government shutdown if congress can pass it before funding expires on friday. it's december 20th, 2022 friday is christmas eve eve, i think. "squawk box" begins right now. welcome to "squawk box" here on cnbc. live from the nasdaq market site in times square. i'm rebecca quick along with joe kernen andrew is off. let's look at the dow in positive territory it is up 25 points s&p is down by over 3 points nasdaq down close to 20 points this comes after losses for all three major averages s&p is getting closer and closer to the 1,800 yesterday

closer to the 3,800 level after being close to 4,000 and above it in recent days. we will see what happens as we get to the end of the year as we look at the treasury market this is where there is action. 10-year treasury up to 3.6%. this comes as the japan nikkei tumbled overnight. all of the moves related to the bank of japan. it held the ultra low interest rates steady and modified yield curve. it will allow fluctuate rates to 50 >> oh, my gosh >> nobody was expecting the bank to do anything like this by the way, the range is what will happen before the bank steps in to stabilize rates by buying bonds the boj said the adjustment is intended to improve market

functioning of the yield curve and maintaining the financial conditions if you ask anybody about this, they will tell you this is looking like a beginning of the end to japan's ultra easing monetary policy. that has been a long time coming the japanese 10-year treasury was allowed to rise to the highest level since 2015 0.426% this is just the latest central bank saying we can't be accommodative anymore and tightening the yen moved significantly. >> it's not negative >> that is something >> that is something in and of itself. >> yen was a huge mover. strengthened by 3% against the dollar the dollar/yen you see the chart down 3.3%. this is the strongest level for the yen in three months. this play ns into what we talke to the dollar strength has waned at this point

you have seen the hard times it can play out with mu multinationals with better numbers. if the dollar's strongest days have passed. >> i like to have a seminar on exactly exactly demographically get you stuck with negative rates for 20 years. it is something to do with demographics and how many kids and aging population it has to do with a culture. it's hard to wrap your head around what would cause interest rates -- soaring to .4% on the 10-year treasury >> the social promises they made to the people. >> would you invest for ten years at .4% >> the financials took off and japanese stock market and real estate stocks got hit. japanese financials took off

>> financing the nikkei it has been -- that's the first thing i thought. you lose japan >> it tells you how much tougher central banks are going to be. >> alphabet soup >> you can't stand alone swiss national bank. the tide has shifted the rest got pulled along because you cannot stand your currency to get decimated like that in the inflationary times >> we have this going for us revealing a 2023 spending bill if passed before current funding ends on friday i hope everyone can get there. friday is a monsoon coming, ylan? >> christmas is coming, joe. >> before that, nasty weather.

>> that's right. that's right they have to make sure everyone can be in person to vote at least in the senate. lawmakers have reached a deal on the $1.7 trillion bill to fund the government for the next fiscal year. the text of the legislation was released overnight it includes $858 billion in defense spending $45 billion for the war in ukraine. $41 billion to combat natural disasters. there were some unrelated provisions attached to the 4,000-page bill. the electric count act to certify the elections and ban on tiktok on federal government devices. several tax provisions did not appear to make it into the bill. the fix for the tax deduction and restoration and enhanced child credit both sides had to make compromises in this and had to pass the bill this week. >> it is not going to be everything everybody wants,

that's for sure. it is preferable to a cr which will leave the country high and dry. >> the senate is expected to start moving the bill on the floor today and in hopes of passing it on thursday the house can vote on friday ahead of the midnight deadline to keep the lights on and hopefully avoid the big start. back to you. >> exactly storm. that's the operative word. we can't avoid one ylan, thank you. it is tough to change the weather. is it going to be snow my accuweather says bad rain and winds. >> i don't think we will have a white christmas in d.c maybe where you are. >> i don't know about here maybe north of here. you know what? christmas -- next christmas is two weeks away you know -- we just got rid of our tree from last year. i swear.

we just -- i remember carrying it out and cleaning the needles last week. >> i hope it is not real, joe. >> for me it is 1/50th of my life approximately for you. it is much less. that's how it starts changing. >> christmas is my favorite holiday. >> is it >> right >> mine is -- well -- >> i like thanksgiving >> i like halloween. >> halloween's pretty good >> the weeks leading up to christmas and everything you need to do i need a wife. >> you do? it is intimidating >> it's a huge list. i like christmas >> do you have him find something? >> he is on his own. >> i have never been successful. unless it is large and a really

good clarity >> got ya' you've gotten smarter with age you figured it out >> i couldn't buy clothes or shoes or bags. >> i can see that. ylan, thank you. in the meantime, sam bankman-fried was send back to the bahamas jail yesterday after the plan for him to waive extradition called he arrived in a blue suit and white shirt and shaking. he spoke briefly and was told to stab stand up straight by a court officer. he told the court he was shocked sam bankman-fried was there in person and not requested his presence at the hearing. reports over the weekend said he would consent to extradition in court, he demanded to see the copy of the indictment after the hearing closed, he told the lawyer to proceed with

the extradition hearing. now the source tells cnbc that sam bankman-fried expected to make an appearance at 10:00 a.m today o today. we have more on the story are with jacob frenkel >> weird to go to that penthouse in the bahamas to possibly spending the rest of your life incarcerated >> a hard thing to get your head around >> you wouldn't want to be facing that. is there any hope to ever see the light of day >> anything can happen i was hearing this morning and i have a hard time blelieving thi one. part of the decision to waive the extradition is hoping to get bail in theunited states which he has been unsuccessful getting in the bahamas after repeated

requests i have a hard time thinking the united states would give him bail either. >> okay. i don't have to report to serve until may. you know how fast may would come >> i think he is a huge flight risk. >> i would, too. you know you are going eventually and going to be there a long, long time, i don't know how you get -- you see weinstein's guilty >> i did >> to go from here to a movie guy. academy awards tuxes and beautiful wife that is shakespearean. >> don't do terrible things. >> i'm not defending him or sam bankman-fried. people can go from -- you shouldn't assume you will stay here. >> you can look at white collar crime and say it is not the same it destroys people's lives >> if you ever lived through losing anything like that.

it can destroy all kinds of lives. >> then again, you always say anything -- >> yes absolutely if you have to do it >> don't lose your sight >> if the accusations are correct, he will have stolen more money than madoff >> inflation adjustment. we still cause it a ponzi scheme futures right now. up 32. red. down 2 on the s&p. nasdaq down 1. we will talk strategy next as we head to break, check out the shares of disney opening at a 52-week low after falling 4% yesterday i don't know bob iger didn't save the stock yet. that bloom came off the rose quick. the unexpected opening weekend for "avatar.

stock down 40% over the last year you are watching "squawk box" on cnbc

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i got it reading what the comments are. the santa rally is shrinking futures are mixed.

let's talk markets with karen murphy at kester and mimi duff i was bringing viewers in with my thinking when i said interesting. you said this is the most neutral we have been in ten years. that's an interesting statement to make. you are not the bullish or bearish, but neutral in ten years. the regime has changed from what people used to do and what's working and now an entirely new strategy neutral? >> the neutral strategy? the ten years, the fed most of the time, has been suppressing bond yields massively. as a result, there is no alternative. equity valuations got

ridiculously high especially in tech here we are a year later and we really like diversified portfolios across the board. we came in over weight fixed income and we scaredquared up as the board. the longer-term outlook despite the volatility is solid. >> all of the forecasts are probability and percentage and things like that at this point, a 30% probability we go down another 10% and test the lows >> i think that's totally reas reasonable especially in the overall volatility that is a reasonable outcome 3650 to 4300 that range in the s&p and in bond yields 3.25 to 4% in

10-year treasury notes. >> karen, do you feel better am i reading that wrong? we have inflation behind us? we may have earnings issues now. does 2023 look as bad as 2022 to you? >> we think we're turning the chapter in the bear market up until now, the focus has been on information now we have decent numbers suggesting the fed is beginning to win the war better cpi report. container rates are lower. wages are starting to show softness that's all good news the challenge is the market hasn't contended with the lower earnings environment for next year they are still expecting 5% growth profit margins near historic highs. all of this collateral damage from the cumulative tightening monetary policy has not yet made its way into numbers with that, we're still expecting

weakness into next year, particularly with valuations on average leavels not terribly attractive, but not expensive either we feel neutral. you are not paid to take a lot of risk. especially on the equity side. >> is that the first six months or most of 2023? >> we anticipate recession in the first half of next year. that suggests by the second half of the year, assuming it is not too deep of a recession, you could see a rebound of markets all of those earnings estimates have been pushed into the back half of the year you need to see some of that excitement about the back half of the year come down in order to work through it and be more positi positive going forward >> do you think the fed in the back of its mind is neutral and still talking tough? you are seeing some of the

effects, everybon in the labor market we hear about a lot of layoffs eventually that will add up. >> i think they need to see more work done on the labor side. we just started to see the first bit of evidence that wages are slowing. all the announcements of layoffs are not big enough to make it to the broad numbers. the risk to wages is they are very hard to bring down and to slow so the fed is more likely to overshoot on labor market weakness than let it run for longer they will have to see more weakness in the numbers in the first half of the year in order to back off. the early indications are positive >> mimi, would you buy fixed income or wait for better opportunities? start buying a bottom's up analysis in sectors and start

nibbling >> we have been advocating buying fixed income. specifically the last three or four months. the blowup in uk gave us the entry in the global markets. the bank of japan this morning, you know, following that announcement to let 10-year treasury yields with the cap of 50 basis points. that re-pricing of fixed income. the opportunities outside the traditional assets is what we added emerging markets to that we think there are great opportunities there. on the equity side, our tilts are focused in norway where we feel like energy independence away from russian natural gas and alternatives

norway should benefit. we also like uranium >> great mimi and kara. thank you. when i talk to mimi, she knows are you related to duff & phelps at all >> no, i've been around the markets for a long time. >> okay. i used to work with a guy whose last name is barney and we worked at smith barney >> no relation >> people would ask him on the phone. he said i don't think that is germane to the conversation. >> that is a good answer >> he said i don't see how that is germane >> people think i'm related to quick. >> we do we call each other cuz

>> i thought you were 50 degrees. >> oh, like jimmy and warren >> we are not related. >> oh, i thought you decided >> i teased. maybe 50 generations out i have no idea. >> i was adopted not related to anyone. >> you are >> i am. i don't admit it fine wasn't easy. when we come back, twitter users voted that elon musk should step down as the head of twitter. now musk may change the way the voting works we have details right after this. as we head to break, check out shares of amazon it has given back all of the pandemic gains and then some down 10% since march of 2020 we will talk tech later this hour "squawk box" will be right back. . they'd huddle.... welcome to the peytonverse. such a visionary. game plan... you go. no, you go!

