bigger. it's wednesday, october 9th, 2024, and "squawk box" begins right now. ♪ good morning, everybody, and welcome to "squawk box" right here on cnbc. we're live from the nasdaq market site in time square. i'm becky quick along with joe kernen and andrew ross sorkin, and the futures at this hour under just a little bit of pressure. it looks like the dow futures up by 38, nasdaq futures down by 30, the s&p down by 4. but it comesafter a pretty positive day, particularly in the dow sector yesterday. the dow was up by 126 points. that was up by a third of a percent. the s&p was up by 1% and the nasdaq up by nearly 1.5%. as a matter of fact, it was the best day for techs since

september. in the treasury market you're looking at the highest yields yesterday since august 1st. this morning, slightly yield. you're still stalking the 10-year above 4%. then as joe mentioned, stocks in china plunging in their second week of trading. the mainland csi 3,000 dropping and the tech-heavy shenzhen falling by more than 8.5%. china's ministry announcing it would hold a news conference on saturday, but it wouldn't specify a topicing. >> let's talking hurricane milton. expected to make landfall this evening. it regained category 5 strength overnight with maximum winds at 165 miles an hour. it's on a direct path that could directly impact tampa bay. it's very vulnerable. the region has not been hit by a major hurricane since 19 21.

forecasters expecting a storm surge of 10 to 15 feet from the tampa bay area. up to 15 feet of rainfall. ron desantis and president biden have been strongly urging people to evacuate, but that window is now closing. you're seeing st. pete and orlando airports halting most of the operations. walt disney worlds, universal studios closing early today and anticipating remaining closed tomorrow. and you're already seeing how difficult it is to get out of town. >> i don't know if you've seen. we were showing hurricane helene. that's been a major issue that ron desantis has been talking about, trying to get everything cleared off the streets. every time they get things cleared off the streets, people

bring more things out of their homes that were flooded. >> it's those items that become projectiles. >> right. it's been a huge, huge issue of concern. >> did you catch the weird trending twitter thing yesterday between president biden, vice president harris, and governor desantis? it was bizarre. after vice president harris said what a poor job desantis was doing, president biden said -- i don't know. maybe he didn't know. >> that could be the case. >> or it could be -- president biden said ron desantis is doing such a great job, i even gave him my cellphone number to call. >> desantis, there was the pwhe he said, she hasn't called in 3 1/2 years. why call now. was everything -- >> what's worse .

>> you don't think biden was -- >> you think for spite? >> i don't think there's any love loss between biden and president obama. >> my other read on this is biden has called desantis during these hurricanes over the last four years. >> and had a good relationship. >> no, no. hit storicly it's the president of the united states who calls the governor when there's a hurricane or problem. as vice president it wouldn't be your role to call. it would be almost out of your role. >> i think that was desantis's point. it's still out of your role. >> we're in this haze that i don't think around the world of who's -- it's kind of like if she's going to be president and she is kind of already and he's -- if he wasn't ready to be president, if he -- if he couldn't be president for another four years, is h president now? i think it's -- i don't know. >> i mean, look.

i think biden's point was, yeah, i'm still talking to hum and we're in control. and desantis said he did have -- >> has there ever been a dynamic -- when lbj -- i dodge think there's ever been a dynamic where he's almost a lame duck before he's a lame duck. after the election year a lame duck because you're waiting until the 21st of january, but in this case since he's not going to run -- >> right. i would assume you would be lame duck in a similar scenario. >> right. and lbj's -- i can't remember. it wasn't his -- it wasn't -- was it humphrey? >> meantime let's talk about what's going on late yesterday in the world of google because the justice department made recommendations for google's search engine business practice indicating it is considering a possible breakup on the tech giant. at least that's what they may be

sugg suggesting. eamon javers joins us with the latest. eamon. >> good morning. in a court filing just after 5:00 p.m. last night the justice department is considering a breakup of technology giant google and is contemplating sweeping business practices of the company. the doj says the measurings it would like to impose could include contract requirements, nondiscrimination product requirements, data and interonability requirements, and structural requirements. the last term is the doj thinking about ways to force google to sell or spin off chunks of itself. this is the first look and what the justice department thinks google should look like. they're expected to off a more detailed framework by the end of the year, and the federal judge is expected to make his ruling

by the summer of 2025. we've got a ways to go here. google lost the case in august when the judge ruled they did have a monopoly in the search market. google reacted aggressively, bashing the doj's rash and sweeping proposals. google said, we believe that today's blueprint goes well beyond the legal scope of the court's decision about search and distribution contracts. a spokesman for rival duckduckgo says this proposal smartly takes aim at breaking google's illegal hold on the general search market now and ushering in competition moving forward. google would end other profit-making tools that would allow it to be the default engine. one idea is to make google publicly available, the data,

index fields as well as google search results. features, ads, underranking symbols could be forced into the public lick domain largely if other companies to use here. all of that could chip away at dominant's important position of search, but it might open the door for a lot of competitors into the market. >> eamonn, a couple of questions. >> what we know over the next couple of months, this is the first issue proposal. it's a high-level proposal. . they're going to get access to the emails, the books, look at all the systems, talk to the experts. then they're going to talk about what the remedies are that they want to fix the monopoly

problem. all of that's expected to be done by the end of the year. then google's going to have a chance to fight that every step of the way in front of the judge. the judge will then starting next spring, you know, go into his chambers and give it a deep think. by the summer of 2025, come up with a ruling. you can imagine whatever that ruling is, that will be challenged by google. it will appeal. how many years is northbound's guess, but we're at the beginning stage. >> is there any precedent for what might be the recipe inside a company? you're talking about -- >> like coca-cola's secret formula. >> the search code, all of the feeds. one of the things that's surprising about that, the truth is microsoft's bing and other search engines in many cases are

comparable in some cases. that's not why one is using the other, per se. part of it may be some of the questions about antitrust, you know, it's my default on the phone. others think it's a better system. it's not that there's some secret thing that they have that nobody else has. >> the defaults were really the key to this trial. there was a lot of talks about defaults throughout and just the idea that basic human behavior is when the default is loaded on your phone, you don't really change it even though it might be technically possible for a consumer to do that, you know, whether it's five boxes you have to check or 12 box yos u have to check. people don't do it. the defaults and the huge amounts of money that google pays to have those defaults, that's going to be maybe number one on the department of justice's lists. it so you might see bing a

little more, duckduckgo. in the era of ai search and summerization, you might see all types of things. one of the things they talked about is allowing websites to opt out of google's ai summary product. if they're out there summarizing sort of the known thing about the world series or whatever your search topic is, they could say, no, i don't want google to summarize my content for itself ai product. a lot of changes here potentially coming to the search inquiry, and it has huge ramifications. >> it seems like an old fight. >> it does. that's what i was thinking to. the justice department gets around to these things once the monopoly may be on the strerj of falling apart itself. eamon, the company's response to this, in part was, if they go

ahead with some of these in incredibly draconian -- >> radical. >> right, radical is what i was thinking of. the stock's down only 1.25%. i guess that's in part because there will be years of back and forth. and i guess also potentially na could change if there's a different administration that comes about. i don't know that a trump/vance administration would look much more favorably at big tech. >> this case was originally filed under the trump administration. i think trump would continue right along this vein especially when it comes, as you say, to big tech. the other thing is what happens to android? what happens to chrome?

do those get spun out as separate companies, and what does that do to their process? what's in it for wall street? a hot would look at it reflectively and say, this is bad, this is government going after corporate america, telling companies what to do, and that's almost always bad. but one of the potential outcomes here is simply more publicly traded companies for wall street to invest in, so if you're a wall street investor, you might look for opportunities to grow. >> all the baby bells? >> right, all the baby bells. you could have a lot of baby googles out there is. is there more in terms of that more than one giant and potentially not growing as fast? >> eamon, it's something we're going to talk a lot more about. thanks. and this has been a

discussion for a while. boeing withdrawing its latest contract offer after talks with the union broke down. that i said, further negotiations don't make any sense at this point. the union says boeing refused to offer its plan for wages and retirement plans and sick leave. after talks broke down, national global ratings issued a negative outlook for boeing's credit rating. the machinists walked off the job september 15th after they rejected a labor deal. coming up, lots of talk about market strategy ahead the "opening bell." futures are in the red, but bachlly unchanged. still ahead, fema administrator deanne criswell will talk about preparationsor f milton and the response to

helene. "squawk box" will be right back. you have... the fearless investor. the type a cpa. the bootstrapper. the bootmaker. yeehaw [narrator] but many do have something in common. we all trust schwab with our wealth. [narrator] thanks to our award-winning service, low costs and transparent advice. every day, over a million multi-millionares trust schwab with more than two trillion dollars of their wealth.

(luke) homes-dot-com is a new, evelevated home-shoppingn multexperience.es trust schwab beautiful design, tremendously rich content, and, my favorite touch, it's the only site that always connects you to the listing agent. feels like a work of art! (marci) lovely. what about the app? (luke) uh-oh! look what i did. it's ringing. hello? hello? (marci) they can't hear you. (luke) hello? (marci) because you glued a frame over the microphone. (luke) i think i've glued the frame over the microphone. (vo) ding dong! homes-dot-com. we've done your home work.

pete g. writes, "my tween wants a new phone. how do i not break the bank?" we gotcha, pete. xfinity mobile was designed to save you money and gives you access to wifi speeds up to a gig. so you get high speeds for low prices. better than getting low speeds for high prices. right, bruce? -jealous? yeah, look at that. -honestly. someone get a helmet on this guy. xfinity internet customers, ask how to get a free 5g phone and a second unlimited line free for a year. switch today! cbs health is demanding federal trade commission chairwoman lina khan and two other commissioners recuse themselves from boosting their profits while inflating insulin costs for americans. in a 23-page motion that was filed last night for the ftc,

t cvs argued they have a track record that indicates bias. they filed a suit against pharma managers. that would be cvs, caremark, unitedhealth, and cigna's unch scripts. futures out in the red a little bit for all three indices that we followed. joining us now, the chief investment officer of bmo family office. carol, i don't -- we have seen new highs obviously, but it seems like the pace of the advance has kind of moderated a little. in your view there's been a lot of things that the stockmarket has had to kind of come to grips with and recalibrate. and it's done it. for example, gee politics, the election, hurricane, strikes,

all these things, but it's held up, which means a soft landing is intact? >> we've always been in a self-landing camp, never really bought into the fact you have to have a recession just from the sense that from a calendar standpoint that a lot of people were suggesting we had to have a recession because we hadn't had one for a while, no. the most constructive underpinning if you will for it, they do this in a wall of worry, that as opposed to when you have exuberance and everyone is over their ski landing, those create a lot of bubble warning. but where people keep focusing on fundamental, the great part is you get the next four to six weeks chockful of fundamentals coming from earnings. >> you think the numbers won't

surprise us this week on inflation. go ahead. >> it will be hard to get the housing down. insurance is part of it. now with the hurricanes, the wildfires that you've got in the midwest and out west, there'll be pressure on that that will keep that there. so it keeps it intact in terms of the fed's got to be cautious in continuing the right decline or rate cut scenario, although we think they ooesh got plenty of room where the policy is. but it's going to take time to get the core rate down. >> that's what's kind of weird. the core rate's going to have trouble coming down. the jobs number was much stronger than expected. why does that give the fed the ability to continue to cut 25

