Skip to main content

tv   Squawk Alley  CNBC  March 14, 2016 11:00am-12:01pm EDT

11:00 am
good morning. it is 10:00 a.m. in south by southwest in austin, texas. 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪ 25 lighters on my dresser yes, sir ♪ ♪ you know i've got to get paid ♪ good monday morning, welcome to "squawk alley." jon fortt and myself. kayla tausche in austin at the annual south by southwest festival where the president waded into the fight between apple and the fbi over the weekend, made some big headlines. morning, kayla. >> reporter: good morning, carl. it was quite a keynote to kick
11:01 am
off the the annual film, music and technology conference here in austin. the president and the first lady in town for a democratic national committee fund-raiser in dallas. and the president stopped by for a conversation late friday about that debate, and about technology in this country. but that legal standoff between apple and the fbi took center stage. >> we recognize that just like all of our other rights, freedom of speech, freedom of religion, et cetera, there are going to be some constraints that we impose in order to make sure that we are safe, secure and living in a civilized society. >> reporter: the president did say the debate won't be settled with a, quote, absolutist view. and he said that while he understands the value of en description for citizens, that he does worry that the sophistication of the devices we will eventually carry will mean we are all walking around with the equivalent of a, quote,
11:02 am
swiss bank account in our pockets. that debate aside, though, the president's very presence here at south by southwest has fueled more criticism that this conference has become simply too big. it does add about $300 million to the economy here in austin, but it swells the population by about 30%. so the criticism has continued. but nonetheless, it has become a favorite for a lot of companies to build brand recognition, whether it's big startups like spotify, uber, lyft to blue chip names like mcdonald's, united, pepsi, budweiser. evening this morning, goldman sachs who has representatives here in austin, it will be buying a company called honest dollar. that it believes is the future of retirement benefits. it's a mobile company, it's based here in austin. they are going to continue to keep it here, but it just shows you, carl and john, how every company is trying to throw their hat in the ring when it comes to tech, and it comes to
11:03 am
innovation. and so certainly, every company that wants those buzz words to apply to its company is going to be here in austin. we'll have more for you throughout the hour. >> that's a nice curtain-razor. we'll talk more about austin throughout the course of the hour. let's stick with apple. the government saying apple's arguments about security and privacy in the san bernardino case is simply diversions. the company's reply due by tomorrow. ahead of the response, apple's lawyer, ted buttrose joins us and josh lip ton in san francisco. hey, job. >> reporter: hey, carl. ted, thank you for joining us this morning. >> thanks again for having me. >> reporter: you know, since i last spoke with you, ted, only about a couple weeks ago, it seems like this fight between apple and the u.s. government has just gotten a lot more hostile. we saw department of justice call apple's rhetoric false, and corrosive. apple firing back that the doj's
11:04 am
latest brief is nothing but a cheap shot. why has this confrontation escalated so quickly, ted? >> these are tough issues, difficult issues. we are working on a reply to the government right now, and i think that there is some disconnect from -- between the rhetoric we saw in the justice department's brief and what you've heard from director comey, what you've heard from president obama about the fact that this is a policy issue. this is important national/global issue that we need to talk about and work through as a policy matter in congress. and i think the lawyers who filed the brief in court last week, i think, got a little bit carried away with their rhetoric. we're going toim could back and show why their arguments are legally wrong. why the order they're seeking would have terrible consequences for national security for the security of citizens, and why it's simply not an issue that a court can resolve in an order. and it's something that's really a policy issue that we have to resolve. the american people have to resolve.
