The start of it as we continue to watch alphabet shares essentially unchanged today, jon. Yeah and our ylan mui is there in washington who joins us with more. 170 million now in the context of facebook maybe doesnt sound like a lot, but thats a lot for the ftc right . The ftc is quick to point out this is the largest penalty ever collected under this privacy law that protects children when they are surfing the web and when theyre online the settlement was actually split between the ftc and the new York State AttorneyGenerals Office 136 million will be going to the ftc, about 34 million going to the new york a. G. And during the press conference i would be on the lookout for some very tough rhetoric from regulators weve heard from new yorks a. G. Saying she felt that youtube put children at risk and abused their power. We already had a statement from the ftc chairman saying theres no excuse for the violations that youtube is alleged to have committed. So i think that youre hearing a very strong tone out of regulators here in washington, but of course the critics are going to say, you know, wheres the bite wheres the actual teeth in this settlement will youtube actually have to change its Business Practices in a meaningful way and to implement strong conduct relief in settlement of an action brought by the ftc and the new York State AttorneyGenerals Office for the alleged violation of the childrens Online Privacy protection act, commonly known as coppa coppa requires that certain websites and apps get parents consent before collecting personal information from children the definition of personal information includes cookies used in behavioral advertising the coppa rule applies differently to thirdparties serving behavioral ads versus creators of child directed content. While the content creators are strictly liable for coppa compliance, thirdparties are subject to coppas requirements only where they have actual knowledge that the website or service theyre serving the ads to is child directed to put it in context for todays case, youtube as a general audience platform is not directly strictly liable under coppa for the content of the videos uploaded by others to its platform unless it has actual knowledge that the content is child directed our complaint alleges numerous instances in which youtube and google had actual knowledge of the childdirected nature of channels and videos on the the youtube platform this is the basis for the ftc to find that google and youtube violated coppa our order accomplishes three important purposes first, it imposes a substantial monetary judgment of 170 million with 136 million going to the federal trade commission as a civil penalty and 34 million going to the state of new york. The 170 million judgment is 30 times larger than the largest coppa civil penalty the ftc has ever previously obtained it is three times larger than any privacy penalty assessed against google anywhere else in the world, and it is ten times larger than the Civil Penalties we have obtained in all of our 31 prior coppa cases combined. A penalty of this magnitude sends a strong signal about the importance of childrens priv y privacy. Second, the order requires the companies to refrain from using or benefitting from the data that they previously collected from child directed videos or channels third the order imposes additional obligations on google and youtube that go beyond the requirements of coppa. The order requires youtube and google to notify channel owners about their potential coppa obligations. It also requires youtube to develop a system or a mechanism through which channel owners must identify their child directed content on the youtube platform so that such content can be treated in a coppa compliant manner this is particularly significant because coppa does not require platforms such as youtube to determine whether the videos posted by others are directed to kids or not. Going forward, youtube and google will automatically have knowledge of and coppa liability for all child directed content directed through this mechanism. In this way the order prevents youtube anding gastr google frog a blind eye to the existence of kids content on the youtube platform finally, youtube must provide annual training about compliance with coppa for employees that deal with the channel owners none of this is required by law. No other company in america is subject to these types of requirements, and they will impose significant costs on youtube. This case sends strong messages to thirdparties like youtube, channel owners, and the Business Community as a whole for youtube and other thirdparties like it that serve ads, they cant market their ability to get child viewers on the one hand and disavow knowledge that children are using their service on the other. They cant rate videos as kid directed for one purpose and then say they have no coppa liability when they collect information from kids watching those videos for those who create child directed content to upload on youtube, the message from todays case is that the ftc considers these videos and channels to be websites or Online Services directed to children under the rule and thus strictly liable for compliance with coppa