coinbase was a $300 stock. >> it was a $10.9 billion -- >> authorized by the sec is to go public. how is it the sec can authorize a company like that to go public and here we are -- if you're an investor. >> i like hearing that from you. "squawk on the street" is next and gary gensler next ♪ ♪ good tuesday morning welcome to "squawk on the street." i'm carl consistent nia with jim cramer and david faber apple and coinbase at the top of the news flow. goldman cuts odds of a recession. another s&p 500 target hike from bemo apple getting into the headset game, looking to bring mixed reality into the mainframe the sec's crypto crackdown, bitcoin dropping to its lowest

level since march as the regulator sues binance and coinbase gary gensler joins us on cnbc in a few minutes from now elon musk says ai regulations are on the way in china. first up, breaking news this morning involving coinbase the sec suing the crypto platform in manhattan federal court, accusing it as operating as an unregulated securities exchange brokerage and clearing agency, the regulator says since 2019 coinbase has made billions unlawfully securing the buying and selling of crypto assets we'll discuss all of that with sec chair gary against ler in a few moments, jim we're going back several years now, and some of the complaint just looking at the blatant disregard for sec laws. >> we want to really distinguish between binance from last night where the government is going after a very specific

individual, talks about commingling, really basically running a criminal enterprise. when you look at coinbase, what they're saying is they're running an exchange that's illegal, an unregistered exchange they do not charge armstrong they're not trying to close it down, no commingling at the same time this is the long-awaited sweep against these businesses. >> does this go back to the basic contention that these are securities >> exactly >> there's a lot of belief that this is -- i want to say some very harsh things about these people. >> which people? >> coinbase and binance. their belief is why don't you show us what you do instead of charging us, making us regulated by prosecution over and over again, over and over again gensler said, listen,

we've showed you, register just like if you were a stock today is the day where he just says enough already. we're not buying into your whole rap that we have to play it your way. we're going to court saying you're violating these exchanges and register binance can't because binance is crooked. >> binance operates for the most part outside u.s. shores. >> but when you look at binance, they list all -- we used to put a bug on the right side of our tv, had a series of securities, they were not real, not real, just manipulated pieces of paper. >> they were never pieces of paper. they were always digital. >> i'm not trying to joke around here i think this is a massive fraud. when you have an executive saying something that i can't even rebeat, binance ceo admitted to a compliance officer in 2008, we're operating as a

currency they have it only inside criminal enterprise. >> that's the line that stood out yesterday. how do we explain getting past the ipo process then >> for coinbase? >> coinbase. >> coinbase i think bulldozed their way in i think they felt they could break the law and never break the law. look, move us in to chairman gensler. david, one of the things very clear about coinbase, they're not trying to shut coinbase down. >> which, by the way, will cost coinbase a lot more money one would expect and have to be regulated -- if it has to be regulated as a securities broker essentially, right >> as someone who allegedly practiced law like me, page 99 says permanently enjoying coinbase -- from violating

rules. that doesn't mean they want to close it down. they want to play ball. >> this is the complaint from the sec against coinbase. >> they want coinbase to discourage all ill-gotten gains resulting from securities act violations what does that mean? >> i don't know. we should always remind people these are civil actions, not accompanied by any courtroom action the sec sues civilly it's penalties, it's fines. >> they sued civilly binance -- >> made criminal accusations but have to be accompanied by the department of justice. >> absolutely. i'm saying this is a sweep, that if you're binance, what they're saying is we're going to shut you down binance says, yeah, be my guest, see you in court, except for -- court of opinion, court of congress of people they own,

that have mind share of? remember armstrong was not charged, the head of coinbase. c. z., the head of binance, is going to have a hard day >> do you think it's existential to the ecosystem >> absolutely, absolutely. i think if you are in a series of coins that were mentioned, and we all kind of know them, we're talking about solano, talking about chardon sew, these are viewed -- >> are you making these up >> garbanzo beans? >> please don't irritate me. >> it's my job >> there are things that we have reported on which are to me ponzi schemes and they're all --

coti, axie, axs -- obviously this assal dan know. these are all listed as things that are not real, all these one time or another regarded as securities what this says is they're ponzi schemes, that they're things to enrich people. the reason i point it out, a lot of our viewers have trafficked in these things. what you find out in the very long binance is, well, let's just say polygon, mat tick, you've been had. solana, how many times did you see solana listed as a serious something. security it was a scheme. i just think we have to recognize that the scheme is

something that hurt a lot of our people so let's get -- gensler is trying to protect them that is not the primary reason he's on, but there is no doubt about it when you look at all these different so-called coins, they were done to manipulate. there's also a sense over and over again that binance, in order to be able to look like it was a real exchange did wash trades constantly to make it so it looked like they were bigger than anyone realized so there you go. >> with that, let's get to sec chair gary gensler joins us on a first on cnbc interview. chairman gensler, great to have you back welcome. >> good to be with you, sir. >> we've had you on several times and tried to get from you a sense of timing when there would be more clarity regarding this space it feels like now is the moment. >> look, i think there's been clarity for years. the investing public has the benefit of the u.s. securities

laws crypto should be no different, and these platforms, these intermediaries need to come into compliance and protect the investing public >> of the cases we're talking about, do you want to take them one by one which one is more important in your view? >> you're leading this interview. i'll follow you where you are. let me say this to the investing public these trading platforms, they call themselves exchanges, are commingling a number of functions which in traditional finance we don't see the new york stock exchange also operating a hedge fund, making markets, and as we alleged in binance, having a sister organization flooding the platform with transactions called wash trading and the lack of controls on the platforms it's really a web of deception

and conflicts along with a controlled person, mr. zhao, trying to evade u.s. law. >> given the timeline we're talking about, what do you say to viewers who wonder why enforce. has taken arguably, at least several years, so long >> it takes time we do things by the book that's what the american public would want us to do. we follow the facts and the law, and i couldn't be more proud of the investigative teams at the sec working together with colleagues in our various divisions, trading in markets, general cleveland browns console lar's office, a lot of gum shoe, walking the beat investigation to build a case like what you've seen alleged in 136-page complaint. >> mr. chairman, a lot of it is hard to understand

for instance, in the binance complaint you say -- mr. chairman -- i need to know this, the sec's binance complaint also seeks emergency relief like an asset freeze, asset credit discovery and even the appointment of a receiver. are there more pleadings coming? if you do this, that's the end of binance >> look, we have concerns, and i think the investing public should be aware putting their hard-earned assets onto these platforms. we have concerns when a platform like this puts themselves out to the public, is consciously trying to evade u.s. law and customer funds, you didn't even know who was in custody of them. was it custodied hear or overseas, were some of the funds in crypto possibly moved to

affiliates -- a number of affiliates called merit peak and sigma chain, it's fundamentally a lack of controls, deception, conflicts and, yes, we're going to do that which we can in front of the courts and make -- to the extent we can, make the facts known and the public protected >> when i read your binance, i cannot understand how anyone can assign a value to crypto it seems entirely predicated on the greater fool theory. do you disagree? >> we as an agency are meant to be merit neutral, jim. there's a lot of question, 10 to 20,000 tokens. actually in the coinbase complaint, we note that they have through the coinbase