11:05 am
>> and you heard ted, president barack obama at south by southwest now weighing in on this issue. he seems to have taken the side of law enforcement. you heard him speaking at the top of the show. and he asked, ted, if we're going to create these devices or systems where there is no key, there is no door, then how can law enforcement stop terrorists' plots? what's your response to president, ted? >> well, i heard the president's comments, and saw the commentary over the weekend, and online. and i think a lot of people were interpreting him as supporting a back door to encryption and back door to devices. but the president's advisers, national security advisers, the secretary of defense, the commission that the president appointed back in 2013, all have been strongly supportive of encryption and against back doors that would make all of us vulnerable. and so i think it's part of a conversation. president obama is someone who will listen to both sides of a
11:06 am
dialogue, and that's what we want here, is a dialogue and a conversation as president obama put it, a while back, about these important issues. with respect to the specifics, the government is often confronted with competing interests. so we have attorney-client privilege, a reporter's privilege that protects reports from having to produce their notes or give up a confidential source. so our constitution creates limits where you have competing interests. and here we're talking about privacy interests, we're talking about compelled speech that the government is asking the court to order, to order apple to go in and spend weeks writing software, creating a new operating system that the company believes would be dangerous, that would threaten the security of all the citizens around the world who have iphones. and so it's -- these are competing interests. but it's not like the government doesn't have access to information. apple cooperated immediately with this investigation,
11:07 am
produced the data that it had in its possession, and so it's not like there's a vacuum of information. but we have a system that protects the individual rights of citizens, privacy and the like. we also respect the needs of law enforcement. and the issue is, how do we reconcile those competing interests? that's not an issue that a court can resolve. it's for the congress. >> ted, it's jon fortt here in new york. and you mentioned it's an issue for congress to resolve. it's not just apple in the spotlight. facebook is also in the spotlight. not a terrorism-related case, but the government would like access to encrypted messages being delivered on what's app. how much are you thinking broadly about, you know, beyond apple's case, also the what's app case, in the arguments that you make in this particular case? because they might influence what congress does, which could, of course, have a big impact on apple in the not too distant future.
11:08 am
>> we really are looking at it broadly. the -- a cavill indicated. a family member of one of the victims in san bernardino filed friend of the court briefs supporting apple's position. the technology community and i think citizens recognize that this case in san bernardino is going to set a precedent that if the government can get an order in this case, one case, it's going to be used around the country, around the world, to create this tool that can unlock phones, that can threaten the privacy of citizens that could then be hacked and stolen. so it's a big issue that goes far beyond apple. it affects all these technology companies, all citizens who use these devices. and so it really is a big policy issue, and as we brief the case and are going to argue next week in court, that's going to be front and center. because it's not just one phone. it's not just one case, as the government keeps saying.
11:09 am
you can't blind yourself to the fact this is a major policy issue. it's important. we have to resolve it in a way that protects everybody's rights. >> ted, i'm wondering how the brooklyn decision changed the legal calculus for the company, and if that has changed any -- either strategy or communication, as you plow forward. >> yes, judge orenstein's decision in brooklyn, in federal court in brooklyn, was very important in the sense that he really walked through the constitutional problems, what's called the separation of powers, where you can't have a court basically creating new laws. and that's really what's happening here. the administration going back to president obama's comments, decided not to push for legislation in the fall and pull back from that, that would have sought a back door to devices and really resolve the very issue we're now seeing the government raise in court. and judge orenstein talked about, in his opinion, how that's just constitutionally impermissible. that you can't have courts
11:10 am
resolving legislative issues in that fashion. so it's really given us even more arguments about why the government can't get what it wants from the courts. it has to go to congress, it has to deal with the policy issues. so i think it's very helpful to us. >> and ted, part of -- when the government filed its latest brief, part of what made a lot of headlines was it seemed like the government was suggesting that there was this kind of special relationship between apple and the chinese government that the chinese government had requested information on more than 4,000 iphones in the first half of last year. and that apple had accommodated them by producing data more than 74% of the time. so what people were asking, it ted, is apple accommodating in china, but refusing similar accommodations with our own government? >> no. not at all. that was really just baseless and false statements in the government's brief.