basis points? how do we know that the first one wasn't a policy especially after you watch the 10-year and the two-year yields have risen since the fed cut? i don't know whether the market's trying to tell us something or not. you say, stay on track, keep going 25 basis points every time in a strong economy with the market at all-time highs? >> i think the piece of it is if you look at where the fed was, they went to 5.25 over a year ago when inflation was running at 8%, 9%. so that 5.25%. even the headline inflation is down over 2, but the core closer to 3, you've come down substantially down. the policy rate itself is still on the restrictive side. you've got an economy that's following through that anyway. you've got some support in jobs numbers. you've got reasonable gdp coming through, so the fed has a little

bit of room to come down in that policy rate yet. we wouldn't suspect that you'll go on a 25-basis-point every meeting and stay there, but you've got a little bit of room in there still to be supportive of that and to see how things go, because as they talk about all the time, the long and variable lags, it's going to take time to see how it works through. >> as points out, the interest payments because yelin has kept everything short term, which, you know, when rates go up, it's not great. $950 billion interest payment versus the defense budget is $826 billion, and medicare, $869 billion. so just to sit here at rates -- with rate asset these levels costs us 950. it's rough. it's probably good if we could come down. >> right, right. that is good. you know, the 2s and 10s are really starting to reflect the fact that -- or the

understanding that the economy is stronger, that you're going to see that strength. so uninverting that 2 to 10 curve is telling you that the bond market says there is some growth there that they're going to wbe watchful of. >> okay. as long as we're inverting and in recession, it's going the way of the football, nfc/nfa indicator. it's no good anymore. >> right. >> thanks, carol. >> thank you. coming up, elon musk's visit to pennsylvania included more than just a campaign stop with former president donald trump. we'll bring you some of the new ontails emerging including a phe call with the governor. that's next. "squawk box" is coming back right after this. >> announcer: this cnbc program is sponsored by baird. visit bairdifference.com.

(vo) time to move? make it easy with opendoor. sell your home in any season, for any reason. [vampire hiss] (vo) start your move at opendoor.com.

what tractor supply customers experience is personalized service. made possible by t-mobile for business. with t-mobile's reliable 5g business internet. employees get the information they need instantly. this is how business goes further with t-mobile for business.

welcome back to "squawk box." elon musk making a surprise appearance at the pittsburgh steelers/dallas cowboys football game on sunday a day after he spoke at donald trump's rally. during the game, muffing has a surprise phone call with pennsylvania's democratic governor josh shapiro. he told shapiro he wants to invest in the state, pennsylvania, specifically in the pittsburgh area. he was in the early stages of the idea, he said, but expressed interest in expanding his factories to the region. muffing wmusk was in the bach with a part owner and an 81

million dollar product to bring manufacturing to pennsylvania. they struck up a relationship, this according to two of the people familiar with the conversation. so an interesting wrinkle or twist in the long-running drama/soap opera that is -- >> i had a few thoughts. >> josh shapiro is not going anywhere, that's my prediction. pittsburgh is very -- it's hilly and very similar to my hometown and a great place, but because of what happened with the steel industry it's -- you know, it could use some investment like this. it's a very liveable place with great sports teams in it. i think shaper's from there too. epperson. it's on the -- one of the rivers, the three rivers. they ship all their grab down

through cincinnati, all their crap, but i'm e not going to -- >> mostly for him, carnegie mellon. >> he was at u-pen too. >> in terms of talent in pittsburgh when you think about -- >> uber did its early self-driving in pittsburgh. they took advantage of a lot of the talent, ai talent that's coming out of carnegie mellon. a lot of smart people there. >> you know what else is there. oakmont, which is -- it's like a mecca. it is. it's almost like a religious experience. an amazing, amazing place, and unbelievable history. i digress. when we come back, we're going to head to the battleground state of nevada where one of the key issues for voters is housing affordability. plus, a look at the great divide in silicon valley over the race for the white house and the lobbying efforts of big money donors. before we head to break, let's take a look at yesterday's

s&p 500 winners and losers. >> announcer: executive edge is sponsored by at&t business. next-level moments need the next level network. that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow!

♪ (alarm sound) ♪ amelia, turn off alarm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

now to the election and a key irv in the battleground state of nevada. that is, housing. megan cassella joins us right now. she's in las vegas, and she has more on this story. megan, good morning. >> becky, good morning. latino voters will have the power to swing the election. it's all depending on what's going on. the biggest issue is affordable housing. construction projects like the one behind me, they're going up all over las vegas. they're the last in the nation when it comes to affordability and rentals and among the lowest when it comes to homeownership rates. latinos consistently put access to housing at the top of the list of issues they care about.

80% of latino voters put owning a home as a crucial part of the american dream. but here in nevada they increasingly feel like they can't make it happen. >> latinos are going to see why can't they reach the dream, why am i struggling to buy my home, why can't i have my piece of the american dream. it will definitely affect how they vote. >> reporter: now, the biden administration has allocated about a billion dollars of funding from the american rescue plan to nevada specifically to address affordable housing. that's what's helping fund projects right behind me. builders here say the funding has been krushle to help keep up momentum, keep up supply as interest rate have been high, but they also say they have felt like they've barely scratched the surface when the estimates are for 80,000. >> we know it's a drop in the

bucket. there are 14 affordable housing units available for every 100 households that need it. so what do the other 86 households do? right? so that's what we're wrestling with locally. >> reporter: harris will be out here today to make her address to latino voters later, and trump later this weekend. both candidates especially harris have donated a huge part of their agenda to talking about housing. organizers say even the best policiyed only go so far when people are preoccupied with paying their own bills and finding their own homes. when we come back, the silicon valley's split. the major power players are deeply divided and supporting the lobbying efforts from ai to crypto. you don't want to miss this. plus, at 7:10 we'll be joined by the u.s. ambassador to japan, rahm emanuel and taking

aim at china's economic impacts. we'll have a lot more on "squawk box" coming up after this.

when it comes to investing, we live in uncertain times. some assets can evaporate at the click of a button. others can deflate with a single policy change. savvy investors know that gold has stood the test of time as a reliable real asset. so how do you invest in gold? sandstorm gold royalties is a publicly traded company offering a diversified portfolio of mining royalties in one simple investment. learn more about a brighter way to invest in gold at sandstormgold.com.

welcome back to "squawk box." on the trump side you have musk, david teal, sax. joining us is a writer at new yorker. this week he published a deep dive into the lobbyingests regarding crypto. it's a must-read piece. i want to get deep into understanding what's happening in the valley and where the fault lies. let me start with this larger question. do you believe fundamentally na the politics of silicon valley have shifted? i think there's a perception from the headlines you have this deep divide.

i mentioned certain people on certain sides, the idea that it's a deeply liberal place, but somehow it's shifting to be a conservative place. are you seeing that? >> upper-level low. i think, you know, the valley is still overwhelmingly liberal. it will still overwhelmingly voigt for the democrats. but if a few years ago you said you liked trump, you would have become a pariah in silicon va valley. what we're now seeing is because of a handful of leaders who have come forward saying they're supporting trump, voting for him, or they're agnostic, rew remaining on the sidelines, it's okay to say you believe in trump and the republican party. people with wealth have often sided with the republican party, but this is different because they're siding with trump and that would have been unthinkable just four years ago. >> one of the reasons i ask that question, there's part of me that things that silicon valley

at least in the venture capital world was at least a libertarian world. you know, peter o'toole was a libertarian. mark would have been in a liberal camp which might have manifested itself as supporting republicans, and it was always the rank and file, if you will, the engineers and others, who might have had a more liberal leaning and whether that really has shifted the balance. >> i think that's really fair because i think not only are they libertarian, they're h heterodots. i think the folks who are now coming out for trooper are very much of that camp, where questioning assumptions is exactly the right way to think. you're right. throughout much of the last century what we've seen is the owners of the companies oftentimes side with are more

blue collar, labor focused, and democratic. we don't see a huge difference between the lives of the people who own and run the companies and the people working with them though. certainly mark andres and others are much more healthy than their workers. the workers themselves are much, much more healthy. this seems like an opportunity for them to talk about tacks, the issues that they know that folks with money care about most, and we are seeing them make inroads. it does not mean the valley has become liberale -- or conservative, but it does mean we're seeing for the first time conversations that didn't happen before. >> charles, let's dive deeper into the lobbying issue, because that's where you go on this piece, and it's fascinating to understand pieces around crypto and ai and the sort of extremes -- or the -- how far folks are

going and why they're going there, meaning speak to the money piece of this, maybe even the dark money piece of this. >> yeah, absolutely. so today the tech industry is the largest contributor to super pacs in the nation. almost half of every dollar given by corporation to a super pac in this election was given by the crypto industry, and they have a very, very specific reason why. they want crypto to be legalized, and they're using that money as a tool to bully politicians, and it's being -- it's very effective. katie porter, who is running for the senate here in california, a essentially her race was blown up because a super pac came in and spent $10 million overnight running ads just annihilating her, and it worked. politicians in other places saw this happening and they began voting for pro-crypto bills and agreeing and releasing

pro-crypto statements. money matters. the people with the most money is the tech industry. as a result, they're able to cajole, bully, and woo their way to whatever kind of naks they see fit. >> legalizing crypto, obviously one issue. ai. >> yeah. >> what does the ai industry actually want? we've seen a lot of leaders come to congress and do hearings and say, they want regulation. do they actually want regulation? >> they do. they want regulations, but they want regulations that work for them. in particular they want regulations that work for the big companies, because companies like ai are out there stumping and lobbying. keep in mind, it's a mixing formulation. what the ai industry wants, they want a seat at the table because they know that the regulations that guide this industry are going to shape everything. it's go ing to shape who are the winners, the losers, who gets to sell their products, who double.

as a result, what's most important is not only to have a seat at the table, but to frame this the right way. the way sam altman is framing the current debate is this is a competition between democratic ai nations and authoritarian ai nations. we want to be on the side of right and truth and justice, which is very, very convenient framing ther femme. big companies versus small companies and fast progress versus slow and safe progress. by framing it as democratic versus authoritarian nations, you're saying this is a fight between good and evil. you can ask for anything. >> charles, if you ask ai what it wants from washington, it said exactly what you said. i don't know. you must be -- you're actual intelligence. this was artificial. they said the ai industry seengs a balanced approach while implementing it with a light

touch. >> is that from chatgpt? >> i'm not going to say who i used. >> google? are you using gemini on a day when they're going to be broken up? >> no, i'm not using gemini. >> okay. >> it could have been ask charles. >> charles might been an ai. >> that's a very polite way of putting it. >> yeah. cautious legislative approach to avoid stifling advancement. i like it. >> it used to be silicon valley believed politics was stupid. all they wanted is for washington, d.c. to stay out of their business so they didn't screw everything up. but we're in a new world. airbnb, uber, they realize politics is an existential risk if you're not on top of it and not in the conversation. sam altman with openai understands pushing regulation, being part of it, that's how you get ahead. they're inject themselves in any

way they can. >> charles duhigg, tnk yhaou so much. when we come back, "squawk box" returns with two big hours ahead. as a leading global asset manager, pgim has established a track record of helping investors capitalize on growth opportunities. pgim investments. shaping tomorrow, today. at t. rowe price, we help advisors move forward by building agile etfs designed to outperform the index. that's the power of curiosity. better questions can lead to better solutions. t. rowe price. invest with confidence.

