause that much increased volatility >> for the week to date, nasdaq was down 2.7%. >> after being up on monday. in the meantime, china ended zero covid policy following unprecedented protests now it is facing an economic recovery which is uncertain. we will bring in michelle cabrera. let's talk through the numbers which are not to be believed out of china they say two deaths from covid since december 7th when they released the covid restrictions. >> literally not to be believed. not these are not to be

believed >> the video of hospitals and bodies and other things. it looks like spring of 2020 here in new york >> we arrived at darned if you do and darned if you don't in china? they have to end the zero covid policy protesters said they need to make it clear. everybody knew and predicted when it happened because of the population is under vaccinated compared to the united states, they would have issues like this and the vaccine they have is not as effective they would have to go through a period where just like we saw when we had pork producers shutting down because everything in the factory was sick. that is what is happening now. despite this, they still had the major big annual economic meeting on friday and saturday there have been reports they would cancel it. i see you shrug and roll your eyes exactly. it demonstrates they are very

committed to trying to turn around the economy they see how much damage has done >> is omicron really like a cold it was a cold over here because we were all sflvaccinated or ise omicron strain more virulent >> the only data we can point to is if you look at hong kong earlier in the year and where they also have issues with the vaccination rate with the elderly. >> and the herd immunity there are no herd immunity >> the rates were higher than any other place in the world during the pandemic. the numbers of how many people have died supposedly you can read all of the reporting and number of urns ordered suggest that people are dying at ha higher degree that

the government is willing to admit. >> the research suggests it is doubling in a matter of hours, not daily basis. it gets really hard to keep up with it. >> it is is gruesome. can't you follow cremation it is so gruesome to talk about it there are ways of looking at this even if they lie through their teeth? >> they are suppress all of that information. the population itself will see what is happening and know within their circle there are people who can't go to work and who are ill and dying. >> the numbers are staggeringly scary. if you assume the lowest mortality rate that we saw the first time through this thing and apply that to the population in china >> you talk about gruesome here in new york city, we were running out of capacity for

funeral homes and et cetera. >> hospital services >> this was, remember, what do they do? >> why didn't they -- you had stefan bencel who said they were talking about bringing mrna vaccines the white house said they would give them vaccines if they just asked for it why not prepare your population? >> they do everything better >> this is the great mystery i have spoken with several people who are very connected to the degree that any american can be with the leadership of china and asked this very question why won't they take the mrna they shrug they said we have no idea why not. >> i understand the respect for the elderly and respect for that if that was really what this was about, you would have done something to protect that population and bring something to make sure they were okay.

>> this is one of the criticisms if we all look back, the world looks back at the way we handled covid, we decided we were going to try to protect everyone and in retrospect, we should have focused very much on the elderly and immunocompromised. >> exactly >> exactly what is a shame is that china could leapfrog that. we have two years of evidence. that's still not what's happening. >> is the reason they are releasing this at this point is because of the protests or the economy was suffering so greatly? >> oh, i think it is the combination of both. the one headline i would say from the economic meeting is the economic meetings are silly. good old fashion state planning fast they can direct capital to where it should go >> i thought you believe in that >> however, they have reiterated

repeatedly after this meeting they would try to stimulate the consumer rather than having an investment-led economy and having a consumer-led economy. that would be significant. our economy is 80% driven by consumer their's is 54% all of the money they businessey not make it and economists have been banging the table about this >> they have been vaccinating a lot more elderly people with that vaccine does it work >> it doesn't work as well. >> 50% they are handing a lot of those out? >> they did do a greater number of vaccines. >> you just power through my comments, right? >> i worked with you for 20 years. i described you as the older

teasing brother i never had. >> and never wanted. >> you have to shake it off. >> teasing brothers. you are right. i like to pretend. you are right. you powered right through it >> yeah. once they get through covid, the hurdles for them are enormous. including the united states is not backing down with deterrent and freeze their issues to go to war. the chinese economy, dare i say, we grew up with t8%,11% those days are over. >> will they go into recession >> absolutely they can go in rece recession. don't forget this right now. this is why cnbc is so interesting. two things were true for 30 years. china was going up and interest rates were going down.

those two things are reversing before our eyes. the repercussions will be astounding to watch. it will be painful this is a new new interest rate regime interest rate cycles are long. >> yeah. >> so, same mother, brother and sister or you have the younger mother are we that close? older brother, but same mother the second mother much younger >> my mother was super young she had me -- >> okay. with us. we're only half? >> i have a brother 14 years younger. >> it is possible. we don't need -- we can have the same. >> absolutely. >> okay. >> yeah, yeah, yeah. >> alec baldwin second family member. >> you lost me we could have a second >> right, right. brother and sister 30 years

apart. if we're 30 years apart. >> we're not 30 years apart. i may look 30 years younger than you. >> you do. you do >> michelle, thank you >> always a pleasure. coming up, a major deal in the defense sector with missiles and nasa rocket engine later, mohamed el-erian will talk to us and reminder, you can watch us live on the cnbc app. ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia.

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regional carrier will wind down the agreement to fly for american airlines and will agree to fly for united. ceo broke the news over the weekend. the move was caused by concerns of mesa's financial and operational problems related to the industry pilot shortage. mesa's operation for american is tied to hubs in dallas and phoenix. american will back mesa routes with other carriers and the main l mainline operation. and l3 harris will buy

aerojet for a $4.7 billion deal. the products help power nasa rockets. back in january, federal regulators sued to block lockheed martin for $4.4 billion. the ceo wants them to be the supplier to the pentagon like raytheon and lockheed. the shares are down 1.5%. and benedict coming up, we t the disney bet on the "avatar" installment which fell short at the box office. and reminder, follow squawk pod on your favorite podcast app and follow along anytime we'll be right back. >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure

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we're back the blockbuster sequel, avatar missed some of the more bullish estimates. disney, has placed a big bet on james cameron avatar franchise slating three more sequels and building an attraction at disney world's animal kingdom joining us is "variety" co-editor and executive chairman, former nbc cable president and a cnbc

contributor. cynthia, i'll start with you, how do you -- was it disappointing? i hear a lot of positive buzz about it we're in this postpandemic world, are people fully ready to go back to theaters at this point? >> you know, i think it's a very good question. i think that on the -- probably this was the best scenario for domestic box office opening that disney could have opened for it was -- people certainly showed up. it was by -- it was definitely a respectable performance. the franchise itself was associated with such enormous box office that the expectations were enormous. in the case of james cameron films in particular, one of their strengths is hold that people will come in weekend two, weekend three, and weekend four. so the real test of this movie will come over the holiday period but there's no question, there

has to be -- they have to be doing some math at disney right now and looking at the enormous cost of this film, the marketing of this film, they do have three more sequels slated for the next couple of years. i can't imagine they're going to spend the same amount of money that they have on this one >> cynthia, i'm glad to have you on later in the interview, i want to talk to you about some of the other films. i've seen them all my son -- i saw eight movies when i was there and i keep seeing them back here. i mean, i've even seen -- what is that crazy one about the triangle of sadness. it was nuts. tom, do you go to movies still are you going to see "avatar" and is that a good move to get three more sequels i'm not going to do it >> i did see it. i saw it at the same screening at becky did.

>> all the cool kids >> that's right. >> that's why you weren't there. >> is it -- would you -- is it a good financial move? that's what you think about a lot for disney is it smart? >> well, i have to think that this will do fine for them because they have so little holiday competition for a big family event and it is in china which is very rare for an american film these days lack of competition at the box office for the next couple of weeks i think will do fine i think this has to be a teachable moment for iger. he came back to a lot of fanfare that creative was going to be at the center of disney going forward and great storytelling was going to be at the center of disney going forward while this was a stunning film in terms of 3d effect and it

will do great for i-max, i think that a 2-year-old with scissors could have really ed iited this thing from three hours and ten minutes down considerably. the plot was thin. and i think iger is going to be saying that this is not the kind of money that they should be spending and disney should stand for a different quality of storytelling at least that's my sense of -- if i'm going to have this as a teachable moment coming back in, putting creative at the center, one of the key internal themes for them but the real tell will be how this works for the fly wheel what this does for the parks what this does for disney+ what this does for merchandise with all of these sequels coming iger did the fox deal. and the fox deal has been looked

at as not one of the good deals that disney did, that they way overpaid, but avatar was looked at as the on brand elementof that fox deal for disney and what they do with it from here in terms of the disney fly wheel i think will have a lot to do with how iger is viewed ultimately in terms of whether the fox deal made some sense or not. >> cynthia, do you -- i go to theaters -- i don't need to see "thor" i have not seen "babylon." what's your favorite of those? none of those people -- i don't know, they're not actors are they just voiceover types. i guess it's an animation,

right? if you like pixar you might like "avatar." >> i saw ten minutes of avatar over the summer. i think in fairness, in fact, "avatar," this is something that disney inhar itted from the fox deal it's got all the ingredients, this should work across the disney fly wheel of theme parks, streaming. the question is, is the enthusiasm there i think to the points, though, the conversation about this movie and its success for disney would have been different a year ago when people thought that that total addressable market for streaming was a lot closer to a billion than perhaps 250 million.