11:11 am
and really showed a lack of understanding of how apple functions. in china, as around the world, apple responds in the same way it does in the united states. and no country has made the sort of sweeping request that the government is making in san bernardino, asking apple to create new software, to create a back door. so it's really -- apple is very consistent with how it responds to law enforcement requests in the united states and around the world to valid lawful orders. so it's doing nothing different in china or anywhere else. highly misleading statements in the government's brief. we'll be addressing that in the brief we file tomorrow. >> ted, taking a step back, as you know in this case, the revenue that the government is suggesting does involve rewriting the operating system to remove barriers, to breaking into a particular phone. but is there some middle ground here in the future when it comes to encryption keys? what if there were a demand made
11:12 am
or request made for apple to retain a certain ability to get access to messages on a phone after due process has been followed? is there any room for that? from apple's perspective, do you think? >> as you know, apple shortly after this order came out and the government made its request, called for a commission to study exactly those sorts of issues. the danger, and this is one of our arguments, once created, software that could be used to unlock and to break down the encryption in phones becomes subject to hacking and theft and cyber crimes. and once it's out, the former head of the office of homeland security called it a bacteria logical weapon that you can't control it. and the government can't control its own data. so that's -- that's the real risk and danger that apple and other technology companies
11:13 am
confront. the question of how we move forward, how we address these issues, is really an important question in that everybody, experts, politicians, leaders of this country, leaders of the technology industry, civil liberties groups, need to come together and see what we can do to come up with a solution. but we can't do it through judicial proceedings in the midst of a political campaign. that's not going to -- that's not going to work. >> well, ted, thank you so much for joining us this morning. and we're going to be looking forward to reading that brief tomorrow. >> thank you very much. i'll go back to work right now. >> carl, we'll send it back to you guys in new york. >> josh, thank you so much. let's get a check on the markets here this morning. some muted action, dow down 2 points. bank of japan tomorrow night and the fed on wednesday. some traders keeping their powder dry. oil is a big story, down over 4%, worst day in more than a month on some negative headlines out of iran regarding production. starwood up sharply on some deal
11:14 am
news. the hotel chain getting unsolicited takeover proposal from a consortium by china, worth 76 share in cash. the board says it has not changed its recommendation in support of the company's plan to merger with marriott. when we come back, donald trump versus big tech as campaigns turn more contentious. a closer look at some of the candidates' remarks attacking business, and the co founder of youtube on the current media landscape and his new project which combines live video and food. an experimental cannabis drug up over 100% this morning. that's coming up on "squawk alley." ♪ okay, so you launched your bank's app. now what? how will you keep up with the new demands of today's digital economy? the fact is: some believe they won't need a traditional bank down the road,
11:15 am
so at cognizant, we're helping banking and financial services companies think digital, be untraditional, and reimagine what the bank of the future can be. our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. we're creating new platforms across channels so customers can effortlessly invest, borrow, lend, transact-wherever-whenever they choose. and we're digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. digital works for banking and financial services. lets talk about how digital works for your business. ♪
11:16 am
11:17 am
after a weekend of rally violence, we're awaiting donald trump's first campaign stop ahead of tomorrow's crucial primaries in ohio and florida. silicon valley executives also closely watching the trump phenomenon. the gop front runner often openly criticizing apple, facebook and this recent swipe at amazon. >> i have respect for jeff bezos but he bought the washington post to have political influence. and we have a different country than we used to have. he owns amazon. he wants political influence so that amazon will benefit from it. that's not right. and believe me, if i become
11:18 am
president, oh, do they have problems. they're going to have such problems. >> people buying media companies have political influence. imagine that. so what's just the impact of trump's silicon valley future. we're joined by the columnist for the american enterprise institute. jim good monday morning to you. >> hi, good morning. >> so is donald trump going to win this one, because the tech companies and the tech elites he's criticizing are really groups he wasn't going to get voting for him anyway, the coastal elites that he so oft often der rides or is this a problem going forward? >> listen, republicans overall have been trying to make in roads in the silicon valley. that effort, especially if donald trump is the nominee, has had a setback. if you look at whether it's
11:19 am
immigration, trade, encryption, donald trump has taken positions which -- are anti-tech, anti silicon valley. he must not view this as a group he ever hopes to win. republicans from a campaign standpoint, they wanted to have more tech input so they can be -- compete on equal footing with democrats, whether it's bernie sanders, or hillary clinton. donald trump has made this less likely. not only does this sort of hurt his campaign, it makes it harder for republicans to win in the future. when such a key group, not just technologically but cultural, as well, will become more anti republican. >> jim, i'm -- you know, remember when jeb bush went out west and took an uber are ride and all of that. but how realistic is it that the gop would do well in this front? we all know how california has historically leaned. >> right. listen, it's an uphill push. but there are a lot of areas where there's a lot of -- where there's a lot of overlap. or there should be between sort of republicans, center right and