tomorrow is world mental health day and when we come back, carson daly, the host of "the voice" and co-host for "today" and phil shurmur, ceo and founder ofroct pje healthy minds will talk to us about the all day festival raising awareness around mental health issues. "squawk box" will be back in just a moment.

welcome back, everybody. tomorrow project healthy minds is going to be hosting its annual world mental health day and festival that in the gala that they're holding in new york city. those events are going to be featuring thought leaders and celebrities like demi lovato and chance the rapper, but joining us right now to talk about it is carson daly, the host of "the voice" and co-host for "today," he's hosting the festival's gala. we're joined by phil schermer, the ceo and founder of project healthy minds. gentlemen, welcome to both of you. >> thank you, becky. thank you for having us. >> thank you for being here. phil, let's talk about what this project is and what it is bringing? >> at the core of what healthy minds does, 60% don't know where to go to find help and the core of what we do is build a digital platform to help connect americans to mental healthcare and our world mental health day festival and gala, as you know, stigma is an enormous issue in america and it is about creating

one place for thought leaders to talk about meanntal way. >> you've created like an expedia where people can find the best ways to get the mental healthcare they need. >> we talk about it as an open table or expedia for finding mental health services. it should be as easy to find mental health services in america in 2024 as it is to book a flight or hotel. >> let's talk about how you two met. in 2017? >> my mental health journey is one i hadn't talked about until we did a piece on kevin love, who wrote an article about having a panic attack during an nba basketball game. i said, this -- i said to craig, this happened to me at mtv years ago, i had this exact experience, he asked me about it, i ended up talking about it on the air and in the next month or two, my -- the producers, everybody really reacted to that mental health story you told. it ended up being -- now it is this work i do and i met phil on the heels of that, he came in to

launch project healthy minds, he came in with a rapper named logic who had done a song that was the national crisis line for the national suicide hot line, on the mtv vmas and the call for the crisis line went up and it struck a chord with me that in popular culture, there wasn't this much advocacy being done in mainstream and it seemed like a lot of people needed help. so i just jumped on board. >> i think you telling your story means a lot, though, because to have a very successful person who millions of people watch every day and look up to say that, yeah, i struggled with panic attacks too, what happened, how did it come about? >> i feel like -- i joked it is like that movie "fight club," where the first rule of fight club is nobody talks about it. i grew up in the '80s, i didn't discuss mental health. one stat we always like to tout is that the time that elapses between somebody who has a mental health symptom and when they go out and get help, that time period is 11 years. >> can you, for the audience, i

think a lot of people suffer from either anxiety or depression or panic, but they don't know. they don't know -- they don't know if this is actually a mental health crisis or issue for them or this is just a momentary -- right? it is very hard to -- >> yes. >> self-diagnose yourself. >> totally. >> if you will. >> totally. i think that's one of the things that is important is it is easy when there is a cultural stigma around mental health. it is easy to justify to yourself that how you might feel isn't really anything serious, so it is easy then to put it off. part of what we need to do, like all things in healthcare, is get people started earlier in their journey working on their -- the same way you work on your physical health before you have a health crisis. >> we pick up a basketball game and you roll your ankle, how long does it take are you, like, did i break it, high sprain for you go to urgent care. maybe two hours? but it takes people 11 years, they suffer in silence, because

they don't know. i was having panic attacks. i dropped out of college, i'm pretty sure when i dropped out of college, i had a panic attack in that english class that led me to my counselor that led me to drop out. music saved my life. i hear music, it calms me down, it makes me feel good. i had a career being as close to music as possible strictly related to its relationship with me and my own mental health. >> and did it get better once you started -- >> yes, the best day i ever this is when i got diagnosed because i didn't know it was a thing. i thought i was losing my marbles, i had no idea what was going on. i didn't know that your brain could literally send a false signal to your body and tell you that there is an imminent threat here and you need to get out of this room when that actually doesn't exist. i didn't know that was a model. i didn't know it was anything real. >> the current state of treatment, does it involve psychotherapy and drugs? >> yeah. there is a whole -- >> both? >> there is a whole spectrum

from meditation to therapy, psychiatry, in patient, peer to peer. >> it is all mediated clinically. if you have low neurotransmitters, something that will predispose you to being depressed, you can only fix that with helping the chemical imbalance, right? >> yeah. >> will not be done through therapy. >> it can be done by all kinds of things. i think over people's lives, you need different types of mental health support. what you need at 22 is different than what you need at 32 or 42. >> and there is different things too. i was talking to somebody yesterday about acute depression, you have something that happens in your life that triggers you and puts you into that, it drops your serotonin levels significantly. it is harder to restart that unless you are talking to somebody and maybe getting drugs that would boost those serotonin levels. >> having this conversation, this platform in society now, popular culture, what i bring to the table, people see me, you're that dude from mtv and here you are having a conversation about mental health, trying to normalize the conversation or break the stigma. once we get to that, that's

point of all of this, project healthy minds and our gala and festival, the same way kevin love or anybody else in the press talked about michael phelps and i talked forever about this, simone biles, the more people that unlock their stories, people watching, they can relate to that. >> successful people coming and talking about it -- >> if they can do it, i'll be okay. >> it is something that is very open to be able to be talked about. >> i just love that you call yourself that dude from mtv. i remember watching. >> i know, right here. >> i'm having flashbacks of it right now. do you ever shut down times square? does 'n sync ever stop by? >> no. elmo. >> oh, gosh. >> elmo. >> and the naked cowboy once and a while. >> is he still around? >> i haven't seen him in a couple of years. he was here until about covid and then we lost him. >> thanks for letting me having a trip down memory lane by

coming here. >> thank you very much. incredibly important project and we appreciate your talking to us about it. >> thank you for having us. >> yeah. >> it is just past 7:00 a.m. on the east coast, you're watching "squawk box" on cnbc. i'm andrew ross sorkin with joe kernen and becky quick. we have a lot going on this morning. our top stories right now, the department of justice indicating it is now considering a breakup of google. the doj saying it may ask a judge to force the company to divest parts of its business like the chrome browser and android operating system. it says those services are used to maintain in legal monopoly and online search. boeing withdrawing a contract offer to 33,000 striking machinists. company said further negotiations don't make sense at this point. talks on a new labor deal breaking down this week. much of boeing's aircraft production has been halted because of the strike. and hurricane milton expected to make landfall on the west coast of florida late tonight. the storm restrengthening now to a category 5 hurricane. the tampa bay area and its more

than 3 million residents could face widespread destruction. the city hasn't taken a direct hit from a major hurricane in more than a century. quick look at the futures this morning. we got some red on the screen, the dow jones off about 14 points. dow should say -- s&p up about point and a half. the nasdaq off about 4 points. straight over to frank holland with a look at this morning's premarket movers. frank? >> good morning, andrew, joe and becky. rio tinto announcing it is going to acquire arcadia. very interesting chart. big jump up, their shares up over 30%. rio tinto pulling back just 1%. this deal will create one of the largest global suppliers of lithium, all cash deal transaction, for $5.85 a share. that's a 90% premium to arcadium's closing price. rio tinto considered an offer for anglo american, more focused

on copper. shares up 30%. rio tinto pulling back 1%. we have citi initiating coverage on 19 companies in the transport space saying that sector is facing one of the most challenging downturns in recent memory and the pullback represents an opportunity to buy some quality names at reasonable discounts. some top picks, u.p.s., shares up half a percent. csc, up a quarter percent, off its highs of earlier today. on the list, fedex, one of the initiations up a third of a percent. saia up three quarters of 1%. back-to-back upgrades on affirm. yesterday, btig, today, morgan stanley. up 3.5%. the buy now, pay later company will go to equal weight with a price target of $37, below where the stock is trading at right now. analysts say the company is on track to attract higher income users in part because it is now available in the apple wallet.

andrew, back over to you. andrew, by the way, interesting aside, you have a guest coming up, he's part of the reason i'm working here at cnbc, ambassador emanuel. i used to work in chicago, long story, part of the reason why i got the job here. all jokes aside. >> rahm emanuel, okay. frank holland, nice tease. we have mr. emanuel coming up, talking about china in a moment, thank you. coming up -- oh, really? i didn't realize this. the ambassador of japan, rahm emanuel has an op-ed in today's "wall street journal," taking aim at china's economic tactics. yes, one of the brothers emanuel. there are three. boy, are there ever. he's going to join us right after the break. stay tuned. you're watching "squawk box" on cnbc.

were you worried the wedding would be too much? nahhhh... (inner monologue) another destination wedding?? we just got back from her sister's in napa. who gets married in napa? my daughter. who gets married someplace more expensive? my other daughter. cancun! jamaica!! why can't they use my backyard!! with empower, we get all of our financial questions answered. so we don't have to worry. can we get out of here? i thought you'd never ask. join 18 million americans and take control of your financial future with a real time dashboard and real life conversations. empower. what's next. (♪♪) (♪♪)

what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

in an op-ed in "the wall street journal," rahm emanuel, the u.s. ambassador to japan is focusing on china's strategy of economic coercion. ambassador emanuel writes today, we can further isolate china by confronting beijing's economic tactics, where its determination to dominant is most apparent. it uses coercion, americaen tillism and debt trap diplomacy to crush competition and control countries. the u.s. ambassador to japan joins us this morning to talk about it. thank you very much for being here. china is front and center on our minds. we spend a lot of time talking about it in relation to what we have seen with the economic policies and most recently with the stimulus that has been boosting the stock markets until today. but what you lay out is a very real way of looking at diplomacy

and how we deal with them. how would you describe this entire thought process? >> well, mainly a couple for us here, which is one on the political, you try to always look at what i would say opposition of your opponent, in this case, china, is doing and then flipping in what is considered a strength by then a weakness. their attempt is to isolate country a, philippines, australia, et cetera, using coercion or the mercantilism. president biden with the tri lats between korea, japan and the united states or on the philippine front, we have done it on the security multilateral going to a more lattice work, multilateral approach. they're giving us huge opportunities. australia showed, as i laid out, how to beat back the coercion.

it was through expanding trade and economic opportunities to other countries to the point that china just threw in the towel. that is how lithuania did it with the eu. that example, you apply not only on the coercion front, but -- chile had to close their steel plant because of a massive dumping of cheap steel by china. that's going to give us a huge opportunity into the developing economic world where the united states can be a center of an economic system where their industry, whether that's on the steel side or higher end or ev side is protected. so we need to bring our economic state craft in line strategically so what you're doing diplomatically, from a security standpoint and economic point has a single effort of deterrence. that is what we did during the cold war. now it has to be applied here. >> how has china reacted to this partnership that is built up from the hub and spoke situation to be pushed back.