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executive edge with the latest on elon musk. yesterday, users voted in a poll that musk should step down as ceo. musk may call for a major policy shift. he responded to a tweet that suggested premium blue sub des subscribers should vote because they have skin in the game he replied good point. twitter will make that change. before we head to break, let's look at the blast from the past a lot of times, joe, you and i talk about -- i know what you are going to say sometimes before you say it which is a little weird this is why. this was 17 years ago this week. >> i was talking to penelope about that i think it may have been longer. do you remember blake was there? she is 22 years old. >> boca? we went to boca several times. maybe that was -- we have been

hanging out together for 20 years? >> was that still haynes or carl >> it was haynes >> i know she said that. i don't know i had a conversation yesterday maybe she knows. >> it could be multiple trips. one 20 years ago and this could be 17. >> the reason for showing it >> we haven't changed at all our eyesight >> i have the marquis hat -- could i have gotten $15 million as a celebrity spokesperson? >> not legally >> we can't. no one more little bit of information. that shirt you know who gave you that shirt? >> david

>> david >> i know what you would say. >> david >> the king of hollywood who is now head of warner bros. he was just a normal person at one time >> a mere mortal. >> at one time when we all knew him. he hasn't changed a bit. >> he used to have great swag when he was here >> he did. >> great swag from warner bros. >> he does that's the sign of things. we need good swag. >> people are wondering what the hell i was thinking about that. >> we have known each other for a long time. >> this company is more than 50% of my life for me and this show is more than 40% of my life. >> by the way, when we started asking us the other day what makes it special it is the people it really is a family. that was my answer it is about the people >> cnbc is in our blood and what

we've done is part of cnbc for 40 years or 35 years >> this is our nice way of saying we're old >> don't look it coming up, confusion in the courtroom. we'll talk about yesterday's hearing for sam bankman-fried and what to expect when he comes back to court today. >> correction. it was carl. we must be confusing trips >> i don't know so all this is muddled. i forgot about him here is a look at yesterday. that was two minutes ago s&p 500 winners and losers >> announcer: executive edge is sponsored by at&t business at&t 5g is fast, reliable and secure but seriously we need a reliable way to help keep everyone connected from wherever we go.

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good morning welcome back to "squawk box" live from the nasdaq market site in times square. the san s&p now in the green nasdaq still down three points a lot of time before the opening bell to see how things move. a lot of it has to do to rates going back to 4% on the ten-year >> the bank of japan looks like it is loosening things and allowing that ban to widen to 50

basis points to 25 a doubling of that looks like the beginning of the end for the complete easing from the bank of japan. catching up with every other central bank including the u.s. central bank. we will talk more about that in a little bit in the meantime, former ftx ceo sbam bankman-fried and his legal team take another crack at it today kate rooney has more >> reporter: it was a kchaotic day yesterday in court and he was expected to come back to the u.s. that didn't happen there was confusion with the bahamian and american legal teams. attorneys declined to comment. both sides showed confusion. the hearing had been scheduled so sam bankman-fried could accept extradition the lawyers wanted to see the

indictment against him before making decisions the local attorneys were surprised to see sam bankman-fried in court at the end of the day, reporters said he agreed to extradition on the strongest legal advice sam bankman-fried is expected to accept extradition at the 10:00 a.m. hearing today if that happens, he would be flown to the u.s. for a bail hearing. we have a bankruptcy hearing at 10:00 am .m. here that will be virtual >> what is on the docket that is the interesting part for people looking to get money back >> it is a 341 hearing you get the executive team like john ray with the procedures there are no big milestones. we may get some incremental things on friday

he would hear the requests to unseal the names of creditors. that is one big thing. >> the idea we don't know the creditors. >> there are about 1 million creditors. they have been redacted. that is a huge interest for crypto prices if you think of the other shoes to drop and contagion. if you have a big creditor for ftx, that could hit crypto >> it could be interesting kate, thank you. now we want to bring in jacob frenkel. he is now the chair of the government investigation and securities enforcement practice at dickinson wright. jacob, let's walk through what happened yesterday of the his attorney saying it was a decision he was making to go ahead with extradition that was against the best legal advice. how do you say things are playing out? >> i think walking through chaos

is the best way to describe it i think it is something unprecedented. i have been practicing law 37 years. i work on international extradition matters on securities fraud cases and this is something i have never seen before close coordination with local counsel is critical. one of the things we talked about on friday with sam bankman-fried's gamesmanship i guess one of the requests to see the indictment reflected him being told there is a more robust indictment forthcoming as a foundation for ultimate extradition. i think it is a fundamental lack of communication and lack of coordination we saw yesterday because you indicated and we heard from kate and now he is planning to waive extradition. that means he is coming back he will be arraigned in a u.s. court as early as tomorrow

i interpret that to mean, although, as we discussed on friday, his best strategy consistent with the bahamian lawyer he is coming back to the united states and appear and in court and ultimately, he will enter a guilty plea and i think he will cooperate. >> so, you think he will throw himself on the mercy of the court? this is not someone who is not legally astute both parents are lawyers and professors at stanford law school are they advises him separately or is he ignoring them, too? >> it really is impossible to figure out what is going on. as we talked about it on friday, we talked about the conspiracy theories one question is was yesterday an act, too at some point to say i really

did not understand the proceedings before me. i did not understand the proceedings in the bahamas or what ex-pratradition was going o mean ultimately there will be a dialogue between him and the court. whether the court in the bahamas or the court in the united states where he has to acknowledge that everything has been explained to him and he understands the proceeding and knowingly waiving whatever rights he would have who it would be contest ex extradition or part of the guilty plea and waiver of appeal rights from whom he is getting personal counsel we don't know. at the same time, what we saw yesterday was fundamentally lack of coordination and communication between the lawyers more than anything else. >> you arie saying that would no fly it he said i didn't know what i was doing that won't fly because it has been explained to him and he

waived >> that is it exactly. we have gone through the history in the u.s. system and international extradition legal processes where the practice of making sure the defendant understands fully the rights that he or she has and rights waived are part of the communication before the judge actually rules i think if it is an act, it will fail >> i heard speculation earlier that he was doing this because he thought he might be more likely to get out on bail in the united states. his attempts to do that in the bahamas have been unsuccessful he made repeated attempts of that do you think there is any chance he could get bail in the united states i think he is a huge flight risk >> that's a great question i think initially there is no way he will get bail or the bail would be astronomical. >> he has a lot of money potentially he could have

squirreled away somewhere. >> exactly i seriously doubt he is going to get bail if, in fact, he does -- he enters a guilty play and does cooperate and is working with the bankruptcy trustee and working with the new ceo and working with the federal prosecutors to explain what happened to the extent that he is able to do so, then i think it is conceivable down the road he could get bail before sentencing i view it as highly unlikely >> what do you think when he has put on this -- he did a media tour extensively before and basically say i didn't realize what i was doing do you think that holds water in the court? >> absolutely does not hold water. what we're talking about is the concept of criminal negligence what was lost is that whole

discussion is criminal negligence is a nice try it will not fly when you don't have in place any governance or record keeping systems as we scudiscussed on friday, t is fraud misappropriation and embezzlement the government can prove intent. what people talk about criminal intent, people talk about the affirmative intent to deceive. we actually have in the law what i call three substitutes for criminal intent. basically it is willful blindness, deliberate ignorance and conscious avoidance. they mean the same thing fundamentally it is the ostrich head in the sand defense it doesn't work. someone has firm obligations or responsibilities and ignores those. ignores signs. that is substitute in law for criminal intent.

the ignorance and profuse apologies will not work. >> jacob, thank you. >> good to see you thank you. coming up, covid numbers in china are ticking higher we'll bring you the latest next. one death they admitted to one death. one death. >> i think it was two. followed up by five deaths seven deaths total >> yeah. then at the top of the hour, more on the surprise move by the bank of japan overnight. yen jumping by more than 3% 'lbeig bk.e dollar wel rhtac u know, mid 30s, couple of kids, recently went through a divorce. she had a lot of questions when she came in. i watched my mother go through being a single mom. at the end of the day, my mom raised three children, including myself. and so once the client knew that she was heard. we were able to help her move forward. your client won't care how much you know until they know how much you care.