11:20 am
silicon valley. when i talk to silicon valley executives, what is the big problem facing you? what prevents small companies getting big or big companies from prospering? and the first they mention, regulation. then they'll mention corporate taxes. these should be issues where the two sides can work together. but it's not going to happen if the front runner or the next republican nominee is not just seen as sort of anti tech, but also seen as, you know, bigoted or prejudiced. those are not silicon valley values. and the donald trump values seem to be something very different. >> yeah. silicon valley does have a strong libertarian streak that could swing either way party wise. i wonder if you think this pushes tech elites who otherwise might not be that political to actually donate the other way. do the democrats end up benefitting even if they're not kind of ginning up the same
11:21 am
degree of excitement and enthusiasm as the gop is? >> i think one concern with donald trump is really that civil liberties concern when he was there threatening amazon. i think all these companies can envision a world where if they don't comply -- whether it's something like encryption with the government -- the government will actively be hostile towards you, i think that's very frightening. i think the civil liberties issues are frightening for individual voters. i think they're also frightening for business. so not only is the -- are republicans not making in roads in silicon valley, but i think they're going to sort of radicalize silicon valley into becoming s becoming vehement liang tie republican. >> certainly not like sanders' positions are going to welcome that demographic with open arms, right? we're talking extremely high income and another of other things sanders is railing against. >> i think it's sort of more of a cultural thing with bernie sanders. which he seems to represent, sort of, you know -- sort of, you know, openness, and -- and
11:22 am
young people. trump is representing a more closed america. you know, no immigration. trade restrictions. he's representing more closed republican party that basically -- this is going to be a white republican party. again, so i can see even though the tax issue may be seen -- more pro republican, republicans moving in the wrong direction that is not going to be very hospitable for silicon valley or being appreciated. >> it's going to continue to be interesting. we're going to watch closely what happens in florida and especially ohio. thanks so much, jim. >> you bet. when we come back this morning, we'll go back to texas, south by southwest, for a conversation with the stars of "mr. robot." and european markets close in eight minutes or so. a wrap-up of trading overseas and the macro data that spun both china and europe in a minute. lergy? eees. bees?
11:23 am
eese. trees? eese. xerox helps hospitals use electronic health records so doctors provide more personalized care. cheese? cheese! patient care can work better. with xerox. that's it. how was your commute? good. yours? good. xerox real time analytics make transit systems run more smoothly... and morning chitchat... less interesting. transportation can work better. with xerox. out on the town or in for the night, at&t helps keep everyone connected. right now at at&t, buy the new samsung galaxy s7 and get one free. no matter how you hang out, share every minute of it. buy one water resistant samsung galaxy s7 and get one free. and right now, get up to $650 in credits per line to help you switch to at&t.
11:24 am
11:25 am
trolling for a gig with can't blame you. it's a drone you control with your brain, which controls your thumbs, which control this joystick. no, i'm actually over at the ge booth. we're creating the operating system for industry. it's called predix. it's gonna change the way the world works. ok, i'm telling my brain to tell the drone to get you a copy of my resume. umm, maybe keep your hands on the controller. look out!! ohhhhhhhhhh... you know what, i'm just gonna email it to you. yeah that's probably safer. ok, cool.
11:26 am
south by southwest kicking off over the weekend, content and creators. our kayla tausche back with us from austin where she spent the weekend. >> reporter: tech and entertainment colliding in full force here at south by southwest with "mr. robot," usa network's show that had a cult following and now has grown well beyond that, made a big splash here in austin. the show, if you're not familiar, it stars ramey malik as a hacker trying to take down a big corporation. christian slater plays the ring leader of the hacking group. the plot twist, most of the inspiration is drawn from real-life events and that's a fact that actually initially scared star christian slater. >> passwords, you know, how easy it is to -- for somebody to actually break into your accounts and -- i had to cancel a credit card last night. so, you know, those are scary things. but -- so it's just made me --
11:27 am
it's definitely raised my level of awareness, and i pay a lot more attention. and have much more of a hands-on approach to -- through everything going on, and in -- in my world. >> reporter: stars there, just like us, even christian slater, had had to cancel his credit card, because of fraud. where we were talking to them, it was actually this part of austin where the "mr. robot" team recreated part of their set. you might recognize it as a hacking lair located in a coney island arcade. it takes up a full city block and even includes a 100-foot working ferris wheel, which our team luckily got to try out. the show stars that place was packed all weekend. and they credit the success and the popularity of the show itself to the rise of streaming. >> there was definitely a line drawn at some point between television and film. and now is seems like everybody
