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tv   Squawk Box  CNBC  September 25, 2019 6:00am-9:00am EDT

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podcast? what does thatdo >> audio >> we'll tell you how to join the party. tell me how i can join the party. september 25, 2019 you are all invited. "squawk box" begins right now. ♪ >> announcer: live from new york where business never sleeps, this is "squawk box. >> good morning, everybody welcome to "squawk box" here on cnbc we are live at the marketsite in times square you've seen now that the nasdaq and s&p have been down the last three days dow has been three of the last four days. this morning, things are lower but not by much. dow is down by 15 points
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s&p off by almost five and nasdaq down by 24. you see president trump calling out china and a little afternoon, word about nancy pelosi announcing an impeachment announcement, then president trump saying he'll release the full transcript. this is just the volatility we saw. definitely wall street watching washington to see what news comes next wework's cofounder adam neumann is stepping down as ceo. the starrup once valued at $47 billion has shrunk in a matter of weeks
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he said, quote, i am so proud of this team and our company. our business has never been stronger in the recent weeks, the scrutiny towards me has become a distraction. i have decided it is in the best interest of the company that i step down as executive each will have three votes down from 20. wework's former copresident and vice chairman have been named co-ceos of the company the parent company, we, could layoff 4,000 to 5,000 in response to this there may be a search attempt for a new ceo. >> they named two and said they were permanent ones. >> they are internal picks but
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outside investors want to bring in an outside operator >> layoffs seem extreme. how do you chop off a third of your work force? >> the issue, there is core wework as we know it, which is the office space but there were all of these initiatives undertaken by adam, by his wife. we education, we life, lots of other things much of which has slowed down already. the question is, if you try to cut back and demonstrate what this business really could be, maybe that will help the
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situation. the big question is still for soft bank. that is an issue there is the issue joongoing. i wrote about it not a situation i think any of them are proud of or would want to be? >> did i read it correct that softbank put in $15,000 and that's the whole value at this point? >> they put in 10. >> it would have been worse if it was ipo'd at $47 billion. >> and the public was left holding the bag. >> thegenerous sympathetic vie
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is that it worked. and the public is not left holding the bag. at the same time, jp morgan was lending adam neumann money against his stock, which he used to buy buildings, which wework was then leasing >> is he even worth $500 million now or is that money jp morgan is on the hook for >> probably more than that >> the loaning process started in 2015. >> he's not liquid --. >> but if soft bank put in $10 billion.
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>> but their $10 billion is only worth $2 billion >> he has a lot of the voting but i don't know what he has in the actual >> got to have more than $5 billion. what was it all about? >> how much is his stake in the company? no idea. >> we'll figure it out before the end of the show. >> she's probably bought $6 to $8 million >> i thought he was leasing back >> he does air bnb with the company properties talking about a publicly traded stock, dow component nike. revenue from china rose 22%.
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figure that out. despite the u.s./china trade fight. saying the company has seen double digit percentage growth every quarter for more than five years. that's like 20 quarters. >> in relation to tariffs, we have been strong to say we strongly believe in free and fair trade we are confident feel continue to do so under the current dynamic. nike shares up to an all-time high yesterday janua was here and pal
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trussel, i remembered that you were out yesterday >> in chicago on its show. i'm still good prevegen >> it works. in health news, massachusetts banning vaping sales for four months cdc has announced asking people to stop using the product. juul will cut back on staff and hiring flavored e-cigs make up more than 80% of total sales. in trade news, china says they have no intention of unseating the u.s. as world
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leader he called on washington to remove all unreasonable restrictions welcome china beige book international. we need a little different color than beige it is a little darker. third quarter was weaker worse than 2019 in manufacturing, the brunt of that deterioration. >> not just that it is weak but weak despite that there is more credit provision going to the key con my the chinese have had the position that they are not doing much to stimulate the economy.
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refraining from heavy infa fracture investment. which is true. but they are doing more than they are admitting our borrowing numbers are sky high borrowing by firms six-year high our shadow banking numbers are so interesting the ideas that they banked the last few months, we've seen the largest share of shadow banking. >> growth is slowing for these industries but it is still growing. it is not declining. >> much less is these numbers produced by china. >> can the beige book tell us?
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si sift through all the noise >> we don't advertise it, gdp doesn't matter that much our view because we have to play this game. fourth quarter last year was down do down and it has gotten weaken from there. somewhere near 6% but not anywhere near the smooth performance the chinese are claiming >> the chinese, they are used to some big gains and really a quick rise into the middle class. i don't think they take that for granted. this austerity they'll have to be subjected to, do they have a
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lot of staying power do you think xi is saying uncle when they started to feel how bad the fourth quarter was this scared the chinese and we saw a major rebound into 2019. in the short term, xi has said uncle. they are going to hold out the idea of doing all of this restructuring and reform look, you got a lot of head wind enormous debt. it is never going to be easy irdon't like to feel pain but when is this reformation gloioig to start >> so they still need to buy
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sneakers >> some companies do really well nike has there are a lot of basketball players in china that have been widely followed. >> that's amazing. best buy and we'll hear from the ceo and a look at winners and losers in the dow. nike is there, reportedly, it is a dow component. this is apple card.
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welcome back to "squawk box" best buy holds first investor day. >> today under new ceo laying out the new five-year target and reportedly hitting $50 billion in earnings. discussing tariffs on their
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business >> here is what's so tricky. the lists themselves are still in the process of being stabilized they are not easy to read. it is not like a perfectlity rated list first, we are trying to figure out what will be on the list we are working closely with vendors and bringing product in early. you are continuing to see supply chains move. >> in august, there was some conservatism based on what may or may not happen on the whole when tariffs go in if there are price increases, what will be the reaction. we just saw consumer confidence hit a nine-month low are you seeing changes to best
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buy yet? >> we are not. unemployment at 3.7% we also saw the most housing starts in 11 years we are not seeing this degradation broadly. >> she has said everything stabilized ultimately. feeling strongly with the instore network, website and services is the right plan regardless of booming economic growth or not. >> i guess that is the question. players like this like walmart and target, they have other areas that don't get hammered by the tariffs. >> that's a point she said, once we figure out which items are
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subject. they try to use the portfolio approach and move the cost, it is tough when almost all your products are on the list >> 60 per% of products are made overseas >> they are the last standing large provider she said 60% of goods sold should be 40% next year. >> it is a great management between between corrie and the others >> it is amazing the cost they've been able to cut out of that business. they've got more to go they announced more than $1
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billion cut of costs this morning. >> thank you when we come back, an exciting day. we are launching a new podcast details of how you can take part and crypto alert bitcoin dropping dramatically. you are looking at bitcoin below $81. stay tuned with us here on cnbc. at synchrony, we're changing what's possible every single day. and if you run a business, that means a lot. we create financing options for your customers. to help them get the things they love instantly. our data provides insights into what your shoppers have already bought.
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as everyone knows, you can watch "squawk box" here on cnbc weekdays 6:00 to 10:00 a.m >> i think the people you are speaking to know that. >> as everybody knows. as many people know. there are a lot of the smartest most influential
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people know. >> they know >> but i digress we are launching a podcast not going to be the best day of everyone's life. squawk pod brings you the best debate from the best show in business news. >> are you the one promoting this >> when you do it, it sort of drips of insincerity >> as opposed to your -- >> i'm excited about this. >> this is a great podcast you'll get the behind the scenes >> you want to intro it every day? >> i do.
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my podcast >> you listen to podcasts. you put these in your ear every day. >> backwards >> backwards like you do but you are hopefully only going to do this if you missed the show some times people see the show 10 or 15 minutes on their way to work and you catch up. >> you don't see anything? can i let myself go? >> you don't have to suck it in for the podcast. >> what have you been doing? >> don't have to worry about fixing my tuepe and everything. look for us every day on cnbc.com/podcast on apple
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podcast or your favorite podcast app. squawk pod, subscribe today. >> weak start. strong finish. coming up, big news in media land vox media buying new york magazine later from trade talks to impeachment proceedings, what do investors need to know and where to put your money. asking former white house chief of staff bill daily what is going on and where this is headed but first a look at yesterday's s&p 500 winners and losers ♪
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>> announcer: welcome back you are watching "squawk box" live from the nasdaq marketsite in times square. >> good morning. bitcoin dropping again after it plunged about 15% yesterday. briefly traded below $8,000. some are blaming the drop on the tepid reaction to bitcoin futures. this morning trading at $8,024 >> are you ever -- you were going to buy and then you didn't do you have an entry point at this point >> i think i will never ever buy for myself personally. >> if i did for my kids that they would have it for like 20
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years. >> it went to 20 then 4 then 13. >> if i did buy it for my kids, it would be a nontradable. i thought it be under $5,000 at this point, for the children. >> do it for the children. >> like the children's fund. the hedge fund that has nothing to do with children. >> the sorkin fund >> do you remember george, for gifts. he didn't like giving people gifts. he would say he gave to charity. someone pinned him down. he said he gave to the human fund children's fund is the same kind
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of thing >> it would be like buying a lottery ticket it will be worthless or worth a lot. >> it can be very volatile >> currency doesn't move around like that. >> like gold >> but if you are paying your rent in bitcoin. >> talking other headlines, at&t plans to keep direct tv. chief operating officer said the service is an important part of the company's strategy those stories of them spinning it off you thought were greatly exaggerated. >> at least for now. saying at&t spins off a lot of cash and that cash flow is
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important right now. >> that is an important machine. call it a melting ice cube it creates cash. where there is debt to be paid off, not something you can get rid of lightly there are valuable questions to be asked >> is it a melting iceberg, which would slow if like elizabeth warren -- with a new green deal how quickly would it melt? if we stopped the rise of the seas it has been kind of in the news? >> it is melting in the same way -- >> do you think one
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administration could get it to melt a little slower >> i don't think any one administration could get it to melt slower. >> you've got three suvs >> i'm talking direct tv this with one is big, vox buying new york magazine the ceo will continue to run all aspects. it won't result in editorial layoffs. the new york-related publications won't close the late leader, his daughter has been running it. she will become the president of vox media. >> this is not the new yorker.