>> what's going to win best -- you blew off my entire slate of movie. what's your favorite movie that you saw >> first of all, very impressed that you've gone really down the rabbit hole of art house as a movie, the most enjoyable movie that i have seen of late would be "the woman king." >> very good tom, have you seen anything other than the fifth "thor" movie? >> i haven't seen them all "avatar" being nominated for best picture is a big deal i loved "elvis" which is up for best picture >> i don't know why you don't love your former -- we're way over we got to go

that's not good for comcast. thank you. >> thank you when we come back, twitter user say that they want elon musk to step down as the head of twitter. musks says he will abide by the poll we'll talk about what happens next "squawk box" will be right back.

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breaking news, a majority of users voting on whether elon musk should step down as the head of twitter have voted in favor of musk leaving. what will it mean for the future of twitter and his other companies. tesla shares are up this morning. we are looking at a positive open on wall street. major averages lower for back-to-back weeks we're going to talk tech and when we might see a rebound for the mega cap names. and the latest in the ftx collapse sam bankman-fried now expected to surrender himself in the bahamas today for extradition to the united states. details are straight ahead as the second hour of "squawk box" begins right now ♪

good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick. andrew is off today. u.s. equity futures this morning indicated up 47 points at this hour, as you can see, we're up about 46 points green there, green arrows. very muted compared to last week and even friday. treasuries, right around at 3.5% range for quite awhile on the ten year even with what the fed has been doing, talking, cpi. everything else that we've gotten, 3 1/2 is where we've been how much the fed has to do with that and -- i can't necessarily control the ten-year, but it can

in certain ways. it has -- i think they would like that higher too so that the yield curve would be quite as inverted with the two year at 4.18 take a look at oil slowing global economy perhaps oil stuck at $75 and then crypto, bitcoin is -- got back to the low 18,000s. and then we saw jay powell, back down to the low 17s, now below that at 16,735. >> all of these concerns about what's happening with the global economy is certainly playing in. >> that's what they want. we have breaking news for you this morning that twitter poll that was initiated by elon musk asking followers whether he should step down as the head of the company has ended with a majority saying yes, she should. about 17 1/2 million votes were cast in the 12-hour poll 57.5% of the voters wanted musk

to leave 42.5% wanted him to stay musk said he would abide by the results of the poll, but he hasn't tweeted since it ended 45 minutes ago. it's 4 in the morning in california if that's where he is. he was around the globe yesterday. he told the delaware court last month that he would eventually find a new leader for twitter. last night he tweeted, no one wants the job who can keep twitter alive. there's no successor on this news, we're keeping a close eye on shares of tesla because tesla shareholders love this news. stock is up. there had been questions about how much mind share he could spend on each of these companies. tesla and spacex taking up a big part of it ron baron, a long-term tesla shareholder talked about how elon is a key man. and all of this use follows twitter policy update on sunday. the platform says it will not

another accounts created for the sole purpose of promoting other social media platforms this is really what created a huge amount of outrage mr. beast, one of the social influencers has 16.6 million followers. a lot of kids who follow him he said this is kind of garbage because they send their subscribers regularly to other places to see their content. when you lose some of the big social media icons and people who are doing those things, that was a huge question. >> well, the twitter poll, we may not get a true answer in all the mail-in ballots. and they have three weeks from today to trickle in to see what the final results would be in a single day, it's possible to do anymore. let's got to dom chu with a look at some of the mornings top premarket -- do we know the house yet? we're pretty sure of the makeup of the house

not to be concerned. >> it seems so off brand, right, to have a social media company looking for mail-in ballots. >> we adopted the pandemic wave of doing things. why can't we vote on the day of the election with voter i.d. and know exactly what's going on wouldn't that be good. >> i have a lot of thoughts on this i think it probably would go a l lot longer than the minute and a half we have l3 harris technologies, they're scheduled make a $4.7 billion deal. they make engines and projectiles and helps nasda rockets. federal regulators sued to block

a planned purchase of aerojet. and the ceo has said he wants the company to be an alternative to large pentagon suppliers like raytheon and lockheed. they're trying to lay out the case for getting this deal closed by regulators the shares up 1.5%, this is the time of year across wall street when analysts lay out their best ideas for the upcoming year. being named a top pick for 2023. they think microsoft will be one of the beneficiaries of the spending on software by corporations and businesses and it could be -- it could be poised for accelerating earnings growth shares up one-half of 1% and a check on first solar analysts are calling the alternative energy company a top pick there they think amongst other things that it will be the biggest

beneficiary of the ira or inflation reduction act. it has more to gain based upon its heavier focus on solar energy, bigger scale projects. shares up one-half of 1%, joe. i'll send things over to you >> ira too many things. >> i'm thinking about my individual requirement accounts. >> go back further, the horrible violence, just like, we can't find three other letters to describe something >> we can focus -- we can brainstorm, joe, and you and i, for how to find synonyms for all of these things. >> thank you the eu accusing meta platforms of violating antitrust rules by distorting competition in the online classified ads business companies that break these regulations can in theory be

fined up to 10% of their annual global revenue shares of meta as you can see, down a little bit, about 1%. to talk more about this in the broader tech sell-off, let's welcome mark mahaney at one point, becky, we did show an irs -- bringing up an ira story and we showed an ira guy >> are you kidding me? >> once we brought up the taj mahal casino and showed a picture of the taj mahal thousand do you know if you ordered that mark, are you worried about this for meta >> well, you just added one more risk to the name they faced a fair amount of regulatory risk. i thought the bigger rich was much more on the privacy side. facebook marketplace is a small set, it's a low single digit percent of their total revenue

it's a little surprising you would think of all the big tech platforms, the one that investors clearly view as the most competitively challenged is meta, facebook, because of the rise of tiktok it's a little bit surprising but it adds to the risk profile. >> they have -- you wonder how much teeth the eu has, but they've been successful in the past i mean, 10% would be material, would it not >> yes, it would so just to put numbers around it, joe. meta does about 115 billion in revenue. they're going to do roughly that this year. 10% of that would be a big number i find it hard to believe that it would lead to that kind of scenario there would be some sort of negotiated solution between meta and the eu it's an odd case to have been brought up this is an asset that is lightly monetized by meta. they don't charge listing fees

or final value fees, so to say that meta has made facebook marketplace a dominant commerce platform seems a bit of a stretch. but i haven't seen all the details. i think most investors are going to say this is a small part of meta and it's surprising i think there will be a little bit of skepticism in the market about how this will end up >> so you're a pro you're an institutional pro. talking about this earlier institutional pros aren't buying these things now even though -- we just showed, i don't know, five or six stocks they were down between 60 and 25%. individual investors, "the wall street journal" says, they're doubling down while many professionals have bailed out. if any of these professionals a year and a half ago owned a meta or an apple or an amazon, wouldn't this be a good time as an investor to be at least

buying these and then if they go lower, to buy more to make a long-term position, or are the next five years really going to be problematic because we've, i don't know, got rising interest rates. different environment than the last ten years >> i like the way you set it up. i'll go with option "a" rather than option "b." if you're a long-term investors, you have assets that are clearly dislocated if you're willing to look through continued softness and a december quarter and a march quarter as macros start to weigh in you could try to find a better time to enter in we changed our tune. going into this next year, we're constructive and it's because multiples have been de-risked. estimates have been de-risked. we we've seen a lot of cost actions

taken. when these fundamentals of the revenue growth starts to come back second half of '23, first half of '24, it's going to happen on a lower cost base. you're going to have a slingshot opportunity. one should be more constructive on tech going in, but you want to be tactical, top picks are netflix and uber >> okay. i was going to ask ones which ones you like the most can the individual investor beat the pros by this strategy now. i wonder who is going to eventually be right. we think the pros are all right, but i don't understand this right now where the individual guys are hanging in there and the pros are getting out >> well, i think you described me as a pro and i've made so many mistakes along the way. i'm not sure i'm a pro it's a humbling experience and a job. i want to stick with the point for a variety reasons, tech

traded off this year you mentioned one of the factors which is aggressively rising interest rates we left easy money land 12, 15 months ago you can wade in on high-quality tech, apple, microsoft, google, amazon and probably meta names that, you know, don't have profits, have free cash flow here and now and have been dislocated than -- we'll have macro pressures, but they have the balance sheets to work through this and there's some of them that are intact amazon falls into that camp. facebook faces a lot of challenges, but i think valuation is so asymmetric that i also don't to like meta. mark mahaney, thanks. >> thanks, joe. when we come back, we've got much more on twitter users telling elon musk that they don't want him to run the company anymore. we will talk about that poll

with analyst gene munster. also talk about what it means for tesla if elon musk can focus more on that company that company's shares are up this morning next, there's less than a week to go until christmas the final chapter has begun. we'll talk about the make-or-break period for the retailers. you're watching "squawk box" and this is cnbc >> announcer: "squawk box" is sponsored by bitwise the world's leader in crypto index funds.