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now to the latest covid developments in china. authorities are scrambling to add hospital beds and add screening clinics as the wave of covid sweeps thecountry. this after the country began the zero covid policy changes and economic related issues. it is hard to say which is more important to the chinese beijing reported five covid related deaths today following two yesterday. those are the first fatalities officially reported in weeks we will talk more about china with kyle bass at 8:30 a.m.

eastern. i would not be surprised if he has other ways of trying to gauge what the actual situation is in incha vis-a-vis covid at this point "squawk box" will be right back. ♪ ♪ 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. power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment

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crime has spiraled out of control. and every-day americans are paying the price. our elected leaders must act. congress, crack down on black markets on the web. state officials, close loopholes that let criminals walk free. prosecutors, do your jobs and put criminals behind bars. it's time to get tough on retail theft. it's no secret it has been a tough year for tech stocks, but what does it mean for the s&p as a whole? >> becky, what we have because of the nature of the pullback in markets in the past, say, 12 months, and we had shifts in the developments of the s&p. two of the bigger drags and one of the reasons we have had such under performance with the s&p

and the tech heavier deposit, is because tech has been one of the under performers technology's weighting has become less than it was. it is the heavily weighted part of the s&p, and communication services the second worst drop, about 2.9% meanwhile the sectors, staples, energy and health care, and roughly 2.5% i want to point out, health care and technology, the two biggest weightings in the s&p and today they make up about 42% of the index, so keep that in mind.

the discretionary trade, and at the beginning of the year, becky, we were talking about a roughly 920 billion market cap, and a lot of market value lost and that has translated into a real drag for the s&p 500. specifically that big communications trade if we are looking for some of the numbers here, i put them up on twitter @thedomino. and then the eu's charges against meta, and joining us is

the current president of care journey. the charges the european union brought yesterday came as a prize to me, at least, and looking into competitive issues and the biggest surprise is if they are successful in their charges against this, they could ask for fines that reach up to 10% of the company's global revenue, and it's a huge number, and it would be $11.8 billion, and that would be 10% from this year >> the investigation was opened almost a year and a half ago when you are exploring markets in the digital economy and you are trying to put the old rules of the road in place, you will uncover opportunities like what you saw this week, where conversations about how we use information may be a factor in determining whether or not companies have violated rules. this is a square peg and round

hole, and they are sort of digging in under the hood to say did accessed information about how people interacted with ads on the general facebook news feed, so to speak, influence how facebook built a competing product and might that be the case it ripples over into other places we are seeing in the united states like amazon marketplace and the like >> how serious should investors be taking this tp first of all, will they be successful then will they go for that big of the fine? >> the $11 billion fine, it's a policy signal of the importance of what is driving online behavior my bigger perception is data as a vehicle for anti-competitive behavior will be a theme that cuts across all companies leading in big tech. i would think of this more as a long-term kind of -- depending

on your view -- opportunity for competitive products to come to market or reinforce the dominance. pay attention to the research investigation on how data is used or misused and that will be what data is doing in the competitive marketplace online >> then you have to think as a shareholder back to the idea of what that means, competitively what that means in the future. we have already heard about apple potentially making changes to its app store to compete with europe rules will american companies be less dominant as a result, or is this a temporary setback? >> my hope is that we are moving towards more innovation and creativity when you have apps that we saw emerge the last decade or so like a facebook and others, in some cases when they become so

big they become almost like infrastructure and as a result the ability for the next generations of apps to come to market would be prohibited >> would it be more from the united states or more of a global competition >> well, it's to create more dynamics for companies, and here we have the talent and capabilities, and i would bet more on innovative tpuplz coming up in the american marketplace having a better shot at competition if competition succeeds, and that's to make sure there's an opportunity, so think of this as bullish on a long-term. the nikkei fell overnight. later, former fed vice chair,

roger fergusonill ve wgi us his take on that surprise move "squawk box" is coming right back

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into this morning. and japan looking to juice economic growth. forget twitter should ceo selon musk step down as the ceo of tesla? the second hour of "squawk box" begins right now good morning and welcome back to "squawk box" in times square i am joe kernen along with becky quick. andrew is off today. and looking at the futures, and that's not where the compelling story is today the dow is up about 33 points. nasdaq down 12, and s&p down one or so and this is where we are monitoring things more closely,

the treasuries we have the 364 now on the ten-year, but news coming from far, far away, the other side of the world, and we will talk to steve liesman in a second of why it's so important -- did japan raise the band by 50 basis points -- >> it's a doubling of the band it's just the significance of the move that the bank of japan -- >> currency -- the guy keeps writing in that we put one currency in dollar and the other -- that's the way it's done you think we are really making a mistake up there stop calling us idiots or go ahead, i don't care. i get that all the time. and then in oil, take a quick look at oil up a dollar now to

76 the crypto board did not -- we keep saying it's holding 18, holding 17, and now it's holding 16, and up 1.5%. it sounds complicated, and it matters in a big way. the yen strengthened against the dollar here you see the dollar versus the yen. steve has more on this and it's complicated because this is a huge signal that japan is finally relenting >> could be relenting, becky let me givea hreugs caution in there. until now the boj has been the odd bank out when it comes to

tightening monetary policy and now you have to ask if it's tweaking policy or joining the crowd? it lifted the cap to 50 basis point from 25, and the affect has been global. u.s. stock futures plunged and then rallied most of the way back and then the dollar weakened globally on the move this was not generally expected to happen for several months the trouble for understanding this move is that the governor of the bank of japan insisted this is about improving market function and maintaining its yield curve control, not the beginning of a tightening cycle. here's a quote from the press conference this morning, and he said, quote, today's step is aimed at improving market functions there by helping enhance the effect of our

monetary easing and it's therefore not an interest rate hike their problem is the ten-year yield was at the top of the range, and yet japanese inflation has been on the rise moving from deflation in april until now, so positive rates for headline and core, though core remains below its 2% target, and then now you have to step back and figure out if you should take him at his world if it's about market functioning and then you have to prepare for his exit in april where a more hawkish governor could come in the bank of japan gives an inch and investors ready to claim a mile is the headline, and i don't know where to come out on

that, but that's the tension >> well, people say they are about to ease and drop rates again, and that's what markets do, right? >> right fair enough. it's absolutely what they do and the other thing is, it has been expected. the question has long been how long can japan hold out while, you know, the ecb went hawkish and the u.s. federal reserve said we are going over 5%, and how long could japan say we are immune and we are literally and figur figuratively a financial island out there in the globe there had been issues about market functioning, and now you have to sit back and see if it's the beginning of a tightening cycle, or has he, indeed, done

this so he can maintain yield curve control. >> how much of this is just then was too strong and they needed it to come back down the yen -- sorry, it was too weak and they needed it to come back against the dollar because you get killed by inflation, right, get crushed more than other countries are getting crushed? >> you would, but japan would like a weaker yen because it's so much of an export economy, and if you are kuroda, you would probably keep this easing cycle and let the world pivot around you in this regard becky, it's not unexpected to me they took a step towards tightening, but i don't think they are quite ready to join the crowd. i think the bulk of this is

going to wait, the change in policy, until there's expected change over to a new governor next spring. >> by the way, their inflation rate is like 2.2% on average for 2022, but it has crept up in recent months, and it's crazy. >> can you do the seminar i was asking for, steve, on d demographically what it is about japan, and it's demographics, right, and culture can you do like a 40-second seminar and tell me why it's so different? >> i don't have japanese demographics in front of me, but you are right, it's an aging population that does not have a strong immigrant population coming in so their workforce is kind of stuck at where it is what they have done better than we have done, joe, is make the

higher participation rate among the elderly because it's the necessity being the mother of invention right there, but we could learn a thing or two about how to keep our aging population in the workforce, but that's their problem is that they have a hugely high savings right, and there's an aging population that saved and not spend and inflation -- >> yeah, inflation at 2.2 is the highest it has been in years >> i have the core at 1.7, becky, also, and so -- hang on i have to put my glasses on. 1.5 on the core, and beginning in april they were in deflation. >> we have heard it's a global

phenomenon, supply chain reopening and they still don't have it, and it's an island, isn't it they don't have to bring things in why isn't it more than 1.7%? >> they don't allow you to increase the utilities >> a person explained to me how they don't see it as their inflation being domestic the way ours is. it's not caused by increasing prices internally, and it was higher prices, and when i look at that you say do i have a domestic inflation problem that would respond to my monetary policy, and the bank of japan said no and they kept the line on theoriesing policy while europe slowly changed.

as you saw last week, and i don't know if we talked enough about it, and saying 50s are in the future while the u.s. slowed down a little bit, and that's because the dollar weakened against the yen and euro >> steve, thank you. we're going to have more on this story from former fed vice chair, roger ferguson, and that's coming up at 7:30 in the headlines, ftx bankman-fried has agreed to be extradited to the u.s. from the bahamas. he will be back in court today after his local attorney agreed to draft the necessary dock manies bankman-fried faces fraud charges in the u.s. related to the collapse of the ftx, the cryptocurrency exchange. and then louisiana, west virginia have become the latest

to prevent use of the popular social media app, tiktok, and 19 of the 50 u.s. states have now blocked access to tiktok due to security privacy concerns. what do you do you just go to an app store and download it or omething? >> yeah. >> i asked my son that yesterday, and he said, yeah, yeah, yeah, like you do anything else well, i said, don't do that, it's already on my phone anything i have. i play into the whole perception of the boomer -- i don't care. i play into it >> boomer? >> and then limiting children's pain medications i can write for those commercials -- >> is it progressive

>> it's one of them. but i love that guy, and he's pretty funny >> not effective if we can't remember what company it's for >> you are right the reason those commercials are funny is because -- >> they are true >> yeah, and everybody does what they say we do he's not being effective >> can we go back to children's pain medications kids who were masked up did not get sick, and now their immune systems are going through three years -- >>just trying to control fever and congestion -- >> yeah, but you are trying to sleep. do you know what it's like my daughter has been sick for weeks on end and coming back out of it, you want them to sleep and you want to sleep. >> it's a flu? >> no, not a flu, but i don't

know what it was and it was a virus, and now -- >> don't tell him. >> it's everybody i know if you look at kids that age in school, younger kids, they go through sickness after sickness because their immune systems are trying to play catchup at this point, and they didn't have three years of cold medicines on the shelves and you can't find it when you walk into the stores >> they are in business to sell things >> yeah, this is the one area where it looks like 2020 again when you walk in coming up, the president and ceo of paramount media networks and mtv joins us, and to talk the streaming wars and the success of "yellowstone", and how this guy knows exactly what people want to watch on tv everything he touches seems like he is great. l 's that cowboy that knows al