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i need an elitist media guide. do they have thosegreat cartoons >> that is the new yorker, owned by same owner of vanity fair and vogue. >> see, this is what i need. >> new york magazine has been an independent magazine >> the person running it, stepped down a few years ago >> who is running it now >> his former deputy >> wow, this is tmi. bill daley will join us to discuss the talk of the how much
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impeachme impeachment inquiry. you are watching "squawk box." >> today's big number, 15% that's how much of the world easy internet bandwidth is used for streaming. so they'll be okay? i think they'll be fine. voya. helping you to and through retirement. when i lost my sight, my biggest fear was losing my independence. mmm... good. so i've spent my life developing technology to help the visually impaired. we are so good. we built a guide that uses ibm watson... to help the blind. it is already working in cities like tokyo. my dream is to help millions more people like me.
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and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. welcome back, house speaker nancy pelosi announced impeachment proceedings. >> today, i'm announcing with the house of represents moving forward an official impeachment inquiry. preceding with investigations under that umbrella. the president must be held accountable. no one is above the law. >> the president was quick to tweet his reaction an important day at the united nations. so much work and success and the
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democrats are to demean it with more witch hunt news bad for our country. joining us bill dalye, former white house commerce chief of staff. what does that mean for the next election you are somebody who knows a lot about this >> having been through the last impeachment proceedings. president clinton was good as co come partmentalize it. this president i think will fuel it president clinton was impeached,
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evicting him is another thing. >> it was his second term too. he wasn't up for reelection. >> i think that's why nancy pelosi has been reluctant to launch this. >> do you call this a firm launch because she didn't take a vote >> it is a process nancy pelosi follows a process >> she is not holding anyone accountable to vote yes on it. >> it is a big step. >> explain this to me, what do you think her calculus is. she didn't do it before around the russian interference issue
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does she do this under pressure or because she's more convinced thats it mo that it is more of a problem >> nancy pelosi is the best politician on the hill i do believe she understands her membership has changed you get so many from purple districts saying they are now for impeachment, it is a fundamental shift. this whole ukrainian whistle-blower it has changed things i think right now, it probably helps him. it confirms everything he has said they are doing. you don't know what will come out in an investigation.
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>> i maybe would have thought it was less political if they had waited for the transcript and the whistle-blower >> it is pretty obvious the white house will try to block any attempt. then you have the question of is that enough. should you have the taips. all of that side show. it has been there position, joe. i don't think there is a fact of total cooperation. i was chief of staff and we used to get letters every day threatening contempt and want this document and that document. it has gotten to the point where the ukrainian thing tipped it over >> i understand that i'm strtrying to figure out, th
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congressman has brought up a lot of basis points. what is the evidence that got us to this tipping point in the first place? we talked about it now but now something on a big bag of nothing got us to where we are tipped over. >> i think part of the problem was that they had not turned over the whistle-blower report >> we have been talking about impeachment for two and a half years. >> republicans through the impeachment word around obama at times. >> do you think voters will vote on this issue? to the extent that this gets to character and by the way, there
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are those on the other side throwing claims at joe biden by the way, i don't think they are equivalent >> the threat to the president is not what is on the table today, it is what this develops. when things started with nixon, it wasn't clear where this would end up, republican and republican voters were very much against impeachment. >> if pelosi called you yesterday and said, bill 140ushd i do this or not >> i think on top of all of it and what the president stated, so many want it. >> the votes of do what you are doing now. that's the process you don't rush to a vote >> but even to launch an
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inquiry. >> she's getting her six heads together they were already looking at everything just launching a formal inquiry. >> again, she follows a process. >> you still need to get people on board or put them on the record she wanted to apiece aoc >> i don't think so. >> did you see aoc's tweet >> listen to her plmembers, especially republicans or purple districts. when those are saying i'm going to put my job on the line, that is a game changer. during the clinton impeachment, the market went up and down by
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30%. >> that was impeaching a democrat that would be good for the markets. i'm kidding. >> because it is a lag effect from the prior republican administration >> under clinton, there was a republican congress. he started with a 40% lag in the market >> okay, joe at least you are honest. >> you say you love politicians. do you watch the market now? it is unbearable >> i was in london and listening to what is going on in brexit, i was thinking ours is not so bad.
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>> when you see other countries, there are actually fights on the floor. >> we are not too far from that. >> bill, thank you for coming in we hope to see you again soon. coming up, the story that gets stranger every day. adam neumann steps down but isn't fully leaving the company. more on that when we return. do you have concerns about mild memory loss related to aging? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. woman: what gives me confidence about investment decisions? rigorous fundamental research.
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welcome back to "squawk box. corporate story of the day continues. wework co-founder adam neumann stepping down as ceo wall street journal reporter maureen farrell, good morning to both of you. dan, you might remember -- >> good morning. >> -- we were on the show together and at the end of one of the segments that we had i
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said to you, do you think there's a chance the ipo doesn't happen and here we are so my question to you now is do you think this ipo will ever happen >> well, let's start with you were right when i walked out of the studio i thought, huh, it was the first time i had ever seriously considered it. i didn't have a great answer honestly right now, there's no way to know. we don't know what the new ceos plan to do they had an all-hands meeting yesterday and there were a lot of questions from employees specifically around financing. it was going public not to make everybody rich but because they needed the cash. so i think there are a lot of questions about the viability cash wise and ipo would still be a way to make money. >> maureen, what do you think about the timing of a potential ipo? let me make it a two-part question do you think that these two new
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ceos are going to be the ones to take it public because i keep hearing that there is at least an ambition among many of the big investors that they bring in an outside ceo. >> so, first, i think right now it does feel like the intention is that they're here, they're at the helm, there's no outside search so they're tasked with taking this company to the next level. the ipo, the chances of it happening this year are pretty dide minimis. as dan said, they need cash. that seems to be their attention. we're hearing a lot about cost cuts we're hearing a lot -- you know, we'll see the private jet, really different things about the business i think we're going to be learning a lot very quickly about what they want to do so at least for now i think the plan is for them to kind of take this company forward. >> maureen, your paper says too
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little too late. is it? >> i mean, it's -- things have gotten very dark for the company clearly. i mean, earlier this year it was a $47 billion company. over the last few weeks it's been very unclear whether they could have done ipo at all. >> right. >> obviously the ceo is gone the valuations that investors were willing to give this company when he was out talking to public investors kept on eroding. it got smaller and smaller so now it's almost like they have to start from -- not from scratch but they need to figure out a lot of things and start anew really. >> dan or maureen can weigh in on this. we were actually debating it earlier. we just don't know the numbers, maybe you do do you know what the value of adam's stake is today? the reason i'm asking is jpmorgan which i've argued has been on both sides of this in
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not such a good way had a credit line out to them with ubs and credit swis and there was uisse. do the value of his shares, they were collateralized against that, are they worth more than that still >> from what i can tell, it's a little unclear for starters, we don't know what the value of the stock is. what's wework worth? pick a number. >> 10 or 15 billion? >> well, it seems that he's got basically about the same number of shares of softbank. maureen, you can double check me on that. it looks like he and softbank are even in terms of equity. >> his entities that he controls are 30%. we don't know exactly how that breaks down but, again, as you said, i mean, what is the mark right now? we are hearing 15 billion as a number and, i mean, you know, right now we're not going to get a mark really. >> right >> for a while we're hearing that they're
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looking at refinancing their credit line. they mabrey in some new equity maybe we will see an actual mark sometime this year if some new equity is brought in yeah, it is unclear. kind of who knows how that shakes out it's clearly a much riskier loan than it was when they made it. >> okay. maureen, we want to thank you. dan, we want to thank you. we should have you all back. i know the soap opera is far from over. thank you guys. >> thank you. >> appreciate it. coming up, ken feinberg is coming up. he was named as co-administrator of boeing's victims' fund. futures are flat the dow's down less than 10. s&p off 3 and change nasdaq indicated to open down about 20 watching "squawk box" on cnbc. was ahead of its time.
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cool. oh, wow. you two are going to have such a great trip. thanks to you, we will. this is why voya helps reach today's goals... ...all while helping you to and through retirement. can you help with these? we're more of the plan, invest and protect kind of help... voya. helping you to and through retirement. the president must be held accountable. no one is above the law. >> house speaker nancy pelosi announcing a formal impeachment inquiry of president trump what investors should take away from the announcement. the vaping crackdown continues. another state announcing a ban we will speak to former fda commissioner dr. scott gottleib about the investigation. and water dot org teaming up with beverage giant abinbev. we will hear about the mission of the second hour of "squawk box" continues right now
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live from the beating heart of business, new york. this is "squawk box. good morning, everybody. welcome back to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. take a look at equity futures. they're basically flat we have seen both the s&p and the nasdaq down. dow's been down three out of the last four sessions but they're not off by much. nasdaq is indicated down by 20 points dow is off by 5. the s&p indicated down by 3. we'll see where it goes. >> a couple of headlines making news this hour electronics retailer best buy anticipating a jump in revenue and lower costs by fiscal 2025 telling investors that it sees enterprise revenue growing to $50 billion over that time
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that compares to 43 billion right now. also anticipates an additional billion dollars in efficiencies. hd supply planning to split into two separate companies the company that was home depot will keep the hd supply name for the maintenance. another company will keep the construction and industrial operations the stock is 1.5%. mortgage applications falling 10.1% with new figures from the mortgage bankers' association. largely driven by a 15% decline of refinancing mortgage rates having risen 20 basis points over the past two weeks. the average 30 year mortgage rate now standing at 4.02% an announcement from the nasdaq coming to us >> yeah. i'm not sure -- >> i'm not sure what they're trying to say. if you are hearing feedback -- >> i thought i was hungry.
