Transcripts For CNBC Squawk Box 20240712

Strong gains and this morning you will see that there are green arrows once again, the dow indicated up by about 88, s p by about 9 1 2 and the nasdaq indicated up by 48 points if you watched what happened in the treasury markets, we did get a lot of fed speak and it sounds like there is a little bit of confusion. You can see the ten year note has ticked up a little bit, 0. 769 is the latest yield andrew and lets take a quick look at the dow transports, gaining another 2. 5 yesterday, also hitting a record high, the two as to beings to watch this morning, eli lilly and he regeneron both big winners on Covid Treatment hopes. And President Trump touting both of those in a video that he released over twitter late yesterday. Well tuck a lalk more about th. But also take a look at shares of tesla, new Street Research upgrading that Company Stock to a buy saying that to sees a decade of hyper growth ahead, this call makes the firm the second highest priced target on the street so in lead with pwhat they thin, but not sure that it is a straight bet on the same with electricity. And last night in salt lake city, Vice President mike pence and california senator Kamala Harris faced off in their one and only debate before the elections. They sparred on the economy, jobs, china, taxes, health care and the handling of the pandemic the tone though from last nights debate quite a bit calmer than the first president ial debate. Lets start with a sound bite on china and jobs the president s trade war with china, you lost that trade war. You lost it. What ended up happening is because of a socalled trade war with china, america lost 300,000 manufacturing jobs farmers have experienced bankruptcy because of it we are in a manufacturing recession because of it. Lost the trade war with china . Joe biden never fought it. Joe biden that been a cheerleader for communist china the last several decades joining us now with his takeaway is frank luntz. You were watching last night with a focus group what did that group think . They thought that mike pence was the clear winner, which is very different than what happened in the first debate they felt that pence was calm, cool and collected, they had an issue with how Kamala Harris communicated and as im listening to them, the tone andor last nigh was what the American People want they talk about where they stand, but still some complaints with our undecided voters that they are not specific enough about the future, that Kamala Harris spent too much time prosecuting the Trump Administration and mike pence spent too much time defending the Trump Administration they want to know exactly what they will do on jobs, what they will did on taxeo on taxes and number one question, what will happen with the Supreme Court. Will joe biden try to pack t Supreme Court. Mike pence good an youdid an yon job making that an issue and that shocks me the idea that the Supreme Court would resonate nor with undecided voters it wouldnt surprise me if they were hard core voters who knew that this is the issue they were going for. But for undecided, i would have guessed that the Biggest Issue would be the economy i agree and if you notice what pence did, they go through the give and take and this is the impact of the debate, tlsz suppose edso change peoples perspective. You cant give mike credit for winning the debate, you have to give came maam Kamala Harris f losing it. It did not do well for al gore back in 2000 and it did not sit well with voters with senator harris in this debate. Voters probably looking a little bit more for a return to more president ial behavior, not liking some of those things. But lets show you a clip about what they did say about the economic rofecovery. Mike pence used the opportunity to go after the Biden Campaign more taxes, more regulation, banning fracking, abolishings forle 2350 forles for sld fue s fofossil fa prescription for economic decline. President trump and i will keep america growing. The v shape recovery under way right now will continue with four more years of President Trump. Frank, what did the panel say about the responses to the economy and what they heard from each candidate the issue about the economy is they dont think that it is as good today as it was back in march. They are concerned about the jobs coming back but they did not hear a plan from either candidate about what they will do to bring those jobs back no details im waiting for the candidates to look people straight in the eye, look the American People straight in the eye and articulate step one, step two, step three mike pence did a better job this debate than donald trump did a week ago in explaining and doing so in a president ial, Vice President ial way the approach that they have taken up to this point but i want to be cleerp about thi clear about this, voters are not looking backwards, they are looking ahead. I know what handled the ne lastr years, so tell me what is happening the next weeks and months and next four years and frank, how voters think about the truth versus the presentation i absolutely agree with you that the disposition and demeanor with which senator harris carried herself relative to Vice President pence, Vice President pence would clearly be the winner having said that, listening to the actual answers, listening to the answers of how they are answering questions or, rather, in certain cases not answering questions, or answering questions with untruths, the question is, does what is actually coming out of their mouth matter well, it matters, but an tdrw it is not just hearing what they have to say, it is watching them and how they say it. And if you are dismissive, if you reject i know this is a show about money a show about finance, a show about the economy. But every time i do these focus groups, undecided voters, and they only represent 6 of america, almost everybody has made up their minds by this point, they are looking at the total candidate, not just where they stab on the issues. And they are not reading the wall street journal or the financial times, what they are doing is watching to see whether or not they can trust that individual and mike pence did extraordinarily well in that never got agitated, never got flustered. A complete difference from the first debate that our focus group thought that joe biden won because they thought frankly that donald trump was not acting president ial and was everyone abusive to the Vice President frank, i would never say alternative facts. I know someone said that one time, i think it was Kellyanne Conway but there are weighiare ways th take numbers and facts and you will skew to one id or over the. And hearing senator harris talk about the manufacturing issue. I mean, i guess it is in the eye of the be holder whether it is true or not, but our Manufacturing Sector was decimated the last 20 years, whether it was offshoring or whatever it was, but there was definitely some return of manufacturing jobs based on the way that the tax bill brought certain repatriation, so who is telling the truth . I mean, it is in the eye of the beholder which candidate is i see it all the time in the Mainstream Media well, we dont need to fact check the left because they are not lying, we just need to Fact Check Trump because all he does is lielie. And both sides have some whoppers i saw biden talk about manufacturing, it was false in my view. And so you can rebut, but hurry up because it is coming, i can see it in the spy cam. Anyway, go ahead it is coming because it is responding to what the voters saw. Because they saw the debate. And i go back to paul simon wonderful line from a song, a man hears what he wants to hear and disregards the rest. We have people voting for joe biden when they walk the into that room, when they walked in to our zoom, who left voting they have didnt change their minds, but they left believing that mike pence is more president ial and it is not necessarily about the policy it is about the presentation it is about whether they look you straight in the eye, it is about whether you are rude i cut you off, and they would not have liked what i did. It is very clear that mike pence won that debate. This is exactly what happened in 2016 donald trump was losing, he lost his first debate, mike pence level set it and then trump came back donald trump is not by a significant amount right now frank, i dont disagree with you. I think that the Vice President mike pence as i said to you, from a disposition perspective, if that is how you are looking at it, he looks you in the eye, he looks like he is telling you the truth. However there is sort what im worried about, there is a false equivalence is city because he would say dare i say untruths both about the Trump Administration itself and also untruths about the Biden Administration that is not to say that senator harris did not skew some of the facts her direction at all, but there were things that were said that were just the opposite of true and what i dont understand is how you think the public especially those in the middle who are trying to come up with an a answer conceive or think about that or is it that they dont know what the truth is the answer is they may not know what the truth is, but they are not ideological like you guys are they dont have the strong philosophical underpinnings. To them, the character of the individual we asked this specific question. What was more important to you honesty and fruit truth or polih as taxes and budgets and health care and covid and almost to a person, not unanimously, but almost to a person the honesty and integrity was more important and to their perception, somebody willing to listen to the responses, somebody willing to in a calm relaxed way, willing to explain where they stand, willing to take criticism and then explain why it is unjustified, that is the person they are looking to vote for and remember, when you are watching a Vice President ial debate, you have to judge not necessarily where they stand, but are they ready and capable to step in these are two old candidates could these two individuals be the next president and as they were judging them that way, they judged Vice President pence better than senator harris frank, are the it seems to me that people think that the lefts truths are truer than the rights truth. They say it with a straight face it is amazing to me. Without any sense of irony or self introspection at all. I just im flabbergasted when i hear it. It is almost like, well, wait a second where does that come from in. You guys are setting irss up to a very contentious morning. It is like i feel like im mom and dad and i have to separate you. All right becky has another sound bite actually, i have 