you mention the situation with canberra, they spoke out about china and wanting to know the origins of what really happened with covid. how does china react to australia, then turning around and saying, okay, we have all these other trade partners instead? >> i think the proof is that after three years of really trying to isolate australia and maximizing economic opportunities and economic markets in other countries, china through in the towel. exactly what happened with lithuania and the eu. we need to be the center of gravity on this anticoercion operation. the last g-7 held here in may, that actually, for the first time in g-7 talked about coercion. you have to have a strategy, an alignment, be able to identify what coercion is, i would argue what russia did to europe on using energy, that's a form of economic coercion. so my view is economic coercion is one piece.

the mercantilism where you destroy other countries' industrial base is another form of their economic kind of warfare. and then using debt trap to literally take acountry's sovereignty away from them or infrastructure away from them. all of that, while china sees it as a strength, is actually their vulnerability and you need to apply the same strategy of literally using multilayered. lattice-like work, multinational efforts, where china becomes the isolated party because their tactics is offensive economically, politically and securitywise to our country. think about last week, they were in conen frontation with fishin boats. they were in japan's space and on the coastal areas off the islands. they're doing this all the time to countries and the united states had a comprehensive integrated approach where our

strategy on the political and diplomatic as well as security and economic front is collaborative and cooperative and of the same vein. >> what do you think of u.s. companies doing business in china? is it a good place to do business, and should they be allowed to? >> they can do business there. i won't leave myself -- i grew up in a time where cost inefficiencies was the issue. i think u.s. companies who do that, that's up to them. it is a big market. but i will tell you, you know, china demands of the united states companies that they turn over their research. i'm sorry, your r&d, u.s. taxpayers subsidize that r&d. you're not allowed to turn over the family jewels just to have a market access. we fund that. and i just think for too long the united states is allowed commercial interests to occupy our national security. in 2012, when -- >> how do we fund the r&d?

>> tax credits. they take a tax deduction for it. >> we take a tax deduction, you should be held to higher standards? >> i don't think you should be in the position, not just higher standards, i don't think you would be in a position turning over your research to china. and china often, very frequently, participates in intellectual property theft and also economic espionage. there is a case with google, a case with asml in holland. that is part of their modus operandi. they make that a core piece of their economic strategy. tokyo electron competes against asml in the semiconductor industry. they don't try to steal ideas, intellectual property theft. and you shouldn't be in the position if you want access to the market you have to turn over your research. and your company's kind of basic core strategic advantage. that is part of the access. you can do it as a company, we're not going to ban them.

but we have to understand something. we held on to this view for too long that china was a strategic competitor. china adopted the view they are a strategic ed avadversary. i'm more than willing to be a competitor, but not more than willing to say to people, what part of the intellectual property theft do you enjoy? we have to be conscious of that. >> if we're partners with a country like japan, where you're the ambassador, do you disagree with not just this administration, but also former president trump's -- >> i don't disagree with this administration. >> in terms of should we allow nippon to merge with u.s. steel? if these are good partners and they're willing to invest money back into pittsburgh and other areas, like northwest indiana, should we allow this deal to go through? >> well, you know, it is in a process cfius, i'm in a position

i can't kind of fully comment. but i do want to -- >> lucky for you. >> exactly. i want to note two things. two things are very important. one, about four or five months ago when the united states made a decision to replace all the cranes for more secure cranes, the contract to build the crane factory in the united states was awarded to a japanese company by the united states. that says trusted ally in bright lights. number two, five years ago, when the united states was looking at toshiba, japan raised issues. it is not exactly, like, a one-sided issue. there is a question on the material fields, the national security question. it is in the regulatory process. i would note that if it is from an ally perspective, the united states has shown because we're the number one target for japanese from an fdi, foreign

direct investor, and we're japan's number one foreign direct investor for four consecutive years. that's not just allies, that's friendship, that's confidence, because stability, sustainability, has replaced just cost inefficiencies. >> so, rahm, in a perfect world it would be nice to always use coercion and isolation and set an example to not use tariffs. but in some of the situations you described, would you say they're never an effective tool or part of what you leave in the quiver under certain circumstances? because we talk about it all the time now. the dumping situation you talked about, is it ever productive to use a tariff or does it set a bad example, causes retaliation? >> look, it is a tool, and it is a tool in the toolbox, but it is not the toolbox.

and so, you know, do i say never use it? i can't even -- there is thousands of different types of permutations, so to say never would be wrong. it is a tool in the toolbox. there is other tools in the toolbox which i try to lay down. i think there should be a coalition of trade defense coalition with an article five-like principle at the core of an attack on one is an attack on all. that will have its own deterrence on china, trying to do what they did to australia to lithuania, to japan, to south korea at different points over the last seven years. that will also have its own deterrence effect. and then also working and bringing companies together to understand how to deal with not just coercion, but mercantilism. the reason i focus on this, we have a strategic interest to reach out, i hate this term, but

what i call the developing economies. what china is going to be doing on steel, evs, minerals, is flood the zone with cheap subsidized products. chile just lost their only steel plant affecting 20,000 jobs. mexico, brazil, south africa, friendly to china, just filed cases with the wto. having a strategy to confront that mercantilism is a huge economic and political opportunity for america to reach out to the developing world and be their ally. what chiniaa is about to do is turn off a huge amount of countries on the economic front and we need an economic strategy to welcome them into the bosom of what the united states and other countries like japan, like the eu, are approaching. because china is about to destroy their industrial base. that is what is going to happen and it is coming to a theater near you. >> ambassador, as we await that movie, one of the questions i have is ultimately as the

relationship evolves or maybe in this case devolves, is there a way to actually have this frenemy relationship? does that actually work where you can actually work together on one part of the world and not on the other? because i -- while i think the u.s. may think we can do that, i think if you're on the other side of that, it is a very complicated idea to hold both of these ideas in your head at the same time. >> look, i -- my attitude and, look, i think realizing the mistakes i had assumptions i had that were misplaced, china has -- you can't have a -- let me sit back up, you can't have a system, an international system that is based on a law applies to whether you're the biggest economy, or a developing economy. where one country is participating in intellectual property theft as a part of the business practice and economic espionage. google has a case. asml has a case. i can run down the litany. i can't tell you how many times

the chief of staff, companies with ceos would come to me and say i'm getting killed in china, but i need -- i say, okay, let's file a case. no, no, no. they live in fear of that. you can't have two systems, one by rules, by laws, applied universally and principally across the board and the other one, we're breaking the rules and stealing is kind of the business practice. it just doesn't work. now, you want to participate in the international economic system? okay. that's great. it is how you lifted millions of people out of poverty. you did not do it on some other just investment level. you participated in a world-based system. you're one of the, if not the number one beneficiary of it. and you did not participate by the rules in which everybody else was playing. and my view is, we can have a singular global system where trade is promoted, but you're going to have to play by the rules and not steal and cheat from people and crush their own

domestic economic manufacturing base or coerce them when you don't like that they said about either covid, the example of australia, taiwan, in the example of lithuania, where your economy gets crushed by china or attempted. >> does the world trade organization see things like you do? >> you have to ask them. >> or do you think they don't have enough -- >> here's the one case we do know. china entered the wto based on a set of rules they never really adopted. we have to either reform -- it was up to me, if i had a magic wand and it is not, we're going to have to basically on the wto modernize it to deal with the economy, or otherwise come to a conclusion, you know, it is not being effective. >> ambassador emanuel, thank you. >> thank you, guys. >> for your time today, we appreciate it. great to see you. >> thank you. i want to know one thing, how mr. collins got -- i didn't realize the mayor of chicago, my

patronage expanded to cnbc, that's a good piece of information for me. >> oh, excellent, frank holland, frank holland said you're the one who got him here. i don't know the story, but i'll find out. >> usually my power goes to the airports, streets and sanitation. cnbc, it is a whole new job opportunity for america. >> we will find out the story and get back to you, ambassador. thank you. >> have a good one. >> i owe my entire career to your brother. it is all in -- the only thing i'm worried about, i could turn 75 some day and with your other brother -- >> let me tell you, you're not going to die at 75, because we're going to kill you at 70. >> love that. >> thank you, ambassador. >> be good. see you. >> when we come back, oil's roller coaster ride escalating and the possibility of cooling tensions in the middle east causing huge fluctuations in the price of crude. we'll get into that story next.

and check out shares of nvidia up again this morning, gaining more than 25% of the last month alone. we're coming right back after this. da announcer: time now for toy's aflac trivia question. google announced its deal to bayou tube on this date in 2006. what was the price tag? the answer when "squawk box" returns. insurance doesn't cover. aflac! health insurance does leave a gap. but aflac gives people money to help close that gap. aflac! oh! coach prime got one on the line too baby! uh huh! see that's how you hold up a trophy. trust me. get help with expenses health insurance doesn't cover. find an agent. get a quote at aflac.com. i hope you're hungry. i'm glad i brought my own dinner. uh huh. honey... but the gains are pumping! the market's closed. futures don't sleep in the after hours, bro. dad, is mommy a “finance bro?” she switched careers to make money for your weddings. ooh! penny stocks are blowing up. sweetie, grab your piggy bank, we're going all in. let me ask you. for your wedding, do you want a gazebo and a river? uh, i don't... what's a gazebo?

something that your mother always wanted and never got. or...you could give these different investment options a shot. the right money moves aren't as aggressive as you think. i'm keeping the vest.

♪♪ data science can help address some of the biggest challenges in financial markets. if we focus on the mortgage market and follow the life of a loan from origination right through its pricing in the capital markets, our data science capabilities can provide a deep level of insight. at ice we have extensive data sets, especially around three pillars. the property, the mortgage and mortgage performance. this trifecta of data and its history is a bit of a data scientist's holy grail. ♪♪

and now the answer to today's aflac trivia question. google announced its deal to bayou tube on this date in 2006. what was the price tag? $1.56 billion, which is the equivalent to $2.4 billion today. crude prices steady this morning. 73, after a slide yesterday of 4% on news of a possible cease-fire between israel and hezbollah. but markets are still wary of an israeli retaliation against iran's missile barrage from last week. joining us now, tom closa, opus

global head of energy analysis. i guess it is quiet right now, tom, on that front. but if we go to before the most recent -- you know, it has gotten obviously, it has been upgraded to possibility of even a wider conflict, but before that, what were the dynamics? you had russia still selling oil, right? you got iran still selling oil. you got the u.s. as the largest producer of more than, you know, historically than we ever have before. was it a well supplied market prior to the worries about the middle east? >> it wasn't particularly well supplied. but it is never well supplied in august. august is the highest demand month of the year for crude oil. >> okay. >> it was pointed lower and i think it is still pointing lower because you have to consider that there is probably about 600 or 700,000 barrels a day of additional crude for export

that's going to come out as temperatures moderate in saudi arabia and iraq. you throw that in with the fact that you had a ministerial meeting last week, that suggests we will see additional crude on the market from opec plus in december. and you have a market that is pointed to the downside. there is a possibility that you can have a wider conflagration in the middle east, but it is not a probability. it is a little bit like it is a possibility that the giants and the jets may win the super bowl this year, but i wouldn't be betting on it. >> even with the new coach, i guess. if israel were to not go after the nuclear sites, but were to just really try to strike a blow against the refineries, would that change the dynamic? >> i'm sure in diplomacy right now they're having these conversations. and if the israelis do what they

did in april, when we had a similar analog to this and just hit some military targets that have nothing to do with oil production, i think you'll see the market drop. i think that oil is destined for much, much lower numbers and whoever wins the presidency next month is going to have a problem maybe of a little bit of oil deflation. all of the balances for 2025 point to more oil than the world really needs. and if you to have opec plus coming back to the market, with some of that production that they cut, i think it is a real problem in 2025. >> it is weird, $50 oil would be great, we can refill the spr, but then the industry starts shutting in certain nonprofitable fields, i dguess and we could cause the next price spike. it is hard to be you, tom, to try to figure out -- everything

has got an unintended consequence or opposite effect on what you're watching. >> it is very dynamic though. it is interesting to that extent. next year is definitely a problematic year. i mean, even the most bullish investment banks think that, you know, we could dip into the '60s or the '50s because we will have more oil than we need next year. the other thing is you don't have the big money chasing oil anymore. earlier this year, i said it was like the oil market is like iron judge. it doesn't chase. when you're not chasing crude higher, you're not putting a lot of money on that side of the market, and you're not getting that investor premium that was there for most of the last 20 years. >> do you have a nick knicks an. we have mets, rangers and knicks. next time. next time you come on, we're inclusive here.