once our order has been effective for a period of time, the commission will conduct a sweep of the youtube platform, determine whether childdirected content is being properly designated as such in order to ensure that the channels themselves are complying with coppa. And that is ftc chair owe recei Joseph Simons detailing the action, the settlement that requires al phabets youtube to pay this 170 million settlement lets bring back in our ylan mui. Ylan it strikes me how the chair is talking about how this only requires youtube to follow these rules. It raises the question, what about instagram . What about tick tock what about so many of these platforms that are popular with kids regulation isnt legislation, where does this leave the rules . Yeah, so i think that the hope of the ftc at least is that this settlement could serve as a deterrent and perhaps a model for other companies in the space. You heard him talk about ensuring that youtube does remain accountable for the provisions of this childrens privacy law. He said that he doesnt want youtube to turn a blind eye to the content that is on its site, and it set up this system that requires the content creators, the users of the site, to sort of selfdesignate and to identify the content directed at kids thats important for two reasons, one because theres been criticism already so far about the size of this fine. Simons said that cost to the business of setting up that system, that should be considered as a significant cost of doing business and added to that dollar amount of the civil penalty of 170 million, and in addition, it ensures that youtube and perhaps others will not be able to escape the very clear provisions and protections of this privacy law. However, theres a lot of debate amongst the commissioners about whether this provision actually creates a sort of back door system within youtube that if youtube can just point to the content creators and say, hey, it was their job to determine whether or not this content was directed at kids, their job to follow the rules, not ours, perhaps youtube could escape some culpability there but here you hear simons very adamantly arguing that they want to ensure that youtube is aware and is designating and does not turn a blind eye to whats being posted on its site. Yeah, ylan, definitely right out of the gate simons there stressing the size of this coppa fine compared to all the other ones before. Ten times larger than all of those cases combined, just to put that number in perspective thanks for joining us and breaking down this conference as it continues Julia Boorstin has more from los angeles as well. Youtube itself has been coming out and outlining the changes its going to make due to this situation with the ft clrks as well reporter thats right, the ceo of youtube posted a blog post talking about how theyre going to be working with lawmakers, and they are going to be taking additional steps to comply with coppa, and to make sure theyre doing what they can to protect children making big changes about the way they collect data from kids using their service, the way they target ads, also saying that in addition to asking content creators to selfidentify, theyre also going to be using machine learning, using technology to try to identify any content targeting kids making a lot of changes there. One thing theyre really trying to do is move kids away from their regular youtube platform and onto youtube kids, which is a separate place with content just for kids, which will be much easier to make sure theyre complying with the rules analysts told us they do not think this is going to have any impact on the Financial Performance of the company because the fine is so small in comparison with alphabet, google and youtubes revenue, the company is so large that it just will be a drop in the bucket for them the real question is whether this could dissuade content creators from wanting to create content for kids because their simply not going to be able to make as much money from advertising. Youtube is creating 100 million fund to create original content for kids well see whether if youre a mom creating content with your kids and have been making a pretty penny from youtube, youre not going to be seeing as much revenue from youtube. Well see how that shifts things. Certainly the fine itself, as you said, 1 100 of 1 of their 2020 revenues. Julia boorstin, ylan mui, thank you for that well turn to the rally. Stocks in the green led by the tech sector. Chips on pace for their best day since about the middle of august our next guest advising to stay long in tech joining us this morning, wedbush head of tech, and ubs Global Equity strategist keith parker good to see you both. Good to be here. Whats your general take . Obviously some positive headlines overnight for the global market. August was an exhausting month i think we saw 60 of the days in the month had 1 plus moves, and that shows were in a defensive mode thats carrying oifr into early parts of september as well i think main strategy at least amongst the tech and dedicated investors i speak to is to avoid the blowouts the cloud sass complex, valuations got extremely stretched to the upside, and i think the pain that was