00 quick question i looked at your focus group how did you choose them, how many people, is it rehe neflecto where the undecided voter is and how accurate was this four years ago listening to these type of focus groups so the second debate when i said on cbs news that donald trump is back in the race, i got challenged by at the time cha charlie rose, nora odonnell, i even got a phone call from les mun dez, are you sure about that trump performed so well in that second debate that he had come back in to the race and he was now credible again i say the same thing about what happened tonight these people 15 individuals, all from swing states, all undecided voters maybe three or four of them had a point of view. And in fact if irn to go back at it again, i would have thrown a couple of them out because they truly werent undecided. But from that segment of the population, eight of them walked in with a narrow advantage for donald trump seven of them came in with a narrow advantage for joe biden virtually all of them, all but two of them, felt that mike pence won the debate im willing to go out on a limb and say that he did. And he did not because of what he talked about, but how he communicated lets listen into what the candidates had to say about the issue of tax cuts as well. The truth and the fact is joe biden has been very clear, he will not raise taxes on anybody who makes less than 400,000 a year he said that he would appeal the President Trump tax cuts im speaking. Joe biden will not raise taxes on anyone who makes less than 400,000 a year before he has been very clear about that now, it is not just it wasnt just about the issue. And pence challenged her and the public believes that the Biden Administration is going to raise taxes on people who make less than 400,000. But that wasnt what got peoples attention when she said to him im speaking and she has that smile, i will tell you that she was very well prepped in terms of the language that she used, very effective but she was not well prepped and not well served in terms of how she presented. You saw her reaction almost lining a laugh, im speaking, you knew that that and she did it twice during the debate, you knew that line had been rehearsed. For undecided voter, authenticity matters so much, and they did not find her authentic. Frank, inthat we do have a sound bite from the focus group too if we want to play that to hear some of the things that they were telling you. Lets listen in. In one sentence, tell me about tonights debate laura, ill start with you well, i didnt really learn anything new we already knew about pence sort of coming in and i didnt learn a whole lot about Kamala Harris tonight. A couple little questions that i would have liked to have heard answers to, namely the court was a big one for me disappointed, i still couldnt get some of the questions ive been looking for answered felt like i was in an older election, like politics of yesteryear im concerned about what im going to do for the collective whole, im concerned i felt like it was a bust the stuff that i wanted answers to, the questions were asked, but there were no answers. Like the Supreme Court i have a feeling that that is our consensus, that you really wanted an answer from the california senator are about that, but you didnt get it. In one sentence frank, i think part of the issue is feeling like you dont get the answers coming from the questions that have been asked i doubt that that is something that is unique to this debate, but has that grown, is it more problematic or is this just more of the same . You are correct to point that out. What was skepticism is now cynicism where they would be annoyed that they didnt get an arranges now they just assume that the politicians dont answer them and they assume that the politicians arent telling them the truth. And that is why that authenticity, the Integrity Matters so much. This is not for the last 26 days of the campaign, this is not going to be who will raise your taxes, it wont be about the specifics in health care, who cares about you. Who empathizes with you, who understands you. To me this is 2012 rather than 2016 it will be about who gets you, who understands your pain rather than who can fix it. I think that last bite, if you rescind the trump tax cut, there will being tax increases on people that make less than 400,000 now you, i dont think that the new taxes hes proposing are for people that make less than 400,000 but included in the trump tax cuts, there were maybe if he rescinds the trump tax cuts he just does the Corporate Tax or does, you know, maybe he puts in doesnt repeal the law en masse. Takes out certain things that would leave taxes the same on people below 400,000. But if you just purely rescind those tax cuts, it would raise taxes on people. So you can see how both sides are saying truths but they are spun in a way that they can both claim to be true andrew, is that not true joe, ill do you one better ill do you one better one of the things that the Biden Campaign has said is that they will raise the Capital Gains rate right and if you raise the Capital Gains rate, it doesnt matter whether you make 400,000 or not, that Capital Gains rate at least for some people over the 20 threshold is going to go up. So where is the truth put that in the lying category so where is that is all im saying, they are not alternative facts, but there are ways of massaging the facts to your side of things that where you almost can make a Statement Like she just made the statement, no one under 400,000, senator harris and that is is it false i mean he, it kind of true because he doesnt want new taxes perhaps, but it is not really true if you consider Capital Gains and some of the other i dont know. That is why none of us ever will run for office it takes a special person to go do that i think. Let me jump is this because you got two more debates to go the public is asking for specifics. And this is a lesson for donald trump. They do not want his behavior in the first debate all the polling showed a widen of joe bidens lead in the swing states, in the country and number two, trumps negativity, the people who dont like him actually increased even though we know what he is all about because he has been president for a while. And number three, as you show on the screen, the bedding odds are going up for joe biden every single day this is a wakeup call to the Trump Campaign that if you deliver a message the way mike pence delivered it, if you are straight forward, if you dont insult, if you challenge as mike pence did without being rude and offensive, you have the ability to capture the hearts and minds of those undecided but if you behave in a way that doesnt allow people to even hear the messaging, even hear the responses, you will fail for the three of you, last point, it was fascinating to me that donald trump a week ago did fine for the first 10 or 15 minutes. But as he went on, the resentment grew. What works in the first 10 or 15 minutes does not work in the back hour and the public expects to be able to hear what you have to say and they will resent it if you keep them away from the information that they are seeking and the information that they deserve frank, thank you for youre a analysis i just looked up the biden tax plan, it would tax long term Capital Gains 39. 6 income above 1 million and it also eliminates i mean, this is what the Tax Foundation says. I just looked it up as we were talking about it just to clarify on that point, with question should probably look it up in other places thank you sure. Anyway, but there were tax cuts in the plan, beck, if they did rescind the whole thing, peopleunder 400,000 anyway coming up, an activist investor wants the company to cut dividends, the rare request. Plus the latest move by facebook to avoid election interference before we talk about taxsmart investing, whats new . Audreys expecting. Twins wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. Dan loeb is asking disney to end their annual dividend and try to divert more of that capital to new content for the streaming service. They have a large stake in disney based on its streaming prospects. But it is unusual for activist to call for the suspension of a dividends in favor of Capital Expenditures he argues that they could trade similarly to netflix anxious rian rise above the rest of the pack. So interesting move and well see whether disney decides to accept that recommendation becky. I mean, there is probably a part of management at disney that would love to accept that and run with it, but i would guess that they are position concerned about alienating the long term shareholders who have been there for the dividends disney has a very Wide Shareholder base and dan is probably right, if they could get rid of some of the dividend that they are paying out and focus it on future earnings, that could be a huge way to juice the growth but again, you are talking about a widely held stock and what that means for people who have bought in to it for such a long period of time, that is a gamble and there is also potentially a question about the timing of this, which is to say given the ongoing pandemic and how difficult it is to create content in this environment, and this is something that disney is being impacted by, but all the studios are being impacted by, you could make the argument keep the dividend for now, but potentially coming into the first, second, Third Quarter of 2021 when you did wayou do wantp production when you can, there will be a stampede to create content. So interesting to see what happens. But part of it will be about the health of disney and frankly, health of the parks and everything else. So well see interesting time figuring out how to split the baby on this one. If disney has trouble can went, you know what i mean and original content is king, but you think of disney as being in a pretty good place to compete with netflix in terms of i mean, everything that iger bought, pixar, star wars. But they have to create it and i dont know if youve bought into this, i mean we feel as a family, were running out of were definitely running out of new stuff most of the stuff were now watching is stuff that we missed, you know, months if not years ago, going back to watch old stuff in large part because there isnt a plethora of new stuff that is coming and i think come the end of this year early into 2021, you will go on to netflix or disney or hulu and i bet that you will see a bit of churn because some people will say im going to hold off, there is just not enough new stuff for us. Andrew, versailles. But not with the kids. Not with the kids. Which streaming platform is that netflix yeah, it is netflix. Not disney but living in