>> well, my analogy is people look at rising gas prices or high gas prices like i look at the dallas cowboys. i just can't stand it, you know, there is no particular reason for it, but it has a visceral impact on human emotion. >> they're kind of cursed, i think. i think jerry jones is going to have a heart attack one of these days. i don't know. >> they are. and usually oil starts sinking osg the cowboys start linin december and january. so -- >> okay. okay. very good. thanks, tom. we'll be right back.

welcome back to "squawk box." boeing says it withdrew its latest offer after talks broke down. phil lebeau joins us now on the "squawk" newsline with more. what's the latest? >> these guys are no closer to an agreement, andrew. not a huge surprise that boeing issued this statement. they did have talks with federal mediators over the last couple of days. but as we said for some time, the indication of a deal anytime soon, they're just not there. and it remains more than just hey, can they get above 30%, boeing said in a statement when

announcing it was withdrawing the offer that it had enhanced its previous offer, which was for a 30% wage increase over four years, restoration of the annual bonus, and a couple of other key components that the machinists have been looking for. but notable in what is not included in the latest offers from boeing is the restoration of a pension. that's -- i said this for some time, from talking to people at boeing, that's a ridge bridge t. the cost implications near term and long term would be substantial. when you talk with machinists, the older rank and file members who had a pension, but then the program was withdrawn, starting in 2014, they believe the pension needs to be reinstated. so, that is one of the areas where there is a big gap between what the union wants and what the company is offering. but money is also part of it. 30% is just not going to get it done. does it get done at 35% over

four years? possibly. but right now the two sides are not close to reaching an agreement. >> very, very quickly, do you think that there is any hope that -- it sounds like it is on boeing's side at this point of the ball game, to actually come back, right? >> need to come back to the table with an offer? yes. it is. but the union is doing a tricky balancing act here. not only does it try to get the best offer from boeing, but at the same time, it has to convince the rank and file, i'm talking about the leadership of the union, they have to convince the rank and file that this truly is the best offer, the one that they come back with, because 96% voted to strike last time. when your leadership comes and recommends a contract and 96% say get lost, this is a terrible deal, you've got a problem with your own membership that you've got to shore up. that's the balance for the machinist leadership that they have to work. >> okay. phil lebeau, thank you. we know you got to run. appreciate you calling in this

morning. still to come, an update on preparations for hurricane milton. we're going to speak with fema administrator. but, nt, texhe chairman of the house budget committee will join us on a new projection for the federal deficit. stay tuned. you're watching "squawk box" on cnbc. ♪ - [female narrator] they line up by the thousands. each one suffering with a story that breaks your heart. like ravette, who needed help, because every step brought her pain. their only hope is a ship unlike any other. mercy ships.

the largest floating civilian hospital in the world to bring free surgeries and care for people who have no other hope. only 62 cents a day, $19 a month, will help provide urgently needed surgery for the world's forgotten poor. if you have ever wondered: "how can i, just one person, make a difference?" this is your answer. so many are still suffering. so don't wait. call the number on your screen. or donate now at mercyships.org. that's the number on your screen. ♪ (man) look at this silly little sailboat... these men of means with their silver spoons, eating up the financial favors of the 1%. what would become of them when they discover robinhood gold allows others to earn their very liberal rates on idle cash, unlimited deposit bonuses and handsome retirement matching?

they would descend into chaos. merciless chaos. it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! welcome back to "squawk box." according to the latest report from the nonpartisan congressional budget office, the federal budget deficit has hit

$1.8 trillion, with a trc, the highest level in three years. we're getting this news as economists try to parse the presidential candidates' plans to see how much they would add or maybe hopefully subtract at some point, but i don't think this is part of it. joining us now, house budget committee chairman jodey arrington. >> good morning, andrew. >> $6 billion a day is the cost. >> unsustainable. at some point, we're going to run out of other people's money and the people we're borrowing from, some of our foreign creditors like japan and china, by the way, will stop loaning us money to pay for an ever-growing government where we have almost $2 trillion in an annual deficit. if you look over ten years, we're going to add over $20 trillion to the national debt. we're paying over 50 cents on every dollar just to service the debt. that's more than we spend on all of national defense, that cost is almost a trillion dollars, that's more than we're spending on medicare now.

so, the wheels are coming off the wagon, and we have to have a plan to reduce our spending, stabilize the debt by just growing faster than we're spending, and getting back to economic growth. >> this would have been a good year to do it, because revenue was up 11%. >> yeah. we have seen record revenue, by the way. >> corporate revenue up 26%. but spending was up -- >> there is a great chart on the front of "the wall street journal." >> if we grow 1% -- >> we have been outspending every single year. >> we have. but, look, the foundation is always going to be growth. we had over 3% gdp prior to covid. and if we grow 1% over what cbo projects, the ten-year annual gdp average, which is 2%, paulty 2% -- >> but how do we grow and end, are we going to have a real

conversation about cutting? because i was going to say, in terms of cutting spending, neither candidate on the presidential end of things and very few in the senate and the congress seem to be talking about cutting anything ever. >> yeah. yeah, well, i think there are two myths on each side of the equation, politically. one party thinks you can tax your way out of this deficit hole and you can't. you'll run out of other people's money as margaret thatcher says and you'll destroy the economy, quite frankly. this is the worst time to consider adding taxes on our job creators or our families suffering with the worst and most progressive tax of inflation. at the same time, there is a myth on the republican side, that we can just grow out of this $2 trillion soon to double in the next ten years, et cetera, et cetera. about 130 trillion over next 30 years, won't happen. we won't get there if we don't rein in -- so we have to combine the cuts. >> nobody wants to have the cut conversation. >> i do. i do.

>> if i said to you, where do you cut? >> listen, let's start with unspent billions of dollars of covid, let's start with tens of billions in funding for -- >> where is that money, by the way? you read this headline, there is $200 billion, all this money from covid that has been unspent, where is that money? >> well, it is like the money we're spending on illegal immigrants. it is housing. it is healthcare. it is welfare. >> it is spent or unspent? people say this is like the covid money is unspent? >> appropriated but not spent. >> okay. >> it is just billions, but there are tens of billions in spending. in fact, it is 9,000 per illegal immigrant on -- cbo did a report, $16 billion on medicaid spending. this was last week. i can go through a list -- >> i also saw some new data, which surprised me and i don't know what you do about it. the cost of removing illegal aliens from this country could be astronomical as well, which we have not figured out.

>> put that in the deficit plans, why trump -- but we're not talking about cutting right now. on the trump side, no tax on social security, no tax on tips, no-noel -- it is crazy. do you know what this new entitlement for home healthcare would cost? it is $288,000 a year for people to be -- you add to that $25,000 for down payment on houses, $3600 child tax credit, $6,000 baby bonus, universal pre-k and paid family leave. that's not cutting spending, those are layering all this new spending, i don't know how much i just mentioned. >> that's complete new spending. but there is the other argument on the other side -- >> i said that, but -- >> not just that, you got tariffs and what does that do to the economy and how much can you collect in taxes? >> we'll ask ro khanna this. if we had 26% higher corporate revenues, why do we need to

screw with that and go up to 28%, on the corporate tax rate? >> i think trump has a list of things i would say are a starting point for negotiations. >> i'm not saying -- he wants to go down to 15. >> that's right. >> she wants to go up to 28. >> do you think that going to 15 is the right answer? given what you just laid out -- >> these are a list of proposals for consideration. what we have to do is keep taxes low, keep our businesses competitive. how that shakes out in terms of any one provision is -- >> i'm asking you specifically, all of these are specific. if i said to you, 15%, would you vote in favor of 15%? >> i'm more interested in locking in permanent tax breaks for small businesses that will expire next year, like the 20% deduction, the 199a for small businesses, where kamala harris and her tax proposal would allow that to expire and then when she says she's not going to tax anybody making less than $400,000, that's not true. there is 1.5 million businesses

that gross, as you know, well over 400,000, but they don't take home 400,000. >> if you go to 28, you add in state, that would be some of the highest in the world. >> exactly. >> what i'm saying is this, and can you have both ideas in your head and say them publicly, that the harris plan as it relates to taxes and small businesses may not be good. 15% may be too low? can you say that aloud? >> just for -- >> i'm saying that -- >> we're having a fair conversation. >> we need the lowest rates to have our job creators have the most competitive posture vis-a-vis their -- >> would you go to zero? >> we need, by the way, we need the lowest tax rates on our families who are -- whose wages have been burned through by inflation. >> would you only do it for companies that do it here? that's like weird corporate -- >> here is the point. >> isn't that industrial policy? >> here's the point, you can keep taxes low, but you have to

reduce spending commensurately. you have to bring down the structural imbalance in our mandatory spending which is 75% of the budget. you can't just defer the tax, which is what increased deficits are, a deferred tax on our children. >> my question to you, therefore, is your candidate is former president trump. >> yes. >> do you believe there are plans -- >> yes. >> -- that he has articulated that would bring down -- not just grow the economy, but bring down the costs and the spending piece? you're aware of those? and what are those? >> well, i can tell you that he's talked about this efficiency commission with elon musk. and i can assure you that starting with 236 billion in waste and fraud and healthcare and welfare entitlements, there is -- this guy runs a business. he understands you got to clean up your balance sheet. he knows how much waste is in the federal government. he knows the bloat that was

carried over in the bureaucracy from covid. he knows all the waste and welfare. he knows what incentivizing work will do to save money and get people out of the welfare trap. >> can i just ask, he was there during covid, and some of that bloat happened as a result of programs that he put we will to throw everything at it and he knew that in the moment we probably -- there was going to be waste, fraud, all sorts of things. here we are now saying that he's the responsible party in all of this. >> i would not say that. you're saying that. >> he's not? >> no. >> he's not the responsible party? >> look, there's a big difference having to spend money in the middle of an unprecedented crisis. everybody would say it was unprecedented. and a lot of unknowns when he was at the helm at the beginning of covid. fast forward to 2021, the first year of president biden and kamala harris, $1 trillion of

relief before they showed up. added $2 trillion, most of which not covid related. blue state bailouts, bailouts for jununions, pension projects and lit the fuse igniting the inflationary firestorm. very different. one president spent in an unprecedented disaster, one created an unprecedented disaster. >> you demonstrably believe without a bill inflation would have remained super low? how would you explain that relative to all of the inflation that happened around the world? >> supply chains had some -- >> okay. i believe, like you, that that bill, played a role in inflation. do i think that was the match that lit the fire? no. i think empirically the supply chains lit the fire. saw it happen everywhere else. >> add dollars to the supply constraints -- supply constraints there and throw it

too many dollars at it. >> larry summers, ask democratic congressman who said the bathtub was overflowing. we flooded the market we federal money, stimulus monies, creates a chasm in the -- >> larry summers also -- the united states did have lower inflation than we saw overseas. >> low inflation, higher wages, lower unemployment. we've had 25% recently. 2% gdp. no comparison in the pre-covid trump era -- and what we're experiencing today. >> and the world -- >> are you surprised -- quick, how strong the economy is today? given the corporate profits joe just mentioned? >> i don't think it's strong. >> you don't? >> no. last several months, save the last month, i think some problems with the numbers, have shown increase in joblessness. a 25% increase in unemployed people in this country.