witnessed last year in q4 of 2018, thats fresh on a lot of guys minds. So really yeartodate, protection has been at the forefront of the majority of conversations and guys are looking for more value pockets in the sector, whether its in the memory complex or payment side even comcast and the cable side, activision within the video game space guys are scared of the more kind of crowded trades. Keith, whats your take on this if youre searching for growth, especially as Interest Rates continue to move lower here, that tech continues to look attractive would you be taking a more broadbased approach here, or would you be doing more individual stock picking yeah, i think at this phase of the market where the amounts we saw yesterday, factor in falling below 50, you start to see some cracks typically in leadership, and i think we saw some signs of that last year in the Fourth Quarter where some of high flyer tech names had sold off pretty hard. I think youre much more in the phase of being selective within the tech sector, and the to the point about value, though, and thinking in terms of aggregates, tech dividend yield plus buyback yield is really only second to financials, so you have that high yield plus growth, so there is definitely pockets of value plus growth where you can potentially ride out some of the market volatility amidst the backdrop of slowing growth and another round of tariffs coming on board in september. Joel, talk to me about the macro picture impacts tech we see this brexit drama, the plot thickening every day. That is the risk increasing, or is it decreasing in a way because now a Nodeal Brexit perhaps more unlikely. Ask then when you see whats happening in hong kong, is it good that now theyve pulled that extradition bill entirely, or you know, the fact that the protesters now say, no, we wanted more than that, does that mean increased risk for tech overall . I mean, to some degree. The pulling of the extradition bill one more overhang removed, and guys dont have to wake up and have discussions on what the next policy move out of that region is going to be. Brexits approaching well see what kind of happens there. Again, the big, the gorilla in the room remains the state of china u. S. Trade, and obviously now weve been pushed out to middecember on another round of tariffs that should be implemented. But end of the day, it just seems like china and u. S. Are going to be in kind of this tug of war for the foreseeable future and knowing trump and his track record, hell probably see some sort of big humongous deal prior to the election, but again, sectors like the semiconductors, High Conviction buying is going to be nonexiste nonexistent. When theres policy by tweet, youre at risk on any given day of getting blown up or caught offsides on a trade. Youre going to see guys a little bit more nimble, priced sized smaller than historically until this overhang is removed. Is the u. S. On track to be making investments right now giving the macro backdrop here, or are there other opportunities to be had looking globally i think u. S. Remains a acccoe holding in a portfolio giving its total yield of buybacks plus dividends is high, if not the highest across the world, and growth remains above many parts of the world, and the defensive characteristics, whether its staples, health care, and dechb defensive growth remains high across the region. U. S. Tends to outperform significantly. Until we start seeing credible signs of that turning point in markets, u. S. Remains a core holding, but we do see pockets of value starting to open up weve seen some risk repriced. You mentioned brexit, also italy, italian politics, europe amongst Top Performing regional indices over the past one month, and i think part of that narrative is some reduction in very elevated uncertainty. Certainly september is going to give us a lot to juggle from the Central Banks to a lot more. Guys, thanks, good to see you. Keith. Hurricane dorian continues its slow trek up the southeastern coast of the United States and Contessa Brewer is back at hq with the latest in the daylight after the storjs the video coming in from the bahamas is really stunning the Prime Minister says some areas have been decimated. The red cross estimates nearly half of the homes on grand bahama and abaco island are gone the official death toll stands at seven, but listen, so many people are unaccounted for at this point, and were learning even shelters were destroyed during the storm unbelievable video infrastructure, which is critical to recovery is crippled bridges are gone the grand Bahama International airport in freeport is under water. The western air terminal there serving regional flights and private planes crumpled. The port in freeport is a critical hub Buckeye Partners has a 26 million barrel Petroleum Storage terminal there, and the company says its first task is to account for its employees and their families it has pledged to bring in needed supplies to the island as soon as its safe. Right now dorians path is still slighting up the coast just offshore orlandos theme parks have reopened the airport there is still closed for a few more hours. It looks like orlandos airport is planning to reopen in about 45 minutes