wallet, you can trade 16,000 different tokens there's a lot of debate as to the use cases and whether there's any there there. we don't need more digital currency we already have digital currency it's called the u.s. dollar, called the euro, called the yen. they're all digital right now. we already have digital investments. you have entrepreneurs representing digital investments on this program all day long it's whether it's the big tech companies, the automobile companies, you name it it's all digital right now, the investing world. so what is the real underlying value of these tokens, and that's why you needful, fair and truth. disclosures, and that's the regime the securities laws was set up, when there's a group of entrepreneurs, the entrepreneurs should be able to put their case in front of the investing public

in what's called a filing. that's kind of the bedrock of what president roosevelt and congress worked on 90 years ago. >> chair gensler, it's david can you characterize at all what, if any -- i would assume there have been many conversations through time with coinbase, between the sec and coinbase can you characterize -- did you ever get close did you -- have you ever gotten close to getting them to accede to your wishes i would assume given the complaint they didn't quite get there. can you give our viewers a sense of what's happened to this point? >> i'm not going to go into conversations between an agency and the company. we've had discussions with literally dozens of crypto incumbents including the ones that you just mentioned. what we find is this is a field that's built -- the whole business model is built on non-compliance with the u.s. securities laws.

we're asking them to come into compliance they're going a bit of "catch us if you can." they're commingling various functions. the public would be aghast if they thought the new york stock exchange was also running a hedge fund trading against them or allowing watched trading or lacked controlled to protect against fraud and manipulation on the platform. so the conversations have been constructive, but it's also about them bringing a business model into compliance. we have had success. even in the last two weeks an entity filed -- a crypto entity filed as what's called a special purpose broker dealer and got registered that way. we've had success with tokens. now it's about these crypto exchanges in the middle of the

market where frankly the public should really be careful >> chair gensler, if it's a business model built on non-compliance as you just said, if they do comply, do they no longer have a business >> look, i think if there's a real value in these crypto tokens, then compliance will build trust. the business model might change -- it's the hard work of earning the investing public's trust, the innovations -- what we're doing at the sec is pro innovation without trust, the capital markets really don't work. casino capitalism might work wild west capitalism might work for the people that are picking the pocket of the public i'm talking about really work for issuers raising money and investors alike, and to do that you need integrity and rules of the road in the middle

>> chairman gensler, in your binance brief you list the following, sol dana -- sand box platform cody digital infrastructure payments are these not completely concocted counterfit ecurities manufactured to enrich the dealers and not to be able to help anyone who purchased these? >> let me help the investing public on these platforms, they often have hundreds of tokens. coinbase has about 250 on their coinbase platform and 16,000 that you can trade on their wallet binance is measured in the hundreds as well all we have to show is that one of them is a security and they

should be properly registering and having rule books against fraud and manipulation as an exchange, broker and the like. you asked a question, jim, about individual tokens, and we laid out for a judge and the public, and we're very confident about this, i think it was a dozen tokens in each of these complaints it's for the public to decide what they want to invest in. but it's the law that it should be based on proper disclosure. without that proper disclosure, the public can't answer the question as to whether it's just, as you say, counterfeiting or it's a scam or something else it's those disclosures that helps the public understand. otherwise, you're just chasing after something, and this is a field with a lot of hype and hux

centers and fraudsters. >> i know it's not your job to talk about their worth it's my job. sir, they're worthless >> by some estimates, 20-plus-thousand tokens. i would just say many of these will fail because many entrepreneurial projects fail. but there's a second thing, frankly, is we have not seen over the centuries that economies or the public needs more than one way to move value. people talk about, well, this is an innovation about moving value on the internet. and there were fundamental innovations about distributed ledger technology and the like but do we collectively -- will an economy support more than the u.s. dollar, the euro or the

yen. so what we really have here are tokens that are speculative investment vehicles and people are betting on a group of entrepreneurs in the middle and reading websites, reading at which timee twitter pros it belies logic that these are just out there from the thin air tokens that are so-called decentralized and there's nobody in the middle. it just belies logic, and the american public understands this there's a group of entrepreneurs, ceos go to crypto conferences, they hire lawyers, they contest what we say, but by and large these meet the test of an investment contract or security and then the public can decide whether there's any value there or whether it's thin air, as you say.

>> the response from binance, at least, has been in a sense -- i'll read here, this action will not stop us from continued robust collaboration with other policymakers around the globe. there will be a response that argues you're sacrificing some element through this enforcement. do you worry about that? >> it's actually the opposite. three appropriate regulation of the securities markets for 90 years we have helped this economy, the u.s. economy grow and prosper. our capital markets are 40% of the world's capital markets, only 23% of the world's economy and only 4% of the world's pop lakes. we punch above our weight class in the capital markets in part because of robust oversight of the markets, and it's for one reason it builds trust in the investing

public you become the destination of choice you build trust. the crypto markets are undermining that trust, and i would say this, it undermines our overall capital markets, one sector, $100 trillion capital markets and one sector is kind of running around like the wild west, catch us if you can. that undermines trust in the 100 trillion capital markets even if this is in the u.s. less than a trillion dollars >> claire gensler, what now? what next? do these two complaints represent your main move legally or is there potentially more to come >> i think it's -- we've got one goal, protecting the investing public, ensuring issuers can invest in the market in the crypto space, to bring them into compliance we brought a number of actions

we stand ready to continue to work with the industry to have them come into compliance, disaggregate these conflicted bundled operations, properly do the disclosures, segregate, segregate your customer funds from your own, don't trade against your customers there's a lot of work here for the crypto field, but we stand ready to work to get them into compliance. >> chairman gensler, bam ceo a, bam ceo b, you tell me there is commingling here if you have your money with boy nance, you should get it out right now. >> look, i've already read the articles drawing parallels to -- we've also alleged fraud and manipulation at ftx with regard to sam bankman-fried

let me just say the business model of crypto intermediaries intermingles, comingles funds, trades against their customers in this case, the binance case, yes, we've alleged sister organization, sigma chain and merit peak were being controlled by mr. zhao and used on the platform sigma chain was helping trade on that via market maker, boost -- as we allege boost the volumes, corrupted the numbers because of the lack of controls. and merit peak, billions of dollars of customer funds were flowing there. you draw the parallels as you wish i do think the public should beware -- i would say this to

registered investment advisers we have a rule from 2009 about proper custody and how you custody funds and securityies. make no mistake, it's not properly segregated with the qualified custodian on any of these platforms. >> that's definitely going to ring in the halls of advisers today. chair gensler, appreciate the color and certainly the commentary surrounding the news. appreciate you coming on first >> thank you so much you be well. >> gary gensler, sec chair when we come back, wall street's reaction to apple's new mixed reality headset launch including why one analyst is downgrading today. "squawk on the street" continues in a moment.