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>> was that something we need to worry about, folks >> greco out in englewood cliff says it's a fire alarm matt, i've seen your act before. pushing elderly people out of the way as he runs house speaker nancy pelosi launching a formal impeachment inquiry of president trump ylan mui joins us. >> reporter: good morning, joe the speaker told democrats she wants to move expeditiously. she said the president must be held accountable and no one is above the law. >> the actions of the trump presidency revealed dishonorable fact of the president's betrayal of his oath of office, betrayal of our national security and betrayal of the integrity of our elections. >> reporter: this was a watershed moment for democrats but the inquiry itself is still preliminary. six house oversight committees will conduct their own investigations and then they'll
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have to decide whether to move forward with articles of impeachment. there would have to be a vote in the house judiciary and the house floor. if that passes the president would officially be considered impeached and he would face trial in the senate. now it is unclear if mcconnell could stop that from happening, but last night he called pelosi's announcement, quote, an impeachment parade in search of a rationale. today we expect trump to release the transcript of his call with the ukrainian president. nbc is confirming that the white house does now plan to hand over that whistle-blower complaint. joe, pelosi has told people there has been a seachange and it will take a lot to turn the tide. >> it's become a market story, ylan we are touching on it from time to time. let's talk markets and how impeachment and the inquiry
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could affect trading joining us is binky trada and mike santoli, cnbc senior markets commentator. you were at barrons during the last one, i think? >> yeah. >> probably the only one that remembers nixon. i remember that. i remember --nd the irs. binky, i think you think at this point slowing growth and the markets being, in your view, 15% over valued probably takes precedence over all of this noise. is that fair to say? >> yeah. i mean, you know, there's really two points i would make. i would say if you think about how domestic political and, you know, really more broadly geopolitical risks have played out in the equity market historically, it is really two simple things. one is there is usually clearly a sharp selloff but, you know, we are talking about 6% on average. but the most important point is
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that it's very temporary, it's very short lived the average is three weeks down, three weeks back up. >> you're saying if something were to worsen from here, we're not there yet. we didn't get a 6% selloff on this. >> no. because i would argue yesterday's political news and that is not my forte is, you know, marginal incremental negative but the simple point i'm trying to make is, you know, a sharp but short-lived selloff and then, you know, the equity market has always gone back to what's -- you know, what the economy and earnings have been. >> which you're not thrilled with the way that's going. >> currently, no >> yes. >> let me get mike on that woke up yesterday morning, you know, after thinking about the night before and i checked predicted and it's very thin right now. not a lot of money being bet but yesterday morning i sort of thought if there was a true constitutional crisis we wouldn't have been up 120 points. >> right >> by the end of the day we were
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down, what, not that much, .5%. >> yeah, about half a percent. >> about half a percent. the predicted numbers are -- finishing the term is still 0% >> that's the point. >> the impeachment, it went up 57, it's back to 50. >> what's interesting is the market did pick up a little bit from the lows when the president said he would release the transcript so there was a little bit of sensitivity to trying to figure out how this plays out. honestly, this isn't i don't think one of the top three swing factors. >> not even the top three? >> well, the top three are probably all the same. >> have you seen the newspapers today? >> what exactly should the market be pricing in here's the distinction between the nixon experience and clinton. they were both in a second term. >> yes >> i think it's a little bit early for the market on a day-to-day basis to be handicapping the outcome based on what's going on because as you say, the odds for president trump finishing his term and predicted is still 19. >> the issue that this wraps up
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the top two candidates the republican and the democratic candidate in this, and that's -- >> people think warren is already ahead. >> that's right. >> right so -- but then what? so what should the market be pricing about that should the market be saying it's going to bum out the public? it's already bummed out. consumer confidence yesterday showed a huge plunge in 55 and over, people 55 and over in consumer confidence. they're the ones absorbing cable news all day. >> they said giuliani showing warren ahead, he went -- no, kidding. that did not happen. hey, so -- what? >> nothing nothing. >> binky in your view -- working so hard on biden why in your view, binky, is the market 15% over valued >> because growth has slowed i would argue the slowdown in the u.s. is pretty broad based it's been going on for a year, year and a half depending on how you measure it and equities, you
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know, are essentially where they were in the beginning of january 2018 so you have a market that's kind of flat sure, it took some spills in the middle and if you look at what's been happening to macro growth, it's sort of slowed. >> you say we're close to stall speed in the economy >> yeah. many people would argue that the signals are pretty mixed what i would point out is that if you look at the number one indicator or where the u.s. is at, it's the labor market. if you look at private payrolls growth and with full technical explanations, taking the six-month change and i'm using an annual rate because later market data tends to be a bit noisy. as of the last print we are running at a 1.3% annual rate. that is the slowest in this cycle for those that say, well, gee, you know, services are okay services are much bigger than manufacturing and you wouldn't be at the lowest point in the cycle if a big chunk of the slowdown in the labor market
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hadn't come from services. in terms of, you know, is 1% growth, you know, a big deal i think the point to keep in mind is that every time private payroll's growth has gone below 1% we've basically ended up in recession. 1.3% is, in my view, of course it's a lot below 2.5% in the middle of last year, but it is dangerously close to stall speed. >> do you think the evidence supports that, mike? >> i think right now exactly the same evidence, it's a rorschach test. >> that's what i mean. >> you can grant that we have this slowdown. it's a matter of how you extrapolate it from here the other side would say, you know, we've kind of gotten to rate cuts with maybe more to come without yet having absorbed the full pain of a domestic downturn because of global events now the bond market has obviously kind of stopped its yield mark. >> right, but that's a market that's been sort of -- had the flag up. you could argue the other way,
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binky, that the stock market's a leading indicator. it's not 15% over valued, it's refuting your view of the state of the economy >> what i would say, it's not about, you know -- >> refudiating. >> -- it's all about the future. >> that's a leading indicator. >> another way of thinking of that 15% over valuation that i'm talking about, the market's essentially pricing that the ism is going to jump by 7 or 8 points seems a bit hi to me. >> binky, where do you think the interest rates are going to be deciding where the markets are going to be depends on where else you can put your money. >> i would argue if you look at the u.s. 10-year yield it's been extremely well correlated with the cyclical growth. it's fair value, 155 so in the mid 140s the bond market was pricing in a continuation of the slowdown which, again, has been going on for 12 months so as mike says
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the extrapolation i would say is very brave to assume that after coming down for 12 months we are going either bottom or go up people will be telling that story about europe since january of last year and it hasn't -- and the trend's essentially basically continued. so it is about the shocks. i would say closer to 190 regards this horrendous positioning adjustment that we saw, you know, sort of across all asset classes. but it wasn't really fund amo t fundamentally driven. >> thanks for coming in. mike, we'll see you later this morning. when we return, adam neumann stepping down as ceo of wework we've got the details and what it means for the company's ipo time line. that's straight ahead. then boeing will be paying families of the victims killed in the 737 max crashes compensation fund manager ken feinberg will join us to talk about that settlement. quk x"n wchg u'reatin "sawbo ocnbc the family recipe.
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i decided that i wanted to go for electrical engineering and you need to go to college for that. if i didn't have internet in the home i would have to give up more time with my kids. which is the main reason i left the military. everybody wants more for their kids, but i feel like with my kids, they measurably get more than i ever got. and i get to do that. i get to provide that for them. welcome back to "squawk box. here's the markets
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a couple of headlines of stocks to tell you about. shares of nike helping the dow the stock trading at an all-time high 92.11. it's up almost 6%. separately, wework co-founder adam neumann stepping down he's faced questions over leadership style, use of company funds and a startup once valued at $47 billion that has shrunk to maybe $15 billion some people saying as low as $10 billion just in a matter of weeks. neumann saying i'm so proud of the team in recent weeks the scrutiny directed towards me has become a significant distraction and i've decided it is in the best interest of the company to step down as chief executive. investors had expressed concern that neumann exercised too much control over the company in voting each of the shares as a result
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of what took place yesterday will go down from 20 votes per share earlier this year to 3 arty minson and sebastian gunnigham have been named co-ceos of the company there is speculation they may get replaced by an outside person no search is ongoing now but there are investors who say differently. separately, what one person said the parent company we could layoff 4 to 5,000 employees in an effort to reduce spending it employed more than 12,500 people as of june 30th by the way, it is one of the largest tenants -- it is the largest tenant in new york city, the largest tenant in london in many, many big markets. it trouble ensues it can have a real impact on real estate prices, commercial real estate, frankly across the world neumann's rise and fall is the
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subject of a column that i wrote this morning related to jpmorgan and its side on both of this as i argue the most critical enabler of all of this. >> we should say that? >> i should say it >> do you think russell brandt as adam neumann. >> casting the movie >> if it becomes -- >> yeah. >> do you think he can get rid of the strong accent he has and play adam neumann. >> is it a comedy? >> we don't know yet. >> like a dramady. >> it could grow a romance in there, too >> bromance. >> yeah. normally you have some details about all of that stuff, too you hear everything. on that article that you wrote, why were you third and did you do 1/3 of the work >> you know, i don't know. >> i think you've got some clout over there and they put you on there -- >> just to give me a little credit >> no, you know what, we've been working -- i've been on the
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phone for practically 72 hours now. >> why third then? >> because there were other people who really did -- >> did more? >> and actually had gotten the last piece of it or the most critical piece. >> see, i never worked at a -- i know it's a shocker, but i never actually worked in a journalistic organization. >> i'm glad you're calling t"the new york times" a journalistic organization. >> when you started. coming up, the only guy in the world that fairly splits money up ken feinberg, you are in demand at all times you have never been -- and not had something to do in this world. >> like solomon. >> he is, like solomon fair and smart administrator of the boeing financial assistance fund which is going to provide financial assistance to the families of the lion air flight and ethiopian flight and dr. scott gottleib on the vaping crackdown which has our producer very angry.