anytime we've had that we've had an inflation. >> you don't believe the job reports we just got? >> government jobs, working two jobs. >> august numbers revised higher, too, though. >> the jobs numbers were revised downward by bureau of labor statistics by almost 1 million jobs. i like -- a lot more fragile than people think. carrying this kind of debt load, coming out of it -- i don't think the federal reserve would have put 50 basis points on their cuts if they weren't concerned about it. >> are you surprised stock market at all-time highs here. surprised by that? >> i'm not surprised. it's going to fluctuate but was lower than higher when feds cut the interest rates counterintuitive. >> it was terrible, you accept, and taerrible in the future, markets would be lower? >> just like the cbo report different than predicted.

joe biden's and krrsamala harri first year, $900 billion. almost $2 trillion. a lot more than projected, yeah markets more resilient than anticipated. >> thanks for being here. >> i'm a long way from the cotton patch of west texas. >> invited anytime you want. >> make your day. oil's going to 50 now. and cowboys are never winning another super bowl. >> oh, man. now you -- i didn't think you'd go there, joe. >> that's low. thank you. >> thank you. when we come back we are going to take you inside the shadowy underworld of counterfeit ozempic. a story you have to hear. plus, will speak with the fema administrator as florida braces for hurricane milton. you're looking at a live shot of tampa right now. stay tuned. "squawk box" will be right back.

new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job on indeed, it's easier for talented candidates to find it. which makes it easier for you to hire them. visit indeed.com/hire

ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

florida is bracing for hurricane milton with landfall

expected as early as tonight in the tampa region's if the storm strikes the city it would be the first major hurricane impact there in over 100 years. milton comes about two weeks after hurricane helene. that storm claimed over 230 lives in 6 states with $286 million in federal assistance distributed so far. for the latest on what we're doing about these storms and for the disaster relief we are turning right now to fema administrator deanne criswell joining us from raleigh, north carolina. helene this there hard and administrator thank you very much for joining us. so much activity. hard to know where to start. why don't we talk about what you're doing in north carolina and femas efforts there. >> yeah. good morning. so i'm here in north carolina right now and we're continuing to support governor cooper and his entire team with the ongoing efforts to meet the people that

have needs across all of these impacted counties. i had an opportunity yesterday to travel with the governor to burnsville and to spruce pine, and even had an opportunity to talk to some of the major employers as well as some small businesses as well as residents and first responders to understand what their impacts are. we have been bringing resources in and personnel to help support the ongoing efforts and will continue to move people in. we're starting to see a lot of progress in certain areas, but there are definitely some parts of appalachia significantly hit and it will be a while before we can get the water and power restored in a few of those areas. >> it's been two weeks, and there has been an outpouring of frustration that has played out on social media. in some cases people saying that fema hasn't been there, that they haven't been there to support them, and other cases saying they've, federal authorities have actually turned away local volunteers trying to help. what do you say to all of that

pushback out there? >> yeah. it's unfortunate that we're still having this conversation. it's a false narrative, and it's just a distraction to what we're doing here on the ground. just because you don't see somebody in a fema shirt walking around a community doesn't mean fema's not there. much of the water and food that's been delivered into these communities came from our warehouses. we have experts from the army corps of engineers and the department of defense that are on the ground helping out in these communities. and we've had staff embedded at the state eoc side-by-side with the state and we understand the needs and meet the needs and get the resources in place. we've been on the ground since the storm passed through appalachia, still here and will be here long as needed to meet the needs of all of these

communities. >> is this an example of a storm that's just so big and so powerful and has such a wide swath through so many states -- it's hard to imagine being able to put everything back together very quickly? >> i mean, this was definitely a historic storm. it hit six different states, and each state had a different type of impact. right? when we look what it did in florida with the storm surge and the wind. we look at, in georgia, where it was primarily the damage from the wind and a lot of downed power lines from trees. but then in all the states in appalachia, that flash flooding. all of them have very different risks but we have had personnel across all the states impacted. i have leadership teams embedded with all of the governors' teams to ensure we're continuing to meet their needs and we're still preparing and pre-positioning resources to support florida for hurricane milton. >> president trump has, former president trump, has been

critical as well talking about how families in emergency can only get $750 for some of the things that have come through. there's been criticism from lots of political angles, but what does that do to your job on the ground, and is it true? >> well, let me just set the record straight on the $750 first. right? we know some people have immediate needs. they need to replace medicine, maybe buy clothes. official food and water. that's an initial financial assistance to help them meet those immediate needs in the beginning, but as people register and get that funding we're also giving reimbursement for repairs, for damages incurred in their home, or lost belongings, if they incur costs when they evacuated and displaced. right? we also have a hotel program where we're putting people into hotels that have been impacted. a lot of resources. these types of programs will continue to support individuals

that were impacted throughout this response and the recovery effort. and where it impacts is that it creates distrust, and i need people to apply for this assistance so we can actually get them the resources they're eligible for and desperately need. >> what happens to homeowners whose homes were flooded, they didn't have flood insurance, as was the case in many, many, many homes that were damaged in north carolina and other places. what can you do for them? what will be allowed to be done? are they ever going to be able to come back to their properties and think of rebuilding? >> yeah. i mean, insurance is certainly the first place that we want people to go, but we know that a lot of people did not have flood insurance, and that's where our programs come in and theyhelp jump-start the recovery process for them. we can give them funding to help with the repairs to their homes. we can give them funding to help replace things like their refrigerators or other appliances.

or a lost vehicle, if it was their primary vehicle. we'll also be working -- i'm sorry. go ahead. >> how long does it take for that process? people, who for two weeks, their world's in turmoil. how long does it take to get things like that done? >> we've already given out several max grants to individuals that had damages to their homes, and so as they register, and as we validate the damages to their home and we use things like aerial imagery so we don't need somebody to go in-person. that money is already flowing out to the communities and the last number this morning was over $35 million here in north carolina alone has gone out into individuals hands, into their bank accounts so they can start that process. >> how are preparations going for the latest, with hurricane milton coming in? >> yeah. we're expecting, again, just another historic storm now to

hit the west coast of florida. three years in a row they've been hit by these major storms, but this one is going to be, i think, unlike any of those. it's going to be a very strong, dangerous storm with significant storm surge and a major met pra pau -- metropolitan area. i was anble to meet with the mayor and checking quickly on initial needs from recovery on helene and concern preparing for this storm. getting out of the storm's path is most important piece. i believe people still have some time to get out of harm's way. the storm surge is what we're so worried about. you don't have to go far. we want people to just move out of those evacuation zones, but we are prepared to help support the state of florida with the efforts they're all right putting in place. we have over 1,200 search and rescue personnel from our teams as well as the department of

defense, the coast guard as well as other federal partners that have vehicles and aircraft that will be able to go in and support the state with all of those initial search and recovery efforts to help them as this storm passes. we're sending in additional resources as well, same things that we sent in prior to hurricane helene, to help with the initial stabilization after it. >> does fema have enough money to make it through hurricane season? >> so right now we've been watching our disaster relief fund closely and we have absolutely enough money to support the ongoing efforts for hurricane helene as well as what we anticipate we're going to need for hurricane milton. but we need to evaluate how much this is going to have an impact on our disaster relief found see if we can sustain additionalments, because hurricane season is not over yet. >> administrator criswell, thank you for your time today. >> thank you. when we come back, the doj

indicating it is considering a breakup of some of google's services used to advantage its search engine. more on that story straight ahead. "squawk box" will be right back.

the department of justice is indicating it's considering a breakup of google. doj said it ma? a judge to force the company to divest parts of its business like chrome, the browser on android operating system saying the services are used by google to maintain an illegal monopoly on online search. founder and managing partner at -- you need to be able to look deep into the future to even have this discussion, i think. right? should we even bother? should we try? it would be years before we actually see what comes of this. right? >> that's the main point. probably reporting on this about three years early. it takes a while. the who major topics to follow on this that are relevant, microsoft from 10, 20 years and

ibm 10 20, 20 years before that. both companies resulted in nothing. no breakup. no major change. remember, the doj did say today that they would seek a number of remedies including, up to and including the most extreme bakeup. it's possible more modest changes could appear. one would be this, right? so right now chrome is embedded, the default position on a number of platforms, samsung and so forth, across the internet and across hardware. you can imagine something as simple as when you turn on your machine for the first time or tenth time or nth time you're prompted to ask which browser do you need to use? google if propose that and doj could accept. the big user is for google. after all of these many decades of extraordinary story, the storied company, google, alphabet, it remains basically a

one-trick pony. the revenue. the profit. the enormous success of google comes down to ten blue links at associated and search revenue. their ox could be gored but a lox time before we really know what's going to happen. >> and google, it would point to the judge's acknowledgement, people use google. very high quality. again, you point out why does it cost billions of dollars then -- >> that's it. the judge here a very smart guy calls himself by the way, a hip-hop kind of sir. he found google to be monopolist, law, his ruling, fact finding hard to give a return, found that google search quality very high perhaps highest. google has come out swinging with their public defense. it's definitely going to be, we are the best and in the best position because we are the best at search.