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shoppers were out in full swing this weekend for what has come to be known as supersaturday. that's the last big shopping weekend before the holiday crescendo. joining us is the ceo and chief research officer of the telsi advisory group let's talk about the strength of the consumer right now we saw the november retail sales number that was weaker than had been expected. does that show fatigue are they going to show up to shop at the last minute? >> i think they're going to show up at the last minute, but they're going to get deals think of all the deals that were happening in october with amazon, target and walmart and the big prime day that you had with amazon.

it may not have been as big as july, but it's a pull forward. and then you think about the hurricane that happened in the southeast. you had a lot of replacement spending that went on two. the year over year numbers of retail sales are showing strength but that lower to middle income consumer, there's more cautious and less discretionary spending than what they had in the past >> what you said that shoppers are going to get discounts, what does that mean for the margins and profits? >> it's going to hurt. it cannot be goodwhen the whol goal of retailers this holiday season is to exit the fourth quarter with clean inventory so that you enter 2023 with the ability to earn a better margin. all the retailers guided coming over their third quarter earnings, some were better than others you saw also, for example, companies like victoria secret had more pressure with some of the holiday sales that were out there. you're seeing that even the luxury goods companies, there's a little bit of moderation in the spend from what it had been.

still growing, but less than the past look what you said about andrew. andrew is off somewhere cold people are traveling and seeing families for two years that they haven't seen in the past. >> you have a list of winners. which of these stocks do you think come out ahead >> i think ulta, ralph lauren, dick's sporting goods, costco, you're getting all types of consumers shopping costco and you're seeing companies like ralph lauren which has expanded the purview of who they're appealing too. >> it's funny. macy's, walmart. it's not just one group that's going to do well or not just the discounters, not just middle market, not just luxury. but you're going to pick names in each one of those. >> exactly the reason why i'm doing that, every company today, they're

executing with agility if you have expecting the unexpected which is my theme for 2023, it requires agility. you look at what macy's has been doing, whether it's adding new categories, lmvh and what they're doing, i think you have to have -- you have to be innovative in order to drive wallet share every category, you'll have wallet share being driven even at the lower, middle income level. what are you offering them either in price, product or value. >> these picks that you made, do they reflect your conviction for the coming year? there's a lot of questions about additional concerns with recession or what might happen to the consumers at that point you feel confident in this at least for the first six to nine months of the next year. >> those are the holiday winners. it's timely because we just came out with our 2023 outlook this morning and i feel confident with ralph lauren going into

2023 i like the off-pricers for 2023. i think that value offering and the trade down is going to benefit the off pricers. i think you'll see a little bit more benefit than the department stores given some of the comparisons that you've had. also on the specialty side, the new one i would add to that for 2023, watch abercrombie & fitch. i think they've been smart about the way they're executing both their real estate strategy and their product strategy >> dana, thank you we'll talk to you i'm sure very soon with more of this holiday retail shopping. >> thank you. coming up, mohamed el erian joins us live on set to talk markets and what investors should expect in the last two weeks of the year and beyond what we know about the financial segment laffyos. stay tuned much more "squawk box" is straight ahead ither. just a few nights of fun.

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♪ let's get to the latest on the collapse of ftx. a source tells cnbc that sam bankman-fried will no longer contest extradition to the united states. he's expected to appear in a court today to formally wave those rights this is a reversal for

bankman-fried and it comes just days after she was taken to a jail pending a court hearing conditions in those jails are very difficult you got to wonder what else they're thinking just in terms of maybe trying to get back here more quickly than u.s. prosecutors can get their case together we'll see what happens with this coming up next, mohamed el erian joins us as we get ready to kick off the new week on wall street. and millions of dtwitter users say they want elon musk to step down as the head of the company. millions wanted him to stay, but the leave group is one musk initiated online poll. we'll talk about what this means for twitter, also what it means for tesla. >>st> ay tuned, you're watching "squawk box. which this is cnbc

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welcome back to "squawk box," everybody. this is cnbc right now we want to welcome a special guest to the set to talk markets and much more. tom farley he is the chairman and ceo of far peak he's going to be with us for the rest of the show tom, welcome. >> thanks, becky good to see you. >> i like the jacket. >> i thought twice about this because i knew i would catch grief from joe. >> is that the best thing about

leaving the big board, you could never show up at a real office -- >> not a chance. i would have lost my job immediately. >> people would have been, like, what areyou trying to do you obviously are a big game couch hunter you bagged a big couch, shot it and took the fur off it. >> maybe i should have -- >> i brought another jacket this morning if i got cold feet. >> you like it >> yeah. i like it on him >> i may change jackets at the commercial break. >> i like it. >> i have an aflac jacket that -- >> you put that on i can put that on and probably look better. i like and you're so good looking anyway, i would like you to be less be good looking mohamed el erian is also here. it's graef to have you here. >> it's wonderful to be here thanks for having me. >> we've got some crazy stuff to talk about let's jump right in to what's

happening, whether the fed is going to go through with this or not. and we've been talking all morning long about how pros are taking money out of the market they've got more in cash than they've had in a long time while average investors are keeping money in where's the smart money? what are you thinking? >> 18 months-plus into this inflation episode, we shouldn't be where we are now. we shouldn't have a situation where the markets are in one place and the fed is in another place and that's where they are. the fed thinks we're going to 5.1% and staying there for awhile the market thinks, we're going to come down and be under 4.5% >> what do you think >> i think the market is probably right i think the fed risks overdoing it i understand why because they fell so far behind and because people are worried that the fed will overdo it, they're pulling money out. they're worried about what's going to happen to the economy and earnings

we didn't need to be here, but now that we're here, we have this big uncertainty and we're going to continue talking about the fed when the fed should have stepped back and let fundamentals determine where this market is going. >> cpi is weaker than expected you think it would have been taken care of by what the fed has already done >> there's two issues. headline inflation is going to continue to come down and we should really be talking about core inflation there was an article today that showed over half of the advanced economies, core inflation is still going up core inflation is a problem. the second thing we should be talking about is what happens in the middle of next year when inflation gets sticky at 4%. did you notice that the minute someone suggested to the fed share, will you be changing the inflation target, we he said, n

way. but it's a real discussion to have would you pick 2%? i'm not sure you would >> you said we shouldn't be at the point where at today what do you mean by that has the fed screwed something up over the last 18 months. >> the fed is in the midst of a three-part policy mistake that's going to go down in the history books. number one was mischaracterizing inflation as transitory when there was enough evidence to keep an open mind. number two is once they retired, remember that word, retired transitory from their vocabulary, they didn't move with any determination so we had this ridiculous situation in the middle of march. we printed a 7%-plus inflation print, and they were still injecting liquidity. number three, which is, they may go too far and may push us into an unnecessary recession >> as you've watched this, tom, you used to talk to the greatest

companies in the america all the time is this a way -- any way to run an economy do you think inflation can be so bad that you should accept a -- maybe a brief recession to break the back of that are -- i just wish there was a better way, supply side, a way to increase -- keep rates low, take care of the labor problem by making it easier for companies to start up and entrepreneurs to do well you don't do that by raising rates, do you? >> i'm not as harsh as mohamed el erian they had no choice over the last six months to keep raising rates to the point where the economy cools dramatically every single ceo is thinking about layoffs, cutting hiring, or dramatically reducing investing. >> all that is bad. >> so i think -- >> all bad. >> i agree i think the fed is behind the curve. when you hear, oh, the labor

market is cooling. no, no, it's going ice cold. so now is the time to act as opposed to six months from now. >> can you imagine trying your best to orchestrate those outcomes that's unfortunate, isn't it you said horrible things layoffs, not investing so this is their stated goal at this point was it do you think it came to that >> it has come to that i didn't need to tom, what are they telling you about how much they're going to pay the workers they're going to keep >> really, really interesting. in europe, you have to increase pay because inflation is so high in the u.s., there's a haves and haves not. it's performance based you're doing a good job. i'm going to give you an inflation adjustment on wall street, you're going to get zero in terms of your annual bonus if you're not a top 50% producer, 75% producer in the u.s., it's more haves and

haves not. in europe -- >> put wall street aside, a big question is will the u.s. have the same industrial action that we started to see in europe? will the workers who have job try to protect their real wages better than they have so far that's a really important question do you think we will have industrial action? >> no question it's already happening it's real. inflation is real. people are going to the grocery store and the pump has come down but still inflated over where we were a couple years ago. they're saying to their -- they're saying to their c-suite. we need more dough. >> when you look at the outlook for 2023, the china reopening has been a huge play, oil prices are going to surge when china gets back on its feet. we talked about how covid is going to be an issue there you're not getting accurate reports of the deaths or the cases right now.