versailles, if you remember the court, it was like being at disneyland. Ill add to my list ill throw out one for you and becky and our viewers, tehran on apple tv plus, it is outrageously amazing reminded me of falda. And it is written by one of the actors from falda. It is spk taectacular. I only watch kids stuff i was watching daddy daycare and that is without your kids being around thats weird there are never not kids around that is the issue. That is true. Youre talking about your husband. Im told we got to go a lot more to come on the show facebooks move to combat election interference and later on squawk box, a big lineup, including Lloyd Blankfein, and also joe lonsdale will be joining us that and so much more, squawk box rolls on. At cdw we get youre always looking to modernize. Yeah. Im just not sure Office Drones were the way to do it. [ laughing ] drone voice lol. Our market share looks good, but. Drone voice where are the bagels . Well, cdw can help you modernize your company the right way, with a scalable infrastructure from hpe, making you more efficient and secure. Great. Oh. [ drones buzz angrily ] lets find a different room. For transformation that works, you need Hewlett Packard enterprise and it orchestration by cdw. People who get it. But a resilient business you cacan be ready for it. Re. A Digital Foundation from vmware helps you redefine whats possible. Now. From the hospital shifting to remote patient care in just 48 hours. To the university moving hundreds of apps quickly to the cloud. Or the City Government Going Digital to keep Critical Services running. You are creating the future on the fly. And we are helping you do it. Vmware. Realize whats possible. 20 associate cart pusher. Urly the different positions ive had taught me how to be there for others. I started out as a cashier. I mean, the skys the limit with walmart. Its all up to you. Before we talk about taxsaudreys expecting. New . Twins wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. Facebook announcing that it will stop running political ads in the u. S. After polls close november 3 and keep them halted for an indefinite period the company said that the move is aimed at reducing opportunity for done fusion or abuse the Company Previously announced that it would not allow new political ads to run starting 7 days prior to the election and it will not allow any ads seeking to delegitimize results of the election. It shows them kind of ramping up and looking for ways to really kind of react if there is not any clarity on the election immediate will after the affect. When we come back, stimulus whiplash after mixed messages from the white house on covid relief talks. Well have an update on where negotiations stand and lets take a look at the s p 500 winters and losers as business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will. You can rely on the people and the network of at t. To help keep your business connected. Good morning take a look the u. S. Equity futures. Dow up about 150, nasdaq about 51 and s p 500 about 14. But right now, were watching shares of ibm, the company just out with news that it is planning to spinoff what it calls its managInfrastructure Services decision, allowing to focus on its hybrid cloud Growth Strategy the move is accomplished through a free spinoff to ibm shareholders, should be completed by the end of 2021 the argument is that that business really dealt with the legacy systems, part of what the former ceo used to call the empty calories of revenue. But 19 billion of revenue, we should say the business that they plan to focus on the cloud and kind of Software Business has what they say is a 77 gros margin, but today only represents about 31 of their revenue. So a real shift in the landscape of what ibm looks like under its new leader yeah, and up what is that . 4. 3 to 129 becky, warren, that is not one of his greatest investments. But i guess he did okay. It was up at 150 or 160. Yeah, i dont think that that would be something that he would crow about, that decision. No. If you were going to when he bought it, is ibm even called tech at this point 110 billion, ibm market cap before todays move. But double ge. And shifting expectations for coronavirus relief, lets hit to ylan mui with a look at where things stand good morning. Well, the big deal might be dead, but there could still be a lifeline for the Airline Industry the treasury secretary and speaker of the house were back on the phone again yesterday, they talked twice about a standalone bill for the airlines now, both in the house and in the senate, there are proposals that would provide 25 billion in relief and extend the Payroll Support Program through march. The house took up that measure last week, but it was quickly blocked by republicans over procedural issues. In the senate there is a bipartisan bill with two republican and two democratic cosponsors. Im told after the president tweeted, roger wicker started polling his colleagues to see if there was any potential hope of moving that legislation forward. There is an important difference between the house and Senate Versions of the bill the house bill would be almost entirely new funding in the senate, a large chunk would come from loans and grants previously authorized but that have not yet been spent. Only 11. 4 billion would be required in new funding and that explains why the president tweeted that he already has the money to make this happen. Now, the treasure secretary and House Speaker are slated to speak on the phone again today well see if they can cut out one more deal before the election back every on to you what are you hearing about i mean, presumably when they call it piece meal, they usually dont mean just one piece. Are you hearing right in addition to airlines, what is next, what would be the next priority do you think todown the list airlines is the only thing right now that we know that democrats are talking to the administration about we know that passing anything will require both bettchambers congress but in the senate, there are additional bills that are focused on the priorities the president had laid out in his tweet. So there is a bill that would extend ppp and allow some Small Businesses to take out second loans if they need it. There is legislation around drenk direct checks, a little bit smaller than what democrats had proposed, 1,000 a person for both adults and kids so there are some bills that are swirling around in the senate. Whether any of them go anywhere or whether Senate Leadership decides to bring them up to show that they are following the president s marching orders, that remains to be seen. But it is really airlines where were seeing the most momentum right now. I dont know, themarkets, you know he calls off talks between mnuchin and pelosi, we go down 400 plus then there is a possibility of some piece meal stuff, we go up 550 and then another 150 that just shows you that there is some fed there are things happening that nts are juarente on logical fundamentals that where traders are just going are connecting the dots between piece meal and you know what i mean we get it back so quickly. Seems like there is Something Else happening right, i mean texpectation wa that there was new movement. It seems both sides went back to the beginning. This is what people have been talking about for months this is the same argument that they have been having. And these negotiations were supposed to bridge that divide so i dont know that were necessarily moving forward so much as going backwards. Right dow above 28,000 i dont know all you got to do is talk about stimulus and it goes up. Anyway, thank you. Going backward from a worst point. If the president tweets, forget it, there is nothing that will happen for the next month, that is what concerns people. As soon as you think okay, negotiations are still on, they are still talking, okay, we zoom right back to where you were and above doesnt always make sense when we come back, well talk about the case for bitcoin the cryptocurrency not faring so well this year down almost 48 to date. But next guest is trying to bring aware nos congress with a initiative on capitol hill, that is straight ahead. 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This was a good idea. Shhhh. Im being quiet. Youre breathing on me if you want to save fifteen percent or more on car insurance, you switch to geico. Its what you do. Lets go to the cemetery coming up, 50 donated to every member of Congress Campaign so what is the catch is it 50 worth of bitcoin well, well tell you why next think well make it in time . You may not expect the unexpected, but you can certainly take it all. The lexus es. Wow, this rain is bananas. Now available with awd. Lease the 2021 es 250 awd for 359 a month for 36 months. Experience amazing. At your lexus dealer. That selling carsarvana, 100 online wouldnt work. But we went to work. Building an experience that lets you shop over 17,000 cars from home. Creating a coast to Coast Network to deliver your car as soon as tomorrow. Recruiting an army of customer advocates to make your experience incredible. And putting you in control of the whole thing with powerful technology. Thats why weve become the nations Fastest Growing retailer. Because our customers love it. See for yourself, at carvana. Com. A livcustomizeper iquickbooks for me. Okay, youre all set up. Thanks that was my business gi, this ones casual. Get set up right with a live bookkeeper with intuit quickbooks. Welcome back to squawk box, this is an interesting story. This week, all u. S. Congress members received 50 in bitcoin as part of the crypto for congress initiative. The donations are part of an effort to familiarize lawmakers with crypto and jump start a Digital Asset strategy for the United States. Joining us right now to talk about it is founder and president of the Digital Chamber of commerce, the group behind the initiative, good morning to you. Its a fascinating effort to try to get congress to understand whats really happening here behind crypto. There are questions, by the way, about whether these donations, if 50 in bitcoin turns into i dont know what, does it create any legal ethical issues no, absolutely not. Look, the best way to learn something new is to experience it for yourself, and we want our elected officials to experience the power of watching technology in their own hands, and our hope is that members will start to understand the critical importance technology is going to play in the mobile economy for generations to come. Thats the point of us. How much of this is an effort at pushing congress to i imagine create laws or open up some laws around cryptocurrencys and block chain and the like, and how much of it is about doing