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the crypto news is news on merck. good morning, bertha. >> merck is suing the federal government over the medicare price negotiation provision of the inflation reduction act calling it, quote, political kabuki theater, arguing that, quote, the program takes property for public use without just compensation in violation of the fifth amendment, adding that it creates the false impression that innovators like merck are voluntarily participants in its program by coercing them to sign an agreement conveying that the government set prices that are fair and a result of negotiation. under the ira, the government will identify ten drugs this fall in september in medicare part d which have been on the market for more than nine years for the beginning of the negotiations those discounted prices would go into effect with a 2026 medicare plans. another 15 would be added the following year with part b drugs, infusions administered by clinicians added in 2028 analysts say potentially 60 drugs would be discounted by 2030

the congressional budget office estimates the ira drug pricing measures as a result could cut the deficit by about $130 billion between 2022 and 2030. carl. >> good summation of that news we'll talk about it in a moment. let's get to the opening bell. cnbc realtime exchange at the big board is petroleum drilling company and at the nasdaq, scholastic, a children's publishing and education company. jim, pharma has had interesting periods here regarding judiciary on approvals now this >> i think we're at some sort of moment in time where the government basically all ends of the government have decided we're going to regulate drugs in the way we do in other countries. that's what the merck lawsuit said david, i'm very concerned about where the ftc has decided to undue years of precedent about

what companies can do in order to combine. >> tell me more. specific to what, jim? >> well, i just think if you think you can put two drug companies together and somehow it's going to improve the company, i think the ftc says if you put two drug companies together, it makes it so there's alack of competition regardless. >> i think size also figures very prominently into how the ntc is thinking about things they would argue otherwise, regardless of the antitrust implications if you're big and want to do a deal, the likelihood is that you'll be opposed by the ftc whether or not they have the legal justification for doing so i'd also point out the ftc has similarly diminished the role of administrative law judges. that was last friday, issuing a final rule that modifies internal procedures that would diminish the role of an

administrative law judge they will no longer render an initial decision that could become the decision of the agency, will allow them to be a recommendation, all of which just says, let's keep our eyes on the ftc you raised it here i'll go there as well. they are so outside what seems to be the bounds of what has typically been the work of a regulatory -- of an antitrust agency. >> right if you go back to teddy roosevelt and you talk about what the sherman act was meant to be, what the trusts were meant to be broken up, it was nothing like this. those were trusts put together including prices what t.r. wanted was competition. competition among big and small companies, particularly small companies. i would argue many of these combinations are to create better drug companies that can

compete, exactly what roosevelt wanted when we think about roosevelt, that's really the basis of antitrust in the country i see this as saying, if you own these stocks and they merge, you made money, and that's not right. nowhere in antitrust is that, nowhere. that's just kind of freelance administrative decision making whichever one seems to be accept as being somehow legitimate even though there's nothing in any of antitrust in any case that this is about enrichment of wealthy people maybe the antitrust of a foreign country, not our country it's unbelievable. everyone just kind of acts like, hey, so what hey so what. this is a true, very powerful regulator who has disagreed with every aspect of antitrust since it was first put together in this country. >> that said, jim, on a macro level today, there's some

constructive things going on world bank just upped the forecast for u.s. this year. goldman cuts their recession odds back to 25% they don't think back stretch is going to shave off more than .4 for the whole year >> all you've got to look at is schwab that's supposed to be one in the crosshairs morgan stanley has been awful, exactly where it was during silicon valley bank. no doubt about it, especially when you read the pathetic parity that the prc is offering. they say, listen, we'll throw in more money by letting you take rates down we're so much stronger country than the chinese david, there's the belief in the media that we're the pa thedic parody of the human mind when they cross us in the strait of taiwan that we'll lose that war. how did we become what nixon

talked about us, when the north koreans attacked one of our folks? how did this happen? >> well, jim, i'd like to spend the next two hours discussing this with you, a deep dive into the geopolitical landscape and history, but i think there's other things that we might want to do, but i have that for you if you'd like to step off later, i'm happy to have that discussion. >> what do you want me to do talk about how constellation is taking share because of something that's happening -- >> on this theme, i would note a story of interest this morning seq sequoia, having backed the likes of google and many others, is breaking into three entities across the globe, and it is splitting off its chinese and u.s. operations. so it is separating them i think that, jim, is an example of many of the different things undertaken by corporate america,

so to speak, to in a sense get ready for and deal with what already are very heightened tensions between our two countries. >> totally true. look, i don't want to be too etherial about it, it's pretty obvious there are some companies like nike that feel like -- and other companies like micron that have been kicked out. >> if if you're nike, starbucks, tesla, apple, you're in deep >> those are made for china -- when you have dow chemical made in china for china that's been the kind of place we come in. >> coinbase is down 20%, carl. >> well, there you go. time to rethink your view of sol dana i've seen movies where there are -- i've seen netflix shows that have currencies that are

more serious than sol dana >> remind me, were you using crypto for some yield last year? do you feel you got lucky on that front >> lucky holy cow just cleanup i played the game. why did i play the game? we have people come on, he's saying if the fed cuts rates, it's terrific. i listen to mike novogratz, i, too, can make a killing. he's on our network. smart, funny >> i made good money with novo novogratz. >> but you're out of that game >> better to be lucky than good. i moved to nvidia. >> wasn't a bad move >> no. a little better. >> although it is down we haven't even talked about apple shares which are off .5% a

day after the worldwide developers conference. a lot of the time which was spent discussing the apple vision product, like a ski goggle kind of thing $3,500. >> that's the initial bid. >> yeah, yeah. the apple watch which i criticized some time back is perhaps not getting great currency you both have them on. it's doing, what, almost $18 billion a year in revenue. clearly a successful product in no way has it replaced the key product, but nonetheless, it's successful. is it possible this could become something similar over time? look, i think that when apple starts, they put out something everybody writes for it. i'm going to go see it next week i think that, look, it all comes down to what reed hastings said when he first talked about

netflix. do you have time apple is saying, look, you can look sideways, you can talk to your spouse at the same time but my problem is, if i have t time, say, to read a book, it may be a worthy competitor to this there's this issue -- david, get ready do laugh at me further >> ready. >> there's an issue of loneliness in this country it's a major form of mental -- it's a mental issue. you're not lonely with this thing. you're not lonely. jam-packed. >> that's why iger's appearance was so striking yesterday. there's going to be ip that gets mind on this goldman and needham reiterate apple buy. jim, there's the whole mac conversation running entirely on apple silicon. >> those of us who have been to the metaverse with mark zuckerberg, his metaverse, it's very much like hanna-barbera

versus this, nvidia, omniverse is kind of like the picture phone, a little better this thing is -- look, not to ever pitch edge very ses tim, but tim's got the edge. >> based on what i'm trying to understand. >> i think what i saw yesterday is better than the picture phone than jensen was offering in, like, the last 25 minutes. i think what i saw seemed better what you're seeing with jensen is what alphabet is going to come up with or what meta will come up with this was something that i think i'd like to spend more time in david, when are you going to spend time in it you have a lot of things in your life you're not going to swim in it -- >> i don't think i'm the chosen audience for this. i'm not quite sure i would assume gamers are.