seaports in jacksonville, savannah, charleston are closed. Charlestons airport plans to close at 3 00 today. Jetblue mentioned in a filing it expects to see a slight negative impact on its thirdquarter revenues because of dorians impact hurricane warnings are now in place for charleston, myrtle beach, wilmington with an expectation of extreme coastal flooding and storm surge through the end of the week, and i just want to remind you, next week marks the anniversary of florence, which of course inundated wilmington in the surrounding regions with water, cause aed a lot of damage there now this one is making a beeline toward wilmington. Jon. Yes, indeed, that is rough. Thank you. We are getting a market flash as well, dom chu has that at hq. It has to do with oil crude has been climbing steadily throughout the course of the session for wti and brent. Heres some news that could affect it further. The Treasury Department has designated a large Iranian Petroleum shipping network as one that supports and finances terrorism. This is through the Islamic Revolutionary guard corp. And through hezbollah, the militant group in lebanon iranian officials are kreegzingly seeking to deceive customers into buying iranian oil and warning the Maritime Community against dealing with sanctioned individuals and groups so a new issue from the Treasury Department coming out. It could have an effect on oil prices well find out later on today as this develops. Back over to you thanks, dom chu. And when we return, more than 30 u. S. State attorneys general preparing an antitrust investigation into google. We will ask Dan Rosensweig his thoughts on that and the youtube settlement next. Stay with us fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. The tech lash out of washington is ramping up 38 u. S. State attorneys general putting an antitrust case together against google. This follows the youtube ftc settlement we just saw moments ago and we saw the senator of oregon suggesting that executives in another era might have faced jail time joining us former yahoo chief operating officer, Dan Rosensweig. That yahoo thing was a long time how are you . Good. Lets talk about the outlook on google in Silicon Valley right now. It seems to me i was just looking at this tweet from the base camp ceo talking about how google is ranking its ads higher than basecamp, you know, theres discontent it seems. Is this kind of like the microsoft situation from 15, 20 years ago but now directed at Silicon Valley companies it may very well be look, these companies have huge power, and huge influence. Microsoft did in the day people forget, they control the operating system apple had 3 market share. So if microsoft wanted to stop a competitor, they could do it today people are concerned because everybodys going direct everybody wants to go direct to the consumer, so theres only a few pathways to do that, right we know its amazon. We know its google, we know its apple, and we know its facebook so yeah, youre getting a lot of Smaller Companies who are feeling like theyre being disadvantaged by price hikes or on the mobile device the way google displays search ads theres four paid ads above your own brand name were beginning to see customers desperate for access to consumers. Because its social media they can push back visibly. Can they hunker down and kind of wait this out google . Kbogoogle, facebook, et cete, or can they restructure, you know, maneuver their way out of this type of scrutiny and kind of ongoing fines those arent mutually exclusive. They probably could wait it out because the Attention Span of washington is not very high. Its a tweet away from talking about Something Else on the other hand, they should Pay Attention to it because it actually does matter you want these things to be fair, right . You want open access the whole point of the internet was open access. Thats why we all fought for low prices of broadband. Thats why we all fought for putting it in rural homes. Thats why we wanted to bring the price of phone plans down. It actually does matter. It matters to our economy. It matters to businesses it matters to individuals, and so i do think that they should follow the regulations and i do think the regulations probably need to be updated and if they were being truthful they would probably acknowledge it. They have too much stuff is in secret so you dont know. The algorithms change all the time, and thats unfortunate. Curious why you think the floodgates seem to be opening now. Obviously youve got this ftc coppa settlement this morning with google. Then you also have the news, the reports yesterday that more than half of the state attorney generals in the u. S. Are investigating goog europe. Youve got europe, federal scrutiny here across a number of different platforms. The timing of it, some of these complaints have been out here for a while. Why do you think its happening now . You guys talk about it regularly, the tech lash theres a lot of wealth being created. Theres a lot of people with a lot of power theres a lot of people that people feel are taking advantage of them. I honestly believe it goes back to the election, and it goes back to the belief that tech was used to advantage one