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now the answer to today's aflac trivia question. which company started out making motorbikes in the 1940ed and went on to make the most popular car in the u.s. in 1989? the answer, honda. all right. welcome back, everybody. phil lebeau joins us right now we've been watching everything that's been happening with boeing and what they do next after the crashes with the 737 max. phil has some of the latest on what's been happening there. phil, good morning. >> reporter: becky, it will take a while for this to play out we know that the planes are grounded we know they are trying to get the faa and other regulators to recertify them you still have two crashes that are going to get a lot of attention. one earlier this year in ethiopia and one late last year in indonesia now the company has set up a
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victim compensation fund what's noteworthy about this fund is that this week they said here's how much money the company will be giving to the families of each of these victims. now they don't waive their right to sue boeing and pursue a lot more money in courts in the future, but here's what the fund basically comes down to. it sets up an amount of money that each of the families of the victims are eligible it comes out to $144,500 per victim that's a total of just under $50 million that boeing is setting aside for the families of those victims. by the way, they're also directing another $50 million, boeing is, to crash communities. ken feinberg and his firm, they're going to be overseeing the distribution of this cash and, andrew, i know we're going to be talking with ken in just a little bit a lot of questions have come up since boeing first announced this a lot of people saying how did they come up with this amount? should there be more than just
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$144,500 as part of this compensation fund? we'll be seeing more of these questions play out over the weeks and months to come. >> phil, thank you for that. stick around just for a moment because we want to bring in ken feinberg who is one of the administrators of the boeing financial assistance fund and we're always thrilled to have you here and to talk about what's going on. tell us about how you got hired for this job and what you have done now. >> i received a telephone call from boeing. boeing asked me and my colleague who's been with me on all of these funds, camille biros, the two of us, we were asked to design and administer an independent fund we would decide who was eligible, how to distribute the funds over what period of time and over a relatively quick 45 days we developed the program and yesterday we began to sent out the claim packets. >> just to be clear, victims will get money, compensation, but they're not prevented from
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suing? because oftentimes that's been the way these programs have been structured. >> that's right, bp or gm they had to waive their right to sue. that's not this program. >> right >> this program, i'm instructed, $50 million to be distributed. has nothing to do with the litigation in chicago or elsewhere. this is boeing's offer to these families as a -- >> does boeing say this is how we want to do it or do you say to boeing, this is how i think you should do it >> the latter. camille and i say if you're going to distribute these funds, for example, don't start asking families how much they earned in rwanda or somalia. people died from 35 foreign countries on these two plane accidents. so we advised boeing and boeing said, you guys know how to do this you do it. you decide we'll provide the money. >> ken, you've done this so many times it still comes down to the grim reality of trying to figure out how you value a life what do you do to someone who
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had a family with a lot of kids? what do you do to someone who maybe was young and had a mother or father that they may have been supporting? how do you figure that out how do you determine it? >> the same way courts and jurors and lawyers and judges do every day in this country, usually it is based on financial need and how much you would have earned in a work life but for the accident here, simple 50 million, 346 victims equals about $144,500 whether you were a lawyer in rwanda or a worker or whatever. >> how do you figure out -- how do you figure out who to pay if it's not clear-cut, if it wasn't someone who was married, had a spouse, had children, something along those lines? >> a challenge. >> it's a real challenge in a country, let's just take morocco. well, what is the local estate law in morocco if somebody dies who's a citizen
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of morocco what does the law of morocco say about survivors, wives, children, siblings so we've had to go back in each of these 35 countries and we have had to learn what does the estate law say if somebody dies on these planes from indonesia, what does the law of indonesia -- >> it goes to the closest male relative who may be a brother who's estranged and not to the wife or the girlfriend who had the child? >> those are the issues. in india, the pilot was from india, that the mother of the victim is entitled to like half of the estate. so for 35 countries this was the challenge. in the united states we know the law in each state, but when you are talking about foreign nations and how do you make sure that $144,000 to a family in rwanda, how do you make sure they're going to get the money >> right. >> even if you decide here's the
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person entitled to have the money, how do we protect those funds? and boeing has been terrific in saying to camille and myself, you guys figure this out we'll give you the money, you will be the ones who can overcome these challenges. >> phil, you had a question, too? >> reporter: hi, ken phil lebeau. you and i talked extensively when the gm switch crisis was going on and the compensation fund was established there in that case i know that you talked with -- you and camille both talked with a number of the families of victims and victims themselves who were not killed in ignition switch accidents did you talk to the families in this case with boeing? and if you did, what did you hear back from them? because all we've heard so far is some congressional testimony from a few relatives who have said, look, this looks like a pr stunt to us. we don't think that boeing has done enough or has been forthcoming enough what have you heard back from the victims' families? >> we've talked to a few
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families and we're continuing to meet with groups of families later this month in washington a whole group is coming to see camille and i from indonesia, but what you learn from the families in a case like this skepticism what does all of this mean we're getting all of this money. we can continue to litigate with our lawyers in chicago this is separate there are no strings and i think the 9/11 fund, phil, you'll recall, it took a while for families to get a comfort level that this is on the up and up and what we're trying to do with these families and the lawyers representing these families in all of these foreign countries is explain to them, there really are no hidden agendas here we're trying to get the money out. boeing is pushing to get this money out separate from the litigation there's a deadline of december 31st to get the claims in and process the claims, get the
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money out so we're learning from the families, very emotional as usual, but we're trying to explain to them that this really is money that will have no impact on their right to go to court or seek other address. >> ken, one quick follow-up question and i know andrew and becky have more. my next question would be this. not to be intelly kate about this there are more people who said if these crashes had happened in the united states, the way this would play out would be far different. the compensation fund would be far greater and that there would be a bigger price to pay, if you will, for boeing do you believe that's the case do you believe that there would be a greater amount per victim, so to speak, if these crashes had happened in the united states >> absolutely not. don't forget, this is the key mentioned at the outset. these funds, $144,500 have nothing to do with families or
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lawyers seeking additional compensation in the courtroom. just like in 9/11 you'll recall, people could opt out of our program and litigate if they want general motors, you covered it, phil >> yeah. >> if people didn't want this, they could go litigate here this is money that is separate and apart i don't think it would make any difference if they were american citizens, it is a parallel program that allows family members to accept these funds and continue to go to court in chicago and seek vastly additional sums if they want to do so. >> ken, we've got to leave the conversation there we are very appreciative of you being here and always welcome back. >> thank you very much. >> i hope you don't get more calls like thisbecause it mean there's always horrible problems. >> when camille and i pick up the paper every day we look on the front page and sometimes,
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uh-oh, a shooting or a disaster and we sort of disconnect the phones for a while. >> ken feinberg, thank you. as we were talking to ken, phillip morris announced that merger discussions with altria group have ended after much deliberation they have agreed to focus on launching the iqos product as part of a mutual interest to get a smoke free future. it's the only heated tobacco product that has pre-market authorization from the u.s.fda >> i remember the talks got much more complicated between these two after all of the concerns of juul av altria took a 35% stake. there are questions about what's going to happen to juul. 80% of their sales, 80% of juul's revenues comes from
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flavored ecigarettes and that is increasingly coming under consideration. >> this is a new one they were talking about launching. not an evapor. the only one approved by the fda and some other news that seems to be hitting right now, it looks like juul's ceo is stepping down. >> kevin burns. >> so obviously a lot of this happening very quickly last night massachusetts governor put in the widest ban that we have seen to date. four months where no ecigarettes and vaping products will be allowed to be sold in the state until they figure it out you have illinois considering what's been happening here the cdc and state of california are telling people they shouldn't be vaping or using ecigarettes until this is figuring out. >> we have dr. scott on. altria executive is replacing the ceo of juul. >> that's what happens when you own a 35% stake and you realize your entire investment which was worth $12.8 billion is now in
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question things are moving very quickly and very rapidly on this front, but the man who's been at the center of all of this has been scott gottleib dr. scott gottleib was the head of the fda and was the first to crack down on what he saw in terms of vaping and some of the ecigarettes. he led the attack on juul and pushing back that they could not be marketing to children because you have seen an epidemic that has broken out dr. gottleib joins us to talk about the latest developments. dr. gottleib, thank youfor being here first of all. we are just hearing about a lot of this news as you were sitting down in the chair. what do you think about where things stand >> well, i think we have two crises now one is the epidemic of youth use of ecigarettes this has been going on for some time we saw a 78% increase last year and another 30% increase this year on top of that of kids using ecigarettes. that's a crisis born of the
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access and appeal these products have of kids it's driven by the legally sold products of juul and njoy they're buying in convenience stores the other crises are the acute lung injuries. if we didn't have so many kids using ecigarettes they wouldn't be at risk for the acute lung injuries it's not clear that they're being sold by the legally sold fda products it appears that many of these acute lung injuries are being driven by illegal products with oils in them that are causing things like lipoid pneumonia the legitimate products are water soluble. they cause chronic lung injury they are not safe. we believe they're less harmful than combusting tobacco. in most cases it doesn't appear that the legitimate products are what are causing the casings of acute lung injury. >> scott, can i ask you about a
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headline we just read. phillip morris and altria are ending their talks in that announcement they go on to say they are going to be launching a product called iqos. they say it's the only heated tobacco product with premarket authorization including two menthol variants from the fda which followed the rigorous science-based review leaving it to be authorized and it is appropriate for the protection of public health how much do you know about iqos? >> right it was approved recently it's called heat not burn. basically a cigarette that you put in a device that heats it and doesn't combust it they brought forward data that's not as bad as lighting it. i think the key here is to remember that phillip morris
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went through the regulatory process, spent years doing it, probably spent hundreds of millions of dollars doing it it demonstrates that regulatory process can work and new tobacco products can get through and they're necessary for the public health in helping currently addicted smokers help. no vaping company, no ecigarette company has been willing to engage in that process and file an application the process is open to them. they could have done this years ago. we asked them to do it years ago. the invitation has been out there for them to file for approval i think the fact that they haven't engaged the regulatory procession makes them very vulnerable critics are conflating the acute lung injuries with legally sold ecigarettes. there is overlap but in some cases they're distinct i think they're getting very little sympathy because they haven't taken the steps to try to demonstrate that their products could be beneficial for adult smokers. >> you pointed out that when