>> unity >> i wanted unity to isolate my always winning fantasy team because adam schefter is my partner, tends to be a good partner. i think this allows me to isolate the players that i want. i iso them. >> you iso them. >> unit was up $1.50 that was just stupid, overexuberance which we've gotten quite a bit of. >> today bee mow overweighting tech and take the year-end target to 4550, jim. it's clear market resilience is here to stay, the labor market is intact. there's a lot of chasing. >> i think it's wrong. we had the greatest rally since 1991 i tend to think a lot of good

money was made david, you may think the greatest rally since 1991 and about to have a general ian homespun subper cycle of tech. maybe even fracking sand super cycle. >> why would i think that? >> that is being the straw man we just had a great rally. how can we have another great rally? what is this this is the time to discover nvidia >> no, at 38 times sales it's probably not the time to discover nvidia. >> time to maybe discover -- sell it. >> interesting you sound more like see fold today. maybe it doesn't have upside because of the cap-weighted nature -- >> i don't think they'll be broadened. i think we had a huge run. it's been a fabulous run >> you're not selling nvidia, the greatest single stock pick

you've had. >> nvidia owned doane trade. magnificent seven for the greatest run i've ever had i even had robert vaughn >> does that mean you're not -- we've been watching construction spending here go bananas no more on -- >> infrastructure is still there because the government is spending -- still a trillion dollars has been allocated i don't know if you can get three quarters of the line there are three bears who hit him pretty much every day, three bears, and they're kind of like he's goldilocks. he does well caterpillar, david, there are three analysts who right now are saying i am going to take that down i'm not going to allow that to be up. bingo. they're going to try to get it down. >> why is that, jim? >> similar to coinbase. >> why >> because they're nasty little

people who don't really have much in their lives. i don't know. >> maybe they just think the stock is going to go down. >> oh, honest brokers. >> i'm not saying that they are. you seem very hostile to these analysts who are negative on cat. >> i was shocked today, coming out negative on eaton which may be one of the finest reindustrialized companies on earth. you see ge lately? >> i usually keep an eye on it for old time's sake. doesn't look too bad. >> now offering gahc, 25 million shares. >> i'm anxious to snap up as much as i can. why? because if you think anyone in your family has more than two relatives in your family have the possibility of having alzheimer's when you're age 50, you'll have to go get a brain scan and perhaps can participate in one of the trials the only way you can find out if you need that is typically go to

ge healthcare equipment. i think that's a spectacular buy. >> that move in ge is extraordinary. obviously had an extraordinary move down over a period of 15 years basically. >> larry culp knew what he was doing. they all laughed, kind of like "carrie" in that scene >> i don't know that they all laughed. i don't know that's fair we knew they were going to split the company eventually whether or not power would ever come around was a question. >> power is making a little move here >> nobody questioned aerospace >> no. it became the preferred way to pay aerospace. meanwhile housing won't quit. >> see the regionals today, watching m andt, u. ss. bancorp comerica is up helping to lead the market. >> that was the thing, first

horizon has an announcement coming up. a lot of these companies i think were rated down. one of my themes today, david is manipulation i'm really going for it. >> right >> a lot of these companies were raeted down. we heard terrible things about them it turns out that there were a couple of companies that were really outliers. no >> yeah. whatever you say >> meanwhile, part of the goldman call today is the fed will skip june, jim, but will hike in july most likely by the way, we haven't mentioned australia coming back for another one. >> i was waiting for sara eisen to talk about that >> rates now at an 11-year high and signaling more and they paused. >> what's surprising is they have such business with china and yet china is doing -- it's flaun derring. you know which note was best of the morning?

laura martin's note that disney -- >> hammering that for so long, apple needs to buy disney. >> the first amendment protects all sorts of ill-advised recommendations. are you familiar with some of that stuff >> i am. >> pretty good job. >> not bad >> holds up. >> that's ridiculous apple is not buying disney, not with these regulators. >> no, not much of a chance that apple will be able to buy disney with the current regulatory regime. >> maybe under president pence >> -- any of these kinds of deals that would require or have a large technology based company or enormous company buying another big company, no. it's highly, highly unlikely and not even potentially going to be considered as a result of that, were it ever to be considered. >> it's a parlor game. we talk about it because it's fun. >> listen, if there's a different anti-trust regime in place, you may start to see different activity

>> like the mckinley trust who said can we please have trust? mckinley was rather incredible during the great days of, let's put together trust that was a president that was a president and a half. >> when we come back, from chew which to gamestop to bed, bath dand beyond. a new documentary takes an in-depth look at the entrepreneurial turned active into ryan cohen. before we go to break, check ow bonds. no fed speak this week obviously we're in a blackout. light on the data front as well. keeping in mind what we've been through the last couple weeks, ten-year still holding 3.73. don't go away.

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welcome back some interesting news in the world of golf that may resonate far beyond it to share with you this morning the pga tour, and its saudi back competitor liv group and europe's dp world tour agreed to merge. the expectation here is to create a global entity for the game of golf and the agreement, by the way, should point out not definitive it is a memorandum of understanding. it would end the hostility between liv golf and the pga the two have been engaged in litigation and a long history of sniping in the roughly two years since liv golf was created essentially the saudi sovereign wealth fund, the enormous fund that helped to put liv golf on the map. that's all gone. litigation, no longer. the agreement does call, in

fact, for the pif to that create the liv to invest capital into the new entity the pga not for profit, is going to contribute its commercial businesses, and its rights into what will be this new for profit company. the hope is to include not just the european tour but many, if not all the other tours as well, over time to create a global entity for golf. and, of course, most importantly, guys, this is -- there's a number of different things that need to happen between this memorandum of understanding and getting to the definitive agreement, mainly valuation of both pga's business and by the way they haven't been running it, it's not for profit, and what additional capital will be needed there. the addition over time, the expectation is that billions of dollars will come from the pif into the new entity, to help it develop new areas for the game

of golf. but you both are familiar with, of course, what has been a nasty spat for quite some time and the players that branched off some well-known ones. liv is run by greg norman. that all ends. that all ends. in fact, it's very historic in terms of golf itself with liv and pga merging. >> that's amazing. i mean, it keeps coming back to all things sports. >> yeah. >> all things sports related the asset values in these areas are tightly contained but dramatic. >> and the saudis have shown a willingness to want to invest in sports as a global entertainment product with the expectation, of course, that they will be able to create a great deal of value for the fund it's not just golf, obviously. whether it's their interest in f1 or wwe or many soccer teams around the globe, carl, their interest overall in sports has

been significant and they are stepping up big here they ultimately would probably own the majority of the economics in this entity, however the governance will be retained by the pga. i'll remind, though, the current governor of the pif will be chairman of the new entity. >> i thought this was such bad blood. you chose one or the other and that was it. they hated you. >> yeah. not anymore. it's like the afl and nfl, act ba and the nba coming together. >> it's incredible. >> that's what you're talking about. different formats for liv in terms of the teams and everything else combined in here. >> those of us who know people who are choosing, it was like red coat versus blue coat. >> we had norman in here not long ago into i will have an interview with yasser al

rumayyan. >> how about tonight. >> i have the number one way to be able to make stuff out of really pvc, waste. it's a great company jesse sync darinharris. tim masssad, we're not done with this bitcoin and with this binance. this is so much more serious than people realize. and you're being given a chance to save some money like i did i want to thank novagratz. hey, man, get in and it was great i was waiting. >> jim, we'll see you tonight. we'll keep an eye on coinbase down about 15% on news it is sued by the sec in the wake of our teiewi cirinrvw thha gensler. don't go away.