11:28 am
is gravitate to go making great tv, because you can stream it anywhere and have it in chunks and, you know, binge it and enjoy it. if you're watching a film. >> reporter: "mr. robot" season two premiers this summer on usa and the show runners promise an even greater focus on current issues like encryption, like privacy, as well. it's not just the line that's being blurred between television and film. it's also between sports and content. we talked about exactly that, with maverick carter, who is the business manager for one and only lebron james. he was on one of the most well-attended panels here at south by with ronda rousey, odell beckham jr., and the president of bleacher report. we got to talk to him yesterday afternoon about his new social network for athletes to connect directly with their fans. it's called uninterrupted. and i asked him, where is the value in it, with so many other networks for these athletes,
11:29 am
what are they getting out of it? >> we're here to build a network that's -- helps athletes develop and amplify the stories they want to tell that, are deeper, richer, more insightful. and you know, traditional media will still do their thing and do great. and the athletes that come on to uninterrupted, we're looking to take fans on a journey with them to get ready for a big game, a moment after the game. and that's what the athletes are looking for. >> reporter: he says he envisions the future of uninterrupted being something like hbo, although the purpose of it is actually to help athletes, as he just said, connect directly with their audience, not have to go to the traditional routes like television. so stay tuned for more from what that has to offer. we have a lot more coming up from south by southwest as we continue talking about content and content creation. we'll have the founder of youtube just a little bit later on. but for now, guys, we'll send it back to you. >> john and i are jealous, kayla. that looked like a lot of fun. and, of course, a lot more to come from kayla throughout the day. a new edition of the cnbc fed survey has wall street
11:30 am
coalescing around a candidate. is it too late? that ahead and some important primaries tomorrow in a moment. [alarm beeps] ♪ ♪ the intelligent, all-new audi a4 is here. ♪ ♪ ain't got time to make no apologies...♪ theand to help you accelerate,. we've created a new company... one totally focused on what's next for your business. the true partnership where people,technology and ideas push everyone forward. accelerating innovation.
11:31 am
accelerating transformation. accelerating next. hewlett packard enterprise.
11:32 am
good morning, everyone. i'm sue herrera. here is your cnbc news update this hour. funerals are taking place in turkey for some of the victims from yesterday's car bombing. at least 34 people were killed in that attack, which struck a busy bus stop in the capital
11:33 am
city of ankara. four people are being detained in connection with that attack. a maryland police officer is dead following what deputies are calling an unprovoked attack. officers say the 28-year-old officer was fatally wounded when two suspects walked up to the police station and began firing. both of those men have been taken into custody. at least one texas town is under a mandatory evacuation as record flooding hammers part of that state. over 2 million people across the south are being impacted by severe storms, which have spawned heavy rain, hail and tornadoes. and soccer players in australia -- look at this -- got a whole new kind of opponent when an escaped bull took the field during a game. the scary moments all caught on tape as you can see, showing the animal charging towards kids before heading back, thankfully, into the woods. and no, he did not score a goal. that's the cnbc news update this hour. back downtown to "squawk alley." carl? >> hate to play defense on that.
11:34 am
>> no kidding. this is normally the time we count you down to the close of the markets in the uk and across europe. but surprise, because daylight saving time ends here two weeks earlier than in europe. the close of europe will be in an hour at 12:30 p.m. eastern at least until the next couple weeks. meanwhile, the fed meeting means it's time for the cnbc fed survey. steve liesman is back with an early edition focusing on who wall street prefers in the race. hey, steve. >> good morning. want to share with you the results, very interesting of the fed survey, the political part. and the first thing we asked about is what effect does the campaign itself have on the economic outlook? 56% of our 42 correspondents include economists, fund managers and analysts. 56% say the effect of the presidential campaign on the economy is negative. 39% saying it has no effect. now we asked a topical question before we get into the candidates. we'll tell you the candidates.
11:35 am
by the way, want to tell you, these results are anonymous. we're not sharing who said what. but these -- overall results here. 40% pick -- republican would be best for the economy. 18% a democrat. but this is interesting right here. 42% say it doesn't matter or they don't know. that's higher than we have seen in previous polls. a bit of indifference right there. now on to the candidate choices here. who is best for the economy? and the answer is, 0% say standards. 8% for rubio. 11% for cruz. 13% for trump. and john kasich, the ohio governor, 42% say john kasich is best for economic policies. and how about best for the stock market? 35% say kasich, 22% say clinton. so interestingly here, kasich, the number one choice, clinton number two choice. and in both categories, donald trump, the front runner, is the number three choice. want to share with you some of the commentary we got. again, this was anonymous.