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pair paramount's latest "yellowstone" brings focus on the streaming wars where more networks are battling for more attention and subscribers to join joining us, president and ceo of entertainment studios. i saw it in the notes what you said, the media companiesthat have the biggest hits consistently have streaming figured out. the more things change -- doesn't matter what the pipes are or how you get the content, you need the best content and everything else takes care of itself >> absolutely.

our strategy is laser focused on making the biggest smash hits possible, and that allows us to appeal everybody from the center of the company to each coast, and then we not only make the big hits but we franchise them in real time like we did with "1923" and the year prior with "1883", and those are driving our streaming business and that's why you look at every month this past year, we are the most downloaded streaming with signups, and our strategy is working and that's why we are having tremendous success. >> you have key life insurance on sheridan? does he have to stay home at all times in an unsecured location what is with that guy? >> his strategy is one that aligns with ours it's about making the biggest

mass hits and making them in beautiful environments with big movie stars, and writing them about stories about family and power dynamics and corruption, and it's about making and protecting what is yours it's why from 1883 to yellowstone to our latest hit along with "tulsa king," it's a big part of our strategy whether it's "south park" or "spongebob" or "star trek," it's about franchises that go big beyond anyone show >> something just happened where -- >> don't tell me >> i'm not, and a couple scenes in "yellowstone," and it's so violent, but something just came happened and my eyes were like,

whoa and seeing stallone do it was cool, too, or at 70 something years old, or sam elliott at basically 80 riding around on a horse is cool. >> these actors and actresses are at the prime of their game "tulsa" is a great way to appeal to everybody and bringing more and more signups and getting people like yourself to talk about those series we really build out the buzz it's why we are having such tremendous success >> we need to talk about business, and i get infatuated -- tim mcgraw, who knew he would be such a big actor. i didn't want to see that last episode, and i don't want to see that ending. >> made you think of blake, right?

>> just knowing something is going to happen -- if it just happened quickly, it would be okay, but knowing that i was going to watch it happen i didn't wanted to see it. who is going to win, chris, in streaming and how many will be left at that point cord cutting, there's no point to cord cut anymore. you are doing the same thing with streaming i am getting out -- at least it's all in one bundle with your cord streaming, i got way too many things >> the winner of the war is not going to be the one that spends the most money but the one that makes the mass commercial hits when doing that you are making an eye towards profitability quicker and more efficiently that's why we are laser focused on making the big hits and turning them into franchises to fuel the future of paramount plus, and the winners will have the hits and from where we sit, we will pretty great about that. >> can you tell if we are going into a recession or not?

is this totally elastic, streaming? i would think it is. >> consumers are always about following the biggest hits and going with the most buzz, regardless of where the environment is and economy, and big hits break out from the pack and that's why we are doing so well every month this past year we were -- almost every month, we were the number one most downloaded streaming service staying laser focused on the bigger hits is proving wildly successful and we have lots more room to grow >> the only caveat i would give you, i have been through a lot of up-fronts, and i remember the way it used to be, and nbc would be -- we would have "friends" and "seinfeld," and then next year we would be dead last at different times, and you live and die by the sword, and you may have no hits next year

how do you plan for that >> our business has been rooted in the mass commercial business, whether it's in cable or broadcast with cbs, and across the last 20 years, nobody has been number one in more demos and more genres than cbs or entertainm entertainment studios, and that's why we are having success, because we are appealing to the center of the country and the coast and around the world, and that's why the franchise strategy will continue to deliver, and we are taking the big hits and making them bigger, and taking calculated new bets like "tulsa king", and doing it with global movie stars and delivering >> yeah, we subsequently came back to number one aren't we still -- cbs is not number one now, is it? >> most watched network. >> that's just -- you are using some figures -- i don't know, irma sa

you are messaging -- you still have "survivor" on, and these people are still surviving after 30 or 40 years -- and he goes, joe, we don't care if you watch anyway but is "survivor" still on >> yeah, it's still on, and my partner, george cheeks, does a great job. >> still surviving >> okay. thank you, chris great to have you on good luck and -- i don't know. harrison ford, i have not seen the new one yet. >> i am dying to see that. >> we're talking about it, chris, and that's what you need, but you have to do it every year >> he's gone >> he's gone he may not be gone am i right or wrong about

"survivor "? they ran out of islands to throw people off of. >> i was trying to stay out of this conversation, and i am dragged right back in. when we come back, we have morning movers for you, plus japan's nikkei jumping overnight, and widening the gap on the ten-year government bond yields, and it was pretty good for the financial stocks in japan. we will talk about all this when we come back you said the nikkei was down by 5%2. "squawk box" will be right back ♪♪ ♪♪

be ready for any market with a liquid etf. get in and out with dia.

he has a look at this morning's premarket movers >> we have an analyst kind of theme, because everybody is laying out their best ideas for the coming year. amazon has been a huge focus for a lot of traders and investors so far this year, rightfully so. the giant responsible for a fair amount of market decline this year losing about half its value during that span, and an overweight rating and $130 price target also best cost disciplines and a better environment for growth and cloud computing in the coming months, so those shares for amazon up. and then we have electric vehicle ed focus, and rivian has been hit hard enough where they have a $30 price target. rivian shares up about 1% in the premarket trade. we will stay with evs, because they are up about 5% here in trading after the company was able to raise enough capital and lucid is close to raising close to $1.5 billion because of

the share sales, and the stock, by the way, is down big, about 80% this year. evs and amazon is in the focus >> it's one place to start with a stock down 80% within a one year period. >> twitter is down why is that down >> questions about liquidity >> medita is down more than twitter -- >> and tesla >> that's what i mean. you could also say it was the stock sales from elon that caused concern >> any experiment you do you have to control that >> otherwise you can use it to say whatever narrative you want.

>> which i do. still to come, former vice chair, roger ferguson, giving his take on the move from japan overnight. and then mike braun on the spending package released overnight. check out the futures. they have been mixed all morning long the dow a little better than it was. the s&p is now green -- was, maybe, is -- was we'll be right back. >> not that bad. have the best hs for the golfer on your list. like tour balls from the best brands. and top-of-the-line irons and drivers from callaway, taylormade and titleist. a golf bag is always a great gift. when you shop online, you can find even more great gifts. one-hour pickup is always an option. and the hottest styles from calia, footjoy, walter hagen, and travismathew are a win. all from dick's sporting goods and golf galaxy.

if you are just waking up, check it out japan's nikkei falling sharply overnight after they held their ultra interest rates study but modified the yield control range, and that means it will allow the yield to go to 50 from 25 that move is being viewed by the possible beginning to the end of the policy the ten-year was allowed to rise

to the highest level since2014 the yen strengthened by more than 3% against the u.s. dollar, and right here you see the dollar down by 3.1% versus the yen. and joining us is the former vice chair of the chair, and also a cnbc contributor, roger ferguson what do you think? >> i think that's the case, and the reason is they are seeing a pickup in inflation and the expectation next year in japan is inflation will be 2% or show, and if that's the case then the policy would have done its job and no longer be necessary, and this might be a precursor for the shift in a decades' old policy in japan.

>> you talk about 3.8% is the latest read in a month over month basis, and that's high when you have had zero inflation in decades >> you are right the other thing to recognize is this very low monetary policy in japan made japan one of the largest exporters to the rest of the world, and back in july they were the largest owner of u.s. treasuries in japan, and the policy that investors get rewarded for keeping money at home and you are seeing that play out >> you are talking about 0.4 something percent, and that makes a great argument does it make sense for us to finance our debt if the japanese have different alternatives?

>> well, when there is great uncertainty i think the real message here is a domestic message in japan that maybe the ultra loose policy is no longer appropriate. yes, inflation is relatively low compared to the rest of the world but relatively high compared to the mild disinflation they have had and it also means it's not worth keeping your yen at home, so to speak, and the margin, becky, i think is a bit of a change and the markets have reacted exactly that way the other question, obviously, is what does this mean there's a new governor coming in next year and there's talk about changing the arrangements between the government and the central bank i think all of this sort of piles on to a degree of change and uncertainty in japan that is rippling around the global markets. >> let's put on your former fed, your vice chair of the fed hat what does the u.s. central bank think about this

are they glad to see other banks moving in coordination or are they concerned japan will not be there to sop up u.s. treasuries at a time when they are looking to pull away from those u.s. treasuries, too? >> somewhere in the middle i wouldn't describe it as overly concerned. this is exactly at the margin. they will focus on things that do matter, which is domestic inflation. once again, you are seeing, you know, changes in financial conditions that we have talked about many times here, and now going from a dollar that was strengthening to a dollar that is weakening is, again, you know, sort of loosening some financial conditions it's something to be taken onboard as they think through the number of moves the fed is going to make next year. sit going to be 2, 3, 4? they will watch this closely as a small but not unimportant change to financial conditions

globally, this time working through the dollar as you point out, the flip side is that it may increase at the margin, you know, borrowing costs for the u.s. that means interest rates could be marginally somewhat higher. you have two offsetting trends here, vis-a-vis financial conditions >> i think the bank of japan would want to move cautiously, because as a export community and economy, they are not going to want the yen to strengthen too much, and they don't want it to be too weak or too strong, so is there a goldilocks picture for them >> i think there's a goldie hragoldielock picture for them they try and get the yen closer to 140 right now it's at 136, 137 not quite sure they are trying to get to the goldilocks moment you pointed

out, and they are close to that, and recognize that earlier this year in september and october for the first time in 24 years the bank of japan and the ministry of finance intervened in markets to support the yen, so i don't think they want to do that either. i think they are looking for that goldilocks level. >> their inflation has to be much lower, and you have an older population and you see the inflation that has risen rapidly, that has to set off alarms there, too? >> i think it does i think that's one of the reasons you see them starting to make these sorts of moves. this is said to be a precursor of lifting their monetary target the market is looking at a interest rate there that doesn't

sound like much, but when you have been in slightly minus territory for decades, that is quite a move they worry about inflation just the way we do here for the reasons you point out. in some sense this is good news, and they are moving away from disinflation, and the pace at which this has moved is very important. you should also add the elements of imported inflation from commodities from oil in particular, and that has to be a concern that that will weigh on already weak growth. i think there are a number of reasons why they need to think about adjusting their monetary policy, and this feels to many in the market as tipping or putting their toe in the water towards more normal policy after decades of loose policy. >> thank you for jumping in on quick news and we appreciate you taking the call. are you traveling or is that home >> i am always at home, becky.