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as always from post nine of the new york stock exchange. stocks in the early action under pressure s&p down 0.1%. there's strength there beneath the surface coming from an unlikely place, financials, at the top of the market, up three quarters of a percent. industrials communication services all green staples, energy and technology weighing that's why the nasdaq is down about 0.2% we're 30 minutes into the trading session. three movers we are watching got to start with coinbase, shares plunging after the sec sued the crypto exchange much more on that in a moment. moffett nathan son upgrades at&t we don't see things in at&t getting materially better, we do, however, believe that at&t's stock price now appropriately reflects reality and we're also keeping an eye on apple, after unveiling its new headset, the first new product in a decade. a number of street calls out on the stock including a downgrade to neutral by d.a. davidson, the

firm cutting apple's price target to 185 from 193 you've got news. >> we broke news in the last hour of course, sort of unexpected the world of golf. it's not a public company. neither, in fact, public companies. one not for profit, namely the pga, but it will become or at least most of what was the pga will become for profit essentially. it is merging with the saudi backed liv golf and also bringing in the european dp world tour and have expectations actually of consolidating a number of other smaller tours that are out there to create a global entity for golf right now, it's a memorandum of understanding in which liv golf, pga tour, dp world tour will combine and become a newly formed for profit entity under the pga name psamm pif is going to make a significant investment into this newly formed company

valuations of what the pga is, liv is, and they'll make a significant investment more importantly over time, the pif is prepared to invest billions in new capital into this entity to fund growth initiatives for golf around the world. governance will be retained by the pga. however or in addition, pif governor yasir al rumayyan will be the chairman of this new entity jay monahan, current ceo of the pga will remain ceo of what we're calling the new entity there will be governance rights held by the pga. it's a new day for golf in many ways at this point given what has been significant level of hostility between the pga and liv, which came out and give huge paydays to certain players who were able to take it, but created certain friction on the

tour itself. that all potentially goes away with this. there's an expectation they will get to a definitive agreement in a short order and by the way, what also has gone away is the litigation between these parties. it had been undertaken by the pga. >> i wonder, was the impetus or motivation more cultural or something about the economics of golf that makes this kind of consolidation necessary at this moment >> i think it was more to the idea of we are better combined liv has introduced some new formats that have been well received, i think, by the viewing public or at least many of the players and so those can become incorporated as well. and really, carl, it's the opportunity for the pga to be taking in new capital to fund what they believe will be growth initiatives, whether it is new tournaments, more courses, any other number of growth initiatives they feel is available to them or will be when they are no longer

operating as a not for profit. the not for profit stays but - >> it's remarkable when precovid we were talking about attendance number of rounds being played, at least in this country, in decline. they were trying to bring innovations to the game and then covid and all the leisure time it gave you undid all of that and created all kinds of new green chutes around the game. >> liv, it was sort of this disrupter and they managed to attract high-profile talent and really -- the pga. >> they did. greg norman has been running liv golf they had nam of high-profile players, johnson, koepka. >> i can't keep straight. >> created a good amount of tension between the overall tour. >> you're allowed to play in the

majors even at liv they haven't gotten to a definitive agreement that said they could be there in weeks. we will have an interview with yasir al rumayyan and jay monahan, who is the current tour commissioner, will be ceo of new company, yasir will be the chairman big day for golf and chairman and fans. >> awfully interesting news, between that and now the s.e.c. watch coinbase today, shares are plunging as the s.e.c. does sue the company over its exchange and staking programs s.e.c. chair gensler did join us on the last hour of "squawk on the street" and had strong words about the industry take a listen. >> this is a field that's built, the whole business model, is built on noncompliance with the u.s. securities laws, and we're asking them to come into compliance and they're going, a bit of catch us if you can.

>> kristina partsinevelos joins us with more on what it might mean for coinbase's model going forward. >> well, let's just go break through everything because coinbase provided me wit a statement. s.e.c. accusing coinbase of operating since 2019 without having registered with a regulator, handling crypto transactions without providing disclosure requirements meant to protect investors. you had the sec chair calling the platforms a, quote, web of deception. coinbase has provided me with a statement from their chief legal officer and the quote is, the sec's reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry is hurting america's economic competitiveness and companies like gase that have a demonstrated commitment to compliance the solution is legislation that allows fair rules for the road to be developed, transparently and applied equally, not litigation in the meantime we'll continue to operate our business as usual.

this coin lawsuit comes 24 hours after the s.e.c. sued binance, 13 charges against the platform, and its co-founder also accusing them of running an unregistered platform in the united states and co-mingling, in other words miss using customer funds, sending them to another trading firm owned by cz here's gary gensler's reasoning. listen in. >> all we have to show is that one of them is a security and they should be properly registering and having rule books against fraud and manipulation as an exchange broker and the like. >> so that means out of 250 digital assets on coin or 16,000 available on binance's wallet, only one needs to act as an unregistered security for this to be securities fraud the argument from coinbase and binance is the s.e.c. won't provide details houn a digital asset which is earnings rewards

for earning crypto is a security and should be regulated like one. with gensler saying we don't need more digital currency we have the u.s. dollar, the japanese yen you can see shares of coinbase down double digits right now. >> thanks. good setup let's bring in needham to talk about it, buy rating and $70 target on coin i'm sure this has been part of your risk profile for a while. it did seem like maybe you were arguing the regulatory landscape was getting easier, not harder is this a surprise >> i wouldn't characterize it as a surprise coinbase did get the notice earlier in the year. kraken a crypto exchange, shut down their program this year, so it was on the horizon. things looked positive with the draft bill in congress that looked like there would be easier regulation around crypto and this comes out today which shows the regulatory clamp down

is still on coinbase, and really it impacts almost every business line as you point out, the exchange business, the staking business, a stable coin business this suit hasn't gotten into it, but there's some around stable coin as well. >> are you envisioning conflict or an attempt to comply? >> i think you could see compliance on staking. staking is less than 3% of net revenue at coinbase. it's not a big area for them for a revenue standpoint at least today. so you could see compliance in certain areas. on the exchange side, coinbase has said in the past they very much nmuch plan to fight this in the courts that's a big part of their business they might in their best interest say look, it makes sense to fight this. i would caveat, we looked at may volume recently and 64% of the volume on coinbase was bitcoin

and ether, the two assets that have been less under regulatory scrutiny it's about 36% of the business, as these other assets that seem to be challenged it's not kind of entirely the exchange business, but let's call it 40% or so. >> so you have been telling people to buy this stuff with a $70 price target you change your mind on this news >> we're looking into it further to see which business lines are going to be impacted by this you do have some positives in the longer term. you have the bitcoin coming up in q1 2024 it's associated with price momentum in the near term this is challenging news for gase. regulation had been one of the concerns for investors and it's at the front of everyone's head right now. >> that's why it shouldn't come as such a shock. the stock down 15%, though, between this and binance, you wonder what it does for

confidence, for retail traders and volumes, that have already been weighed down since the fed started raising rates. >> that's why i think the stock is getting extra hit, is with the wells know notice, i think a lot of investors saw some of this coming. when you had a may volume for coinbase was down 23% month over month, a tough volume picture and with this hit, you could see even further retail erosion. so it's almost a double factor kind of playing into this stock being down this much. >> finally, john, we talked with the s.e.c. chair this morning and i wonder, to what degree the communities of crypto hedge funds, financial advisors, how much of a shellshock is this and how do they operate short of clarity, regarding resolution of these complaints >> yeah. so institutional volume has held up better than retail volume i would say institutions need

regulatory clarity. they'll not behave like retail where they take certain actions. institutions need clear regulation in order to act, so i do think until we get that or until that plays out, you're not going to see massive institutional adoptions. >> yeah. one more hill to climb regarding the overall ecosystem. john, interesting news thanks for the guidance on that. >> yep thank you. still ahead, goldman sachs cuts its recession odds today. jan hatzius will join us live at post nine to explain why more on pga's tour plan to learning with liv. an interview with the commissioner and governor of the saudi pif. "squawk on the street" will be back dow is trying to go positive here s&p 500 went positive eresas early losses we'll be right back. is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts

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wanted to refresh on some breaking news we brought you about 25 minutes or so ago in the golf world certainly resonating now for the last call it 18 minutes, liv golf merging with the pga tour. liv is the effort undertaken by the saudi, and its private investment fund or pif, began a couple years ago, brought over some very well-known players, paying them enormous amounts of money. teams became an important part of it. the actual game play, a bit

different in terms of at least how much and how small was the field of entrants. and did representative a competitive threat to some extent to the pga. these two were at each other until recently where the actually decided they were better off working together and so the results of that in conversations that have taken place over some period of time between the head of the pif yasir al rumayyan and the head of the pga jay monahan have resulted in a deal under which they will create a new entity, global entity, essentially, governance will remain with the pga, that said, enormous amounts of potential or billions of dollars could be coming from the pif to help fund what will be this combination of the two, actually it also includes the european tour, dp world tour and the hope is, for others as well, to join. we they will have the opportunity

to issue shares, it's not a public company, it will involve the pga becoming a for profit company for which it will contribute all of its commercial interests. >> maybe rory and phil can make up now they were swiping. >> i know. >> pga versus liv. >> a lot of hostility. we are going to have that interview shortly with the two men behind the deal. >> looking forward to it in the meantime goldman sachs out lowering their call for a recession in the u.s. in the next 12 months, now going from 35% odds to 25%. joining us now at post nine is goldman sachs chief economist jan hatzius. thank you for being here today why did you make this decision now? >> basically two reasons so the background is we were at 25% before svb we lifted that to 35 because of the uncertainty how much drag from the banking stress we would see and we've thein that down because while we still think

there's going to be an impact, we feel like we can size it more and put it at about 40 basis points off of growth that's the main reason the fact that the debt ceiling deal didn't resolve in the major change of fiscal policy outlook took away a tail risk. >> that's the bullish view in the market where the federal reserve is looking to pause, so far unemployment has been very low, and we do appear to have somewhat of a soft landing the bear case is they're not done raising interest rates. where do you stand on that >> yeah. we would associate ourselves with the optimists in terms of the soft landing but agree that more likely than not you will get a little bit more monetary tightening and so part and parcel of the reduction in the recession probability was also putting in another hike over the next few meetings. most likely we think in july it seems like the signaling around june is pretty strong from both chair powell and vice

chair jefferson that june is more likely to be a pause. but it could be. i mean it's possible that it could be june. our best guess would be july if that happens, probably we would get some kind of signal at the meeting next week through the statement and press conference. >> a lot of your counterparts who are arguably more bearish, seemed to zero in on liquidity and the drains coming from all sorts of directions. you have written about it. is it not a concern for you or do you think it's typical of the cycle at this point. some of the projections from here are -- would take us to post-lehman levels by some estimates. >> there are different ways of defining liquidity you can certainly look at the drag from qt that is ongoing we don't think it's huge, and it's also something that, of course, can be adjusted, if it were to be more substantial than they could stop q.t. somewhat

earlier. they haven't nailed themselves to any projection there. we tend to look out more is financial conditions, and financial conditions, the drag from financial conditions, is diminishing and i think we're seeing that in the stabilization of the housing market. the number one transmission mechanism for monetary policy really is residential mortgages and that seems to be abating somewhat i would say we're in a below trend growth environment and think we'll need to be in a below trend growth environment still, but positive growth seems more likely. >> if you look at everything that's been thrown at the consumer, you know, the inflation shock, the rate shock, what's happened with housing, what's happened with the bank failures and credit tightening, even if it's not as bad as feared and excess savings are finally starting to come down and should wear out by the end of the year, you really think it's possible to avoid a recession? >> i do. i do think it's possible i think it's likely. i don't think it's assured specifically on the consumer,

you know, we have a very large amount of excess savings by our system, about $2.5 trillion in 2021 that has come down, by maybe a trillion or so, but there's still some excess savings there. the other thing, maybe more importantly, is that real disposable income is now growing. income last year was falling sharply so consumers had to dip into the excess savings to keep spending, but now real disposable income is growing at a pretty rapid clip. >> doesn't that make it more likely that the fed will have to do more which makes it more likely we are going to base a harder landing the more they tighten. >> well, they're going to have to triangulate between the different forces and if there's more strength, more support, from real disposable income, then yeah, all else equal, the funds rate needed to get the economy to a soft landing is going to be higher i would think of it that way,

the fed will lean against the support that's coming from factors like real disposable income that doesn't necessarily mean they're going to over do it, but they will have to do something probably. >> we keep going back to what's happened with construction spending and infrastructure act, chips act, bleeding it ways into the economy. where would you say we are in that process if people are having trouble finding fresh mega sites to develop. >> yes there is a lot of strength in nonresidential construction parkly because of that it's actually a somewhat confusing picture because, of course, that's also where some of the bank stresses are probably going to have the largest impacts or there's quite a bit of weakness that that sector of the economy that's probably ahead of us if you just look at the data on investment in nonresidential structures, it's been pretty strong so there are a lot of moving parts in the economic outlook. when we take them all together,

including the consumer and construction factors we talked about, yeah, something in the, you know, 1 to 2% growth range is in our view the most likely. >> all of it has been underpinned by the strong jobs market any evidence to you it's cooling and it will cool in any meaningful way >> it has cooled very significantly in a good way, so there's sort of bad labor market weakening and good labor market weakening when you're coming from an overheated position. the good labor market weakening is job openings coming down, puts coming down, labor shortages coming down. we've seen a lot of that we've seen it in spades in a lot of those indicators, despite the most recent sort of slight rebound in the job openings numbers. we have not seen a lot of bad labor market weakening in terms of big increases in layoffs. layoffs have risen somewhat, but it has been more confined to certain sectors of the economy, technology, financial services, but if you look at the overall

layoff number, it's similar to where they were in 2018, 2019, when we had a pretty strong labor market. >> i like how you put that a good weakening of the labor market thank you. appreciate it. good to have you today jan hatzius of goldman sachs. >> up next more on that stunning news in the world of golf. pga and liv golf are merging we'll have an exclusive interview with the pga tour commissioner and the governor of the saudi pif. "squawk on the street" right back ah, these bills are crazy. she