11:36 am
i'm favoring kasich because of his willingness to work across the aisle, which i believe the stock market will be more comfortable with. finally somebody says about clinton, it's only good for the stock market if republicans maintain control of the house. and now here's the last one. associating any of these candidates with the word best is very difficult to do. they strike me as equally awful. interesting to see whether or not the candidates wear this being the best for economic policies and for wall street as a badge of honor, or the reverse. back to you. steve, i've got to ask, i noticed ted cruz scored zero percent on the stock market. is that about working across the aisle and the legacy of the government shutdown? he was 11% on economic policy. >> that's right. that's exactly right, john. wall street prefers establishment, status quo and working across the aisle. they're not very ideological when it comes to either side. and you saw that, by the way, in the 22% that pick hillary clinton, if not john kasich. >> yeah.
11:37 am
this clearly is not an establishment presidential election cycle. steve liesman, thank you for the insight. meanwhile, it's the court case everyone in silicon valley is talking about today. a partner at sequoia capital fired after a sexual abuse law enforcement filed against him. josh lipton has that story. josh. >> reporter: john, a bombshell here on sand hill road. long-time vc michael goingen out at sequoia, promptly dismissed who joined the firm in 1996. sequoia saying we understand the allegations about michael gogan unproven and unrelated. we decide his departure was appropriate. the suit was filed on march 8th by a woman who says she was brought to the u.s. as a victim of sex trafficking at the age of 15, and met gogeun in 2001, claims she was abused sexually, physically and emotionally for over 13 years.
11:38 am
as compensation, he agreed to pay her $40 million, but only paid $10 million. a statement saying, these horrific allegations against me come at the end of a ten-plus year romantic relationship that ended badly. he goes on to say that the complaint is filled with language that is designed to destroy his reputation. goguen, who elab rates further in a post on his linkedin page sits in ten companies. his only public board seat at info blocks, though he stepped down as director there after the company's annual meeting in december. cnbc has learned those board seats will be transferred to other sequoia partners. a cross complaint alleging extortion will be filed with the court at around 1:00 p.m. eastern. back to you. >> what a story. don't know what to say about that. josh lipton, thanks for bringing it to us. up next, not every day you see a stock chart like this one.
11:39 am
big jump. phrma more than doubling this morning on the results of one experimental drug. more coming up on "squawk alley.." but first, rick santelli. >> i thought you were going to by it is pass me. so much going on today, not only in the country, but in the world. we have seen that. been there. done that. there's a lot to learn from history. you want to know what the big number is today? this is the big number today. that's it. you want to know what it means? come back after the break.
11:40 am
11:41 am
11:42 am
coming up on "the halftime report," famed value investor rich pa sfwleena joins us. he's going to share a new stock pick. and the call of the day on the consumer stock says can rise 30% over the next year. and how much should a stock's performance factor into a ceo's pay? we debate that question as well, coming up top of the hour. we'll see new 15. >> sounds good, scott. thanks. we get a special version of the santelli exchange because rick is here in new york. it's our pleasure. good morning. >> it's my pleasure. i'm sorry, but i can't do this thing sitting down. we have to do it standing up but i will tell you, you know what that big number was? it was 1957. it's not the year i was born. i'm a little older than that. i wish it was the year i was born. it was the year one of my favorite books was written, "atlas shrugged".
11:43 am
the reason i bring it up today, i look at the world, there are so many issues, so many issues. don't just take regulation and energy and fracking. it's all in "atlas shrugged," all of it. state of colorado, reardon metal. how he made it with kinetic energy. what was the point of the book? the point of the book was, those that made the trains run on time. those that had the big patents. those that had the intellectual property. they got fed up. they couldn't do their job. and the government forced certain businesses to buy inferior products from other businesses. any of this sound familiar? think apple, think the fbi. we are living "atlas shrugged." why is it so important? i would rate for the country to have that rhetorical question, where is john galt, who is john galt? john galt is all of us. we need to understand that in the end, if we're going to make a positive difference in the future, we can't have election cycles where one side, the middle and the right side, they talk trash.
11:44 am
and i don't mean they're talking trash in the form of what they want people to do, how they want people to act. i'm talking about whether it's entitlemen entitlements, whether it's fracking, whether it's energy. you know what, all the banks and wall streeters that get this big bulls-eye in their back, read "atlas shrugged." maybe we should shut wall street down for 24 hours, see how everybody who blames wall street likes that. maybe we should shut energy down for 24 hours, see how people like that. in the end, these are great industries, and run well. can you imagine if our energy companies were run like third-world companies with all the corruption? let them have their 10% return on capital. small price to pay. lights go on every time i hit the switch. gang, back to you. >> yeah. if google and facebook went on strike for 24 hours -- >> exactly. and you don't think they deal with wall street banks, financial institutions? of course they do. don't be short-sighted, people. we need everybody working together to fix this.