i can't afford to travel >> talk to you soon, roger >> feels at home wherever he is. coming up, a bumpy ride for tesla since elon musk's twitter take over. forget twitter, some say elon musk should step down from ceo of tesla and then robert frank has a preview -- i saw that episode. it's frightening >> yeah, joe, even rick grimes couldn't save manhattan right now. 16% of manhattan office space is empty and that number expected to rise as more tech firms layoff workers and cut their office space we will look at towers of losses and what it could mean for taxes and the new york economy, coming up right after the break

manhattan's office market having the worst month for new leases since 2021. the return to office appears to have stalled joining us for what it means for the economy is robert frank. this is counter to what we have been hearing from real estate people, at least recently. >> yeah, things were getting

better for a little while or looked like they might, but that sort of fizzled out after september. there's now over 100 million square feet of empty office space or leasable space in manhattan, and that is equal to 40 empire state buildings of vacant space now only half of manhattan's office workers are back in the office and that's unchanged since september. the big worry now is layoffs, especially in tech meta, amazon, google and twitter, they were the biggest leasers of new space during the pandemic, and now meta is laying off over 800 employees in new york, and vacating over 250,000 square feet of new space it just took over in hudson yards. twitter laying off over 400 people in manhattan and unclear what it will do with its 140,000

square feet in chelsea, and amazon cutting its space in hudson yards the new office buildings or class a space is strong, and the bigger worry is the older buildings, and aveit's down 15%. and the owners are looking to pay for the expensive renovations or leave the buildings largely empty. and many stocks are down 40%, and since the leases are long-term leases and have not rolled off yet but will start rolling off in the coming years, they are seeing a vacancy rate of 15% and could get close to 20%. >> if you do have the money and can do the renovations, why not convert to residential because

that's where rents have been pushing higher and higher? >> well, that is the hope, and there's a process that is under way now with the city and state to rezone a lot of business districts in new york to residential to convert those buildings, but it's very expensive, especially right now with labor and supply costs still very high. a lot of the commercial buildings, especially the older ones, they don't have good floor plans or elevators that work for a residential building there will be some supply coming in, and the residential market needs it there's a residential shortage right now, but not going to be what everybody expect. >> and same thing for the retail space, and some of it would have to be gotten rid of. it takes a long time for that to play out it has been decades for that to play out, too. >> right the question for next year is

how much distress and how many defaults will we need to see in the commercial space to revalue the entire market. that's what needs to happen. the average rent is around $68 per square foot. the question is what is the real value and would it have to drop to 50, to 50 that's the big question. there will have to be a lot of defaults to get to that answer >> robert, thanks. >> thank you coming up, forget twitter, should elon musk step down as the ceo of tesla and we will look at that after the break. "squawk box" will be right back. n the south side of chicago. it has been a long road, but now i'm working for schwab. i love to help people understand the world through their lens and invest accordingly. you can call us christmas eve at four o'clock in the morning.

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♪ evercorps isi slashing its price target on tesla from $300 a share to $200 a share. analysts chris mcnally said the stock has fallen below a key threshold and says he doesn't look quite as ridiculous, just in terms of where his price targets are and where the stock is at this point after this cut. investors will begin to rapidly test a true valuation trough assumptions and revisiting china demand assumptions read about the call at

cnbc.com/pro tesla shares have been on a wild ride as elon musk makes waves, the stock hit its lowest level, shares down 57% year to date for a look at what's ahead for tesla let's welcome gordon johnson, looked at a lucid chart, down more, meta down more, a lot of tech stocks are down you've been bearish on tesla for a long time. some of them are coming home to roost. what's the primary catalyst for where the stock is right now down from the highs in your view, gordon >> joe, thanks for having me so i think it's fundamental, i know a lot of people are focused on twitter and we can talk about that, but let me just run it down for you so right now you're talking about a company that has engaged -- yesterday another price cut in china, five price cuts in china this quarter, one

price cut in the u.s., one in europe today this morning we have china sales down 20% week over week, they missed the consensus estimate by 21%. why is that important? u.s., europe, china, in the third quarter, china was 72% of the total market talking about a company engaging in margin slashing price cuts, but here's the problem, they're running two plants at 20% utilization and shanghai at 93% utilization. you're talk about a company, a car company, has built too much capacity they can't sell, yet valued as the next four largest automakers combined. he beyond what elon musk is saying and sell side analysts are saying, they're looking at the data and becoming very concerned. if you look into next year they're running down their backlog. the backlog in china has collapsed to nothing, in u.s. and europe down a lot. backlog down, margin slashing price cuts yet can't sell out

their capacity that's problem for a company valued for tremendous growth. >> gordon, whenever you're on, people say, what is he talking about? tesla sells every car that it makes. where do they get that notion? >> yeah. that's -- i want to say that's dead wrong they're guiding 2.4 production ahead of sales and in q3 and q2 more cars than sold. that's the definition of not selling everything you're making inventory in china is around 35,000 units what's healthy is 10,500 units in the u.s. they can't sell out their production whoever is saying that, i don't know where they're getting that from again, they're producing more than they're selling for three quarters in a row, which is a record the problem on top of all of this, right, a company that's not running the factory at full capacity, can't sell what they're producing. elon musk is engaging in far right conspiracy theories on

twitter, but even before that, you have a racial lawsuit at their freemont factory you have a guy who said he was going to deliver ventilators who delivered cpap machines. the people tesla is focused on, their core constituency of liberals who thought evs would save the world are moving away from elon musk even if he leaves twitter he's still going to be the ceo of tesla. i don't think that overhang disappears and when you see the q4 delivery numbers and the q1 delivery numbers, i think the stock is going to come under tremendous pressure. >> overall, gordon, obviously, the -- there's huge market potential for evs, so maybe that slows, i don't see that slowing, you see competitors making strides. none of their stocks are doing much i don't -- do we -- are the big three going to be viable bmw, mercedes and porsche?

i still think that when someone wants an ev they think tesla first unless they're, i don't know, unless they're, you know, totally thrown off by some mean comments on twitter. i guess they're out there. but then they buy a volkswagen. >> that's a great point. byd sells more cars, more cars in china, than tesla vw currently sells more cars in europe than tesla. tesla has cut its prices five times in china this quart. byd has hiked its prices whenever competitors come in, tesla's market share gets decimated. i want to take a step back tesla is valued next to the four largest automakers bmw who sells 2.5 million a year and has higher margins than tesla is valued at $70 billion, right. assuming tesla can get to that level, looks like tesla's run

rate sales have topped out 1.6 million, assuming they can get to bmw's level of sales and margin, you're talking about an $18 stock if they were valued as such that bmw is so i know that people say the stock is down a lot, i know people love tesla, but i just think there's significantly more downside as people realize this is just an auto company. 95% of revenues selling cars, 5% from an energy division that loses money. again, those china numbers today i think are going to scare people because they missed the consensus system. >> all right you didn't say one thing about those mean tweets or erratic behavior or anything like that i think you've been saying all these things for a while and these are actual things you can point to. >> the stocks are collapsing >> the other stuff, we'll see what finally happens, whether, you know, there are -- people that love climate change now are -- it's weird. it's like somehow not being able

to -- they would rather have the p ministry of truth enforce it twitter -- >> like 67,000 miles before you offset the co2 to make it. we'll see. >> that's true too yeah details, details, details. all right. thanks, gordon we'll see you later. >> thanks, joe when we come back, senator mike braun on washington's spending bill and joins us in a nutes. kyle bass of hayman capital on china, covid surge and what it means for u.s. companies doing business there we'll be right back. to smooth, heal, and moisturize your dry skin. gold bond. champion your skin.

. good morning japan jolting markets around the world with a surprise change to its yield curve policy u.s. stock futures plunged, but have made their way mostly back to even, up a little bit in fact dow just turning negative. lawmakers out overnight with a 4,000 page spending bill a race towards a deadline at the end of the week. we'll get the latest and speak with indiana senator mike braun. the world bank slashing china's growth forecast just as it moves to reopen from covid-19 lockdowns. we'll have hedge fund manager and china hawk kyle bass how quickly hesees the world's second largest economy recovering as the final hour of "squawk box" begins right now.