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phillip morris did this with iqos it took hundreds of millions of dollars and years. you pointed out any ecigarette or vaping product would take years and hundreds of millions of dollars people who have been investing may not have realized the time line. >> i think the process is more efficient now. the agency, while i was there and since i left, has issued both guidance and regulations defining what that application process looks like in some respects phillip morris was a pioneer. they filed the application before the regulations and guidance were outlined there's a much more efficient pathway for people who want to engage it. i don't think an ecigarette company would have a problem getting a product through a pmk process. it's always hard to go first i think that process has been better delineated. it's not going to be a quick process and it's not going to be
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inexpensive. you have to do some testing to show products are less expensive. that's the standard under the law. i mean, congress passed this law on a broadly bipartisan basis so these companies do have an obligation to engage the process at some point. i fear that the process and that that engagement has to happen right now given the risks that we've seen from the products in the marketplace. >> let me ask you to put on a different hat but as someone who has worked on wall street and you're on the board of pfizer too. we've heard in the last few minutes that the ceo of juul was stepping down and that he would be replaced by someone from altria what do you make of that move? what does that tell you if you try and read the tea leaves? >> i think a lot of the traditional tobacco companies did make bets on the non-combustibles, the so called modified risk products i think there is still a place for these products to potentially help currently a
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diktded dikted adult smokers altria made a big bet on this. they're in some respects committed to that bet. juul hasn't managed this product in the marketplace they created this teen epidemic. if you ask kids what they use, they don't say i vape, they say i juul for the first time in the 2019 national tobacco survey, we're going to have a point estimate of what percentage of american youth who vape use juul. we put in that survey a question do you use juul. for a long time we didn't know how many kids are using juul the fda has that data. they haven't released it they're probably still scrubbing it to make sure the number is accurate they know how many kids are using juul the commissioner's testifying and saying he may well get asked that question by congress. they probably have that data i don't know for certain, but they probably have that data right now. my guess is it's going to be a high percentage of kids vaping products are using juul product. >> scott, let me go back to your
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role as a former regulator, someone who has just stepped out of this administration it seems to me that we're reaching some sort of an inflection point and the states are now trying to get more active regulating the government, the federal government is trying to get more active regulated i'm not just talking about when it comes to ecigarettes, vaping, some other issues out there there's this entire culture of up starts that wall street has been celebrating for the last decade or longer you can look at an uber, airbnb, you can look at any of these companies, wework where the culture was move fast and break things, don't worry about the regulators, we'll worry about that later a lot of that is coming them roost and there is a little bit of a pendulum swing back they're looking at all of the tech companies and anybody and everybody where their industry has gotten ahead of the regulations. do you think this is a bigger issue, kind of a pendulum moment >> i don't think juul realizes
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they're a tobacco company. we're seeing a lot of investment money come into the space. one of the things that happened this summer you is you saw hardware for vaporizing cbd. they put the money behind big marketing campaigns and popularized the vaping of cbd. i believe a lot of these acute lung injuries are going to be cbd and thc-based products you have to look at what they did to sell the hardware they sold the hardware, popularized the activity and they drove that activity some or a lot of that particularly by kids it's very difficult right now because there's different problems there's the teen use of ecigarettes and there's the acute lung injuries. if we conflate the two and we pull the legally sold ecigarettes off the market, it will increase the market for the illegal products we better be ready to enforce against the illegal products
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right now fda, my guess, they have 15 or 20 field force operators out there policing against the illegal product. so if congress wants to pull the illegal product off the market they better give fda, i believe, more money to police the product for the illegal products. >> juul lab says it's going to restrict product-related advertising and will not lobby the administration on draft guidance so i guess the debate had been there whether they were going to go on the attack and go on the offensive position on this or whether the defensive position. >> i wish they said they weren't going to lobby the administration two years ago it would have saved me a lot of time >> what do you think happens next >> well, again, i think that it's very important for people in this space to make distinctions between these different problems they're interrelated the solutions might cross over i think you're seeing a lot of conflating of this we'll hear from the fda commissioner today on the agency's view.
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i think the agency has historically said they might have some redeeming value if they can help addicted smokers get off of tobacco we've gotten so far down the field of the dangers whether it's tina diction or acute lung injuries from what are probably illegal and maybe some legally sold and legally made products as well that this opportunity may not be redeemable. >> doctor, could you ever see a moment where a juul-like product is a nicotine patch? >> yes. >> that's the way it's marketed, that's the way it's sold, that's the way it's regulated >> yes i wrote an op ed in the wall street journal advocating that they be brought through the over the counter. the schchallenge for them, they a two species annal tox study. they damage the lung i don't think that study will be clean. i think the products do cause chronic lung injury. the standard is to equate them
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against tobacco. if they can legitimately help an addicted smoker quit combustible tobacco, it's probably going to be less lung injury than from smoking. they are a modified risk that's what you would have to dem mop straight through the otc pathway. that could be an expensive study. that said, i think if a company came through that pathway, i think they could have a monopoly on this market especially as the vaping product sold as tobacco products start to be pulled off the market which is what we're seeing now. >> scott, want to thank you very much for your time today again, dr. scott gottleib just left the head of the fda -- as the head of the fda earlier this year he was the one who was leading the charge against juul being marketed to teens and to children we're just seeing this all kind of come home to roost with juul's ceo announcing that he'd be stepping down today and would be replaced by someone coming from altria which has taken o you the a 35% ownership stake in
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juul for $12.8 billion last year thank you again for your time. great to see you. >> thank you. ceo of ab inbev and water.org joining us got that v, yeah, i ain't petty, ♪ ♪ looking fly, looking fly, ♪ ♪ looking fly, yeah, they ain't ready. ♪ ♪ i can shine, i can shine, ♪ ♪ i can shine. ♪ i'mma do what i'm made to do. ♪ ♪ i'mma do what i'm made to do. ♪ built for excellence. you start from the foundation up. the excellence is reaching dreams and chasing them at the same time. ♪
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this is what i do. for more than 22 million people in 13 countries, so far have been helped by water.org
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they've partnered with major companies. joining us now to discuss their partnership, carlos bredo, ceo of anheuser-busch inbev and gary with water.org we talked about episodic tv. we've been following this with you and matt damon the actor and the efforts to make a dent in what's a global problem still, and that is access to clean water. last time we had the stella partnership. this is a continuation of that, right? >> yeah. yeah absolutely this is how we're reaching millions of people around the world. the partnership with stella has reached 2 million people we're on our way to 3.5 million. what we're seeing is the power of two brands. stella and abi with water.org. taking the message to people in
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new ways go back and talk about it. one out of nine people, i don't know if that helps what's the total number? you've helped 22 million which is a big number but it's scratching the surface. >> there's still a lot of people 800 million people that lack access to water. 2.1 billion without access to sanitation what we're doing with stella is we're creating a new model helping people get access to water through finance, through micro loans that they can afford once you do that, you can turn the market capital loose on this the philanthropy that they provide basically corrects the market failures, helps us to accelerate market capital. >> if i may add, what we saw is every time you connect a brand that's well known, respected, trusted to a cause you get consumer slack because a lot of people want to do good, they don't know how and they don't trust a lot of things they see when they see a trusted brand
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connected to a trusted organization, they feel, hey, why not? if i buy this chalice or this product, i'm helping somebody connect to water after we connect it, what they told us is that the number of people, especially young people that connected to the cause, went really up big time. so that's something that brands can do to help such cause. >> you can see the direct effect of what you do with this we had the discussion of an esg money manager. why don't you just do something. instead of, you know, sort of dressing it all up and trying to introduce people, just tell them what you're doing. maybe they get their money back. maybe they get 2%. you've got people with micro loans. you have women or whoever is responsible for clean water, they spend four hours a day getting access to people they can't go to school, they can't be with their kids they can't do these -- for 200 bucks they can have a line run in there and they all pay it
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back too, right? >> this is the underlying asset that they're investing in. loan portfolios. people that repay them at 99%. if you can put together we're talking about water equity a fund that allows you to bring the institutional investors, which i believe we'll be able to reach now as we get our returns up, institutional investors that get esg with this. there's esg, there's esg, right? esg for a wind farm out west is one thing. esg for a woman who makes $2 a day and gets water, that's what we're doing. >> can people take return of their principal, 1 or 2% bonds are -- negative interest rates in new york anyway you get your money back and you help someone in the process. >> they would but you still can't scale to the type of capital. this is a trillion dollar problem. charity is never going to get us there, but charity can be the bridge to get us there to reach those institutional investors to really scale it up. >> i think what's new is $3.13 which is how much you're going
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to donate for everyone of these chalices that is bought, that can provide access to water for someone for five years how does that work >> it's incredible they have devised a system like everything you just described. you need some seed money to start the fire wheel a lot of them are in the emerging markets that we support and sell to. it's on the line that's in the market >> updated >> where's jason because i always seems like when
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i see him, i think i can take him. you know what i mean >> jason more to come on "squawk box" this morning across the tape in the past couple of minutes. phillip morris and altria have officially ended merger talks. and juul labs. eangewinheexhon all much this brki ns t nt ur in just a moment it was sophie's big day.
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by the way, she's the next mozart. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places. it also has the highest growth in manufacturing jobs in the us. it's a competition for the talent. employees need more than just a paycheck. you definitely want to take advantage of all the benefits you can get.
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breaking news in the tobacco and vaping business. altria and phillip morris are ending merger talks. the ceo of juul is out the ecigarette company is suspending in the united states. impeachment in the united states what it means for his trade deals, the economy wework, former twitter chief operating officer will talk to us about strong-willed founders and getting through corporate growing pains.