11:45 am
>> all right. quite a political season. real issues you're talking about. thanks, rick. >> thank you. and an experimental cannabis drug has shares of gw phrma up more than 100%. meg terrell has more. >> reporter: john, you might say this chart has investers on a high today. while this drug is devisarrived the cannabis plant, not derived from pot, thc. this is a drug that gw phrma has been testing in rare forms of epilepsy. today they reported the results of their first phase three study, overwhelmingly positive, really surprising there. they found they reduced seizures by 39% compared with 13% on placebos. so folks really positively surprised this morning. now the company does have three more late stage studies. folks are looking to -- forward to the readouts. they say now based on results, they're going to start conversations with the fda about applying for approval. if you look at the stock, though, over the last year, it
11:46 am
really does kind of have a similar outlook as -- what we have seen in biotech. has not regained the losses back to the highs where it was last summer. and that's really similar to what we have been seeing in biotech. but folks are saying, maybe this is the beginning of that black cloud lifting over biotech, the first positive readout of this year. piper's putting out a note today saying maybe this is the beginning of more positive times for bio tech, guys. back to you. >> thank you, meg tir rely. up next, steve chin on video, media and his new project which just launched at south by southwest. we will be right back. vo: know you have a dedicated
11:47 am
advisor and team who understand where you come from. we didn't really have anything, you know. but, we made do. vo: know you can craft an investment plan as strong as your values. al, how you doing. hey, mr. hamilton. vo: know that together you can establish a meaningful legacy. with the guidance and support of your dedicated pnc wealth management team.
11:48 am
11:49 am
welcome back to "squawk alley" live from south by southwest in austin. our next guest is an internet entrepreneur. he worked at paypal and co founded youtube before selling to google. now he is here talking about the future of streaming, the future of live streaming and announcing a new live streaming food app. we are joined now by steve chen. we are so glad to have you here, steve. >> good morning. >> reporter: so you wrote the book on content by creating this movement, creating youtube. how do you view where we have come in the last decade, and where youtube has come? >> sure. i mean, i think when we started youtube, it's hard to believe that it's been over ten years. but it was in 2005 when we started youtube. and at that point in time, video
11:50 am
on the internet was still a new thing. photos had been around for a while. text had been around for a while but videos were still difficult to do. there were so many different types of code ex out there, and so when you take something on a video camera and tried to share with other people, it was very difficult to do. and now i think we're in a similar stage now with live video. live video is also something that's kind of in the last year or two has really started taking off. but we're still in the very first stages of how video in the live format is going to form itself. >> reporter: so when you wrap your head around what live video will look like -- we've heard twitter talk about what they're doing with periscope. facebook is obviously making its in roads there, contents popping up as you're streaming and you sort of have to engage with the viewer as you're doing it. what are the attributes of successful live video? >> well, i think there are certain things with live video that are just not possible when it's a video that you record and then you upload.
11:51 am
there's the collaboration piece, there's the interaction piece. and so, for example, one of the things we have seen -- and only around for the first five days, a video would start, somebody would be hosting a cooking show and then run out of ingredients or they would be finding that, you know, this spaghetti that i'm making or this soup i'm making seems to need something else and they would actually ask the audience what he is should i put in it and get all sorts of feedback from the audience. this is not something you would be able to do on youtube, a video that's shot and the video is going to end the same way every time. >> reporter: so do you think that is a limitation of youtube and something that still to this do i needs to adapt to? >> i think that youtube -- it's edited, so you can add -- you can add music and there's a lot of times where you can do retakes on certain times where you actually mess up and so you can do -- if you mess up once, you can do another take and mess it up again, do another take. so all of the videos on youtube end up being perfectly edited.