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 with joe concern nan. andrew is off today. what's happening with the u.s. equity futures, right now there's not much to write home about. dow down by less than a 1 point, the s&p 10, but the treasury market is smog pay attention to. there have been quaking caused by the bank of japan making some surprise movements overnight suggesting they're going to be ending the incredibly easy policy they've had for a long time you can see the 10-year rebounding, the yields rebounding there as well 3.662%, pushing up sharply if you take a look at the markets in asia, the stock market there was under a lot of pressure the nikkei closed down 2.5%, there were red arrows across the board with other markets and if you look at the currency market here are big moves too the yen versus the dollar. yen was up by about 3%

the dollar right now is down by almost 3% versus the yen and if you look at the dollar index weakness for the dollar overall, down by almost half a percentage point. this is big news and we'll talk about the implications and what its means. >> again, for people that are not watching, looking at recipes for christmas or something, to not know what's going on with the yield curve in japan, i mean - >> actually does matter. >> i know. it's interesting. >> it's not just the - >> it's multifaceted when you talk about the different implications why it's like that over there, what it means for foreign exchange movements and the dollar. >> what it means for the japanese buying our treasuries they're the biggest purchasers which means it will be more expensive, potentially - >> text or call everyone and tell them -- >> to finance our debt - >> text everyone they know and tell them get off these bland morning shows and find out about the japanese yield curve, the abandonment or doubling of the

range. >> it matters. there are a lot of implications. we will talk about it. if that's not enough for you, we also have news out of dow component 3m and this is one you want to pay attention to this is a different announcement the company says it's going to stop making those so-called forever chemicals. they've been named that way because they tend to accumulate and take years to break down in your body. the chemicals are used in a wide variety of products like raincoats, smartphones, medical devices. they're used in makeup they're used in baking pans. they're used in or baking sheets and pans that you use at home. huge concerns about them pfas is what they're called. substances that are manufactured and make your life easier because they're slick and easier to clean things, but they don't break down and that's the issue. that segment represents about $1.3 billion in annual sales for 3m the company is going to be taking pre-tax charges of up to $3 billion as it phases that business out it's going to stop making all of

these products, phase it out of their portfolio, by the end of 2025 i was just reading a little bit more about it, i'm throwing out these pans right now some of the risks associated with them, could be cancer, liver damage, decreased fertility and increased risk of asthma and thyroid disease debate about this, if you have kids at home you know they're marketing you nonpfas products i've been thinking about throwing out my stickless pans for a while and doing it today when i go home done. >> it might not be -- they just last ten lifetimes probably. they're not -- do they last forever? i think things like -- >> ten lifetimes is forever as far as we know it. >> if it's not going to break down in 600 years. >> that is forever. >> that's what scares me about some radioactive waste too, which is the half life might be a thousand years. >> yeah. i want to see oppenheimer. >> yeah. >> i saw - >> preview. >> who is the -- the famous

director, christopher nollen >> i think it is. >> yeah. >> i know all about films. i got -- someone in my family crazy about films. dominic chu joins us about the premarket movers and dom is crazy in his own way. >> a wild and crazy guy in the best of ways, i think, hopefully for folks throughout joe, becky, we have some earnings movers in the mix here. one that's notable from this morning is coming out from general mills, a secereal maker down 3% in trading right now so far just around 25,000 shares of premarket volume. this is all happening even though it reported better than expected profits and revenues and raised its full-year forecast general mills was helped by higher prices that it charged which helped offset rising input costs. nonetheless, those shares, by the way, out performers of 25% this year, giving back some of those gains on a more positive earnings report. next up, shares of steelcase, up

roughly 3% right now very thin premarket trading volumes. this is a maker of office furniture, storage systems like file cabinets, office-related solutions. it had mixed results profits were better than expected but sales fell shy of expectations steelcase did offer a profit forecast and said its order backlog is 3% higher than last year on balance on thin volumes generac down a percent, roughly 2,000 shares the maker of backup generators and power solutions. it gets downgraded to neutral from out perform they think customers haven't reached a bottom inventory levels are in the processing back over to you. >> thank you for more on the broader markets with major averages on four-day losing streaks right now we want to bring in jason,

the chairman and ceo of stra tee gis partners, which is a baird company. you sat down and joe said, hi, sour puss. >> in the nicest possible way. did you deny it? >> no. >> he said, i resemble that remark. >> definition of character like i'm like frankie. >> right that's right. >> he's a mean one, mr. grinch. >> listen -- >> grinches. >> i don't know. it's generally not part of -- we've been a latina company since 2013. >> i think you created it. >> we were the first to use it for the markets and existed with margaret thatcher before now it's hard because this era of central banking and quantitative easing is over and that changes everything really, because -- especially risk assets are a function of earnings and interest rates and long-term interest rates are

going to be headed higher, it seems to me. that changes - >> japan today - >> even japan. which plays into what you're saying a scares me is how bad -- how much did we really build up that needs to be worked off and is it worked off violently in a horrible situation or worked off over a number of years where things aren't as good as they would have been? >> joe, i think, unfortunately during the quantitative easing era we've been trained to think of things in v-shaped terms, it's over and then it -- you go through it and then it's over. >> rip off the band-aid. >> this is u-shaped because -- >> or an l. >> or an "l." >> if we make it worse, if policy makes it worse or if events make it worse, it could be an "l." i have a feeling it will be a u. by the token, think about the pandemic recession, nbr suggests it was a two-month recession we lost 20 million jobs and that

recession lasted two months. the bear market associated with itlasted three weeks we've become accustomed to things being bad but getting better quickly. >> being propped up. >> propped up by the government and by the fed. >> that's right. and this time you can't do that because inflation is a problem and inflation is very regressive, as we know, hurts working people, poor people more, and so i would say qe was highly regressive to the extent it was much better for wealthy person than the average person if you had a venture portfolio or private equity or bonds or stocks it worked great here the central banks do not have that luxury anymore because the inflation is now not only a financial -- not a financial asset, it's in real goods and services average people buy. >> monetary theory thrown out the window we're back to reality. >> i can't think of a theory that was so much more quickly discredited than modern monetary theory where it lasted nine months and people -- there's

nothing modern about it. spending money you don't have, that's as old as humanity. but here are the reserve currency you get more wiggle room it didn't work out. >> okay. so what happens? when you say policy can make it worse, what are you talking about? the central bank or are you talking about policy that could come from -- >> it could -- >> washington or beyond. >> right it's, you know, usually it's fiscal, monetary, regulatory and trade. >> yeah. >> i don't think fiscal policy of course because republicans won the house, i don't think that's going to get a lot worse. i don't think that that's a good thing -- >> the republicans weren't exactly like the people who were -- donald trump was throwing them -- >> it's not spending - >> i'm with you on that -- >> rip it up - >> different ways to spend money though >> everybody was handing out checks to everybody. >> handing out checks but -- >> i guess the point i would make, becky, on this - >> going to call me quickie?

>> got close. >> you've been around enough. >> we're showing pictures from 17 years ago. >> yeah. >> i've been calling you quickie for 17 years your last name is quick. >> right. >> i think from the -- the democratic side they might have tried to fix this raising taxes and that would be my -- but -- houses on spending, i agree completely i think our energy policy is a mistake, policy mistake, globally, not just in the united states but also in europe. i think abandoning any sort of rationale energy policy in favor of environmental policy is of great risk for the economy and a great risk he geopolitically and that's not my atmosphere, but it's clear that we're leading our -- leaving ourselves wide open then there's glaeger to and trade. >> they're trying to wrap us up. i want to know what you do your job is to manage money and figure out how to make money no matter what happens. you bury your head in the sand or other things you can actually - >> we mentioned energy

we're overweight energy. we like the energy sector a lot because the companies are getting more disciplined with capital. we like defense companies because of an end of globalization. these aren't the happiest things to be involved in, but we think they're going to outperform. i think consumer staples too going to be an important place to be because listen, we vice president -- haven't seen the jobs situation deteriorate in the united states. we're still in the early innings of that. i think that's upon us, as we get into 2023. >> you think services continues? we've had people say get out of goods. that's a problematic place, get into services because people are still spending on things. >> ultimately, all of those things are driven by income and if income gets hit, there's not a lot of places to hide. right. so you have to go for the places either a structural bottom like energy or governments have no choice but to spend money like defense. >> thank you. >> happy holidays, grinch. >> merry christmas

thanks. >> compartmentalize things, family, everything else is good, it's just that you got to be realist about what we've done and there seemed to be good reason for it, the financial crisis, the pandemic, but you have to pay the piper. >> too long -- >> when the bill comes due. >> bill comes due. >> you have to pay it. >> lawmakers - >> dine and dash. >> lawmakers approaching another government funding deadline. we'll bring you the latest, rightly so, bring you the latest on a big bill early this morning and then we're going to speak live with indiana senator mike braun, one of the 14 or 15 states becky claims as her home state. >> five states >> you claim five. >> if you live somewhere longer than four years, do you get to claim it as a state you lived in massachusetts. >> i claim five or six too. >> okay. >> i'm from cincinnati. >> i'm from indiana but moved a lot early. >> do we head to -

>> school more than four years in a state do you claim it as yours? >> no. >> no? >> need more than four wait until you get old into your 30s. as we head into break -- >> formative years. >> kate rooney says former ftx ceo sam bankman-fried is expected to accept extradition to the u.s. today after some courtroom chaos yesterday. he had to go back to the rats and the mag gots overnight european union regulators says amazon has agreed to make major changes to its business practices to settle antitrust investigations, among other things the eu executive commission says amazon has promised to give rival sellers products equal visibility in a sought-after space on its website. stay tuned you're watching "squawk box" on cnbc bundle up the entire family this season with jackets, hats, gloves and more from dick's sporting goods. with the latest looks from the best brands