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live from the most powerful city in the world, new york. this is "squawk box. >> good morning. welcome back live from it in times square >> a walgreens ad behind you i don't think anyone could ever go anywhere else i'm joe kernen with becky quick and andrew ross sorkin. >> viacom over your head >> yeah, right the futures right now. futures open just a little bit down about 15 points a little bit
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the bodies, fixed income we've got a flurry of breaking news to tell you about as we start this hour. phillip morris and altria have ended their negotiations they're focusing on the launch of the iqos heated tobacco in the united states. that has been approved in the united states by the fda it is not an ecigarette. the tobacco is not combustible we just spoke can scott gottleib of the fda, former head of the fda who said this was something that took them years and hundreds of millions of dollars to get this going. as a result of all of this news you could see phillip morris shares up by 7.6%. altria, which owns 1/3 of juul, right now you see its stock is also higher. up by 3.3% in a related story juul labs announced ceo kevin burns would
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be stepping down to be replaced by kasey kroftway. altria owns a 35% stake in juul. it paid $12.8 billion in that stake back in december of last year juul saying it's going to be suspending all broadcast and print in the united states maybe worth noting that kasey kroftway was the one who headed up the launch for iqos at altria before he was moving to this position also, nike beating estimates on both the top and bottom line for the first quarter. nike's results were boosted by a significant jump in online sales. sales in greater china that surged by 27% and that dow component is up by 5.5%. let's get to the other big story that is now rippling through washington and the markets and that is the new impeachment inquiry of president trump. eamon javers is in washington and he has the latest details.
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eamon. >> reporter: andrew, that's right. we are here at the u.n we thought this big story was the meeting between shinzo abe and president trump but of course this day now completely over taken by the events in washington nancy pelosi announcing a house impeachment inquiry last night the president responding furiously on twitter here's the president's tweet from earlier this morning, just a short time ago, saying there's been no president in the history of our country who's been treated so badly as i have the democrats are frozen with hatred and fear. they get nothing done. this should never be allowed to happen to another president. witch hunt so the president making some of the same allegations about this inquiry as he did about the mueller investigation in his first term the day to day is going to unfold in a fascinating way. the president is going to be meeting with president zelensky of the ukraine he's the official at the center
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of this scandal. they've pressured him. it's going to be there >> there's questions there and ostensibly. >> also, jim and a cnbc contributor. and, jim, why don't we start with you
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the party that launched impeachment, if that should hatch this time. the markets would have been open maybe this will be a wash. a lot of those are seeing it does it make it less likely that president trump wins re-election and we have a democrat get in office who wants big wealth taxes and massive new spending. >> dan, jimmay be getting a little ahead of where the markets are. the democrats ended up winning five seats so impeachment actually hurt the republicans 20 years ago and that's the risk that democrats are taking by
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entering this fight. in the short run it means it's unlikely that nafta's going to get through. if you remember last week, nancy pelosi your family better the politics china. unilaterally. >> talks with china. >> you remember we were making very good progress on the trade
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talks until the mueller report came out it feels like xi was making a bet on political dysfunction some has subsided. you've now re-engaged that both sides are hurting so they need the escalation and i would argue the president would want to do something on china to show that he's governing while the democrats are playing politics with impeachment so it cuts two different ways. >> does this play into the hands of president xi in that president xi may say to himself, i'm just going to let this play itself out >> exactly >> right >> it's a possibility, andrew. absolutely once he gets past october 1st ceremonies in china, he can just walk away. no doubt >> to that point he says, listen, now i'm really going to wait it out? or if the president feels desperate that he makes a deal, then you re-engage and try and drive a harder bargain that basically ignores all the stuff that the white house supposedly wants beyond just purchases and ip and all of the stuff about restructuring, getting rid of
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the subsidies and all of that stuff falls away >> let me just ask jim a follow-up of dan's point about nafta potentially not making it through. we know that this action potentially slows everything happening in congress. when you start thinking through to what that can mean very directly, nafta not making it through, the white house taking unilateral action over drug prices, how does that play out in the markets and what would concern you the most >> listen, nafta's a risky deal. there was work left to be done on getting nafta through, on the new nafta or the other thing it's called which i can't pronounce. there was work to be done. >> umsca >> but without that and the risks, remember, the president in the past has threatened to pull out completely of nafta if they didn't get this through so, i mean, that is a huge deal. there is massive uncertainty amid the white house press secretary said we're not going to work with the other side now that this is going on.
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i think that's a pretty worrisome sign. >> dan, what would we have to see in the transcript or in the testimony from the whistle-blower that would cause speaker pelosi to actually make it truly official and to get her caucus to actually vote on this which she didn't have to do. she has her cake and is eating it too she's appeasing the left and it's not like previous impeachments where you have to vote on just beginning the inquiry. i'm not talking about the impeachment vote. >> joe, i totally agree. right now nothing has changed since yesterday other than a fanfare announcement but the whistle-blower will be pulled out. they're trying to get the whistle-blower to pull out congress goes away so this issue could die. they wanted testimony saying that this was a series of conversations not just the one conversation but this goes back to april they want to tie rudy giuliani into that and they want to make the case that this is a quid pro quo. that's why the ukrainian
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president's comments are so important. he seems to be suggesting that did not happen and i suggest -- i believe the republicans are going to argue that this is somebody with a political agenda coming after the president >> i already can hear it when they say putin denied it, too. see? see, they are in -- >> that's not going to help. zelensky saying it is not going to help at all. >> i don't think this issue is going to die if it's going to die it's going to die in the united states senate. >> going all the way to the senate >> i don't know if they need to take a vote. i would pay -- >> the impeachment probability is still below 50% on the predicting sights. >> then i guess it's a bye. >> so you think it's going to be an impeachment >> yeah. i think democrats are dead set on making this happen. that's why we're seeing this so we'll see what happens in the senate and if republican voters get swayed i think it's unlikely they're going to get swayed. that's what we want to keep a watch on. >> do you think the impeachment
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happens? >> i think the democrats have 218 votes for impeachment. if they want to take that vote in the house of representatives. i think it would die in the senate 32% of voters say they will vote for the other party if their member of congress supports impeachment in a gallup poll in june this is very high risk stakes for the democrats. >> there are plenty of democrats, especially in the senate, they want no part of this but they may not have a choice >> and who's the nominee at this point? biden was already fading, wasn't he >> yeah, but you see elizabeth warren winning in a national poll in quinnipiac this morning. she's winning in a number of states she's emerging the question is whether she's going to be a howard dean where she gets all the momentum and before the voting the voters look for somebody else right now she is the it person in the democratic party and biden is fading. >> i don't know who that somebody else would be at this point. it really does kind of look like elizabeth warren bring on the wealth taxes. >> predicted has some
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interesting -- low -- does michelle obama run, for example? my favorite was -- >> what? she didn't even want her husband to run. >> that's 8 cents. kanye is only 2 cents which was -- >> i'd say that's accurate on both counts. >> take a flyer on kanye >> why not what's 2 cents i love that they have kanye. >> 2 cents. >> he's talked about it before and -- >> jim, dan, thank you very much for joining us. >> great thank you. coming up, making sense of the drama at wework with anthony nodo the man at the top of businesses as varied as twitter and the nfl although those seem to be emerging we'll get him to weigh in on the wework shufflend t ahe drama when "squawk box" comes right back i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model.
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has been at the center of several businesses with their own share of managing drama. anthony noto, the former coo of twitter. he is now the ceo of sofi. sofi has some news to break with us this morning but before we get to that, anthony, want to ask you a little bit about what you think this wework saga means in the larger scheme of things. >> thank you, andrew i'm not that particularly close to the wework situation or what's happening, but i do think it's emblematic of a larger theme that's occurring which is as these companies create tremendous value there are different periods of time where they need different executives the value that's created is a direct result of having the right person in the right place at the right time. having a found jr. wier with an enormous vision is critical to get to a certain point in time then it may be necessary to transition to -- >> to an operator.
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i'm looking at an operator here. >> to someone who can operate a company, have a vision and build other things that are critically important, a great culture, a place that wants to attract great talent and retains great talent. >> do you think this says anything about the ipo market? we have peloton tomorrow wework was supposed to be the biggest. >> i think there are things that catalyze management changes. ipo is one of those. an executive may not be able to take a company through that catalyzes the board to make a decision otherwise, the company could continue on the path that it's on it's one of many different catalysts for a change. >> is it part of the emperor is wearing no clothes type of moment where every single deal is going to get a much closer look and the impetus is going to be on that company to prove that they're worth the money rather than the opposite? which i feel like it's been for several years. >> i think every situation is different as you go through them at the end of the day can the
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company continue to drive share for value for share shoulders? if you get too far out, it causes a reset. >> is there a reset on the idea the sort of a.mazonian idea that you can go years and years and years and lose money i think the lessons of amazon have been misunderstood. >> i think so, too. >> and the debt that they actually took on was so much smaller. >> but when you look at an uber, when you look at a lyft, wework, whether you think investors are not going to give them the rope that they -- that maybe people expected them to have. >> the most critical answer to your question is what is the path to profitability? on a unit economic basis, per building basis, per order basis in ecommerce can you generate a variable profit and comparing that to your fixed costs to drive incremental profit to the bottom line. if there's not a path, investors
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won't continue to buy the dream and when that realization comes valuation gets reset on where they are at that moment in time, not what it can be in the future. >> let's talk about sofi and your own dream you have some news to break here around the world of crypto which is now joe's favorite topic, if you can imagine that. >> we are very excited to announce we are launching cryptocurrency as part of our broader offering we're the only place you can apply for a brokerage account, sofi invest, and have the ability to buy stocks at no commissions, etfs. we've launched four sofi etfs, robo investing and cryptocurrency via bitcoin light coin and aethereum. >> three coins >> correct >> are there plans to make this a much broader marketplace in the scheme of coin base, if you will >> we will continue the rapid innovation we've had we'll add other cryptocurrencies as we've added new etfs.