what the regulatory complex because to some degree, ultimately its going to be the treasury department, and its going to be the s. E. C. Which is going to decide the fate and future of all of this. No its bigger than that Block Chain Technology is the most important technological innovation we will see in our lifetimes. Block chain is the financial infrastructure of the new digital economy. Look, theres many other nations like china, singapore, japan, switzerland, the european union, they understand this, and they are racing to have dominance in the space, and the u. S. Isnt even on the playing field. This would be a significant challenges to both of our National Security and our economy security to have foreign actors controlling the systems and the governance that will power the digital economy. This is our message. Perianne, i dont know if youve seen this, its relatively recent, but over in the uk, something changed for derivatives based on bitcoin it was a setback for bitcoin because i think the premise by the Regulatory Agency over there is that its so hard to value the underlying asset that they dont want trading, i think, in derivatives, are you up to speed on that, and was that a setback in the last 24 hours or so this industry faces many regulatory hurdles in the early 1990s, policy makers in washington, they saw the potential for the internet, for broadband and for mobile technologies, and they sent policies to allow innovation and competition that developed the world that we live in today. We need policy makers to understand these emerging innovations and Block Chain Technology and cryptocurrencys, and set policies that will nurture these emerging technologies and keep the United States in an innovation leadership position. Theres many examples, whether its, you know, these drerivativ issues in the uk or here in the u. S. With securities issues, tax issues and many others its time to understand this technology, and we are falling behind because of our back of understanding and that is see seeding our technological leadership. If theres one thing you could fight for because you have a lot of issues youre trying to push here, if theres one thing you could get tomorrow, what would it be. We need a National Strategy for Block Chain Technology, and the first thing to do is understand it. Education is key for members of congress to make an informed decision about this technology, and we are encouraging you to learn everything you can about this technology because it is going to impact almost every aspect of the economy from Financial Systems to Monetary Policy, to identity supply chains and other Critical Infrastructure we first have to start the basis of simplicity, and understand what it is, and thats what were trying to understand with crypto for congress. My point is, theres going to be some push back. This was the Financial Conduct Authority of the u. K. , published the final rules banning the sale of derivatives and Exchange Traded notes that referenced certain types of Crypto Assets for retail investors, they say theyre ill suited due to the harm they posed because of the underlying alternate cant be valued youre going to run into this again and again. Its a head wind, right . Its a marathon not a sprint okay. Thank you. Coming up, dont go anywhere big guests still to come, including two former governors weighing in on last nights Vice President ial debate. Goldmans roy Lloyd Blankfein. Sales are down from last quarter but we are hoping things will pick up by q3. Yeah. Uh. Boss doug . Sorry about that. Umm. What. Its. Um. Boss you alright . [sigh] [ding] never settle with power e trade. It has powerful, easytouse tools to help you find opportunities, 24 7 support when you need answers plus some of the lowest options and futures Contract Prices around. Dont get mad. Get e trade and start trading today. Futures pointing to a higher open once again as Congress Creeps towards another trillion dollar relief package. The latest on the stimulus talks and what it means for the economy is coming up and controversy around President Trumps comments about his coronavirus treatment and plans to fast track at least two experimental cocktails for public use plus, the pros and cons of breaking up big tech we will hear both sides of the argument as the second hour of squawk box begins right now. Stand amy ground and i wont back down hey baby there aint no easy way out good morning, and welcome back to squawk box here on cnbc im joe kernen along with becky quick, and andrew ross sorkin. U. S. Equity futures at this hour, as you can see, are up about 120 points and could be a few reasons obviously its a stimulus, but were going to touch on another possibility right now, in fact, for whats been a pretty good move the last couple of sessions President Trump urging regulators to approve emergency use authorization for regeneron and eli lillys antibody treatments, and meg tirrell joins us with more ill mention to you something that art cashen actually wrote, i think it was yesterday morning, that at least perhaps to keep in mind, 20 of what were seeing in the stock market and rally after the stimulus debate could be because of, we may be getting closer to some type of treatment for covid. I know youre going to talk about the president. Did you see him yesterday after being diagnosed a week ago or whatever it was. I wish we had some video of his appearances. He looked good and looked like he was almost fully recovered yesterday when he was talking about this regeneron drug, and, you know, he had a lot of medicines, so you cant tie it to one, obviously, but pretty amazing, i think, right . Well, certainly you cant tie it to one, but the president putting a lot of focus on these antibody drugs we know he received regenerons cocktail on friday eli lilly is developing an antibody in this space both companies have filed for emergency use authorization. We brought you that news from lily yesterday and last night, hours after the video from the president. Regeneron announced it had filed for emergency use authorization as well, and there are still more of these inclinical trials behind these now, guys, well have to see how quickly the fda acts here but the next question is going to be the supply of these medicines take a look at what the companies if theyre available regeneron says about 50,000 doses could be made available. It aims to get that to 300,000 in a few months. One dose is one whole course of treatment. Thats the number of people they could treat. Regeneron does have a contract with the government, 450 million, under which it would divide the initial doses and the government would make them available to americans at no cost. The government would also be responsible for the drugs distribution, now lily says it has a single antibody, not the cocktail approach that regeneron has pursued that its filed for authorization of it would have 100,000 doses of that available in october, and it also has a combo approach that its filing for, probably in november, where it would have 50,000 doses in the entire 4th quarter. A supply is going to be the next major question, a similar situation to what we saw with remdesivir this spring guys earlier, before this, and we dont want to rush anything obviously. Were talking about a compassionate use for whatever this was with anything, especially monoclonals, you need details, phase 1, 2 and 3 trials, and you need to have a control group and everything else. Its very important, but just philosophically, mega, lets think about what a vaccine does. You introduce part of the spike protein. Your body sees it, and manufacturers it own antibodies against the virus. Doesnt sound that much different if youre generating similar antibodies in vitro in a test tube and introducing those antibodies that are already against the coronavirus. So, i mean, it almost takes out a step of the vaccine where the body actually has to manufacture its own and youre giving someone antibodies i said this, its a powerful idea if you are convinced of the proof of concept that you can manufacture one of these that is similar to what the body would do naturally this could be a game changer i dont think trump is wrong on this yeah, youre exactly right in the way you described that, joe. This is an immune response that has been generated by someone against the coronavirus. Some of these are actually taken from survivors of covid19 regeneron also combined one of those with one that it made in its labs but it is the immune response and while the initial trials were given as treatment for patients similarly to what we saw in the setting of the president , he was recently diagnosed and received this treatment, its also being tested as prevention for high risk patients who have been potentially exposed to somebody with covid19. And so it is a similar idea, but the problem, joe, is there just wont be a lot of drugs available at the beginning. Thats the problem. And theyre iv drugs. Theyre not pills, easy to take either. And in the president s case, it was very early on, too, and you worry about that second week when the virus is already got tonen to a level that causes the immune response that can be so harmful. And you know, i would assume you would have to get this, we would need to do the testing, obviously, but it seems like President Trump, it was an advantage that he got it very early on in his treatment. Theoretically, if thats what caused the improvement theres a lot of questions still, but reason for hope, i think, to be, you know, we need hope at this point, after watching whats happened to the entire world, right . Absolutely. And you know, we havent seen whats happened with the president s viral load, so we dont have all of the information, of course im sorry, becky, go ahead. We dont. Just from appearances. Thank you. Becky, you want in i did i had a question, too. Meg, you talked about how regeneron thinks they could get 300 million doses ramped up in the next several months, which is great, almost the entire American Population, would all of that go to the American Population i know you mentioned some of it is being bought by the government and kind of guaranteed but are we talking about taking that and splitting it with other nations or would all of that stay in the United States i may have misspoken. Theyll have 300,000 in a few months and 50,000 now, and that all has been purchased by the u. S. Government, but thats why im kind of comparing it to the remdesivir situation where we were in a shortage, so its not going to be enough for everybody. Theyre going to have to make decisions about who should get this drug. Hey, meg, real quick, everybodys quite excited about regeneron, and eli lilly now, and i think thats in large part at least recently because of the experience that the president had. Having said that, the president was taking a variety of medicatio medications including remdesivir, as you know, he was even taking pepcid ac which there have been views and studies that looked at people in wuhan and others who were taking that who had a much less or a much quicker recovery or less problems how much do we know that his quick recovery was a function of regeneron itself we dont know that. Its impossible to know if that is what helped the president the expectation is it makes sense, you know, he was gwynn t given the antibody on friday the way regeneron describes it, its precisely what they looked at in the clinical trial, if patients had mounted in the response, if patients had mounted their own immune response, they did worse over time late thursday night, he didnt have antibodies, you wouldnt expect him to have the igg antibodies that quickly, and then he had the antibodies on monday, of course, regeneron said its probably their antibodies he had because they gave it to him on friday if he didnt have his own immune response, they gave him this immune response in a drug, it couldnt help him. Hes also on dexamethasone which makes you feel great. I want to take a quick look at whats driving the Broader Market rally, and dom joins us for that. Covid19 and drugs are part of the narrative but the near term volatility much more so about whats happening in washington, d. C. On the congressional side, trying to get a deal done for coronavirus stimulus for the overall market, you can see up 5 . 