side over the other in the election. And i think, you know, when people get their credit cards and their i. D. S taken and when you find out theres all these fees or when youre subscribing to things that never end, i think theres been so much being levied against the consumer thepgs themselves, i think theyre exhausted from it. I really do think it goes back to the election where people felt that they were used against their wishes and then not told the full truth but if anger is so acute, then why is this fine such a pittance relative to their revenue . Now youre asking me about why government makes decisions they make. I couldnt even begin to dream youtube probably does that in an hour of advertising. So to me these are always for people to Tax Companies other than using the tax system. Europe doesnt have any Significant Growth companies in the internet or the tech space, so what do they do they tax the u. S. Companies. Theres goodthings, fair things, right things to do, and then theres things that i think just are done for headlines and money and you know, its up for investors to discern the difference between the two i dont even think i mean, the ceo gets more than that a year lets talk some news out of your Company Announcing the acquisition of the peter thiel, thinkful and online skills Training Company thinkful does a lot of coding training, touts median salary of i think around 65,000 a year for people who go through their training this a big shift for you, though normally youve done support for students who are in school somewhere else thinkful is doing their own training, right . Yeah, its a great point. We look at it as a logical tam expansion. Weve got one in every two College Students is registered with us. If you believe analysts, well have nearly 6 million paying customers this year. Were growing at 30 a year. We are the largest direct to consumer company, and what weve done is weve lowered the cost of education, improved the quality of it, made it more accessible, and supported students from diverse backgrounds all over the place by helping them learn the material they need to learn in the academic world academics is not enough. We have a global economy, we have a techbased economy. We were just talking about what technology can do good and bad, and so we want to create really high quality, high integrity, low cost direct to student Online Learning around career skills and job skills. Logically, every student in school thats interested in getting higher paid jobs is going to want something. We have the largest reach to them, so Customer Acquisition will be low. Weve also built online chatbased tutoring, and weve built the largest database of expert q a what were going to be able to do is lower the price of it. Make it more accessible, make it better bulk up the qualityin, bulk up h content. We think this is going to be one of the Fastest Growing assets weve ever bought, and i think in a few years this may be our second largest asset because if you think about 80 of college kids go to college for one purpose, to get a better job the institutions are not training them to do so they are training them in academics. Its all available, bvaluable this is the part they need to learn in order to be employable, if we can make it low price. How much . Right now its about 6,000 we think we could bring it down lower. This company also offers income sharing agreementin s our view is to offer them interest free so the students take very little risk if they want to take it at all start paying us after you get a job and with no interest on that our goal is to make it more accessible, more democratized, opening the diversity to groups that would never get access of this its the benefit of going direct online its much more comprehensive it can respond to the consumers needs much faster than anybody else this has been a business, by the way, that has been growing faster than tech for us, we think this is an incredible acquisition and one thats going to expand our value to both students that we have, add new students and clearly to investors. Dan rosensweig, ceo of chegg. The dow is up 207 points right now, here are the names that are leading that averages fwans so far in todays session. Intel, united tech, and walgreens. Were back after a quick break se behind schedule. 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Plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. European markets closing overseas, getting a boost in todays action every sector was in the green as u. K. Lawmakers inched closer to blocking this Nodeal Brexit scenario daimler, bmw, volkswagen up more than a percent top of mind for investors obviously its brexit. The u. K. Parliament moving to seize control of the process as the situation there continues to spiral willem marx has the latest from london. Last night we saw Boris Johnson expel more than 20 members of his own conservative party because they refused to vote alongside his government. That was to take control of the parliamentary schedule today, and because opposition lawmakers together with those conservative rebels have now taken control of the parliamentary schedule, that means in a few hours time theyll be voting on a fresh piece