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>> how do you decide which ones to take? >> great question. we listen to our members we are digital on the mobile phone. we have to have direct connectivity to our members to understand what they want. they're not walking into a business to tell us. cryptocurrency was the number one incremental product they wanted on the platform in addition to the other products we have. >> now that you've studied this, how much liquidity is out there for some of these currencies like by titcoin you hear horror stories. we bought them, we want to sell them you're off by multiples half the time. >> these assets are very volatile investors need to understand that these are assets that could cause them to have significant volatility in their portfolio. they should make it a small percentage of their portfolio if they decide it's a right investment we do not give them advice on what stocks and assets to buy. we want to provide access to free certified financial
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planners through their mobile phone and let them understand. >> if you don't want volatility, stick to the stock market and netflix or ge or something -- >> volatility is something you're going to have -- >> bitcoin does what netflix does in a day. >> it can move 10, 12% so do stocks in terms of hitting the bid on some of these currencies, you know, i guess the question i'm asking is sometimes you'll see bitcoin is now under 10,000. we have 8400. >> 8400. >> can you really transact at 8400 >> absolutely. there's plenty of liquidity. the reason why -- >> or 8200 now. >> the reason why the bitcoin pieces are volatile, they're new, not well understood there's not a ton of places where you can buy them there is a moment in time where there could be significantly more demand than supply or vice versa. that's why we want to encourage our members to have a diversified portfolio to avoid those periods of volatility and invest over time to dollar cost
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average. >> i interviewed jay clayton and we talked about crypto i get the sense from him that he is not necessarily jumping into the pool so quickly when it comes to maybe crypto etfs or other kinds of instruments do you have a sense that this is coming to a theater near you any time soon? >> what i'd say is it is a very controversial property for people to consider investing in. i think there's broad debates. that's been the same pace on many other types of investment over time. there's a period of time when internet stocks were incredibly scrutinized and there was a great debate about them. our advice to investors, make sure you understand what you're buying, it fits into your goals and it's diversified. >> my question is more existential. people still talk about it are you convinced that, for example, crypto or bitcoin has been around 10, 11 years now at some price, whatever that may be, it was at 4,000, it was at -- at some price is it here to say can you say it's not a greater
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fool actutulip mania. >> you wouldn't launch this business if it could be non-existent ten years from now. >> we're not recommending any particular stock or cryptocurrency our approach philosophically is to give the investor access. >> you're totally agnostic on the -- whether it's even an industry taen years from now? >> we're agnostic on it. we want to provide what's available. there are security stocks that are registered that will provide a platform that will have similar types of risk to them. >> does the noto family invest in bitcoin >> we do own bitcoin. >> you do? >> yes. >> were you early or is this a more recent phenomenon >> i started buying it in 2016 and '17. to be clear to the audience, i'm not recommending that or implying to recommend it we are going to make these products available for investors and educate them as a matter of fact, when you
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buy bitcoin or light coin on sofi we'll say this is a volatile asset this is an asset that hasn't -- >> you're good at that doing the disclosures. this is your former days as an analyst. >> you can get in a lot earlier today than you could have in the last three or four in terms of where the price is but then again it's not -- >> it has characteristics that over time there's optionality on the value. i don't know how to describe this. >> can i tell you one thing that's kind of interesting i really am hesitant to ever talk about this. >> really interesting? >> the stock to flow chart shows having in 2020 if you plot it out, today's stock to flow value is 82.50 on bitcoin. so it got up to 12, 13 it was at 20 but it's not -- it has not deviated from this long-term -- >> joe, your point's dead on there's a constraint on how much
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supply there will be of bitcoin at 21 points there will be no more issuance of bitcoins and that creates a dynamic that will increase demand versus supply. >> sounds like you think it's going to be here. >> we've got to run. as a former twitter man who competed with facebook, are you positive on libra or not >> i am -- i am an optimist on the opportunity that blockchain can bring to the financial services industry. it's one of the things we're focused on. >> may have been born at night it was not last night, i think. >> anthony noto, thank you. >> appreciate you having me. when we return, what's it going to take to stop the netflix stock slide? shares of the streaming giants are now in the red for the year as a slew of new competitors get ready to enter the market. can netflix get back to ruling the streaming industry like it once did we'll talk more about this when "squawk box" comes right back. ♪ limu emu & doug
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what if other kinds of plants captured it too? if these industrial plants had technology that captured carbon like trees we could help lower emissions. carbon capture is important technology - and experts agree. that's why we're working on ways to improve it. so plants... can be a little more... like plants. ♪ coming up when we return, netflix versus the world as other media giants get set to launch their own tv services, where does the long-time king of product fit in it's all coming up after the break. rything. you're right sir... everything. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead.
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dow is up. dow is up. "squawk box," welcome back
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cnbc here's some stories. jimmy johns is being bought by inspire brands for an undisclosed price. inspire is parent company of ashby's, buffalo wild wings and it will make it the fourth largest company. i have not been to jimmy john's. no data points julia? no ijimmy john's. shares of altria are rising. they will focus on the launch of iqos heated tobacco product in the u.s. in a related story, juul labs has replaced its ceo, kevin burns, with altria executive kasey kroftway the cigarette maker is said to be suspending its u.s. advertising. i have an idea, don't start! joining us on the "squawk" news line to join about the story, chris meekins.
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am i right, chris? then you don't need to quit. we wouldn't have you on right now. >> well, what i play is someone who worked at the department of health and human services, there's no question from a public health perspective the best smoking is not starting smoking, whether that's with regular cigarette use or with ecigarettes or with heated tobacco, which seems to be the new focus phillip morris and altria going forward. >> heated tobacco. we just had dr. scott gottleib on, yeah, it doesn't look quite as bad as actually burning the tobacco, but there probably are long-term health risks with that you know, you take juul, it's probably bad for you, but it might help you get off tobacco >> the problem is they were marketing it to kids and using flavors and -- >> that's what i mean. if you weren't trying to get off of something in the first place. i don't know why you'd try to start a nicotine addiction if you don't have one none of it makes any sense to me, chris. so what's the bottom line here,
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do you think, with the juul business which for a lot of investors with cannabis, they saw the jewel thing and they wanted in i think the asset's values are down 50% at this point across the board. no >> yeah. i think there's no question this has hurt the valuations of the companies going forward. what you've seen and what we knew all along and when i was talking to investors at the department in january to join raymond james was that, look, you're going to see increased regulations on ecigarettes, period you have a youth epidemic across this country you have an entity that literally targeted kids and they used the excuse of, well, there's some kids that are smoking cigarettes and this is better for them without having fda approval to say this is a smoking cessation pool and they went out, targeted these kids and at some point that was going to catch up to them. what we saw was with the tobacco
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studies saying more than 25% of kids had used an ecigarette in the last 30 days those are kids that will admit to using it. there is an epidemic going on. eventually you will see politicians going in and saying this is a step too far when melania trump weighed in with the president a couple of weeks ago expressing her concerns and you saw the oval office meeting where the president said he was going to move forward with banning flavored ecigarettes, that was a game changer >> i just wonder what would you recommend for the people that are making decisions and all of these things right now, the manufacturers, et cetera what would you recommend that their path forward should be >> i mean, i think you have to look at what the right public health perspective is. you understand that we're in a very different universe than whenever you were establishing original tobacco and cigarette use decades and decades ago. we're in a different world and in today's world you have to be responsible corporate citizens
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and as part of that you can't do anything that's going to result in increased use among kids. and if you're targeting kids and even if you try to stay roundabout publicly that you're not, that's a problem. second, this is a perfect example of how you can hire everybody in their brother in d.c. to lobby for you but sometimes it just doesn't work and in this instance they had hired lots of former trump administration officials, lots of former bush administration officials thinking they'd put up a lobbying fire wall in d.c. but the reality is the public health concerns from the teen tobacco use as well as this additional sicknesses we're now seeing from the use of mostly probably not juul pods with all frankness is something that can overwhelm that. >> do you have a high degree of confidence that there's not something long-term that we don't even know about that could result in there being major litigation down the road for people that are already addicted
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to juul? >> i suspect that there will be litigation down the road based on their marketing practices and claims that they made and that is something that people should have been expecting from the very beginning this is one of those freight trains that everyone should have saw coming but the dramatic increase in usage and the thought that, well, if we get kids on it early on they'll continue throughout their lives outweighed investors' perspective in looking at the regulatory threats as well as the potential litigation threats going forward. >> chris meekins, i was right. right at the beginning, chris, don't start. that's the bottom line we talked five minutes about it and we're back to that anyway, thanks. let's talk streaming netflix shares are now in the red for the year after hitting an all-time high back in early may. the stock is now off by 1/3 since then this week the company is out with some content that it's hoping will turn all of that around julia boorstin joins us. she has more on that front >> hi, becky that's right
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a big question for netflix as it faces competitors is how content will pay off with subscribers. hit tv producer ryan murphy's new subscription launches on netflix friday this is the first product on the recent spade of deals with tv creators new deals are mixed. 60% positive rating with 16 critics on rotten tomatoes netflix lured murphy over from fox. created hits including "glee," "american horror story" and "nip tuck." they're paying murphy $300 million for the deal netflix has also inked deals with david benioff and d.b.weiss and shonda rhimes for $150
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million. they're drawing subscribers. the company's domestic subscriber number dipped this will be an interesting one to watch especially as we get the next quarter's earnings. sometimes they actually release viewer numbers or at least a sense of how well the show is doing. >> julia, stay here. let's talk more about netflix and the new competitors in the streaming world. joining us now is joan solzman, senior reporter at c net i mentioned netflix earlier just based on the action in the stock over the past 12 months. is that purely, you know, that everyone can do this there's no moat? i thought there was a moat >> the dip in the stock is two factors. as julia noted there was a dip in u.s. subscriber that's the first time netflix has seen that pull back since it's become a digital tv network. as we know, netflix stock, it lives and dies based on the subscriber numbers in addition to that, it's a
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great competitive threat the greatest competitive threat it's faced, the streaming wars disney plus, tv plus and a spade of others that are the first real question about whether or not netflix can keep up the growth it's had so far >> i mean, part is the large numbers, right they've built the subscriber base that nobody else has gotten you wonder when they're going to run into a wall just from hitting some sort of saturation. >> especially in the u.s they have reached the point where they have more international subscribers than they have u.s. subscribers that's partly because of the law of big numbers there's not that many more people in the united states that haven't already tried netflix. >> do the stock prices change the dynamics with which they approach investing in the business >> reed hastings has been famously contrarian about how much he cares about that he said sleep is a bigger competitor and fortnite than disney plus. from all public stance doesn't seem like he's sweating it. >> go ahead, julia.