so how do you as an economist kind of look out andthink, here's what we can anticipate, here's when china will pick back up here's when that will add industrial pressure to energy prices. >> you had a great discussion with michelle today and the bottom line for me is that they're not yet in a place where they can resolve -- reconcile lives and livelihoods. so it wouldn't surprise me, if china shuts down again i think the numbers massively understate what's going on there are reports that people don't want to go to the street they're so scared. that has an economic impact. i think if you step back, the one thing we have to deal with is the three major parts of the global economy are all slowing for their own reasons. so we are in a policy-induced slowdown europe is in a supply side-induced slowdown, china is in a covid-induced slowdown. >> we've argued a lot back and

forth about fiscal spending. i think the government gets involved and 90 cents goes through the cracks you've talked abilitout how youe targeted spending. the fed enabled congress to do a lot of things. is there anything you wouldn't have done over the past 18 months do you think any of that spending contributed to too many dollars chasing too few goods. >> the inflation acceleration act? >> you like all that stuff now you're hammering the fed for waiting too long but i mean, they enabled this. >> let's go to fiscal policy i think that what's too much money spent on consumption, handouts to people -- >> what would you not have done? >> i wouldn't have done as many handouts i would have been much more targeted. >> you would have done chips. >> i would have been much more targeted in general. so i think the example of my oldest daughter, she was working, she got two checks in

the mail did she really need two checks in the mail? she didn't but we just overdid it in terms of support, had we been much more focused and then the investment side is what got sacrificed that's the sadness >> you described something interesting that, like, there is global inflation people say, we didn't do this, biden didn't do this, there's global inflation but you attribute it -- you say it was policy mistakes here and other parts of the world -- energy in europe and covid in china. >> part one of the inflation shock, food and energy but when it spread to goods, what's probably -- we could have done something but it's the third element now it has spread to typical service industry, wages, and that is less sensitive from an interest rate perspective it means the fed has to crush the good sector in order to get to the goods sector.

letting inflation evolve, it's a mistake that got made in the 70s and 80s. letting inflation involve all the way to wages, yes, that was a policy mistake. >> do you have anything more to say? how much was that jacket talking about inflation? i like it. it's very, very cool. >> i'm sure i got it on sale it was ten years ago. >> really? that's not a -- >> no. >> and you haven't changed in shape in ten years, that's impressive. >> are you surprised? >> yeah. look at those eyes >> can we wrap >> coming up -- coming up next, twitter users say they want elon musk to step down if in fact that happens is it a good thing for tesla you're watching "squawk box" on cnbc

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elon musk should step down as twitter -- twitter ceo, at least, those are the results from a 12-hour poll that musk himself posted last night. more than 17 million votes were cast and 57.5% of them were in

favor of him leaving shares of tesla on this news looking up check it out that stock is up by 3% this morning. we want to talk more about this vote and what it could mean for the ev maker we're joined by gene munster managing partner gene, what do you think? is this good news for tesla shareholders >> absolutely. it's a positive for tesla because despite all elon's flaws. investors want him to be more involved with tesla. he has this magnetic personality, debatable, but investors believe that having his -- more of his time applied to tesla helps the multiple around tesla. there's an added benefit of him distancing himself from twitter. it should improve tesla's brand. i believe over the last seven

weeks, as he's been more engaged with tesla, he's become more political. and i think there's a benefit to tesla by him stepping back in twitter. i think this is a big deal for tesla investors. they should feel good with him following what he said and resigning as ceo of twitter. >> he tweeted recently on another twitter poll that he posted out there, the voice of the people is the voice of god do you think he goes through with it on this one? >> i do. i think there's a lot at stake underneath this is his approach of doing things different. it's obviously unorthodox for a ceo to put his job up for a vote and i think elon enjoys doing that i think he has been pushing for the power for the people and that's been one of his brand angles i think he will follow-up on it. if it doesn't, it would be a

black eye. one of the reasons he'll follow up on it, there's a laundry list of reasons why he doesn't want to be ceo of twitter he didn't want the job -- he didn't want the company originally he said in court testimony, he wants to back off from his time at twitter his true superpowers are solving technical problems not ambiguous content monitoring problems. ultimately, i think that what he's doing here is just better aligning what he's really good at and so i think he will honor these results because i think he wanted to -- want to quit. >> just last night he also tweeted, though, that the reason he can't step down as ceo is because there's nobody else who can keep twitter afloat right now. what does he do? who would he find? is it going to be somebody acting on his behalf >> that was probably -- outside of the whole entertainment factor of what's going on with this, that jumped out to me the most and he's leaving -- this might sound out of touch, i think he's

leaving a window open for him to fire sell the company. you think about why would anybody do that. let's run through the math on this if he does -- there's no successor, the company can't be fixed, probably still some value with it. it's $15 billion that would be a $30 billion loss for him. i think he would get a nice tax loss with that 30 billion. he's got a lot of tesla stock and that is still going to be heavily taxed when he exercises it his 30 billion in spacex will have gains that will be taxed. when you look at it from his side, that is something that put a guess it's 20% probability that he's starting to lay the groundwork for shutting it down. >> wow gene, we got to run. but that is hard to get your head around, the idea saying,

i'm going to eat a $30 billion loss who would he sell it to? >> i don't know. i don't know why you have that comment either i just want to recognize that there's other things going on in his mind and low probability but it's something that should be considered. >> wow gene, thank you. we'll talk to you soon. >> thank you up next, the hidden or not so hidden messages in wall street bonuses this season we're going to talk about this and the state of the big bank ayuncuts st ted you're watching "squawk box" and this is cnbc.

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with qualifying internet. it looks like there's more to come the latest, a source tells cnbc that goldman sachs is planning to cut up to 8% of its employees next month joining us now on the cuts and bonuses this season, where the bonuses, are lydia moynihan, "new york post," lydia this is the way things are supposed to work, i guess. the fed raises rates all companies, but especially wall street companies look at what the future is going to bring, and they kind of almost are self-fulfilling, they kind of bring that future on themselves, but it seems like it is probably a prudent thing to do, pulling your horns a little. >> well, you know, banks are

doling out bonuses this year, it is really an opportunity for them to optimize and to lean out their work force as you mentioned, every major bank is instituting 1, 2, 3% co la, goldman sachs, 8% and bonuses are an extension of that wintering out process. for everyone on wall street, bonuses can be as much as 90% of their compensation so that amount that you get on your check, that is a message from management whether or not they value you and so we're seeing this resurgence as fbp, filing by process, and it is so much easier to gently nudge someone out the door and it saves the banks a lot of money if somebody leaves on their own volition and don't have to deal with risks of litigation, and massive severance and that is what this process is and equities in dallas, we're seeing that instead of giving somebody a pink slip, you slowly ice them out so i think the underperformers will probably get maybe nothing,

maybe very little but for the rainmakers and the top performers at the bank, the banks understand they need to hold on to top talent. and whether it's the thick times or the thin times. and so they're going to do it to the best of their ability, to try to hold on to those rainmakers because the economy is going to come roaring back and they want to be positioned to take advantage of that. >> lydia, with the exception of possibly credit suisse, i think after the cut, all of the banks will still have more employees than they did pre-covid. is this just the beginning >> you're exactly right. and it is interesting because even though goldman is laying off thousands of people, they beefed up their work force during the pandemic much more than what we're seeing than laid off so that is initially why they have to cut head count, and slash as many jobs as they can, but i think the bonus season really important for encouraging people to walk out the door. i think the problem here, of

course, is that people might not want to walk out the door right now. last year, you could easily leave and get a job in any number of industries, and any other competition, and right now, there just aren't a lot of jobs to go around. and i think another important piece of this conversation is just how tech is suffering so much you know, the phrase, when tech catches the flu, wall street catches a cold and tech used to be a huge pipeline for wall street to do deals and a great exit opportunity for junior bankers and people starting their careers and they could go to facebook and be making just as much money, less hours, and they have more >> what parts of a, you look at where investment banks are loaded with, where did they get bloated, what areas, and what's going to hold up best, and what is going to fair worst there's trading, there's m&a, there's a wide range of things

where do they get bloated? >> well, i don't think that they were bloated i think these banks want to be as lean as they possibly could and they were just inundated with so much business. spacs were up, overnight 90% last year. and now we're seeing them dip dramatically and initially those cuts are focussed in mortgage banks and then spacs so it is not that they were really ever bloated. i don't think that you're going to see david solomon justify hire fort hell of it to make sure everyone has a job, he was really hiring people in areas that he needed and in spacs, in ipos, in deal making, and a year ago, they did need all of those people and now there's not that much work to do anymore. revenues are down 50%. and so you know, they have to go on to the top performers and more eat what you kill environment, as opposed to everyone getting a piece of the pie, so i think they're just

trying to rejigger their work force to look more like what things look like today >> what did you do with your spac did you fire yourself? what finally happened with that? >> not only do i run a spac, i run a crypto spac, so it's a tough time >> that's part of the problem, i think, lydia. >> lydia nailed it the two are mortgages and ipos ipos are gone. and not coming to maybe the second half of next year. >> we're here at the real home of the ipos, that is the nasdaq. >> fighting words. >> lydia, thank you. we'll see you next time. >> nice to see you. coming up, much more on the fallout. tom was at the new york stock exchange. coming up, we will hear from michael sonnenshein, gysleraca >> do you love adele