11:52 am
whereas we have seen videos on nom where it's a live show and they take something out of the oven and before they take it out, this is perfectly ready to be eaten and find out it needs another ten more minutes. and is put it back in. this is not something you would see on youtube, but part of the live video experience and people seem to like that because it brings you one step closer to kind of this reality experience of being in the kitchen. >> reporter: i want to bring in my colleague, jon fortt, back in new york, who has a question for you. >> great. >> hey, steve. i was a business 2.0 years ago when i guess you were under 30, if i recall. one of the under 30. interested in your perspective on unicorns. back then, 1.65 billion was a huge amount of money to spend on a startup. we have seen bigger sums spent in recent months. but there's talk about a lot of these being overvalued. you invest now a bit. how do you look at value, even among companies that are
11:53 am
prerevenue, preprofit, kind of in the position that youtube was ten years ago? >> well, i think, you know, when -- just thinking about youtube, i think youtube has definitely ended up being one of the surprisingly best investments that google has made. surely, at the time when they made that purchase in 2006, even as one of the co founders of youtube, i thought too much. it has turned out once the monday at thisization has started and people have graffitied towards college students and dormitories, if they had to choose between a television or a computer or laptop, these days choosing the laptop, because all of the content they want to watch is actually available on youtube and they don't need to bring the tv. so i think that there's been a shift towards just not how this content is actually absorbed. but also the monday advertisation side of things. so i think there has definitely
11:54 am
been some kind of definitive i think answer to there is a sort of -- a raising the surface level of what these companies are worth now than what they were worth ten years ago, because the monetization has shifted towards this, vertical. >> steve, you mentioned -- it's carl, by the way. you mentioned just how far live has come in a year. and it seems like the other day we were all obsessed about meerkat for about five minutes and then it was about periscope and now facebook making a big push to dethrone per scope. it just seems like the environment is rife for new entrants to get eaten alive very quickly. why is that not going to be the case with nom? >> well, and i'm going to bring back i think youtube. i think youtube, as an idea, it was nothing new. people have always thought that youtube, a place for sharing videos online, that's not something new. people have been trying to do that since 1999, 2000, 2001. so in some ways, why was 2005 kind of the golden year where
11:55 am
youtube really took off? and i think there are a few thing related to that. i think in 2004, macro media flash ended up being the kodak that everyone had installed on their computers. i think in early 2005, we had broadband penetration reach over 50%. not just for downstream, watching videos, but for people uploading videos. and then also i think just the ability to be able to have these digital cameras. iphones weren't around, but to have digit cameras that could take videos. i think live video is something people have been thinking about for a long time. i think it's just getting there with the ability for us to be caring around iphones that actually have enough upstream bandwidth to be able to be on a beach, to be in a restaurant, to be taking a tour of maybe a back kitchen, and be able to flip on your iphone and be able to do a live video cast and broadcasting from what that experience is like. and a few years ago, that just was not possible. so i think the limitation there
11:56 am
was technology, not so much the idea. >> willing, steve, as someone who has burned quite a few meals in the kitchen, i have to say, i'm glad to see us edging a little closer to reality. come back and see us in new york sometime, soon. >> great, great. thank you very much. >> steve chen, cofounder of youtube and also the co founder of nom. guys, back to you. >> change the world. thanks so much, kayla tausche. when we come back, apple opening its biggest store. you'll find out where in a minute. and "closing bell," the ceo of value act, discussing valiant, microsoft and more. 3:00 p.m. eastern time. [alarm beeps] ♪ ♪ the intelligent, all-new audi a4 is here. ♪
11:57 am
♪ ain't got time to make no apologies...♪
11:58 am
11:59 am
live shot of hickory, north carolina here, where donald trump is being interviewed by new jersey governor, chris christie, of course, already endorsed the campaign. we've heard reports of some protesters. obviously, there will be an eagle eye for any disruptions at rallies across the spectrum over the next several days and weeks. of course, the lion's share of the primaries tomorrow, north carolina among them. in the meantime, dow down 15 points. oil's weakness continues to be a story, as we got some negative bearish headlines, john. some of the big energy names, exxon and chevron leading the dow lower today.
12:00 pm
no clear direction overall in tech right now. you've got some up, linkedin up better. a lot down also. etsy down 4. big companies, small companies. just a mix. >> ahead of a busy week of politics and central banks. let's get to headquarters, wapner and the half. ♪ welcome to "halftime report," i'm scott wapner. top trade today, growth versus value. which is the better bang for your money? with us this hour, steve weise, josh brown, pete najarian and rich pzena, chairman, ceo and coast cio in. stocks moving lower this hour, led by energy names, higher lately as value has come back into favor over the past month. but is that truly the start of a longer lasting trend? that debate begins now. rich pzena, great to have you

99 Views

info Stream Only

Uploaded by TV Archive on