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>> does he know that they're very confident that the future growth for netflix is going to come over seas and they've been investing a lot in content but they're going to have to be investing in local language content and there will be laws that mandate that they spend money mandating content in the countries they're operating. they won't be able to slow down in terms of investment if they want to keep up that growth. >> who at this point -- i want all of them. i see the commercials where they can get you off of the things you're not paying for. have you seen those? i will do that for you >> you can ultimately pay more. >> i want everything. >> i want peacock, i want disney. >> do you want eight different services once they've all launched >> the money they're paying talent to come up with something i need to see and i love seeing things. >> but here's the difference between all these new services and the tv bundle. it's really impossible to start and stop it. if you're paying for tv, you're paying for it all year long.
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the services you could start it for a month and drop it. it's very easy to drop. >> that's scary after you've binged something. >> after i've binged something, i have the halo, i feel like i got something. >> i've got to keep them coming. if you spent another go to watch. >> but i think the fact that apple tv plus and disney plus both are relatively low cost is actually going to make it easier for people to do the plan and subscribe to everything. >> they're not going to allow that kind of binge viewing they're trying to insulate themselves from that kind of practice >> when do you think the technology is going to make it so easy to turn it on and off? >> i think it's already here. >> you think it's already here >> yeah. netflix lets you unsubscribe in two clicks netflix has been growing pretty well all through the time that it's made it so easy netflix is one of those providers. we're going to see a
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bifurcation. they are like cable without nuisance it's trying to be everything for everyone others are more niche that cater to a particular kind of fandom or particular kind of genre. then there will be the ones in the middle it's hard to see where the ones in the middle are going. >> based on what you just said, are news and sports going to continue to grow in value in terms of content because they're the only things you're not getting on some of these services. >> from an advertising perspective because that's the one time advertisers can be guaranteed you're going to reach people real time to the point of getting people the ability to sign up and drop a service, disney is right now ahead of the launch of their service trying to get people to commit ahead of time to a year because they are offering a year at a discount and they feel like people with families, such as myself, might be like, okay, i know i'm going to be doing this for the next year to lock them in so they won't drop the service. >> it's all good. >> content is king. >> yes, right.
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i would like to be a writer. are the writers doing okay now do we know >> there are a lot of places for writers to sell to a lot of them have been telling me they feel like this is getting a little bubbleiscious. >> they weren't participating in the good time. >> that's a whole separate conversation about the writers and agents. >> they are talented you have to admit. i watch these shows and i can't believe this stuff what am i missing? >> one of the things that's interesting about these -- >> no, he's looking at -- >> what show am i missing. >> this is your chance to tell him. >> did you watch any of these little shows from the emmys? did you see "fleabag." >> i can't watch it. >> not for you >> my son was there if that tells you anything and i was looking at him and he was looking at me and i'm like -- have you seen the first episode? >> oh, yeah. yeah you should get to the last episode. >> i can't i can't. i can't! i think thinking about it right
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now is an hr issue. >> have you watched "succession. >> no. that's his life. undercutting, climbing, all of that stuff that's you >> okay. thank you both appreciate it. >> maybe we should go to commercial. >> thank you, guys. coming up -- >> that's not going to make the podcast. you have to keep your cable. >> an inside look at joe's favorite topic impeaching president trump and what investors should be looking out for. take a look at the futures as we go to the break. dow up 10 points if we opened up now. back in a minute
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all right. welcome back, welcome to both of you i feel like things are moving so quickly that i'm not sure that this is going to be the most important focus of the markets today. but where do we stand, how different is this now that nancy pelosi has made this decision? >> i think for the mark -- we would buy, if we get a dip here, we would buy it. for based on what we have seen, and iny what the market is seeing, the reason it is -- it seems very unlikely that there is something here that could actually lead to an impeachment
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of a sitting president in an election year. so the market is saying, look, if anything what this does is it increases the odds of a warren nomination it is scary, maybe >> it is going to leave some -- some smear on both the president potentially and also joe biden >> i mean, i don't know any more than you do, becky probably less. so we'll see but it doesn't seem like it is good necessarily for either that well it plays to each base, we'll see how the middle of the country feels about it but i think the market feels a warren run is unlikely to take pennsylvania and michigan, which you need to have to get enough electoral votes to turn over the government >> so that is what we're seeing with the futures this morning, dow futures turned positive at this point how do you handicap this it is hard to feel like there was nothing that changed, but trying to figure out what changed and how, we did have
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guests earlier talking about how it means that nasdaq, the new nasdaq, new nafta, i should say, is less likely to get passed that's got to be concerning. >> if we look at where the market is now, not that -- from all time highs and look at the headline risks we had this year, the trade war, currency wars, now possible impeachment and biggest entry year drop has been 7%, you would think i was crazy. so i guess it is not surprising that the market is kind of shrugging their shoulders. putting aside how different the world is today, versus the 70s and the 90s, impeachment hearings didn't dictate the market for very long it created a short-term volatility as was a new risk, but then shrugged the market kept focusing on the things that matter more. >> is the risk political or is the risk these other larger initiatives which the president is undertaking which may now be
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more complicated vees s vis-a-vis china and trade. >> the market likes the fact that the trade war, the second year of the trade war has occurred it is no longer getting worse. our idea here is that we have had a decline in long-term interest rate expectations of about 100 basis points in last year, the market is up 3%. earnings are up 8. that tells you the valuation on the market has gone down, even as the discount rate on the market and most people's estimates is lower so the next move up here is simply if things stay stable, and we don't go into recession, you get a revaluation higher, which is very frustrating for bears. they look at the evidence they go, earnings aren't growing, they don't need to we just have a catch-up valuation gain to play here. so the trade war in our mind is not getting worse. and that's been good enough for the market now >> something to keep nimind, central banks, the world is cutting rates now. if you look at one of the drivers for pmi, three months
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out, it is central banks cutting rates. going into next year, we could be setting ourselves up for a reacceleration of global growth. >> another thing that is interesting is if you think about where is the weakness here, like germany has been in a manufacturing section -- recession for a year now you start to lag numbers manufacturing recessions have a way of curing themselves a lot of the recession is a cutback in inconvenienventory tt be replenished they tend to be self-curing things >> thank you for coming in good to see you. >> thank you. want to get down to the new york stock exchange now. so much going on literally in the past hour and a half jim cramer joins us now, want to get his take talking about the soap opera that is wework altria >> so fired up on juul >> well, i'm against kids dying.
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long-standing position >> the floor is yours, jim. >> look, juul is -- i'm not saying it is a criminal enterprise that's up to the u.s. attorney i did think that gottlieb -- look, he's the cnbc contributor, where was he, where was he he could have shut this thing down where he was he in the investigation of cannabis. he's a good guy. this is being sold on the black market too you go it a party with younger people, my wife puthey're beggi them juul did a remarkable job in a short time of setting the stage to killing a lot of people i use no euphemisms about these guys there is a lot of moral relatives, people say, jim, how about guns, alcohol? i don't give a damn about what they say about those they have an entrenched interest and own a lot of congress. juul didn't own congress the only time to stop them is right now. how about human, how about dad,
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how about mom? this is a great thing that this thing is unraveling, and altria tried to have a strategy to be able to make it so they weren't a wasting asset. looks like the strategy failed they paid a lot of money and it failed they should go all in on kronos, i don't know this is a national health issue, treated like it was some sort of just kind of boutique issue. we beat smoking in this country. and then juul came along and i know the real smart, i know berns didn't want his kids to use it. thanks for nothing let him go and try to -- let him watch his father-in-law die of lung cancer and beg for a cigarette. see what he thinks i want to know what he thinks. maybe if i had given him juul, maybe it would have been better. we have to have a stance sometimes. we're humans we're parents. i don't think that it is necessary to be so-called objective about merchants of death. so, there. i have somewhat of a firm opinion on this. i'm anti-team death. and everybody in america should be everybody. we have a responsibility to preserve teens
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i'm anti-teen suicide, anti-teen juuling. call me a dad. don't call me a journalist call me a dad. i didn't check my humanity at the door when i got my journalism card. >> we'll see you in a minute on "squawk on the street. you can subscribe to the new podcast, see the best of squawk on the squawk pod, look for it every day cnbc.com/podcast on apple podcast or - ♪ limu emu & doug
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and now for their service to the community, we present limu emu & doug with this key to the city. [ applause ] it's an honor to tell you that liberty mutual customizes your car insurance so you only pay for what you need. and now we need to get back to work. [ applause and band playing ] only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪
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make sure you join us tomorrow "squawk on the street" is next ♪ >> good wednesday morning. welcome to "squawk on the street." futures largely unfazed by this house impeachment inquiry and instead focused on trade as the president meets with shinzo abe of japan today we'll watch nike, wework, altria, best buy and more. europe's catching up to our losses from yesterday. oil down nearly a buck road map begins with the ecigarette crackdown hearings and investigations and sales

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