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pointing to gains after two straight down days we'll see you what is moving right now. elon musk asked twitter users whether he should step down and a majority said yes we'll tell you what could happen next like he's going to step down. and new this morning, senator elizabeth warren posing new questions about potential

conflict of dointerest between tesla and twitter. stay tuned "squawk box" the final hour is ahead. good morning, everybody. welcome back to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen, andrew is off, and spending the morning with us is tom barley, the chairman and ceo of farpeak, u.s. equity futures that the hour have been showing green arrows modest advances right now, the dow is up 50 points. the nasdaq up 40 and the s&p up 9 points this comes after a down week last week and a down week the week before. so we shall see how we are kind of standing up as we head into the end of the year. this morning, treasury yields have been a little bit higher. you're looking at the 10-year right now showing 3.546% the 2-year at 4.199.

the top story, elon musk tweeted a poll asking ifhe should step down as head of twitter and would abide by the results and 57.5% of respondents said yes he hasn't responded since the poll ended but the shares of the other company have responded, tesla right now, up a little bit this morning, up 3%, and we watched it last week at the end, i think up in the mid 160s or so, dropped all the way down to about 150, which was i think a recent low and now, giving back a little bit of that, 155 or so separately, "the new york times" deal book reporting that senator elizabeth warren sent a letter to tesla chairwoman robin denholm last night and asked whether musk's diverts of resources from tesla is harming the car maker. touched that she is worried about tesla. and suggested that the possibility that musk could be intentionally short-changing either tesla or twitter to

benefit the other. and then, which is it? which is it? and she asked about the possibility of potential conflicts of interest and whether tesla's board has imposed guardrails senator warren said that there are significant legal questions about the relationship between two companies. sam bankman-fried will be back in a bahamas court today a source familiar with the matter says that the former ftx ceo plans to surrender himself to the u.s. extradition process, a quick reversal from what his lawyers said just last week. made multiple requests for him to be released on bail in the bahamas. and those requests have been denied we're going to talk more about the fallout from the collapse of ftx with grayscale ceo michael sonnenshein. that's coming up at 8:30 a.m. eastern time. new this morning, the european union is accusing facebook owner meta platforms of violating anti-trust rules by distorting competition in the

online classified ads business the companies that break these regulations can in theory be fined up to 10% of their annual global revenue and the shares of meta, i don't know, 10%, would be material, it's down 30 cents i don't know whether that is a market check on the probability of the eu. actually being able to get to that point although in the past, the eu is, with that said, there is nothing, it would not be done that way in the united states, and these are our tech companies that are over there. >> in the past, they've done lots of things. >> massive fines >> they have sometimes without admitting or denying, i mean it is just like they get them out of the way, it seems. you know, to help them out a little >> 10% is a lot. >> it is. >> when is the last time you had a new tech company. >> not a lot of tech innovation. >> exactly. >> a good way of taking a little

levy on some of the successful companies from across the bond right now, let's get to the trading day ahead. senior markets commentator mark santoli joins us good morning, mike. >> good morning, joe modest moves in stocks and bonds this morning that go a little bit counter to the recent trend. lower in the s&p 500, it has knocked more than 5% off of it it is taking the s&p back to the down 20% level from the all-time peak there have been six or seven prior times this year when you've had a two-week decline of at least 5%. once you got a really good bounce-back in may, the majority of the times though, really didn't get too much of a bounce-back, so people are focused on where this move is lowering and if it continues, where it might settle out and a lot of folks focused on 3700, this would keep intact this idea that we're in a trading range, the market maybe if it got down another few percent would be somewhat oversold but no urgent follow-through selling this morning. we have a post-options friday

action, where people are sort of squaring up but the longer term downturn, as we coast to year-end stocks versus bond, it tells a pretty clear story over the course of the year similar direction of travel. similar angle. with overshoots to the down side in stocks. this is the price of government bonds. the yield goes the other direction. prices going lower look at this year, where bonds since early nove remember up in price and stocks down in price so that suggests this is a market's way of waying we were worried about inflation and rates and the fed and most of the time stocks and bonds moving in those concerns, and now it's much more about stocks worried a little bit more about economic slowdown or recession and things like that, where as bonds are getting a little more of that safety and we've seen this before, the major lows of this year. june and october and did you see these down side overshoots in stocks and then spread back up similar divergence if you look at housing or home builders, relative to retail, so two big parts of the consumer discretionary, almost the same chart but a little bit of a

divergence here at the end rates going down mortgage rates coming in off their highs. home builders actually have a little bit of a bid right here where as retail, and this of course is really not dominated by the largest most successful retailers, it is kind of an equal way of a retail basket, that has seen another run lower on the similar concerns on how deep the slowdown might be on the consumer and the economy next year. >> it remains to be seen, the divergence you pointed out at the very end of the chart, but i'm looking back, there are a couple of other times when it looked like something like that was starting, where it just then kind of reversed itself. but this might be real this time, if you think about it. >> yes, i mean it could be real. the big question is, you know, can home builders really take advantage of the supply constraints and mortgage rates coming in off their highs, each though they're much higher than the last couple of years, when a huge number of, you know, homes were bought and built, and mortgages taken out. but you know, markets, expressing a little bit of hope that the backlog can keep these

home builders going for a while. >> i think, mike, the depreciation of the dollar also has occurred at that same time as that divergence that may be a little bit - >> exactly, so the dollar coming in, yields coming in, tom, it is sort of telling you that the sites of investors has turned away from when is inflation going to come in and when are we going to be able to get downside momentum in inflation, to much more is what is the effect of the tightening, and i think as we all know, it has become quite a cozy consensus among people that says, look, there is going to be a little built of a reckoning in the first part of next year, earnings going down, maybe guidance lower, the economy struggling, and the market has to make a new low, that seems to be where the view is settling out among the street we'll see if the popular view plays out. >> pretty strong signals to the fed i would think. >> yes, you would think so >> mike, thanks. for more on the markets we want to bring in sam, chief

investment strategist as cfra research and liz young chief of investment strategy at sofi. let's find out where each of you are on what we were talking about. sam, what are your expectations for the first half >> good morning, becky well, interesting that we were focusing on home builders because home builders since 1990 have been the best performers in december, and i remember writing about, talking about buying straw hats in winter and overcoats in summer, basically, hit them where they ain't, and certainly, that's what home builders have done but i would tend to say that i'm in the camp, along with the majority, that are indicating that it's going to be a tale two of halves. the first half is likely to be fairly weak. we are looking now at an earnings recession the last quarter of this year, first two quarters of next year, now expected to be negative, along with the deeply-inverted yield curve, the negative leading economic indicators, et

cetera i think it's setting ourselves up for a fairly challenging beginning of 2023. >> when you say a tale of two halves, do you mean the second half of next year is going to be strong >> exactly i think or at least the potential for a recovery i don't really see the fed hiking rates beyond the march fomc meeting we do have a target at 5 to 5 1/4% and i'm also encouraged by the fact that since world war ii, the fed has started to cut interest rates, an average of 8.5 months after the last rate hike. >> liz, how about you? how do you come in on this question >> well, if we start with earnings, right now, if you look at just the year over year 2023, versus 2022, consensus is estimating flat basically growth i think it needs to come down from there so as we start 2023, and get announcements from companies about q4 and start to get guidance for the rest of the year, i would expect earnings to come down and probably show an

estimate of say 5 to 10% contraction year over year now, there's a lot of belief about a weak first half and a strong second half, at least in the market if you believe that, i think you also have to believe that we probably fix the inflation problem in the first half, which might require a recession, and then we're on our merry way in the second half, and i think actually the big risk here is that if we do have a recession, or if we sit in a stagflationary environment, that it drags on longer than people expect in 2023, so actually the best case scenario is we have a big step-down in the first half, get it over and move on, but i'm a little bit worried that we will drag further into 2023 with inflation than people expect. >> so liz, wall street always acts early, acts on what it sees coming down the pike is it too soon to start buying on a second half recovery? >> i think it's a little too soon and what i would watch is some of the levels on the s&p, when, you know, if we get down, let's make closer to where we were