6 year to date. This move higher in the last couple of weeks or so has been driven by optimism about a possible deal for a new stimulus package getting done lets drill one layer down and see whats exactly driving the internals of the market right now, sector wise, its very much been a mixed picture materials, utilities and energy have been the biggest bouncers over the course of the last week, that if we do get a stimulus package, a little more cyclicality,side move to the economy, utility is the weird stand out there. That could be some kind of an infrastructure play. Also take a look at another layer down the stocks on the move united rentals, rents out bulldozers and backhoes, things you build roads and bridges on tapestry, are consumers going to be able to spend more, and Fifth Third Bank corp. Regional banks surging over the course of the last week as well. And then one last look, joe, the names that we associate with work from home, stay home during the covid19 pandemic. These up vastly, up 26 . Peloton up 13 , and zoom video up half a percent here over the course of the past week, these stocks are performing well, even though there is optimism about a deal getting done for covid stimulus. A few different cross currents in the market, joe, koowell kep an eye on those. I cant help but think of bigly when i see fastly. Its not a word, dom. It could be we could make it a word if we use it enough. Youre right, and there are good ones, refeuduate, my current favorite. Revolutionalize. Misunderestimate. Lets bring in john lynch, cio at comerica Asset Management john, im feeling barbellish here, just reading the kind of thing youre looking at. So its not like you dont like growth you like growth and technology, communications, but then you also like value, industrials and financials, so i dont know, that just sounds like youre trying to cover the entire and maybe that is the right move yeah, its called hedging your bets, joe, and good morning, another word, i irregardless. Throw in like four negatives, and i think youre back to regardless. Exactly so what were trying to do when positioning portfolios for our investors is take advantage of what dom just talked about, stay at home, work from home, shop from home environment. A lot of names are growth oriented, fed share powell has committed to next to nothing on Interest Rates for three years you are going to be discounting profitability in that space, at next to nothing. Thats why we still want to make sure we have some growth opportunity. Yes, were looking at some of the value plays as well this that barbell structure, whether you think about stimulus or infrastructure, and i think we need to make a delineation between the two. Stimulus, the near term with the markets rallying on, appears to be still plugging the holes. Regardless of who wins, well go with regardless this time, regardless of who wins, well see some degree of infrastructure, and we think that bodes well for industrials and materials. Ive heard people use, famous people we have gained back more on piecemeal than we lost on where the president ended talks. We think the regeneron news or trumps quick recovery, maybe part of it was the prospect for antibody drugs as piecemeal, if you will, solution to the pandemic i think the market, as you know, an emotional endeavor, i think near a term, optimism about regeneron and remdesivir and the drugs helping the president. I think thats positive, and longer term, talking about 300,000, it appears, max, and there are what, 330 million of us in the u. S. So there will be issues and the whole idea of determining who gets the vaccine, that also could lead to some pressures on optimism Going Forward so you seem to be a little bit concerned about some of the biden proposals in terms of Capital Gains, et cetera, if he stays double digits ahead between now and the election, do you expect to see that or do you think that the fiscal boosts some people say youd get from a biden presidency, does that counter act the higher taxes yeah, we took 5 down in equities, three or four weeks ago, and, you know, i want to emphasize that, you know, the market always finds a way to determine what the next catalyst is if biden is elected, i think there will be a short period of people trying to figure out what dividends and cap gains at ordinary income, for example, the Corporate Tax rate going from 21 to 28. So that could be a shorter term pressure on the market but then as an investors see potentially a Democratic Senate in addition to a biden victory, if you see that, its a broader infrastructure, and that would benefit the barbell approach you could see broad band, highway, transit, water, and that could be a broader opportunity which would benefit that barbell style. All right and with 15 Supreme Court justices, you know, nothing is going to get stopped there, so, you know, 52 states. We dont know that thats right. Thats what were all grappling with no one will answer any questions. Thanks, john my pleasure, have a great day. When we come back, House Democrats calling out Technology Giants as monopolies and looking for new laws to restrict how they do business, and maybe even break them up. But whatdefines a monopoly, thats the focus of this weeks on the other hand segment with john fort,he will join us with both sides of the that argument. Before we head to a break, lets get a check on the markets the dow is indicated to open up about 139 points after big gains of over 500 points yesterday s p futures by eleven, the nasdaq up by 42. Stdasie lyd its best day yeery ncju 14th. Well be right back. Learned to play an instrument learned a second language applied to college applied for a loan started a business started a blog shared a picture shared a moment turn your wish list into a checklist, with internet essentials from comcast. When youre connected, youre ready for anything. Welcome back to squawk box, breaking in the last hour, watching shares of ibm this morning, the Company Plans to spin off managed Infrastructure Services division into a public company. Ibm says the move will allow it to focus on its hybrid Growth Strategy the move will be accomplished through a tax free spinoff to ibm shareholders and should be completed by the end of 2021 ibms executive chairman is going to join the gang on squawk on the street at 9 00 a. M. Eastern time part of the effort trying to get rid of jim has long called the empty calories of revenue without those high margins, they will push that business off and focus on the higher margin cloud and ai business. Joe. Thanks, andrew. Coming up, what defines a monopoly, and should Companies Like apple and amazon be broken up john fort joins us with this take on this weeks on the other hand segment. Squawk box coming up. Time for todays aflac trivia question. Who is the only person in both the rock n roll hall of fame and the inventors hall of fame the answer when cnbc squawk box ctiesonnu aflac now tell me, what does aflac do . Aflac pays you money directly to help with unexpected medical bills. And is Aflac Health Insurance . No, but it can help with expenses Health Insurance doesnt cover thats right. Are there any questions . Coach yes . Can i get one of those cool blue blazers . You know i cant play favorites. Alright lets talk coverage. Its go time get help with expenses Health Insurance doesnt cover. Mmm hmm get to know us at aflac. Com before we talk about taxsaudreys expecting. New . Twins mmm hmm wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. Hmms and ahhs heard incall. Say hello to a drugfree way to ease stress. Stress comfort, a gummie supplement with lemon balm plus saffron to naturally boost your mood. Stress comfort from natures bounty now, the answer to todays aflac trivia question. Who is the only person in both the rock n roll hall of fame and the Inventers Hall of fame, the answer, guitar legend, les paul i thought it was going to be john melon camp House Democrats released an antitrust report calling out Technology Giants, amazon, facebook, apple and google, and calling for laws on how they do business john ford weighs in. What are you thinking about this democrats, four monopolies, they say, four, i know you guys hate getting called the antibusiness party but reports like this arent helping your case the democrats would help us believe amazon has monopoly power in ecommerce even though walmart is the biggest employer in america and its stock is at all time highs from ecommerce growth, and apple has monopoly power in iphones, facebook has monopoly in social networking, but argues rival linked inn is a monopoly, thats impossible. And google has monopoly power in search, ill give them that one, except amazon is beating them in voice search this is the democrats best shot at launching a new era of european style antitrust law lets hope it doesnt get us a european style tech ecosystem, the golden goose sure looks tasty, right, becky. Yeah, it does so jon, youre saying the tech giants should be able to run free well, on the other hand, maybe were too focused on the word monopoly here, idea behind antitrust law is a healthy economy allows Big Companies to survive, and Small Companies