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just days away from a governmentp shutdown and congressional leaders are out with a more than 4,000 page funding bill ylan mui joins us with more. nothing like making sure it's something everyone will read through completely >> that's right, becky congress is planning to vote on that $1.7 trillion deal to fund the government before the midnight deadline on friday. this legislation would last

through the end of the fiscal year and includes $858 billion in defense funding, $45 billion for the war in ukraine, and $41 billion to combat natural disasters. some up related provisions were attached to this massive bill such as the electoral count act, the location of the fbi headquarters, and a ban on tiktok on federal devices. what got left out? several key tax provisions, including the fix for the r&d tax deduction, restoration of full expensing and the enhanced child tax credit 4,000 page bill was leased overnight. mike lee of utah has complained about the rushed process other republicans wanted to punt the vote into the next session of congress to give the new members of congress time to vote on it as well, but republican and democratic leaders in the senate support this bill and it's expected to pass eventually. >> okay. thanks for more on the government funding bill, what's in it and not, welcome gop senator mike

braun from indiana, a member of the appropriations committee are you going to vote for this and when will it pass, senator >> well, i'm definitely not going to vote for it, and you have to remember, this is something we should have had done by last september 30th. the fiscal year began for the new year on october 1st. i've been here four years and we really haven't done any budget work bernie sanders gavels us in now and in the last two years there's nothing on the mechanics of a budget. this goes way back, probably turn of the century, when we put a couple wars on the credit card, other side of the aisle, obama gets there, doubles down on this kind of borrowing from future generations, and now it has evolved into that modern monetary theory which you referred to earlier. i debated bernie sanders on the senate floor for 25 minutes on that, seven, eight months ago, find it if you need to stay

awake some night it has gotten to where this idea of nothing to run the biggest business in a world, plop a 4,000 page bill in our lap and now they're going to try to vote on it by tomorrow evening. complete chaos and part of how we've gotten here is that unwholly alliance we call ourselves fiscal conservatives. the democrats are unapologetic about borrowing and spending and they roll us every year at the last minute because they tempt us to match domestic spending with the defense we fall for it every time. you've got this mess. >> i like the way you said that. we deny that we're, you know, big spenders, but they actually admit it basically saying both parties do it it's just one party pretends they're not. >> definitely. >> this isn't the first time we need to pass something to know what's in it

we do that every time. that's another thing that americans probably are not fond of. >> in the real world, i was a state legislator for three years, you did regular order it was on ways and means we brought stakeholders into the discussion early we didn't guarantee that particular group was going get more a lot of times they got less if it wasn't effective. here it's a question of how much more you're going to up it like i say, the dems roll us each year. the process has been getting -- this is the biggest business in the world. we're running structural trillion dollar deficits when i got here, $18 trillion in debt we're now $31 trillion i asked a group of reporters the other day do you know what 1% of $30 trillion is. that's such a big number, no one could get it out right away. the crowding out effect is going to have impact going forward

you saw what japan did recently. all central banks are going to probably have to get things back to historical norms. you can't keep accommodating this kind of spend and borrow. that's going to take us all into a bad place. we're the second most indebted economy next to japan. it could be changed. i think fiscal policy is a bigger driver than any other variable private sector balance sheets are clean. this place is going to lose its relevance if it keeps doing the same thing year after year. >> well, we know that higher interest costs for the government, you can just -- there's someone who could give you a number on fgdp and what's takes off of gdp from the crowding out phenomenon that you mentioned, but people realize it, but then we get tax cuts from republicans i would rather just in general leave money in the private sector, but everything adds to the deficit, which causes the fed to monetize the, you know,

what you guys in washington are constantly doing i don't -- do you see it ending, getting off this train ever? >> well, i decided not to go to wall street many, manyyears ago. moved back to my hometown, started a little business. i can tell you for those nearly 20 years out of the gate, you would never get a line of credit if you were performing like this place. you had a couple years where you lost 20% on your volume, you wouldn't even get an appointment at the bank. so i do tonot see it ending. many here don't come from main street, have not run anything, not taken finance 101, let alone a macro economics class, so i think it's going to get worse before it gets better. the medicare trust fund is going to be depleted in four years we've been paying into that since the '60s crowding out effect. it makes what canes would never

be comfortable with on fiscal policy, counter cyclical. >> do you think americans in jen really with a lot of things you're saying? it wasn't reflected in the last election what happened? do you think it was bad candidates from the former president's effect or abortion what do you think happened because the -- somehow the republicans snatched -- it wasn't defeat, but they didn't have the victory that the party was hoping for, given the backdrop -- i mean list the things you could have run on in terms of crime or the border or inflation or afghan -- you could go down the list what happened in your view and what's going to happen in 2024 >> well, it's clear they're faster footed than we are politically. they know the mechanics of this game that is their cathedral and growth business and parlay it even in elections. they found the movable voters in arizona, nevada, in pennsylvania, and got them to

the polls. we had all the issues and ended up winning the popular vote by 3 million votes and picked up just a handful of seats we need to start watching what they're doing and not be apologetic about it. get as good as they are. yes, we had crime in the cities, we had chaos on the border we had the best economy that i was ever a part of precovid and we couldn't make sense out of that to do better. so yes, we need to watch what they're doing and also be the party of fiscal responsibility put it on the line and we've got an opportunity going forward to do that. >> you know president trump well would he play spoiler in your view if he gets -- if he's -- knows he's not going to win, would he try to prevent someone else from winning? >> that complicates it even more it's hard to tell how that scenario works out the issues should still be on our side, even despite that. >> all right

well, becky says she's from indiana, i'm from ohio, it's god's country. probably love going back for the holidays enjoy, merry christmas, happy holidays. >> same to you. >> all right thanks, senator. coming up hedge fund manager kyle bass joins us on china's about-face on zero covid and the future of american business interest rates under xi jinping. "squawk box" will be right back.

still to come, we have some breaking housing data. we will bring u e mbs yothnuer after a quick break. stick around

welcome back to "squawk box. rick santelli here live on the cme hq floor in chicago with breaking news on november read on housing starts an permits housing starts at 1, 427, 000 seasonally adjusted annualized units. last month, 1, 425, 000 upgraded a bit which makes this number the lightest month over month housing starts change since august, since august of 2020 and if we look at the permit site 1, 342, 000 we were expecting 1480000. last month was revised to

1512000 which makes this numbers on permits the lightest number since june of 2020 now we all know that interest rates peaked on the 30-year mortgage around 7.35 in november our most recent read at bank rate puts that average a weasel, a little bit under 6.5% which means it's at a three-month low. maybe there's some help over the horizon, but we all know single family has been suffering to multi family and all the issues that are headwinds in the economy are affecting housing in a big way, even with that drop in interest rates an i'm sure that diana olick will give us more color on the breakdown between single family and multidwelling. we see interest rates, well 3.65, 3.66 on a 10 should we close here that would be a three-week high interest rates were pushed higher because cakuroda at the bank of japan decided maybe

yield curve control is going to end and allowed the 10-year to move towards a half of 1% versus the cap at 0.25. becky, back to you. >> rick, is that a huge seismic move in your opinion is thissomething people should read much more to the nth degree >> it's a great learning experience mr. kuroda might say he's not really altering things that much, but this could be the beginning of significant change and the reason i think it could be a great learning lesson is because we have no idea how this is going to turn out nobody, no country n, no econom no central bank has done what japanese have done to put the foot on interest rates and control them, even to the point where it makes the u.s. look pultry by comparison and the ownership and etfs, equity etfs, this is going to be a lesson to

see how the global economy treats their currency and their interest rate complex as they try to unwind, most likely the biggest restraint in stimulus flam history. >> rick, thank you for more on this including the data we want to bring in diana olick and steve liesman. do you want to break down teems in deeper and tell us some of the details? >> absolutely. like rick said, i'm going to break it down between single family and multifamily when you look at the building permits an indicator of future construction and that's what i want to focus on, the big drop was in multifamily, down nearly 18% month to month single family still down but only 7%. that says something about what the builders are seeing in the rents coming down, potentially getting a little nervous about that but also, when you're talking about the building permits for single family mortgage rates peaked at the end of october and down a full percentage point since then november you were seeing mortgage rates come down pretty sharply. i would have thought you might

have seen less of a drop in building permits, perhaps the builders feeling better. we heard from various ceos they were seeing, quote, green chutes, ceos of home builders, i'm concerned a little bit here that you are seeing this continued drop in the building permits on single family now, going forward, builders did say that their builder sentiment dropped yesterday only by one point and they did say their future expectations for sales were a bit brighter. so again, it's not a great number on the starts numbers or on the building permits but going forward, wekt could startt see the single family at least maybe stabilize and stop dropping so much it's to watch the multifamily as we see the rents really ease and some markets come down, will the multifamily construction sector start to pull back just as single family did about six, eight months ago becky? >> thanks, diana steve, what are you thinking >> i'm wondering the extent to which all of this is a problem

for the fed. i don't think they want to see the housing market doing this well people talk about the housing market being in he recession, but at 1.452 million units you're where you were before the paparazzi and you're still above many of the years before the pandemic when interest rates, by the way, were lower than they are right now. so you see this kind of restraint or this kind of -- these numbers out there, and you're not seeing the restraint on the economy then you have diana talking about better days ahead, i don't think powell hears that, and he gets happy about it. i think it might explain some of the hawkishness of the fed at the recently meeting, they're concerned that you have this really essentially stimulus coming back to the economy you were at 7% mortgage rates -- i'm not saying that's the right level, but now you're talking about some rates, diana can correct me if i'm wrong, in the 4.5 range, and you may not get the declines that you're hoping

for or looking for in the housing numbersp and the housing pricing numbers feeding into the inflation numbers. >> what a dismal science you should listen to yourself. >> on a mortgage rate -- are you talking about an adjustable rate, steve? >> yeah. we've heard some in the 4.5, 5 range on the adjustables. >> the vast majority is about 6% i would say. when you talk to the experts, you can get a lower rate if you go for an adjustable, five-year arm, but the vast majority of people are going for 30-year fixed and that's over 6. are we going under 6, most of the analysts i talked to say while we did come down, we're not going below 6 and that's still twice, more than twice, where we were a year ago while i think there may be green chutes for housing, i don't see it's huge, bright days ahead in the coming months. i don't know that the fed -- >> it's down, diana -- diana, how much is it down? and, you know, is it really -- >> the mortgage rate is down 1 percentage point. >> no.

wait no if you look at a housing chart and you see how much it's down relative to where it was say before the pandemic, 1.425 is not that bad of a housing snooshgts we were under building before the pandemic. we had a housing shortage and the builders were under building at the time. we kept saying we needed more units. >> we're higher before the pandemic. >> you don't pay me for my jokes, do you? >> if you ever read your transcript, it's just -- and you say it and it's just -- wow. i'm just pretty sure, there's no way jay powell is happy with how well housing is doing right now. it's so dismal it's so -- such a -- >> what do you want me to say? >> got to be disappointed with this great jobs numbers. no way he can be happy with how low unemployment is right now. what a thorn in his side that wages are going up it's all so sick too bad we're in this place. >> i didn't invent this world, joe. i didn't invent this world where --