of legislation designed to block that possibility of a Nodeal Brexit at the end of october. Boris johnson has insisted he wanted to hold onto that scenario as a negotiating threat as he meets with his european counter parts next month he says without that threat he wont be able to force a better concession from the europeans, something that would potentially pass through parliament after theresa mays attempt three times failed to get through the Lower Chamber here in the u. K. In terms of the opposition lawmakers they said theyd be prepared to go for an election, something that Boris Johnson is now demanding to try and resolve this situation theyre only prepared to do that once he has allowed them to pass through this legislation blocking off that possibility of a no deal at the end of next month. As you can imagine, weve seen some action on the currency markets as a consequence of this but the uncertainty of a Nodeal Brexit might be postponed several months later on this evening. An election to resolve the situation, where have we heard that before. Willem marx in london, thank you. Now lets get to sue herera for a news update. Good morning, jon, good morning everyone hong kongs chief executive carrie lam announcing the government will formally withdrawal an extradition bill that has sparked months of protest. In a prerecorded television message, lam said the government will not accept other demands from the protesters. Iran ratcheting up the pressure ahead of a Nuclear Deadline for european solution for iran to sell oil abroad. Here at home, Supreme CourtJustice Ruth Bader ginsburg says she is feeling good following three weeks of radiation treatment for a malignant tumor on her pancreas. She spoke to a packed house on tuesday at an arkansas event hosted by the Clinton Foundation i think my work is what saved me because instead of dwelling on my physical discomforts, if i have an opinion to write or i have a brief to read, i know its ive just got to get it done you are up to date. Thats the news update on this hour, back downtown to you guys. When we come back, respective fed nominee judy shelton is going to sit down with santelli in a few moments. Nice little run here close to session highs, dows up 212 and were above 2930 back in a minute welcome back to squawk alley. Lets get over to the cme now and Rick Santelli for a special santelli exchange. Thank you, morgan id like to welcome, yes, a very special guest, prospective fed board nominee dr. Judy shelton lets get right into it. Last time you were on, you said something that really resounded, gots lots of emails it would be nice to be virts you in a vacuum, but i dont think we have that luxury, and i really love that quote, but it also has a dark side is it a starting gun for a new round, a bigger round of market manipulation by Central Banks . Well, in a way, i guess were in a position of having to fight fire with fire, rick, because its been a comfortable position for fed officials to just say were pursuing our domestic economic objectives, but you cant put on blinders with regard to what other major Central Banks around the world are doing, and its one thing to say our statutory mandate says we should achieve full employment and stable prices it turns out theres a third pillar that comes out of the Federal Reserve act of 1977, and its that the fed should be acting to promote moderate longterm Interest Rates, and i think that goes to the heart of the inverted yield curve that were now confronting. You know, the dynamic of whats going on in Interest Rates, especially longer maturities is that we have 17 trillion of negative securities and just this year alone weve gone from only 20 billion negative corporates to over a trillion, so you think the answer is to create more of that because thats exactly what will happen if we take that course of action well, i think that is such a prominent symptom of what happens when you decide not to go with market signals and the price mechanism, but to empower a small group of officials to establish the Interest Rate because this perverse situation of negative yielding debt has been engineered by Central Banks. And i think one could argue, its not stimulus per se i dont think it stimulates Economic Activity, at least productive activity. I dont even think that it raises the inflation rate, which is what Central Banks purportedly are trying to do, it really has its strongest impact on shifting currencies so thats whats happening with these differential Interest Rate policies among Central Banks. Now, if the u. S. Central bank holds the line and doesnt get involved in this kind of al al capone sort of situation where theyre providing something that really isnt on the up and up because its deemed necessary or economies need it, like alcohol during prohibiti prohibition. If we hold the line, cant we do better in the big picture because the countrys doing what youve just described theyre not doing better their economies are deteriorating, doesnt that side of the ledger also deem some introspection . Its tempting to think so, but we do live in an interdependent world, especially with regard to currencies, financial flows, investment activity, and the problem is if the u. S. Maintains