before the previous low at 3577, if you look at what would actually be a 30% drawdown which is usually a recessionary drawdown, 30% hor or more, you have to get down to 3357, there is a long way to go between now and then and i would say getting down to 3500 or approaching that that level, you could probably start dripping in. it may go down further than there. you have to watch p/e multiples. 7.8 times in the last rally which is a little bit ridiculous considering the environment. think if we get back down under 17, we're there now, but if we get closer down to 16, and maybe under 16, then it looks a little bit more attractive. >> so you're talking about a drawdown of more than 10% before you buy? >> yup, that's what the math would say, yes and i do think that we could get back down closer to those previous lows and gothrough them a little bit. >> sam, how about you? if you think the second half is going to be better, and you're pretty committed and convinced

about, that what would it take for you to start buying? >> i think liz is right, when you look at bear markets associated with recessions and we've had a variety of indicators point to a potential recession fairly soon, we find that these bear markets with recessions have lasted longer and fallen farther than those without recessions average duration is 15 months. average decline is 35% so even a fall to a level of 3200 on the s&p, would bring us closer to the average of a minus 33 and then also p/es get trimmed in the bear market bis an average of one-third so bringing us down to a possibly of a p/e of possibly 15 so i would say it depends upon how quickly this happens investors will eventually look across the valley, looking at opportunities down the road, but it really depends on when all of this unfolds before we can say how high we will be 12 months

from now. >> if we didn't have a case of the mondays before, we certainly do after, sam and liz. >> yes, i guess i'm a little more optimistic. you both talked about p/es and right now the forward p/e is something like 16.5. liz, you said earnings will come down 5 to 10%. now let's say p/e for 2023 is 18 times. why isn't that cheap that's a return to equity of, whatever that is, 6% in a world where the risk-free rate is still much lower and with a possible pickup at the end of the year, maybe it is the christmas spirit. >> i love your christmas spirit. >> i mean i hope the christmas spirit is contagious if you just look at p/es though on a relative basis, which is usually how we look at them, right, we're below the averages, the longer term averages right now, if you look at a five-year, and we're slightly below the 10-year average, so technically cheap right now. but just think about what that 5 and 10-year period has been.

of that 10-year period, 5 of those years were spent at zero rates and the average 10-year treasury yield was about 2, 2.1% we're obviously in a very different environment right now where multiples probably deserve to be lower because of those head winds now at the last market low, the p/e got down to 15.3 times, i don't think we need to get back down to that level, because earnings will fall, so just mathematically, we may not get there at the same index level. but we probably need to get back down where we're slightly oversold, because we know that the market overshoots on the down side. so that to me is lower than where we are right now >> thank you >> bye, guys see you later. >> thank you. coming up, the white house economic adviser jared bernstein joins us after the break with the trajectory on the u.s. economy. stay tuned to "squawk box. we'll be right back.

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stridently, about what still needs to be done the white house is not political, well, presumably not about the fed, but are you fully in favor of this tact? i mean nobody, i mean we get wage gains start happening, unemployment is great, it's an historically low levels, and everything is going swimmingly, and the fed has decided, we don't want that, we got to throw a wrench in the works here you're okay with that? >> well, as you suggested, you know, we're very careful not to wade into the independent fed policy, and larry summers who is very pressured to battle all of this was very complimentary of our white house last week precisely for this point, we know history is just absolutely littered with economies that have been brought to their knees by compromising the independent independence of the central bank i think the model that is being followed, that goldman sachs has laid out and one that i pay attention to, slower gdp growth,

that's the transition to stable growth that president biden talked about months ago, that leads into slower job growth, which we've seen, you know, we did have a strong 260,000 job gain in november, but that was, you know, hundreds of thousands below the previous november. feeding into slower nominal wage growth, feeding into slower price growth and i think if you look along that trajectory, you can see the data flow supportive of that transitional model >> jared, do you think that the resilience of the job market, or the -- it doesn't seem to have been affected yet by historic rate increases, and i would think that's good, because you can do more, maybe, and maybe that increases the likelihood of a soft landing, if the job market holds up, and it seems like the fed looks at that as stubbornly remaining, unemployment stubbornly remaining low and that means we're going to go even further,

and stay there longer. it just all seems counter-productive to the way you would want to run a country. >> well, i think you tee that question up just right i think there are a lot of moving parts there to try to understand but i think the key to solving the conundrum that you just raised is of course vacancies. now, if you look at the gap between labor demand and labor supply, where labor demand is defined at not just jobs but jobs plus vacancies, that gap remains historically high. and that misalignment of labor/demand and labor/supply has certainly caught the attention of the federal reserve but you can realign that gap with lower vacancies and we've seen vacancies come in you don't have to take, you don't have to take workers out of the shop if you take the help wanted sign out of the window, and that's part of what is the trajectory here. but i also want to stress something i mentioned in my first comment, which is that again, if you go back to november of 2021, i believe the

job data was north of 600,000. that is truly unsustainable but it was very important to president biden's bounce-back of the labor market to get back to one of the strongest labor markets on record. fast forward to this november, 260,000 jobs, so a very strong deceleration to steady, stable, very strong, very solid job growth >> what's going to happen over the next two years you're an economist, but i note you have the president's ear on a lot of different things, and we have two years, the republicans in the house, we don't have enough workers, and a sort of an, an all encompassing immigration bill is something that all sides talk about wanting to have, jared, that would probably help in a lot of different ways, is there -- it could be bipartisan, since you're not going to get anything done in the house anyway, with any of these big spending bills most likely anymore is, that something that you could shift to and every day, we hear about what is happening down at the

southern border, and you know, not a lot of great things are happening. why not take it on head-on, with the president? >> i think you make a very reasonable suggestion there, joe, and this is something that i think it was day two that the president, when the president got here, that he sent up a comprehensive immigration reform bill to the senate now obviously that was a symbolic move suggesting just how supportive this president has always been towards that policy now, you know, you're talking about the next couple of years, and i'm an old hack here, under this hat, there is a little bit of gray hair left, and i can tell you from all my experience here in this town that the legislative agenda can always surprise you, and president joe biden is pretty masterful at pulling legislative rabbits out of hats, so i wouldn't count anything out i would not, decidedly not go to a place where the next two years

are legislatively done and when it comes to labor supply, you mentioned one part of the equation is we're welcoming immigration reform but there is also child and elder care. i grant you, there is going to be some folks in the world, republican party, who are not going to support that, but there are others who might, and if we want to improve the labor supply, the labor force participation rate, particularly for care-givers, disproportionately women, affordable accessible child and elder care has been part of our agenda, we have great ideas lined up and i think that would be a smart place to look also. >> i think what did the fed predict, 0.3% growth next year that's not good. that's not good for anyone but obviously, we're trying to vanquish inflation for the long term do you think there is going to be a recession do you think we will have positive growth in 2023? >> you know, in a couple of questions, you've asked me to look out pretty far, and i got

to say that the uncertainty margins around these forecasts are really uniquely large. i do think that there are, but i'm not going to evade your question too much, i do think that there are real head winds in play that, as president biden has said, certainly make a recession not inevitable by a longshot i mentioned goldman sachs earlier. i think i mentioned their recession probability is 35%, well below the market consensus. and i think one of the reasons for those more optimistic views, a soft or soft-ish landing, is because of the momentum. we haven't talked about gas prices $3.14 a gallon as of this morning, i just checked, that's down about a $1.85 since the mid june peak. think about filling up a 20 gallon tank, that's $37 of savings. do that a few times a month, you get some of the breathing room that you hear this president is talking about. that's a positive for consumer

spending which is 70% of the gdp. and you know, we also have a labor market that as you and i have discussed is still going strong, providing significant marginal, significant nominal wage gains that's also going to help fuel consumer spending. for which the forecast remains pretty solid so i think there is definitely a path to a strong, to a steady, to a stable transition that's nonrecessionary. >> the leaves are gone, i guess, you didn't hear the leaf blower today. >> how about that? >> the mower, the mower is gone. you know what, i think you have come up with a snow blower, it is going to be the next thing you try. >> speaking of that, i want to just thank cnbc for these nice heaters i have, these space heaters right here, which are keeping me nice and cozy so thank you. >> really? did we do that >> you're welcome. >> that's pretty good. i sent those down for you, jared. >> thank you, joe. >> thanks. we'll see you again. it was totally silent.