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its saudi backed competitor liv golf along with europe's dp world tour have agreed to merge, an expectation of creating a global entity for the game of golf the agreement, which is not yet a definitive agreement, ends the hostility between the parties and calls for the giant saudi sovereign wealth fund, pif, which created liv, to invest significant i'm told what will be billions of dollars into the new entity that's over time the pga, which is currently a not for profit, will contribute its commercial business and rights into a new for profit

company, and will gain or continue to have governance rights over that new entity. i had a chance to sit down with the key players behind the deal. the pif governor yasir al rumayyan and pga tour commissioner jay monahan just seeing these two together makes one wonder how did this come about >> listen, i think today is a historic day for the pga tour and the game of golf and it's a historic day for the pif and the dp world tour. and you're right, you know, there's been a lot of tension in our sport over the last couple years, but what we're talking about today is coming together to unify the game of golf, and to do so under one umbrella. david, the way that we're doing that is we're creating a for profit llc that the pif is going to invest in, alongside the dp world tour, and together, we're going to move forward and we're

going to take efforts to grow and expand this great game and to take it to new heights. so what's happened today and to your earlier question is, we've recognized that together, we can have a far greater impact on this game than we can working apart. i give yasir great credit for coming to the table, coming to discussions with an open heart and an open mind we did the same. and the game of golf is better for what we've done here today. >> yasir, give me sense as to how this came about, how the first call was made and how you were able to find common ground, again, given what had been a particularly difficult history between the pga and liv? >> we met in london. you know, we had lunch, followed by the next day a round of golf, then another lunch

we had discussions we covered everything. and one of the things that i said then, had we met two or three years ago, the impact that we will have in the game of golf would be lesser. >> why >> because it would be something small. but the way we're doing our partnership, it's going to be really big in many senses. we will have both liv and pga tour in addition to all of our assets, and we will be investing in the growth of the game of golf and doing many new things that i think will have a better he engagement from the players, the fans, the broadcasters, the sponsors, every one of us. and hopefully to even give better access for more and more people to the game of golf

the way we would love to make the game of golf very much accessible just like any other sport, like football, basketball, any other sport. and that's what we don't have right now today. >> right jay, from your perspective, i mean, first you had a meeting, jimmy dunn had this meeting, and it kind of went in there give our viewers a sense as to the structure of this. you talked a bit about the fact that you're a nonprofit but you're going to create a for profit you're going to merge, essentially, and be a for profit company. >> yes. >> so the c 6 still stays in play and out of the c6 we'll continue operate our tours put our player retirement and asset plans there. that stays in place. i think it's important, one of the things important to us, is every week when we're playing tournaments we're making a huge impact in the communities where we're invited guests

that continues at the c6 level you take the assets of the pga tour, the pif's assets, and liv and the asian tour and dp world tour, take all those commercial assets, drop them down into that for profit llc this is early. we're going to go through an evaluation or valuation of all of the businesses and the pif will invest in and as yasir is quick to point out there will be an investment in growth initiatives. >> yasir, we're talking about potentially billions of dollars being invested from the pif, correct? >> correct. >> over what period of time? >> that's an excellent question. so the first step is today the second one is the, you know, the definitive agreement then we are creating the board and governance of the whole thing is, we will evaluate every

proposal that will come to us at the board level. so whatever it takes, that's how much is the commitment that we are committed for. >> do you expect to consolidate all these other entities as well are you creating one entity for global golf? >> exactly that's the idea. and the potential there is really big i mean, if you look at the size of golf, monetary wise, it's about $100 billion today i think the growth is there, and i think we can, working together, we can have a faster growth rate than the way it was for the past 10 or 20 years. >> if i could add, when you look at the game on a global basis, there are now more people playing the game outside the u.s. than playing inside the united states.

okay you look at he everything that has transpired in terms of the forms of distribution, top golf, and all the other ways people can interface with our sport, there are people more off course participants than more on course participants and that combined audience in the u.s. is 48% under the age of 35. reaching a younger demographic at a time when the sport has never been more popular and doing so by coming together to collaborate at this point in time, that's where we see the commonalty and purpose and that's where we see this huge opportunity. >> what are your expectations, jay, for when the public learns about this, the players, the fans you think their a going to respond positively you're describing a scenario under which pif at some point could have the majority of the economics, correct me if i'm wrong, of this entity? essentially the saudis sort of people will say they control golf around the world. i'm curious what you think the response is going to be?

>> listen, a lot of people have been reading about the tension, and that, we've talked a lot, and i said previously, that we were going down our path, they were going down theirs today that tension goes away the litigation is dropped. we're announcing to the world that on behalf of this game, we're coming together and it's less about how people respond today, and it's all about how people respond in ten years. when they see the impact that we're having on this game together, there will be a lot of smiles on people's faces and a lot more people playing this game all over the world. if you're a young player that wants to get to the highest level of the game today, you will be more inspired than you've been before. >> what is it with the saudis in sports what do you see in terms of it -- clearly value this idea of these global franchises? you know, i mean i've talked about wwe or f1, just in terms

of the interest there. not to mention, of course, what we call soccer, the rest of the world calls football. >> because it's, you know, a ball and a foot. that's why football. >> you're right. we're wrong. but anyhow, what about the value? what is it that you see as an investor one of the largest funds available in the world to you, that is so compelling >> what's going on right now is in saudi is unprecedented anywhere else in the world we started with something called the vision 2030 by the crown prince, and this vision was announced back in 2017 pif is one of the major components of this vision. now, at the pif, back in 2017, we issued our first five-year document which is called vision realization program. we put all of our aspirations and targets and objectives and kpis and by the end of the 2020,

we achieved all of these targets, you know, the job creations, the contributions, the sector developments and everything else. back in january 2021, we issued the second vision realization program, and by the way it's a public document on our website, anyone can have access to it that document, we said we're going to be looking and interested in 13 sectors sports and entertainment is one of these sectors in addition to aerospace, technology and - >> why sports and entertainment? >> if you look at the, you know, population of saudi arabia, huge percentage of our population under the age of i think 75% under the age of 35. now, with that, i think you will have a lot of young people who are interested in sports and entertainment, and that's basically part of the offering

historically speaking, football was the dominant sport in saudi. in the past i think eight, maybe five years ago, we created a different number of federations for every sport that you can think of we are interested in all of these sports, it's not only golf or football or basketball, but it's many other sports there that's the reason why we would like to invest in sport, in addition to the financial returns. >> there are financial returns that we're talking about. >> definitely. it all makes financial sense to us and that's the only way going forward. we don't like to subsidize things, but we would like to have it sustainable -- >> you think the billions you'll be investing in the new entity

are going to generate a significant return >> that's the whole idea. >> why >> listen, pga tour has been around since 1968. i mentioned to you earlier, our model, we're transitioning from a c6 to c6 plus for profit lllc. this is an opportunity we've never had before and to have this capital at this point in time with the strength of this game, there's so much opportunity. and it's an opportunity we have not been able to activate, but we will now, and we're going to do it in a highly disciplined, rigorous way, and when you look at our sport, the pga tour has never been stronger than it is right now. it's strong because of the way our players continue to compete the legacy driven pro competitive model. there are different ways to interface with our sport to come together and do this together with dp world tour, pif and other organizations, as we move forward, creates