not to get gobbled or stomped. This tech economy isnt healthy. Amazon has used its position to crush third party companies, and facebook has used its superior Data Collection to target and gobble or stomp potential rivals and google has promoted its own inferior products in its search results to pinch off the oxygen of rival ths. Those old terms dont work to address this its time for new rules, and this report from the democrats is an important step so what do you think, whats the answer break them up . Becky, i dont see how breaking them up alone solves this issue because part of what they have done is growing by acquisition and grow through good products, so if you break them up, those little ones will end up getting called monopolies in and of themselves, i think theres a question of how do the rules, how does the framing of antitrust have to adjust to an economy thats based on data and ecosystems, and keeping consumers in an experience where just basing things so much on pricing, are consumers getting a good price, it doesnt work so well Steve Ballmer was with us yesterday, he said he didnt think, he would bet money, he said, the answer wouldnt be that they eventually get broken up he was an advocate for these Technology Companies coming forward, sitting down with regulators, figuring out what it is they think needs to happen to actually make the situation change and better, and how they address that seems like a long step from where we are now to what he was talking about. In a way, yes, i think hes got a point. I mean, microsoft didnt get broken up and one could argue that the case was stronger there, and here, what the House Democrats are saying, their closest ally on the republican side is still wary of regulatory overreach, and is drawing the line at mandating breakups so i dont think the democrats at least as congress is structured right now, are going to find too much receptivity to dramatic action. I mean, well see what happens after november 3rd, but well have to see how disciplined congress is going to be about taking measured steps. Usually thats more of a senate thing, not a house thing. Hey, john, how do you feel about just a very strict Regulatory Regime around these companies and treat them as if they are utilities now, i dont think of them as utilities per se, but they increaseing increa increaseingly are united in peoples lives i think the danger in that is the tech ecosystems move so quickly. There was a time 15 years ago, you remember, when people thought microsoft was just going to be, maybe 20, was going to be overlord forever or even that google was going to be, and then things shift, you know, you go from a pc based economy to a webbased economy, and very quickly youve got this smartphone and app store based economy. How long does the app store dominance and locked in last there are already all of these different kinds of ecosystems outside of app stores, trying to get consumers attention. If you overregulate, you might again kill that golden goose john, thank you for giving us both hands this morning, we appreciate it very much. We got some breaking news we want to bring you right now. The commission on president ial debates just announcing that the next debate is going to be virtual. Its going to be in the form of a town hall meeting, and the candidates will participate from separate, remote locations, scheduled for october 15th so, you know, weve talked about the idea of a mute button before a mute button, weve had problems, you know, just crisscrossing this way i cant imagine what thats going to be like remotely. We manage to do it. Hopefully they wont have a delay. That we deal with. We manage to do it every day becky, are you going to be there in between those two that might help too if youre no, its just, my question would be, have both the campaigns signed off on this obviously the campaigns have to degree what happens with the debate laws that get handed down, too. But you almost wonder if theres a need for a different sort of debate style, if you want the questions answered, if you want to make sure people keep to the time cues, i dont know how you do that or keep control of this or say forget it, lets just have an honest conversation and do it that way but it does feel like these debates and gotten older and clunkier, and dont necessarily fit with what viewers want at this point, with what voters want to see. I wanted to talk to jon for a second, andrew, is it a golden goose . I dont think its i think its a goose that lays a golden egg. Does that mean the goose is golden since its eggs are golden its a walk and a cake. I always call it a golden goose too, but i think its a goose that lays the golden egg, that might mean the goose that lays the golden egg is goldenment. We have a lot more goose that lay the golden eggs. Well be back right after this before we talk about taxsaudreys expecting. New . Twins wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. This is, to me, it was amazing, what im going to tell you now. Morgan stanley is announcementing an acquisition, buying eaton vance, a big transaction, because eaton vance, so many products were from eaton vance its like a 4 billion company, 4. 6 billion before this, and the total deal is valued at about 7 billion just in terms of name recognition, i thought it was pretty interesting, but it shows you, i think theyve got about a half trillion dollars under management, at least, and its just the margins are so slim in that whole business now, that even with all of that, its just really not the market cap thats almost a small cap this comes days after Morgan Stanley completed its acquisition of E Trade Financial which is obviously a much bigger transaction. Becky. Yeah, this is interesting they say with eaton vance, Morgan Stanley is going to have 4. 4 trillion of client assets and assets around management around the world shareholders have the option of voting to whether they want all cash on this or all stock on it. Subject to proration and juch adjustment mechanism, played to the eaton vance common shareholders interesting stuff what they plan to do with some of these things. Eaton vance has been big one of the things they have been big in is responsible eft investing through call vetervert could be a nod in that way too, the gains you have seen. The big Sticking Point on the stimulus bill is aid to the states republicans claim that the Democratic House bill is a handout to the blue states is that the case Steve Liesman has been crunching the numbers, and hes got some answers. Steve, good morning. Good morning, a main stumbling block in the house is 2. 2 trillion stimulus bill is the 415 billion thats allocated to state and local aid, republicans contending its a bailout of the blue states whether thats true depending on how you define red and blue. If you define it by the 2016 president ial vote, a cnbc Analysis Finds the split is about even, 206 billion goes to states that voted for donald trump, and 208 billion goes to states that voted for hillary clinton, but judged by the party of the state governor, democratic led states would get an estimated 89 billion more. That works out to about 300 more per person. A Trump Administration official i spoke with who asked not to be named offered these objections to state aid first, he said, red states shouldnt be bailing out poorly run blue states. Blue states engaged in unnecessarily long and severe lock downs, and states also have c. A. R. E. S money leftover as well nancy pelosi in a press conference said democrats and republicans across the country are calling out for them to do the state and local. Republican mayors and county executives, governors, they need that money, they have outlays for coronavirus, and revenue loss because of coronavirus. Cnbcs analysis found the allocation closely tracks unemployment you can see here, california gets the largest chunk of the state funds at 14 but its also the most popular state and that has the most unemployed new york is second in grants, but fourth in population it has the second most unemployed most wall street economists and the Federal Reserve see state spending potentially dragging on overall Growth Without federal aid. Brookings institution suggests the revenue shortfall could be nearly 5 billion. There appears to be an economic need but there is no formula yet for overcoming the politics of the red state blue state divide. Andrew steve, thank you for that its a real great framing for our next conversation. Joining us right now to talk about all of this and where this stimulus debate goes, judd greg, former governor. And deval patrick, i want to thank both of you for joining us this morning thanks for having me. As we discuss what you think should happen, thank you, with stimulus, and frankly, how this should be approached can a piecemeal approach work, i will start with you judd greg . Do you think theres a way to do this given the approach or are we really not going to get anything if at all until sometime in 2021 i would presume that the most youll get is something targeted on the industries that are truly in cardiac arrest, such as the Airline Industry, maybe something to reboot the Small Business communities efforts, but beyond that, i dont see anything happening theres some very substantiative questions about whether states should be bailed out states like illinois, for example, have massive pension overhang that as a person from New Hampshire who has a substantively strong date do not want to pay for, and you have this issue of lawsuits, which is a non, you know, if mcconnell doesnt get his lawsuit reform language in there so people cant be sued for having employees who ended up being laid off because of coronavirus, hes probably not going to go forward with anything. I think a very small package or a package very targeted on industries which are in cardiac arrest is about the best you can expect. Deval patrick, obviously the democrats have suggested that it needs to be a much larger package. How do you respond, actually, to judd greggs issue about helping states that need that help, especially if youre in a state right now that doesnt need that help well, first of all, i think its not just the democrats, i think it was the chairman of the fed that said we shouldnt under invest in a recovery, we should invest adequately, and i think senator gregg is right, we are likely to get what he described which is a limited piecemeal, if we get that. But i dont think its the right outcome, and im particularly concerned and it ought to concern us all, that the objection is about, you know, bailing out blue states and red states not needing it, so called there are americans living in all of those states and many of those americans are hurting