there was no distraction the leaves are gone. all the leaves are gone. >> and the sky is gray >> i went for a walk >> do you remember wkrp, people were writing in, is that it? >> that was my inspiration, yes. >> are you going to be a sports guy, do you think? >> i got a tweet, that said joe seems a little jealous of your jacket >> yeah, i don't wear any jacket but if i were going to wear one, it wouldn't be that one. no, i like it. i think it looks good. i envy a lot of things about you. what you are 6'4"? >> with the afro, yes. >> what i don't envy is that crappy spac. you're going to shut down your spac >> we don't refer to it as the crappy spac. >> are you going to shut it down it's done? >> so i have a spac, i've done a couple of spacs, as you know, the most recent is farpeak,

we're approaching the termination date of the deal that we agreed in july of 2021. >> is this new >> the termination -- i'm impressing facts that are knowable if you're on the s.e.c., if you're on the s.e.c. website. december 31st, 2022, in other words two weeks from now, that deal terminates if we haven't otherwise closed the deal and we've been up in front of the s.e.c. now for a year and a half, and you know, crypto is not a real sympathetic cause >> we'll talk more about that. >> we'll talk more about it with shonnen shine. because binance did something today, should. >> is this like ftx? >> i would tread lightly. >> that's what i mean. >> they're the money now. >> yes >> they're the new -- they're talking about being the new savior, and coming to the rescue of some of the other companies we'll talk about that. binance buying crypto brokerage

out of bankruptcy, we have the details next and we're going to be talking to grayscale ceo michael rannenshein, all coming up, stight ahead "squawk box" will be right back. we'll talk more to tom farley about the spacs, too

up next, news from the crypto industry. grayscale ceo michael sonnenshein joins us after a quick break. stock futures are off session highs. as you can see now, in the red

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welcome back to "squawk box. this is cnbc we've been watching the market this morning check things out with the future, the dow has turned negative it has been up by 50 to 80 points through much of the last three maurice, and you can see right -- three hours, it is down by 6 1/2 points. and s&p in positive territory

but just barely and if i keep talking, it is going to go negative there we go. and nasdaq up 10 points. this comes after two weeks in a row of declines. last week, the nasdaq was the biggest loser. and if you're watching the treasury market this morning, the treasury yields have been picking up a little bit. the 10-year right now. 3.559% joe? >> voyager digital has announced that the crypto exchange operator binance will acquire its assets, and it is worth over a billion, binance was one of several bidders for voyager. which is currently in bankruptcy voyager says the move will start the process of allowing customer access to their funds, and that this would be done as soon as possible sticking with crypto, the value of grayscale's bitcoin trust plummeting down more than 76% this year to date. joining us now to discuss the s.e.c. blocking its proposal for bitcoin etf, the ftx fallout, and much more in an exclusive

interview is grayscale ceo michael sonnenshein. if it's not a crypto winner, it is at least an uncomfortable time of year for crypto. >> you know, it is a crypto winter, right? we've been through this before we're unfortunately going through it again and we may have to go through one in the future. you know, speaking of voyager and things like that, at the moment, what we're going to see in the crypto winter is going to be more regulation and certainly some consolidation within the industry we've seen time and again, bad actors called out and weeded out of the system, and crypto more resilient and even stronger. >> and you expect that to play out the same way >> i do. i've been in crypto for nine years. i've been through all kinds of cycles and i've never been move confident or optimistic that crypto is an asset class that is here to stay. >> any time there is support levels, and we've seen a lot of support levels for bitcoin in particular, new ones have been

set, is there a level where you would worry about most firms and their ability to stay in business what would that level be could it go back to 6,000? >> crypto could certainly go lower from here. absolutely >> it could. >> but it is important to know that it depends on the kind of firms you're talking about firms that may have liabilities, large outstanding loans, what we've seen with this crypto winter, is a lot of firms employing way too much leverage and that obviously got them to some bad scenarios that ultimately led to their demise, so i really think what the business model is. >> did you watch our interview last week? >> i did not >> well, that would have been one to watch you watched it, right? do you think, i mean you could get an auditor, and we asked him about an auditor, and he said crypto is too hard to understand >> deloitte. coinbase has an auditor. >> it is not much bigger than coinbase what's that got to do with it? >> when you watched it, what was

your take? >> that interview was not his shining moment and that is happening to a lot of the crypto execs, i think they should do a little bit less tv, but look, binance has been a great company. it is not easy to get an auditor, that is true, in crypto, it is not easy auditors require things like very clear controls, and processes, and a very clear ownership structure of your company. but those are the facts. and unless you have established those things, it is not terribly easty to get an auditor. >> and for us, we've had audited financials of the investment product, bitcoin, ethereum, we've offered 17 digital asset class, audited to 2013 to 2014, so i reject the premise that it is hard to get audited financials done, and no to mention that what is - >> what does that say about binance? >> ftx would come in and help

out and it was all over the place. and now binance, sort of bailing out voyager. is it going to have a different ending, a better ending? >> my perspective is that the u.s.-based businesses that are compliant with u.s.-based securities rules, financial regulations, so it would be tough to say what that would look like outside the u. >> so are we closer to a bitcoin etf or further away? >> i think we're closer. >> would that help >> ftx is a failure of people, of process, of governance, it's not a failure of crypto. i think it's a really strong example of why products like dbtc, the world's largest bitcoin investment vehicle ought to be in an etf. they should have the shares trade on the national securities exchange, give investors more protection and these are things that investors should be doing. >> agree with what you said, there is an underlying issue with some of these coins, some of these coins that are thinly traded, and that this was

something else ftx was doing, they were making loans to people and telling them they had to use some of the money to come back and buy their own stupid coins, and then marking up the coin as a result and i think people have real questions about below bitcoin. where is the intrinsic value where is the valuation where are the marks? how can you trust any of it? >> some folks may be overlooking this, but last week, the complaint against ftx, it actually reaffirmed their conviction about bitcoin, ethereum and tether, as being commodities, not securities. and i do think as we move into 2023, you're going to see some of that bipartisan, bicameral support for legislation around crypto, and hopefully answer questions like that. >> wait a second that just means the cftc is once again saying it should be the regulator, not the s.e.c. >> that is one of the other questions to answer. who is the regulator that businesses, that these asset class, that this industry should be going to for that clarification? >> who do you think? >> at the moment, i think it's

going to be a dual effort between the s.e.c. and the cftc, because there are assets out there that are commodities, there are assets out there from this asset class that are securities some other folks may call for the creation of an entirely new federal regulatory oversee this asset class. >> can we switch to, you manage the grayscale bitcoin trust, do i understand this right, that there is roughly $10 billion worth of bitcoin in the trust, and the value of the trust is roughly $5 billion is that all right? >> so there is about $10 billion of bitcoin in the trust itself, that constitutes over 3% of the outstanding bitcoin in circulation. at net asset value, it is about $10 billion. the trust shares trading on the secondary market are trading at its deep discount to that net asset value. >> around about 5 billion? >> and that's why converting to an etf would eliminate that discount >> so the s.e.c. has said no, and then they said no, and then

they said no, and by the way, i'm feeling your, i'm living your pain, in my own endeavor, so this isn't critical of you whatsoever, they're saying you can't turn it into a bitcoin etf, so if i'm one of those 500,000 investors, or whatever, very large number of investors who said oh, my gosh, i invested in this thing that is worth a dollar but i can only sell for 50 cents, what are you doing to help them? >> so we're preparing for all scenarios. i published a year-end letter today to my investors, and i did share that in the event we exhaust all of our legal and judicial processes around and converting to an etf, challenging the s.e.c. denial, we would then consider being able to do a tender offer for a portion of the shares. it doesn't mean we necessarily will but i want investors to know we're prepared, the same way we were prepared with the lawsuit when the s.e.c. denied us. >> if i'm one of the investors and you do a tender offer for 20% of the shares which i think would be the cap as you said, at what valuation is the tender

done is that done at the market value of the bitcoin, the 10 billion valuation? >> all of the details around the tender need to be worked out at the time the tender is placed. we need s.e.c. relief to run it. we need shareholder approval to run it but it is just to show investors we are thinking about all of this >> the behavior, and i'm back to bitcoin, not the others, but the action you've seen in bitcoin over the past month, with all of this happening, that is what doesn't kill you makes you stronger or more shoes to drop? how do you see the trading is it, are you impressed that it stayed near 17,000 it is down from 60 >> it is i mean there's a lot of inputs to price, it could be the marginal cost of production for the bitcoin miners, there's a lot of different elements. >> it costs more to mine it now, doesn't it >> and i think we're seeing quite a bit of distress in the mining ecosystem i think ultimately seeing this range downtime period of crypto,