opportunity at scale that we haven't been able to see or do so it will produce an investment return otherwise we would not be here right now. that is the whole point. >> do you see any issues moving from that not for profit to for sfl profit if do you think you will get pushback >> i don't our membership organization and the way we treat our members doesn't change at all. >> right. >> there are certainly precedence for this nolds other sports and we're very confident. >> jay, hearing global golf essentially and one entity, antitrust? any concern that regulators will say wait a second, you have two competitive tours now and combining -- >> every single player in men's professional golf is going to have more opportunity and more growth, as we look to contribute to the women's game, i would expect the same, and as an industry we're going to grow our industry

i think this is all a positive on that front. >> what happens to players on liv? will they be able to play -- how does that work when you're part of their tour and not yours? >> today we've come together to announce we're collaborating going forward. there's a lot of work to be done there's a strong spirit of partnership. those are the details that, you know, we'll be getting into. but ultimately, the world needs to know that pga tour, pif, dp world tour, have come together and the tension is gone and these are things we're going to solve together. >> the litigation is gone as well. >> couple final questions, television rights, if you're successful it would seem you can negotiate a different kind of a package. is that true what does it mean in terms of the rights here if you are successful in sort of putting it all together >> i think these are the kind of discussions that we'll have going forward once we have identified, step back, evaluate the pga tour, liv, the dp world

tour, identify the path and plan forward. it's going to create opportunities across the media landscape. we've got great media partners i know they're going to be excited about this announcement today. and we're going to create more value for them those are discussions we'll have. >> yasir, how much more time to get to the definitive agreement from here? >> i think it's matter of weeks. we have agreements on, you know, the framework, which is an excellent first step and it all xenz on, you know, just finalizing many things including the evaluation once we get that i think it's just a matter of weeks. >> we're going to get that done. >> you're going to get it done you're confident this is not a memorandum of understanding we're going to have a big announcement around and never see definitive. >> next time we're together with you we will be talking about what we've done and more specifically where we're going we're not going to be having a

conversation about why this didn't happen. >> i'm happy to hear we're going to do this again at some point that's good as well. what are your expectations, you know, in terms of the valuation process, yasir specifics here i like m&a do you have advisers that will have to come to some sort of agreement in terms of what this is worth and that entity is worth? >> absolutely. there are different methodologies of valuation the way it will be, will have our own advisors, they will have their own advisors, and most likely we will have an additional advisors for both shareholders and then move on. >> does greg norman know about this >> he does i made a call just before this of course he's a partner with us, and all the stakeholders

that we have with us, they had a call before this interview. >> a lot of people will be interested and surprised, of course gentlemen, it's been great to have you both. we certainly appreciate it and we'll be watching closely and look forward to the next interview. >> yasir al rumayyan and jay monahan, thank you both. >> thank you you heard it there of course a lot of unanswered questions at this point. it is a memorandum of understanding. although as mr. al rumayyan said they hope to get ato a defi definitive agreement within weeks. it's interesting looking at twitter people weighing in saying you had a lot of players stand on principle, stay at the pga, not go for the big money. the vitriol between the two is significant. the lawsuits and the like. that all goes away you heard it, their hope is that they're going to be able to create a global entity that like any merger grows more quickly than they do separately. >> liv was controversial and

there's a geopolitical angle as well, right. it was backed by the saudi sovereign wealth fund, criticized as sports washing, using sports to distract from some of the criticisms that u.s. has had with saudi arabia over human rights, jamal khashoggi's death, 9/11. president donald trump hosted a few of liv tours, always a lightning rod as well. i'm sure there will be questions about how the chairmanship of this will be saudi led. >> i should point out we're going to have -- there's more to the interview and there will be a full interview will be available later today on cnbc.com actually went into what you're describing a bit more as well. it wasn't a part of what we just aired. that was most of it. there was some back and forth around those questions as well and now, you know, when you say the saudis are going to control worldwide golf, it's not wrong from an economic perspective,

but mr. al rumayyan will push back and say not from a governance perspective the pga board or the board of this new entity will be dominated by members of current pga boards gavinance is going to be important but economics important as well, billions potentially will be going into the nur entity from the pif. >> he raised the point about fan response you asked about it mickelson is getting targeted with comments about blood money and the broader notion of what can't the saudis buy where does their money end and does it end with golf even could there be additional influence in the other american leagues? unknown. >> their interest as you heard him when we talked more broadly about sports is significant. they're buying soccer clubs, there are -- there's interest in a lot of other areas and, so i don't expect that this is the last significant investment that will be made. >> phil already tweeted. it's a good day. >> he did.

>> he's happy with the deal. >> he's happy with the deal. apparently greg norman was okay with it. we'll see what other members have to say. you asked the question, that interview only took place this morning, but we and they don't have the answers. >> yeah. i'm waiting for rory m mcilroy he was one of the fiercest critics. >> he was. >> and phil. big story on transformation of golf in this country we'll take a quick break here with the markets recovering nicely so far this hour. the s&p has gone firmly positive it's up a third of 1%. it is being led by cyclical stocks financials, materials and industrials are your top three performers nasdaq joined the ralgly as well it's up 0.3% this is the all new, all electric lucid air. a car that goes as far as it does fast. as sleek as it is... spacious. as smart... as it is beautiful.

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chart, guys. this stock went from $1 to $120 during the meme craze, when ryan cohen used to tweet an ice cream cone and the stock would go up like 30% has come back down but it's still 25 bucks. >> gamestop is still a real thing. >> bed bath & beyond not so much. >> it's bankrupt, it's gone, but he got out and that was a key part of it. >> and did well. >> yeah. >> it does help us reflect on what a moment that was the whole period felt wrong in a sense but who knew how it was going to end it will be fascinating to see how they frame what will go down in history as a unique chapter in american finance. >> i guess it's over i guess the fed killed that with rising interest rates in the bear market. but as noted, you know, gamestop is still $25 stock it's a far cry from where it was before the whole meme craze. it was interesting to report on

the enthusiasm in the market even if it was unhealthy in terms of what was happening to these valuations >> meantime, 4282, can we continue in that range, the high 4200s and the sports world continues to react to this agreement. >> as you might expect and i think, you know, there's a lot of pushback on the idea that we obviously first brought you, that liv, the saudi-backed golf tour and the pga are getting together with dp world tour and the hope being able to bring in everybody else and create an entity that basically dominates the world of golf globely. some pushback. certainly see it come by here on twitter, as you might expect, in terms of the saudis and, their human rights records and so many other areas people are

complaining, saying pga sold out. pga pushing back saying this is about the future growth of the game. >> he talked about a ten-year time horizon the intersection of sports and business is the focus of the cnbc and boardroom game plan event taking place july 25th in los angeles. that event will bring together the most influential leaders across the sports landscape, including athletes, owners, investors and innovators you can scan the qr code here to learn more you can visit cnbcevents.com/gameplan. we'll be right back.

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good tuesday morning i'm sara eisen with carl quintanilla live from post 9 on the new york stock exchange. setting the agenda, mark smucker on the heels of a strong quarter as we heard from a number of the staples companies. higher prices driving sales increases while volumes are flat we'll get his take on the consumer and where prices go from here. jpmorgan is with us, running out of reasons to be on the sidelines as wall street debates what type of land, wall street is headed for. later, the return of meredi