>> where inflation - >> where the central bank is trying to restrain the economy. >> you know what i mean. >> it's not really the world the world suspect like that. we're going to see what the world is like when the numbers get back in line after we get all the revisions in the march jobs report, the february jobs report released in march by the way, starts in february of 2020, we're 1.571 million they were higher than they are now. and if we look at permits in february of 2020 they were 1.457 snooil million. >> go back a few years -- i'm not asking -- you said these are -- you said these are higher than precovid, they're not we can go back anywhere you want. >> you had a surge just before the pandemic hit, rick you go back into 2016, 2018 -- >> which is my point. >> i just -- >> you were right around this level. >> and we've under built we've under built since the credit crisis. >> i agree. >> i don't know that housing is going to make the fed happy or

sad, but joe is right, joe is right, this is insanity and we will see the markets reverse all this insanity. >> diana looked like becky on a normal day all right. gentlemen, thank you thanks to rick, diana, and steve. right? >> and to me. >> and you. >> let's switch gears to asia. paying close attention to the yen after the bank of japan surprised markets with changes to its bond yield controls in china authorities moved from zero covid but the world bank cut its growth forecast for the country and much of the population remains vulnerable to the disease. with fears the reopening could lead to a million deaths and the emergence of new variants, joining us to talk about all this, kyle bass, hayman capital, i didn't think about that, kyle, but when viruses are mutating, if we do get a surge in china, after they have taken the zero covid policy off, you could see

incubating in millions of people, you could see a variant come about that the rest of us are dealing with again, i guess. that's another downside to what has been a flawed policy from day one over there. >> yeah. i mean, good morning, joe, i think that we've already seen maybe some of the worst respiratory sicknesses in the u.s. in this early part of the flu season this year between revrs and covid and flu and whatever is going to come at us from the virus perspective. i think it's important to think about what happened when covid magically appeared on the set, joe, this will sound conspiratorial, the hotels in hong kong were in december of 2019 and the chinese communist party really had an existential crisis and couldn't roll tanks down the center of the streets in hong kong because there were too many cameras and too much internet at the same time, the chinese population was allowed to travel all around the world

there were 440,000 students here in the u.s. and their current account was being drained to the tune of $450 billion a year because the chinese were traveling and spending abroad, spending dollars, not rnb because no one accepts rnb covid magically appeared at a time that solved both of their problems right away in early 2020. >> yeah. coincidence is not caused, but that certainly is interesting to point out, kyle. do you, at this point, have other ways of trying to determine what's really happening in china in terms of how many people are dying from covid right now? they said 5 in the last 24 hours or something are there other things you can look at that could give us a better idea of what's really happening on the ground? >> you know, a couple news services are paying attention to hospitals and crematory ya in china overloaded, bodies in the

aisles of the hospitals and the crematoriums are being overrun they don't have enough hospital beds to have a proper outbreak that's why they've been welding people shut in their apartment buildings. it's not a really great place to live if, in fact, your government is going to weld you into your building when i think about the, quote, official death tolls coming from their government, just remember, the official death toll of the tiananmen square massacre in 1989 is still zero you're only going to see the numbers that the government wants you to see >> do you have a reason to believe it's going to be just millions and millions of elderly people at this point is there any way around that if you just look at -- if it's a totally population that hasn't the vaccine or virus itself, seems like once it got started it could affect a lot of people in a horrific way.

or not is it an attenuated strain, it's not as fatal, even in the elderly? >> joe, i will say something that might be controversial. if you go to w.h.o.'s website and look at their infections, cures and deaths, country by country, and you start to try to isolate a specific genome, whether you're looking at a north american genome or an asian or european genome, if you just break it down, the -- either there's a massive underreporting of deaths in asia, or the virus doesn't have the same mortality rate in different cohorts of genomes it looks like the asian genome has been spared pretty much across the globe from excessive deaths of covid. whether that's a coincidence or the disease works in different genetic ways, i don't know i'm not a geneticist i'm a financial analyst.

just go to w.h.o.'s website, download the data excel spreadsheet and start manipulating that data it's really interesting when you come to different conclusions. >> interesting piece in the journal. we have to run china won't be number one, japanese report says klechina'sd will not soon exceed america no reason to be complacent, but we don't see a lot of positive news i would consider that positive we are in a, you know, we would like to stay on top, i think, for all our people here. >> yeah. i mean, joe, think about it, we give china the benefit of the doubt and convert their rnb based gdp into dollars at an artificial rate meaning they have a closed capital account and their currency doesn't freely trade and we freely convert their rnb based gdp in the dollar i think if the chinese kind of population writ large were allowed to let's say travel, invest and spend money freely in

a freely convertible and tradeable rnb, say their gdp would be roughly 40% below where it is today. >> interesting all right. always interesting and compelling some day we'll know a lot of this stuff, maybe. depends on who is running twitter at that point. maybe we won't know ever. >> can we talk about twitter for just a second joe or need to go? >> i would like you to go ahead. >> okay. so i was with andrew and morgan and david at the yale ceo summit last week and there was a lot of moral outrage by a lot of the corporate ceos about potential hate speech on twitter and when you look at the first "wall street journal" article about these corporations showing their moral outrage by declining to advertise on twitter the first companies to announce were pfizer, audi, volkswagon, mon dough lease and general mills. that's thick because all of those companies do huge business in china where the government is

committing genocide and crimes against humanity and volkswagon does business in iran and china and russia i mean, let's just hope we're not using volkswagon as our kind of north star moral -- >> i love the moral relativism is as thick as thieves right now. good to have you on. >> thank you. ke coming up, jim cramer's first ta on all the premarket action we'll be right back.

all right. some breaking news for you the united states cfpb has ordered wells fargo to pay $3.7 billion for widespread mismanagement of auto loans, mortgages and deposit accounts this is news that is just out. back in november the expectation was there would be a settlement of more than a billion dollars if that was the case that was going to be the largest settlement on record but, again, early word on this is 3.7 billion this is the early opening statement from the cfpb. you can see the stock is off 3.25%. let's bring in jim cramer down at the new york stock exchange again, breaking news don't have more than a quick statement just looking at the back drop on this. >> 1.7 billion new $2 billion under remediation it's not clear how much of that 2 billion was already paid

a lot had been paid. 1.7 is the focus the question is how far does this put them along in terms of all the other things they have done i think the 3.7 -- i'm not saying it's an exaggeration. i'm just saying a lot of it was in the works and 1.7 is the real surprise >> yeah. the 2 billion is what the bank had set aside. right. exactly. 1.7 is -- look, this is the situation where it just seems endless. you think they did everything, charlie cleaned everything up. i'm not even saying this is the last one this is probably the last big one. ive understand why they weren't buying back stock. they were trying to buyback stock. but it's big but if it's over, then maybe wells can join the council of other big banks. it was 60 in february 2018 all the other banks were well in

kpeus excess 1.7 is new >> jim, thanks we'll continue to monitor that and check in with you in a few minutes. "squawk box" will be right back. if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision.

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just over a half an hour to go the client portfolio manager i know you thought the fed was being hawkish to this point. what do you make of the entire market situation now that bank of japan is throwing in the towel and saying they have to fight inflation too. >> thanks for having me, becky but, look, what this is is the normalization of things that investors have really been asking for for years, right. we have been dealing with a low rate regime for quite some time. more than a decade now things have to normalize this is part of the process. right now of course being are treating the central banks and jerome powell like the grinch who stole christmas. it is the market having to take its medicine so we have a healthy economy and can move on into the future.

now, of course doom and gloom has been pervasive in the markets. when you look at goods, prices coming down, used car prices coming down, you look at supply chains normalizing this year, there is room for things to get better right now we are in the normalization process. that doesn't mean things can't go well for the economy out into 2023 >> the question is how much pain will be here, which sector will get hit. where do you still find opportunities. where are you looking now? >> generally speaking, we are value investors. we're looking for companies misunderstood, unloved and miss priced a lot of that is found where we have experienced the most pain there are things where they need to look for opportunities in this marketplace look for companies to have strong brands, reasonable

pricing power and that that experience over things component consumers have been looking for since the covid era. >> it does not sound like you're looking for big tech you can find stocks down 60% over the last year >> yeah. when it comes to big tech, one of the things that gives me a little bit of caution is that the growth expectations were so high and it's going to be a long, long time before they can even reach that. and some companies didn't even have sound business models to begin with i'm not a big player in big tech right now. i'm more looking for organizations that have been beaten up where the cash flows are still in the near term talking names that have been beaten up like royal caribbean cruise lines that is an area right in the crosshairs for things giving investors pain over the last year plus. right now this is a company

repairing its business model it didn't even have ships on it on the seas for the most part until will fleet was fully able to reach capacity. now, what we have is they have recently come out with investor day. there's a lot of good news and stuff in that particular spot. double digit earnings in 2025. bookings are at prepandemic levels >> we have 20 seconds left one concern would be if the consumer gets hurt hard and stops spending money that was something jason turner brought up at the top of the hour >> yeah. look, i don't think you'll see that happen. consumers have been remaining strong verall. they still have some of the pandemic savings they aren't slated to run out until the end of summer 2023 the consumer still remains resilient. they have a much better balance sheet. things still look bright from my

point of view. >> dana, thanks for joining us today. >> thanks for having me. take a very quick final check. you might want to notice the 10-year yielding 3.67% equities markets are flat. treasury complex oday. we will see you back here tomorrow morning "squawk on the street" begins right now. we'll see you. good tuesday morning and welcome to "squawk on the street." i'm david faber. he's jim cramer. we are live from the new york stock exchange carl has the morning off we begin trading 30 minutes from now. set up for a slightly lower open after yesterday's down draft our road map starts with news we just got about wells fargo it is settling with the