historically as preceded big movements in price, how quickly that happens is, you know, their guess as good as mine. >> would they like to see it stay as very close of a price as it becomes, something that you could use transactionally? is that still in the future, do you hope that happens some day, where it is frictionless around the world where you don't have to worry that it is down 50% by the time - >> sure, i think it would be great to have bitcoin used in various parts of world as a transactional means. >> what would it be worth? 50,000 >> it becomes a turnoff for investors and regulators when there are large moves in price in a very short period of time when you see bitcoin prices moving 1,000, 2,000 dollars every couple minutes or every couple hours, that's not sustainable. from these levels, you like to see a low kind of grind up from here. >> what will the range be next year in bitcoin? >> well, i'm bullish on bitcoin. but you know, my confidence interval in bitcoin being higher

than it is today, it is like 51, my probability is like 51% >> so that jacket and bitcoin, with you $50, $60, worth $250 probably. >> yes. >> roughly. >> you think that is about right? >> you used to be be able to - >> you're talking about tom's jacket >> you know an ounce of gold buys a nice suit always has. >> what do you think bitcoin is worth? i know you think it is higher. >> i do. we've seen this movie before. >> bitcoin is the best case in crypto by far. >> i read papers about how it works and most people, i don't think they know, i don't think they know what a distributive ledger is. >> and i think investors know that i think it is unfortunate that a lot of people have been harmed in the wake of ftx. >> we never thought it would get back to 60,000 we used to laugh at tom lee. remember it was back down to 3 to 4,000

and he said it would come to 20. >> some who have called it rat poison, it is a solution in search of a problem, that the ledgers we have today are pretty good. >> but all money, let's look at a store in value they're a store of value the reason that gold, the reason that gold -- >> with what banks do -- >> the reason that gold is worth what it is worth, it is mutable and only a certain amount that will ever be around, and it's accepted cross culturally around the world. >> bitcoin is all of that and it is transportable. >> and it's transportable. >> i agree. >> a lot of the cases that have propped up over the last three years -- >> what about a store of value it is easy to make. >> you can read a book where money has been for 4,000 years >> yes >> gold hasn't gone anywhere in a while either. >> still a nice suit a jacket for 1800 bucks.

>> you do stock analysis on bitcoin? >> we do. >> what's it worth >> it's tough to put price predictions out there but we have a variety of resources on our website from the research team how to value crypto assets like bitcoin. >> michael, thank you. >> thank you >> you look okay >> you look worried. >> can you take us to the commercial >> i can up next, we have jim cramer's first take on the trading day ahead. stick around we'll be right back. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company. bring on today with comcast business. powering possibilities.

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♪ ♪ a cyber-attack can grind everything to a halt. cisco security keeps your company moving forward. because if it's connected, it's protected. cisco. let's get down to the new york stock exchange and check in with jim cramer. we have talked a little bit about the european union thing they're doing with meta, there are concerns about the online advertising, some of the issues they've had with that from a competitive structure and it sounds pretty extreme but they are saying after meta has the time to defend itself, that they

go ahead and push forward, that they will prove wrongdoing and rules broken they could take 10% of the revenue of the company, that is big number $11.8 billion if you were to take 10% of last year's revenue number as of september 30 me, it was quizzic. quizzical because it is not clear under what authority they have to be able to just claim something. and i also think that it's somewhat specious that there really isn't a claim given the fact there's been changes in the ad world that makes it where meta doesn't have as much let's say claim on people that it had before apple changed so i don't know. i find that meta is still the target because meta has a lot of money but i'm not too concerned. >> okay. what are you watching this morning, jim what has caught your attention what should we be thinking about as we get closer to the end of

the year >> there's a terrific fellow i follow named john reed stark from my dotcom days when i started the street he's saying there could be a big sweep against all of the different exchanges and platforms for bitcoin. and he's really after, really says a lot of things about binance that make it indicate they could be a target along basically with everybody else because what's happened is that gensler has said since the sam bankman-fried complaint that everyone has to comply i wouldn't touch any of these. stark is a serious guy, he was with enforcement for 18 years. and he's talking about how there was a runway for people to say, listen, you should comply. and he thinks the runway no longer runneth over, as he says this morning so i just think that the s.e.c. probably wants to know where binance is based, what it doesn't disclose

also, i think that they're not too crazy about tether i would be very careful here >> jim, thank you. i expect we'll hear more on this in a few minutes we'll check in with you then >> up next, kkr's henny mcvey will join us in an exclusive interview. wherever they are... you need more than technology. you need cdw, who gets to know your business and can design and deploy custom solutions, with pre-configured hp notebooks with hp wolf security. ai-enabled threat detection and remote management protect your endpoints 24/7, giving your defenses some real teeth. bummer. hp makes always-on remote security possible. cdw makes it powerful. ga-a-a-ap! oh... hi. what's this, a hospital bill? mm-hmm. for 1,100 bucks? ga-a-a-ap! looks like your wallet may need a sling too. tell me about it. did that goat say "gap"? he's talking about expenses that health insurance doesn't cover.

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everybody. this morning, kkr is out with his 2023 outlook they're forecasting periodic

bouts of dislocation in the new year and is advising investors to accelerate from a walk to a jog for deployment joining us is henry mcvey, which is kkr's chief investment officer of balance sheet henry, let's talk about this when you say get to a jog instead of a walk on this, what kind of deployment are you talking about? you guys like credit better than stock right now. >> lasttyke we talked, we used the analogy, walk, and once we get through january, you'll get a pretty disappointing outlook in terms of where earnings are going, but it's time to start leaning in what's happened, 2022, 84% of the big central banks around the world were tightening. next year, that will be 12%. that's a huge change second is a lot of institutional investors have derisked mightily they have lost money in growth stocks, lost money in bonds and lost money in stocks

if you think about supply, you take ipos, levered loans, and high yield issuance and look at that was a percentage of gdp, that's back down to the level of june 2009, so ultimately, we're healing ourselves. it's not going to happen overnight. we have been using the analogy of 2000 where a lot of equity got burnt up from high dotcom prices and 2002, we had credit issues around telecom. but you made a lot of money, so we actually are getting more enthusiastic about where we're headed >> this time around, the equivalent analogy, spacs, bitcoin? what sold off in the early year? >> spacs have gotten hit, ipos have seized up there was an excess of venture capital investing. >> what does the telecomequivalent of next year look like? >> i think we need to watch around probably i think you're going to see some consumer

losses around provisioning banks, we'll share that, also real estate around office is back to work maybe doesn't surge back the way some people think there are a lot of people who own a lot of offices around the world where the footprint is changing you look at midtown versus hudson yards, there are different outcomes those are two areas to focus on. we own over 200 companies globally we watch the data there. the one thing i have heard you all talk about earlier today is wages are probably the thing that we're watching the most as a potential impediment to inflation cooling. that's something we should all stay focused on that the offset of that is the goods world is finally deflating last time we talked about walk don't run because inflation would be higher. we saw that in labor, rental, and goods. goods are deflating. think about target missing, those type of companies. we still have wages going up, but rental income is starting to

deflate. you have goods deflation, but you still have services inflation. that's the tension we'll feel. >> what's the pullback you would like toee if you think this is an earnings recession, what kind of pullback do you need to see in the averages? >> a couple points i want to make one, i have been doing macko for a long time. every time one sector becomes a huge part of the market, it generally underperforms and hurts the index. energy in the 1980s, financials in 2007. tech is 29% of the s&p everybody owns it. you were just talking about reregulation with jim. those type of things i think the s&p is not going to perform the way it used to >> a lot of the big tech companies have already seen pullbacks of 50%, 60%. >> i think you could have some bigger names still get hit, and then to me, what's interesting is think about the russell 2000, the cheapest since in decades. relative to the s&p, that's

int interesting. we think the dollar has peaked everybody is standing on one side of the boat right now >> we were asking that question, the pros are selling why are individual investors doubling down on tech. >> i think of another, henry, and buyouts. there's a lot of cheap stuff but there's no debt. are we going to see all equity buyouts from kkr >> i think there's a very important transaction a couple weeks ago we did in europe where we bought an insurance broker. it was a sizable transaction we put in 100% equity and it still is going to make adequate returns. there are a lot of cheap stocks out there. you should look for 2023 to be a good year. won't be a bonanza year because it's hard to get leverage, but there are a lot of public stocks that are cheap and a lot of corporations around the world right now where their footprints are too complex and they're overstated and you'll see

corporate carveouts and you have started to see some of that bubble up. >> thanks for being here today >> and tom farley, want to thank you for sitting in with us >> merry christmas, happy holidays >> happy hanukkah. >> take a very quick look at the markets. you're going to see the dow is down by 34 points. we'll see where this heads make sure to join us back here tomorrow right now, time for "squawk on the street." >> good monday morning, everybody. welcome to "squawk on the street." i'm david faber with jim cramer, and we're live from the new york stock exchange carl has the morning off let's give you a look at futures as we begin trading a half hour from now kind of a mixed bag after what was, if you're long stocks, not a good week last week. let's get to our road map. it does start with tesla shares. they're getting a boost ahead of the open elon musk coming up short on his own poll on whether he sho