its virtue and says were not going that way, first youre going to make it harder for u. S. Exporters because the dollars already at a high level relative to other currencies secondly, i think youre going to exacerbate that inverted yield curve issue, and its just bizarre to have shortterm rates higher than longterm rates. And finally, theres the Global Financial stability aspect of it if dollar denominated debt becomes out of sync, then i think youre into real problems in terms of financial stability. Well, isnt there another road you know, this president likes tariffs and certain situations tariffs do get born, in my opinion by john q. Public, but if countries are cheating by manipulating their currency, would that be a perfect situation to apply a level of tariffs . If the germans, for example, want the euro weaker to help their auto exports, cant we come up with an equation that says should you manipulate your currency, that would be the United Statess recourse cant we take the high road here i think we are taking the moral high road by identifying currency manipulation as an unfair trade practice. It really undermines the principles of free trade, and its a natural response to say if youre going to effectively apply a tariff against American Goods through currency manipulation making them more expensive in your own country, then our only recourse is to is to say then were going to have to do something as well unless we call them on it, we cant begin to seek these broader remedies that i think would start to bring about a level, International Monetary playing field, and thats fundamental to authentically free trade. But you know whats really fundamental . That people trade markets and investme invest in markets for their retirement because theres a price discovery and a real value there. What youre describing if you take it a couple of degrees farther, are markets where why should we get up and trade the Dow Jones Industrial average why should we purchase securities that have yields when all of it is manufactured . Why dont we just create government utilities to dole out certain percentages after you give them your money doesnt this make the whole system ridiculous . I think it does go against the virtue of saving i think it violates what i would call the american spirit of believing in a Better Future and greater prosperity if you just if you just believe in opportunity, and if you see Financial Capital as a seed corn that facilitates entrepreneurial endeavor that brings about a higher standard of living for everyone it goes against all of that to have negative rates, and i think the managed approach to providing decent returns on investment has proven to be somewhat of a failure, so i think we do have to look more toward money providing that clarity on price signals and believing in free markets as the best way for people to make judgments about risk and return and what they would reasonably invest in, and that will be the beginning of getting back on the road to productive Economic Activity judy shelton, thank you for your time, and should you pass all the requirements to be a fed board nominee and go to a governor, youre going to certainly have your work cut out for you. Thank you for joining me today. Pleasure. Morgan back to you. Good discussion, rick, thanks for bringing it to us. When we return, high risk, high reward. A behind the scenes look at the big business of pot and cnbcs documentary cannabis inc. Premiering tonight at 6 00 p. M. Eastn. Wee ckft a quick break dows up 206 but sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. I felt completely helpless. Trashed online. My entire career and business were in jeopardy. I called reputation defender. They were able to restore my good name. If you are under attack, i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyll find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. Heres a look at whats coming up at the halftime report. Were going to kick around how to navigate what feels like a directionless market as wall street remains split on what investors should expect from stocks plus, another bump for rokus price target. Is that stock now too rich or too good to pass up . And al michaels joins us ahead of a new nfl season. Well talk some ball, some stocks carl, about ten away look to seeing you then. Al knows the market we know that cant wait see you in a bit meantime, melissa lee is investigating the cannabis industry marijuanas new reputation as an allnatural cure for illness, boredom and anything in between. The high risk, high reward cannabis inc premieres tonight on cnbc. Whats left to be said about this space a lot of unknowns investors make a lot of assumptions but a lot of questions still, particularly surrounding the promise of medical marijuana. Its perhaps one of the most intoxicating factors attracting consumers and investors into the Cannabis Space some medical experts say its not the allnatural miracle drug so many are betting on i was diagnosed with my cancer in july of 2013 i was just gutted. Were talking staying up at night to write birthday cards to my daughter for every year i wouldnt bealive talking to my wife about who she should marry when im gone what did you do what