and we dont have an economy that is all focused on a given state we have an economy that is about a nation, and so we ought to be thinking about and planning in that way i can tell you that when i was in office and the bottom fell out of the Global Economy in the great recession, which actually seems quaint by comparison, it was the stimulus bill that enabled us to invest in education, in innovation, and in infrastructure according to the plans we had. And thats what enabled us to come out of recession faster than most other states and ultimately gain a 25year employment high. Weve got to be about sustained growth and we have to understand that in times of crisis, that is going to require an Extraordinary Partnership with the federal government its a very good governor of massachusetts, thats really revisionist history. I mean, i was there. I wrote the tarp bill, andas a practical matter, the stimulus bill ended up being a massive, Walking Around none bill authored by the a appropriate, u ended up with things or whatever the company was they spent 500 million on. The economy recovered when people got back to work, and people got back to work and did things because of the huge infusion of money that came out of the fed and because we stabilized the banking system, the stimulus package ended up being 800 billion worth of money that was unpaid for and went on the debt and is being paid for by our kids and paid for by our grand kids. I have to disagree with you. I strongly disagree i realize thats a narrative that republicans have used but i was there and received the money. I worked on that stimulus bill, in fact, at that time, economists from both sides were saying it should be larger it should not contain some 200 to 300 billion in tax cuts, which were not stimlative and we did use the money in the way i described. That wasnt the only source of resources, judd, really, i dont mean to give the impression that it was only because of the stimulus we made the impressions we did we made very very deep cuts in state spending as many states are having to do today well just have to agree to disagree on that one, deval. Senator, let me ask you this, i prefer not to relitigate the past but look to the future, and let me ask you this question, if fema resources were needed in a state like texas after a hurricane, it would be very hard pressed, i would think for you or others to suggest youre not going to send the money and is the question is that the equivalent today i dont have i have no problem with the initial major very significant 3 trillion plus now of stimulus thats come into the states, and the communities and into peoples pockets and especially into Small Businesses to try to keep National Anthem going, and i dont have any problem with the feds, which is putting another 10 trillion on top of that but the issue is whether or not the next package is directed at actually rebooting the system or whether its directed at bailing out, to be quite specific, states which have massive pension overhangs, from the fact they have been running the patronage systems for so long. I as a person from New Hampshire, does not have that problem, because were a fiscally responsive state. Do not want to pay for that. I have no problem putting money into helping Small Businesses over the next hump theyre going to need it youre probably not going to get it in the package, but we should do something we definitely need to focus on na group, a that group and those industries which are in cardiac arrest and if we have to put money in peoples pockets, i can handle that too i know where its going, pensions. Governor, respond to that what do you say about states that have been either irresponsible with their money historically and have not had a Rainy Day Fund for a moment like this well, i can speak to what we have and what we did in massachusetts, where we had a Rainy Day Fund, it was raining and we used that we also used the crisis as an occasion to do significant pension reform and other reforms that were in the long run saved a lot of money for the people of massachusetts. I think a lot of what judd says, i agree with im simply saying, and i dont, by the way, know of any state thinking of using stimulus money in this package to help offset their pension obligations. Im talking about people who are about to lose their housing. Im talking about people who are out of work and need some way to stabilize them today in the same way they did when the first bill was passed because the conditions havent improved. And if that is what the focus is, then we need a bill that meets those needs, even as we are working on beating the virus. Governor, thanks. And judd, its not selectron, it was a fine Company Bought by fl flextronics, im trying to save you from getting nasty mail from the poor people. I knew it started with s. So do a lot of things. We got to go. Governor patrick, thank you its a longer debate, well do it again. We appreciate it we got a lot more coming up on the other side of this break Lloyd Blankfein coming up in the 8 00 hour. Dont go anywhere. Back in a moment keeping your oysters growing while keeping your business growing has you swamped. you need to hire i need indeed indeed you do. The moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base so you can start hiring right away. Claim your seventyfivedollar credit when you post your first job at indeed. Com promo welcome back to squawk box this morning, it has been 100 days, and Julia Boorstin joins us with a look at the start of his tenure good morning. Good morning to you it has been a rocky first three months for stanky, taking the helm in the midst of the pandemic since july 1st, at t shares are down 4 , verizon is up 8, disney is up 10 , and comcast shares up about 15 . Now, stankey who was previously the ceo and run the warner media division, oversaw the launch of hbo max. That streamer announcing just over 4 million subscribers in its first two months, far less than rivals such as disney plus which added 10 million subscribers in its first day stankeys early tenure has been marked by layoffs and restructuring. He took the job weeks after at t laid off 3,400 employees, and a month into his run, he laid off another 600 staffers as part of a restructuring to streamline warner media looking ahead to his next hundred days and beyond, at t is bolstered by the stability of its mobile business as well as the growth of its broad band offering and the potential of its at t tv. There are challenges around, driving adoption of new 5g devices but the future of movie going with Warner Brothers delaying most films until next year, and theres the question of whether at t will sell its direct tv, satellite tv business, as stankey is so far focused instead on the Software Based entertainment of at t tv, and hbo max, guys. Julia, thank you very much. Julia boorstin when we come back, we have mike mayo who will join us to talk about the banks, and at the top t hourer, former Goldman Sachs chairman and ceo, lloyd bla blankfein. Squawk box will be right back. Back to the mornings big news, when it comes to the Banking Industry, Morgan Stanley buying eaton vance, they are paying a 38 premium that stock closed yesterday at 40. 94 theyre paying a mixture of tax and stock, joining us right now is mike mayo, Senior Analyst at wells fargo, and mike, what do you think of this news james gorman, the ceo of Morgan Stanley, transformed Morgan Stanleys business mix, more than any other bank ceo last decade. Kudos to what he did last decade, but its tricky to transition from restructuring to growth, and when his or hmorgany bought e trade, it was more on the Strategic Risk side, we thought he paid a high price, and now theyre pursuing an acquisition. I have to look at the details of this deal, but what is consistent with their theme that organic growth like in Wealth Management wasnt going as well. The low hanging fruit of restructuring is done, and now they need alternative ways to grow, and with that comes additional risk. We said the jury is out on its e trade acquisition, and we think the jury is out on its ability to grow as opposed to simply restructure. You thought they paid too much for e grade, obviously you dont have all the details on eaton vance yet, but its a 38 premium. What do you think of that price . Inning im goim going to ha the details here like i say, when you start growing by acquisitions, as opposed to merely restructure, theres new strategic and financial risk that comes along with that. You do have several banks that you have listed as your favorites. Were getting into earnings season, and i think on your list, youve got bank of america, j. P. Morgan, usc and p and g. Why those banks and are those your four favorite, can you put them in any order . They are my favorites, the highest quality banks in the industry, and i think whats under appreciated is once the war on covid is won, the Banking Industry has a 200 billion piece dividend in other words, earnings should increase by 2 1 2 times from their analyzed rate in the first half of the year so there should be evidence of that coming through next week with Bank Earnings most importantly with the reserving for future credit problems, and what we did is we have a new report where we looked at 25 trillion with a t, 25 trillion of fixed income assets and those assets say it isnt so bad spreads have contracted this quarter alone. We think that the build up of reserves, the worst is behind the banks, also banks should get part of the piece dividend from what i call good citizen costs banks have been waiving fees, spending extra money, trying to make lives better for employers and customers, and those wont be as high we should see evidence starting next week, and these are the highest quality, best performing banks, Great Companies at reasonable price sg. Mike. Thank you very much, its good to see you everyone wakes up every morning to a world that must keep turning. The world cant stop, so neither can we. Because the things we make, help make the world go round. They make it cleaner, healthier, and more connected. Its what we build that keeps things moving forward. So with every turn, well keep building a world that works. Before we talk about taxsaudreys expecting. New . Twins wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. Good morning, futures pointing to a higher open, one day after stocks posted their best session since july. Among the drivers, optimism about stimulus were going to discuss the prospects and whats at stake for wall street, and main street, with former Goldman Sachs ceo Lloyd Blankfein, plus, tech stocks a big winner of 2020, but the biggest names are now under fire from washington were going to talk about that and much more with famed vc investor, joe lonsdale as the final hour of squawk box begins right now like night at the roxy, i dont know, good morning, and welcome to squawk box here on cnbc remember in the car . They were hilarious. I remember. With becky kwquick and andrew ross sorkin. U. S. Equity future at this hour, 500 yesterday, 200 today is there going to be a piecemeal stimulus for airlines . I dont know but the market is in a positive mode and it has been for the last p couple of sessions, and doing a little bit better in october than september, but you know what they say, becky, october is where bear markets go to die unfortunately, they usually die with some horrible downward move that, you know, gets everyone convinced theyre never going up again. Maybe it wont be that way this time. Yeah, bite your tongue. We do have some breaking news from mcdonalds, kate rogers has the details on that. Good morning. Reporter good morning, the company out with better than expected sales for the Third Quarter. Comparable sales increasing by 4. 