now, of course if that were the only reason why would google spend billions? billions with a b, getting these default position contracts on platforms like samsung and so forth? but i do think that, that is going to be the public defense. we know that. an interesting other tidbit about this for viewers, your viewers, is that the u.s. and the eu seem to be marching in lockstep on this google antitrust. about a year ago european anti-trust force called google, alphabet and five other companies, five of the six american, five chinese and one european. six companies so-called gatekeepers to the internet, digital life and google is one of them. this means no major way to get to an onroad to the internet as company or competitor challenger without going through these companies to reach the end consumer. a year later now, after the judge fact-finding ruling in august, the doj is saying, we,

too, believe this is such a severe gatekeeping fact, perhaps one of the only way is to get the internet's blood to flow again avoiding sclerosis is a possible breakup. i don't predict a breakup. i predict, my own personal prediction, i predict it will be half measures, intermediate measures and eventually the market will cure this is. we've seen recent reporting google's dominance in search is finally challenged after many decades by the growth of a.i. and, of course, platforms like tiktok, which as you know, i believe to be digital fentanyl. even search dominance is being challenged. >> michael, my big question. are regulators fighting last decade's war, if you will? which is, if you believe that openai and complexity and claude and xai will provide the answers and break the blue link model,

what are we talking about here? >> a very good question. why is it regulators are so good at fighting the last war? so good at fighting the last war. in the wrap-up to the last war, which in fact was microsoft, the circuit court of appeals in that case, overturned findings of knoplistic breakup, the sherman law, antitrust, was not devised to cope with software. devised for age of vertical and dieing a neale -- diagonal companies, steege companies, i believe they're camping up with this war and i think by the time -- catching up with this war and by the time the future rolls on you will see google search will be less dominant. i think better for google's

business to inanovate and it could be as impressive as -- >> that's almost -- you know -- an anathema to the regulators? >> certainly lina khan doesn't like aqcquisition believes everything should be the way it is back in stone age. i agree. the note they're sounding now and i wish lina khan would change her mind. she underestimates the chilling effect that her ftc antitrust policy has had on investment in silicon valley. america's silicon valley is tip of the spear of the global economy and i don't believe lina khan and her team appreciate making acquisitions very difficult they are disincentivizing business. >> embarrassed in i was eu. going after -- yeah, we have none that we're developed here. >> there are a lot of reasons for eu to be embarrassed.

it's a continent of 500 million people, european union and don't have a single new idea. embarrassing. instead of attacking american companies de companies -- keydecriminalizing basically said, you can't innovate. it's very good for food or -- you watch the sunset, want your -- >> got to they're dieing in the control room. i love paris. >> as you know. i love paris. >> always have paris, michael. thank you. >> always have paris. >> remember every detail. all right. okay. coming up, we're about the latest deals on wall street and ozempic's underworld.

the black market of obesity drugs and a special story you do not want to miss. stay tuned. ♪ yeah, they made me who i am ♪ ♪ so i'm off to see... ♪ we invent them. we design them. we build them. and one day, we have to let them soar. ♪ i'm always coming home ♪

welcome back to "squawk box." lower inflation and interest rate cuts could bring life into dealmaking. our next guest says structured mma involving creativity, especially scrutiny's large companies, joining us, global restructurings for goldman

sachs. complain what you mean by structured deals? >> spin-offs and the like. mma aren't purely domestic we call structured mma. >> you think right now that's where all of this is moving, because -- >> very much so. look, structured mama en vogue n the last years. active portfolio management good corporate hygiene. more clients and companies focused on that. three reasons. from the standpoint of focus and clarity, can i drive operational improvement. a narrower set of businesses. second, valuation. can i drive enhanced total shareholder return? providing a dedicated equity, and third is capital. can i allocate capital? >> the question i always have about dealmaking. there is a build it up, tear it down sort of cycle.

sometimes mega cycle sometimes impulsive. why are we in the tear it down cycle now and when will we go back to the build it up cycle again? is that regulation? what is that about? if the idea of the tear it down and the focus makes sense, does the other, does the build it up ever make sense? >> it does. clearly there's synergies that come from diversification and scale. and at one point in time bigger was better. i would say coming off a period where capital is free. cost of capital is free. where you could feed multiple businesses allocate capital across different divergent subsidiaries. that's changed. right? cost of capital significantly increased. makes for a much harder decision in the board room in terms what businesses to focus on, what to grow, and ultimately more companies are asking, are they the optimal owner of an asset and increasingly you see more deals announced, choosing to set them up as independent sd

companies. >> where is private equity? such a big part of the m & a, you think that's where, those guys would be buyers but doesn't seem to be they're all the buyers. seems more strategic this time? >> yeah. private equity, right, disadvantages from both cost of capital and business spreads. we think they're dissipating. as you setting we see private equity comes back in. to your lead-in, creativity matters. private equity looking to partner with public and strategic investors in these transactions. >> what kinds of premiums are people getting right now? >> depends if it's cash or stock. in a control transaction still looking at 30%-plus transaction. >> what's your pipe line like? investors saying a lot of

dealmaking? usually lifts all boats when it happens. >> it's robe boast. m & a side and a grow be pipeline. >> david, nice to see you. >> thank you. when we come back, silicon valley congressman ro khanna joins us to talk about the state of the race for the white house less than four weeks out from the presidential election. and a cnbc investigation reveals counterfeit ozempic and other drugs sold online and illegally shipped into the united states. we have details next. stay tuned. you're watching "squawk box" and this is cnbc.

(man) look at this silly little sailboat... these men of means with their silver spoons, eating up the financial favors of the 1%. what would become of them when they discover robinhood gold allows others to earn their very liberal rates on idle cash, unlimited deposit bonuses and handsome retirement matching? they would descend into chaos. merciless chaos.

ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the

number on your screen, or visit coventrydirect.com. a cnbc investigation reveals how counterfeit versions of novo nordisk, ozempic and other weight-loss drugs are sold online and illegally shipped from other countries into the

united states. a worldwide problem the pharmaceutical industry says is causing serious issues. >> reporter: not far from the majestic rocky mountains, a quiet tree-lined street and a modest light gray home. not the kind of place you'd imagine an investigation into black market ozempic would lead, but it did. our look into counterfeit weight-loss drugs started with purchasing ozempic online from labor beauty, a company we thought was based in colorado. what we found was that its part of about international marketplace where criminals are brazenly counterfeiting these drugs or buying the real things overseas on the cheap and illegally shepping them to the u.s. to turn a profit. the main targets, novo nordisk

diabetes drug, wegovy and mounjaro and zepbound in a class of popular weight-loss drugs known at glp-1s. they cost $219 and real ozempic cost $21 for a month's supply. they claim they're located in boldululder, colorado, but we s this off an elevator behind an unmarked door right to us at cnbc headquarters in new jersey. >> let's open it up and see what we have. a plain cardboard box. doesn't appear to have any refrigeration, although it's supposed to be refrigerated. looks like might have been refrigeration pack at one point although it's warm now.

it says ozempic on it. 1 milligram, here's the novo nordisk logo and the pen. looks like the real thing. let's see what's inside. >> reporter: was real ozempic? a colorado address. we answer that question. first, our investigation brought us to the uk where hundredses of counterfeit ozempic pens have been seized. hard to tell what's real and what's not. the fakes are that good. deputy director of criminal enforcement for the medicine and enforcement agency. >> which one is genuine and which is the fake. >> reporter: this one is real. the other one with the purplish pen isn't. >> it is to us a very crude copy, not in any sense at all but enough to make people who don't have the knowledge and comparison to make inject this into themselves and cause themselves harm. >> reporter: a total 869

counterfeit were seized relabeling insulin pens. >> completely counterfeit products manufactured somewhere. we don't know exactly where, and made to look very much like ozempic pens. >> reporter: now, back to the ozempic with bought online. novo nordisk says the ozempic we received appears to be a diverted legitimate product produced for and distributed to a chinese market during late '23 and early '24, therefore, it would be unauthorized, unapproved for the u.s. market. the company went on to say the it cannot confirm the sterility preventing increased risk of infection for patients who use the counterfeit product. one question remained. what is the connection between this house listed on the labor beauty website and this office in china? the home owners told us they have no connection to the chinese ozempic seller at all. labor beauty not respond to our

request for comment. the day after sending that request the colorado address was scrubbed from the website. >> and that address in boulder, colorado, a sales rep told us what'sup the previous address of their u.s. wear fouse. clearly a home in a neighborhood. law enforcement tell us the ozempic received from china is connected to an ongoing federal investigation into ozempic packages shipped into the united states. by the way, this is jut a small part of it. watch the full investigation scanning the qr code on the screen with your phone or go to cnbc.com, back slash, ozempic underworld. >> raises huge questions if you ordered this from outside. you wonder what you're getting. what's in it if it's not the actual thing? what are the counterfeit -- what's inside? >> went to eli lilly and showed us a number of sophisticated -- straight up ins liss does not

induce weight-loss. not demiabetic, serious implications. and not refrigerated, saline, what the u.s. has seen in counter fits actual ozempic pens used ozempic penned filled with saline. could be looking at the package looks like the real thing but side-by-side, looks like the real thing, no, it's not. >> not only not the real thing injected into somebody else, using used needles? >> that is a question. you continue to know what you're doing buying anything online. >> pre-owned -- >> gently used. >> disgusting. a needle that's -- >> already been injected. >> may come with new needles but you don't know what's inside the vial. >> and how are nknow nordisk, hw are they fighting back? >> serious to them.

investigators teaming up around the world. not just the u.s. coming from everywhere. epicenters everywhere. turkey, for instance, a hotbed of counter fits coming into the united states. china is. mexico. europe. you might ask why? because it's a lot cheaper. first of all, very good counterfeiters in these countries. just outright fakes. also, the difference between the list price and the u.s. and list prices in those countries are tremendous. so if people in those countries can obtain those -- you know, prescriptions, obtain the medicine for a cheaper price sell it to the u.s., that's profit. steal it, it's -- >> best you can hope for as a u.s. consumer buying this stuff. you don't know what you're getting. >> even if you get the real thing, has it been sitting in the warehouse heated up for ten days. >> thank you. melissa lee. talking small and midcap

performance plus democratic congressman ro khanna weighs in on short sellers report accusing roblox considering growth over child safety and a big story about potentially breaking up gole > you're watching "squawk box," and this is cnbc. it's changed his quality of life. leo's number 2's are really getting better. better poo, better you! that's a good boy, leo!