was the decision . The decision was to go with the cannabis as an investigative journalist, Ethan Stewart is a natural skeptic. I didnt think it could help me really . Oh, yeah. When faced with few options to treat his cancer, he made a bold decision. So, yeah, i dove off a deep end and went into, you know, doing full extract cannabis oil. And thats when i got scan results that were pretty wild. I had no evidence of disease in my body. No evidence of disease . No evidence of disease in my body incredible as it is, stories like ethans arent unique cannabis, a drug vilified for so long the most dangerous drug that is in use in our country today is now being touted as a serious medical breakthrough the notion of being able to treat a vet with ptsd, with cannabis as opposed to a host o farmt suitical cocktails is really exciting. My uncle has parkinsons. He tried cbd and said this is the greatest thing thats ever happened to me thats the beautiful thing about that drug were talking about. There are a number of things where even now the fda says cannabis works cannabis is medicine except for one thing. Well, its not medicine this is a very dangerous National Experiment were conducting former fda commissioner dr. Scott gottlieb no evidence to support the claims made in the state dispensaries that would rise to the satisfaction of the food and drug administration. Because cannabis is a schedule 1 drug alongside heroin and lsd its hard to run clinical trials. In fact, theres only one fdaapproved cannabisbased drug epadilex which treats a rare type of seizure disorder beyond that, nothing which raises the question, is cannabis the miracle drug that consumers and investors are banking on or simply the product of misleading marketing by the industry itself . That is just one of the fascinating debates between cannabis bulls and bears youll hear during our new cnbc original documentary high risk, high reward cannabis inc. Congratulations i know youve been working on this for quite some time excited to tune in to it tonight. The fact that there hasnt been more research and in particular at the federal level is it because of the classification of cannabis as that type of drug or what came first here im surprised to hear that its because of the classification its nearly impossible to secure medical grade cannabis specifically for research. When you do, you have to have a federal license. You have to secure the cannabis usually in safes we talked to one doctor who is the chairman of the medical Advisory Board for one of the biggest Canadian Cannabis companies and he said at the hospital that he worked at, he had to reinforce the floors and get a huge safe to put that medical grade cannabis into in order to conduct the research. And he is one of the pioneers. One of the few people throughout who had the ability to do the research the space is huge the doc is timely. Not just medical but also all of the people trying to get in on this business. I just spoke to rapper jim jones who is teaming up with alex todd on a brand saucy farms and extracts who is talking about how huge this space is take a listen to what he had to say. So if you get the right person for my culture thats known for smoking weed, like a jim jones, like a snoop dogg, khalifa, naturally theyre going to judge it when it comes to a brand they see us backing up about what theyre going to smoke. Alex is showing me all about the business from the farmers aspect all the way to where we at now, side of wall street. So the money of it has been proven youve got these Big Companies that dont know too much about weed and farming but they know theres billions of dollars being made so theyre doubling down and investing in it i think this is probably the biggest thing since dotcom hit hes not really concerned about the Medicinal Properties so much. Im sure. But very much focused on the business theres a land grab amongst the stars. Everyone wants to create this new brand. Ultimately, the idea is to create the next apple of cannabis there are limitations without it being federally legal. You have to have redundant operations in every state. Its not easy to create a nationwide brand just because of the way the states are operating. You have to licenses in every state you operate in its seen as sort of the golden raer era. And when federal legalization happens, if it ever does, then you got it unroll it. Thats big. Well see you on tv tonight after yourown show see you at 6 00 p. M. Squawk alley is backn ia few minutes. Dow is up 208. When i see adversity, i find a way. When i hear never, i say now. [announcer] Southern New Hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. cheering so when i face barriers, i can break through. [announcer] breakthrough at snhu. Edu. Thats for sure. 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Stocks higher today but wall street seemingly split on where the markets are heading next its 12 noon this is the halftime report. Up, down or sideways wall street all over the map on where stocks are headed. Where to look for leadership forget the fed and the trade war. The most critical factor many are underestimating when it comes to fears about a recession. The roku rally the stock surging more than