all right. get back to the markets. just under an hour to go until the opening bell on wall street. our next guest likes midcaps in the near term. joining us now is the head of u.s. small and mid-cap strategies and senior strategist for bank of america research. why midcaps? >> think about fed cutting obviously this is, supposed to be positive for small caps. actually underperformed since the 50 basis point cut. the reason ithink a lot of investors are looking for fundamentals for smaller companies and stuck in an earnings recession. we haven't seen that recovery to positive growth the way we've seen for larger stocks. i think mid-caps could be a better hedge for the near term. they've seen better earnings

trends and still done well historically and often times better than small caps following the initial fell rate cuts initially. those who want to spell it down better than small caps now. >> yesterday somebody told us small businesses still pay about 10% interest on average to get a loan. even though the fed cut rates at this point. is is that mart of the thesis? for a small business still takes a while even after the fed cuts rates for that to trickle down. >> certainly some small businesses and others may be more tied to the fed funds rate. one isn't going to resolves small cap space, half their debt, short term or floating rate. so the more rate cuts we get, the more that helps to mitigate the refinancing risk that a lot of these companies face, but there's also sector specifics that are sectors like real estate and tech within small caps even if we get a handful of rate cuts still face a lot of

refinancing risk. >> are there sectors you like within the mid-caps too? >> i think overall. within both small and mid-caps this is an environment where you want to focus on themes or styles. even more so than sectors, because within small caps even though we've still been cautious given the fundamental backdrop, in a soft landing, our base case, and if we're in an environment the data holds up, the fed's cutting rates. if we see revision trends and corporate commentary turn around then maybe later this year once we get past the election, could be a better environment for small caps. usually volatility, stays high ahead of that. for now focusing on stocks with positive rather than negative revisions have been rewarded. higher quality stocks, and even stocks that have dividend yields because as the fed's cutting rates that should drive money out of the shorter duration and

into equity income. >> are there -- issues that you see with -- i guess the economy coming on? a lot of discussions this morning about whether the economy is starting to turn down? whether it's more complicated? what does it look like from your perspective? >> overall, certainly in a weak macro environment recently, which is one the reasons corporate earnings may see this quarter, will see reacceleration after this quarter, and i think when you look at the balance of data, we're still expecting the u.s. to stay out of recession. obviously the reasons data in terms of gdp revisions and jobs data recently is encouraging. we'll see if that continues. we track a regime indicator on our team and that, after being in a more positive phase for much of the year turned down into more of a downturn phase

the last two months, which tends to be a phase you don't want to earn small caps and risky. tilt it up and stick with quality and volatile in underlying components. >> and from apollo saying he did not think there should be additional cuts on interest rates because he thought the company was doing so well, so well it was a mistake to cut interest rates. shocking from a person who's in the private equity business in large part who you would think wants interest rates to be low as humanly possible? >> yeah. i think the rate cuts, for the overall market, corporates have been able to adapt to higher rates, and especially for large cap stocks. they've been able to do well in this environment, we've been in an environment where the economy has held up. a year ago many expected recession. we managed to stay out of that. i still think for small caps the biggest focus and one of the biggest reasons we saw a big rally in july and in the

russell. investors were focused on the fed as a catalyst for smaller companies given how much investors were focused on refinancing of these companies' space. smaller company, that's really where the issue lies, since large caps have been able to adapt ux and particularly for some sectors. >> if the labor market really is the slightest bit indicating some weakness, i can understand it, but if it's just to keep the, if the default move is to keep the punch bowl going, because people love easy money, or because you're worried about -- >> the point, look theal at it . the rick, go in the other direction. not a good day. >> i mean, why i was thinking the fedor market. what was the 50 all about? the last 20 years, addicted.

love the wall street traders. low interest rates. you don't need them save it for when you do need it. >> that suggests, things aren't very good. underlying piece of it, given the number of people -- >> but the fed seems to be thinking that it's -- i don't know. a losery, that it's so good. i don't know. >> and fed is cutting into accelerating corporate profit cycle, frequently happens, maybe inflationary. within our overall equity market yot look and within the s&p as well had overweights on cyclical sectors that could benefit in the backdrop. >> giving fiscal people, even spend more and, also brings down the overall debt, the interest you're paying on the debt. i don't know. i'm not sure. i don't want to be on the set. >> joe, thank you. >> thank you. coming up, a california

congressman ro khanna joins us on the race for the white house and key tech lines including a possible breakup of og igolen its backyard and what's really happening on roblox? we're coming back right after this.

it all started with a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?!

and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! tax smart investing today, helps to build a stronger tomorrow. at pgim custom harvest, our unique direct indexing approach seeks to help investors achieve better after-tax outcomes. pgim investments. shaping tomorrow, today

. now less than four weeks until election day. a look at the state of the campaign, money and politics and more we welcome congressman ro khanna. a democrat from california. 17th district. located in the heart of silicon valley. he's a surrogate for the harris-walz campaign. thanks for joining us. actually, ro, a, chongman, ro-joe, all the congestion about, about maybe doing something. had a -- we had a minute, a moment, when they weren't sure what to do. i think it passed us by, and now we know that, the two sides are set in who they're -- earlier we

talked about silicon valley being a little bit different. an interesting piece. what do you work for? "new yorker," "new york magazine." >> wrote a story for "the new yorker." you deal with it all the time where the tech titans are coming down and more, at least a few now, aren't afraid to say "the "t" word out in silicon valley. and talk google. all under your purview. do you agree? >> the biggest -- >> that's a no, then. >> biggest news our google won the nobel prize. two of folks win the nobel prize. two people have done more than probably any politician in congress. at&t, bell labs, won nine nobel prizes. i am for sense tab restrictions. google shouldn't have dealing with apple, and the idea break

them up especially with chatgpt has over 100 million users. they're having the most competition today than ever before. doesn't make sense. >> and how do you think it plays -- if it took years, the market always moves by the time they get around to things. >> by the time they break it th up, there will be some other a.i. company. >> which, initially, you would think that regulators might say, in the past, we've seen that by the time we enact these things, the horse has -- the toothpaste is out of the tube and there's a -- the market cures a lot of these monopolistic trends, right? >> and have more narrow, tailored solutions. why wouldn't you want the search profits invested in deep mind so we can have more nobel laureates discovering human proteins? there's a reason bell labs was so successful. now, have them not play fair and have a competition, but just this idea, break them up, to me, it doesn't make sense.

>> how about, you up to speed on this roblox? we read it yesterday and couldn't believe some of the stuff we were reading. >> there, i think, needs to be regulation. you've got hundreds of millions of kids on these platforms. i had moms in my office who had lost children because of the choking challenge online, because they're getting fentanyl online. here, of course, you've got these video games where kids are being preyed on. there's a kids online safety act. there are only 15 members of congress on the house who are on that bill. we've got to pass that. the senate wants to pass that. >> why is that so hard to pass? i don't understand that. >> this is where i do think there's the lobbying that the "new yorker" article mentioned but if the guy from silicon valley can say, let's protect our kids, all it says is, age verification. you've got a standard to protect children. you have to make sure that you're protecting against

predators. >> who is pushing back on that? >> look, i think there are some tech lobbyists who are pushing back on it. >> is that coming from roblox, meta? who's the prime mover here? >> i think there are groups that are some funded by meta, and they make arguments that i don't think hold water. they say, well, if you're lgbtq, you need the internet, but you know what the bullying is more for lgbtq kids online, three times than it is for non-lgbtq kids, and all the kids online safety act is saying, age verification, protect children, make sure there's a standard of harm. so, i think this is a case, really, where tech lobbyists need to be defeated and let's pass the bill. >> let's get back to -- we'll talk the campaign at this point, and there are, you know, competing plans for how to not kill the goose that lays the golden egg that you love so much out in silicon valley, and we've

had some on make a pretty good case, joe lawnsdale or even elon musk, for a light touch on regulation and taxes for the silicon valley titans. do you prefer what -- tell me the best thing kamala harris is proposing to help the entrepreneurs in silicon valley? a 28% corporate tax rate? >> the best thing is she's proposing is massive investments in science and technology. silicon valley was built on the investments made by darpa, by nih, nsf, a lot of the technology was commercialized, and she's saying we've got to continue to invest this and we've got to invest in a.i. and the public research on a.i. >> do you think the government, i guess, taxing people to raise money to give to technology or to do research is better than just getting out of the way with regulations for silicon valley? >> well, we need sensible regulations to protect our kids. >> okay. >> to make sure -- look, on an

a.i. chatgpt, you don't want someone asking it, how do you commit suicide? make sure there's regulation. how do you make a nuclear bomb? >> why raise the tax rate to 28% and then subsidize through the government for research and development? it just -- you're taking away on the one hand and then adding and getting the government involved on the other. just let them do it. >> this is why we've got -- >> let them do it at 21%. >> because you're along looking at investment that's ten years down the line. making transformative investment and change is something our government is good at. our tax receipts are only 17% of gdp right now. in the '90s, it was around 20%. this idea that we are overtaxed is empirically not true. >> we did have some record receipts this year, 11% revenues at the same time the spending went went up 11% so we're running a $2 trillion deficit. do you think it makes sense to

spend more than we're spending now and tax more to pay for it? >> let's look at where we can bring down spending. one place is to be smarter on defense. we've got all these legacy industries, five prime contractors. why don't we have some of the defense tech compete? look at the f-35. lockheed had an exclusive contract, $1.7 trillion, cost o overruns. let's look at areas where we can bring down costs. i'm all for that. we disagree on taxation. i want to tax some of these folks more. >> we've come up with the current -- it's probably the sorkin plan. i think you had it first, taxing some of the loans. >> i read his op-ed in the "times." >> is that where you got it? >> i get all my ideas from other people. it was a reasonable plan. i said if sorkin's for it, you know? >> that's after you came on and said the unrealized capital gains was probably not a great position. then you got yelled at. >> yeah, because it's not a

smart position. that's not the way to go after taxes. >> but it's a surrogate -- as a surrogate, you're not supposed to come on and disagree with what you're supposed to be saying here, ro. >> i represent the valley. one of the things in the valley, people say, why are some people moving away from the democratic party? one of the things they value is the free exchange of ideas where you're willing to say what you believe, where you can criticize folks and not just be party line, and i think that that's what built this country, this freedom of speech. i'm much more progressive than a bunch of people who support me there, but they know i'll engage. >> that was good. that was a really good stump speech. remember what you just said in case we -- wi think i could say that too. >> you should. the midwest. >> that's right. congressman, always good. whr you're in studio, odgo to see you too. >> great seeing you. >> we'll be right back. . my bror max recommended you. so, my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out

of 10 of our clients are likely to recommend us. our neighbors, the garcía's, love working with you. because the advice we give is personalized, -hey, john reese, jr. -how's your father doing? to help reach your goals with confidence. my sister's told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial. daughter: hey, dad. dad: hey, sweetheart. daughter: what are you doing? dad: i'm gonna clean the fence. daughter: it's a lot of fence. dad: you wanna help me? dad: aim at the wall, but get closer.

daughter: (gasps) what the?! daughter: alright. dad: side to side. when you work with someone who knows a lot and cares even more... you can do this. ...you're unstoppable. (♪♪) wow... are you kidding me? you can do this. at truist, we believe the same is true for banking.

it's mine. you, ok? yeah, are you ok? we're fine. my serve. maybe we should stop. this pinewood pickleball champ stops for no one. we got our melons checked. she had a concussion. admitting i was wrong is worse than losing at pickleball. saving your brain is a definite win. don't mess with your melon. if you hit it, get it checked. oo welcome back to "squawk box." a final check on the markets. right now, you're looking at some red arrows. the dow, off about 14 points. the nasdaq, looking to open down about 22 points. the ten-year note sitting at 4%

and the two-year note sitting at 3.971%. let's show you oil real quick. talk about bitcoin but we'll show you oil right now, wti is $73.25. bitcoin, still over -- did you see the news from hbo about who may be satoshi nakamoto? >> he looked like an average guy. >> "squawk on the street" begins right now. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. futures steady on the back of tuesday's 1% gain, a heady mix of corporate news today. google, boeing, pfizer, nvidia, and some macro with fed minutes and more than half a dozen fed speakers today. our road map begins with the storm watch, though. the monster cat 5 hurricane milton bearing down on the florida coast, tampa bay bearing