6 in the u. S. , driven by strong average check growth from larger group orders and strength at dinner. Analysts have projected sales to increase by 1. 9 a big beat there mcdonalds saw continued strength in sales in september, with low double digit comp sales in the u. S. , including positive comps, thanks to recent promotions like the travis scott meal guest counts remain negative for this quarter down 2. 2 overall, a 4. 4 decrease in International Operated par operated markets and International Developmental licenses were looking for global comps to decline by 5. 4 overall the company touting its Strong Financial position and increased its Quarterly Dividend by 3 to 1. 29 a share. The unique strengths including our unrivalled drive through presence around the world advance delivery and digital capabilities and marketing scale have become even more important during the pandemic. Mcdonalds usa today president will join us for an interview on the exchange today at 1 15 tune in more for all of this. Were hearing that President Trump says changing the debate style to virtual is not acceptable to us and im not going to waste my time doing a virtual debate eamon, is tweeting that out. Thats the latest. Meanwhile, we want to get to lloyd, investors and Corporate Leaders are closely following the stimulus talks in washington joining us now, a very special guest this hour, former Goldman Sachs ceo, Lloyd Blankfein great to have you with us this morning. Its great to see you, if i could see you, somehow i can only see myself here but y i know youre there. Im here. And were excited to have you. We had an interesting interview with neil cash carry you heard of powells comments, to paraphrase, i think he said Something Like yeah, we might overshoot or Congress Might overshoot with stimulus and give a lot more than we need. It will be put to good use, and we kind of heard the same thing yesterday. He said theres no moral hazard around this time and thats how its different than in 2008 because that was sort of, i dont know, selfinflected, however you want to view it. To you view it that way, lloyd i would say theres no, you know, enemy of the people in this time around theres always moral hazard. I mean, people can run their businesses to anticipate crises, and keep access cash im not sure its in the Public Interest that people keep excess cash on the order that would get them through a crisis. We turn the country into a t belt in terms of risk taking, and in terms of return for the sake of avoiding the once in a hundred year event i do think its different to some extent. I have a lot of, you know, i have a lot of sympathy for people who are hurt by this at the same time in the abstraction, capitalist model, you want to punish people who dont anticipate things and prepare for a future the idea that something of some sort would happen is a much higher probability so theres always a bit of moral hazard in all of these things, but the practicality of it is i think the United States would like to have an Airline Industry at the end of this, and so you have to be practical with these things, and not just sanction moan yo sanctimonious about it. Before we get to that, i just want to get one more question to you overall, lloyd, and that is i guess, you know, i think in terms of risk management, and im not just being nice, but obviously that was one of the things that you were great at, and, you know, as a trader, i think that, you know, thats why you ended up running Goldman Sachs, so if youre running this country in terms of fiscal and Monetary Policy right now, are there risk red flags coming up to you yet i dont know what we are as a percentage of gdp in terms of t debt, but other places have gotten into trouble at similar levels in the past sure, not just the level of debt the level of Interest Rates. Money is close to a free commodity, and when something is free, you tend not to husband it, and you tend to overuse it, like its a free good. And so you have to be very very cagey and alert because you know that even if you cant see them, they will be perfectly obvious to you in hindsight and obviously your critics will remember having seen it. But you know that given that money is kind of free, it presumably is not being allocated in a disciplined way, and so there are bubble elements to this, and you can see them, you know, you can see some things, obviously the credit market, people are lending to, you know, what historically would have been viewed as weak credits, lending to u. S. Treasury, today, 80 basis points, for a long time, 60 basis points for ten years in a, you know, as if they would never be inflation again, as if the dollars youre going to get back, plus 60 basis points a year is going to compensate sier you for the risk youre taking the wash of money is creating bubble elements, you look at how much money is available on the basis of somebodys reputation, for example, as opposed to, you know, as opposed to a Business Plan okay. So im going to lead into this, and then andrew can take over. We need an Airline Industry. We all agree with that why should shareholders not lose a penny in the Airline Industry. Why should taxpayers not be compensated for, you know, for keeping not employees of airlines in business but keeping the shareholders as solvent as they were when they went in. They did do buy backs, some would say they didnt shepard the money as well as they should have even though this wasnt their fault, they still, you know, maybe should have prepared for a rainy day better why should they get off scott free, the shareholders in the pure model, no one ever should, and you have to have a lot of things the pure model has to be practicality, and we need to have these institutions, we need to have these Companies Take the money. And be able to run their business at the end of it. You dont really i mean you kind of like to reset it and have it working and make decisions without governments finger on the scale or any kind of intervention or looking over the shoulder, but of course that wont make sense to people doesnt make sense to me because you do kind of want, you dont want to let people get off scotfree, and you want to compensation, you know, the public for the investment, and for, you know, lets use the word bailout again but if you are too active in that respect, and if you take too much value, you run the risk of a, it being unattractive to take, and b, the business may not be run very well afterwards. You have to have some balance. I can understand it from both sides, but i think theory has to give away sometimes to practicality, but you cant totally abandon the concept of free markets free markets, you know, have to compromise with necessity. Lloyd on that specific issue, though, and you probably heard me talk about this the political backlash against the banks was so strong after the financial crisis in large part because of the rescue, the and feeling that it was inaccurate i have argued against it throughout that the banks pay the money back, they paid the money back plus plus, and taxpayers were beneficiaries of the that, in addition to the economy got back on its feet and was able to be the back room engine of the economy once again. If you were to make the same arguments around the Airline Industry, you would say you want the airlines to be working because theyre going to be an engine to the economy and create jobs and same to some degree on the banks. People think the banks were a man maid crisis made crisis, and to some degree they were youre a ceo, if your company is about to go bankrupt, dont you think theres some kind of market deal to be had where the government says okay, were very happy to help you but were going to dilute the shareholders, thats whats going to happen here i think they will. On the flip side, because these are consumer brands, dont you think they would be injured even more if they just went bankrupt. Bankrupt is as much injury as a company can have you know, day dont shoot you, i think, at this point, but i havent checked in recently. I think, you know, i think that when the risk starts to become existential for the airline companies, theyll do what they need to to protect their business, and it might be close to that. They might be negotiating positions, but theyll, i think, eventually deal yes. Both sides will be incented at the cries of existential risk will do it theres a different concept, in american culture, theres antipathy, theres always been a lot of antipathy to large, you know, aggregations of financial power in the country, going back to the founding of the country in jefferson and hamilton, but people have always had a lot of resentment to those at the foll fulcrum of economic power. The problem will come in in hindsight when the world is fine again, saying oh, gee, it wasnt the airlines fault but wasnt the groceries fault or the restaurateur fault or any one of a number of industries or people that arent going to survive this economically, and say why were those guys so favored and other people wrnlt is it because they were more deserving is it because they were bigger, and those arent the right reasons, and so they will no doubt be, after this gets done, they will no doubt be second guessing, and, you know, show trials again, why these things happen the way it did that said, you have to deal with the problem that you have today. I think sometimes you have to put, you know, do these things and i think i would like to have an Airline Industry and it wont give me satisfaction to protect high capitalism, and think of what happened in the Airline Industry, when it was a specific bailout. Does anybody people, legislate whi legislatures who were involved in the rescues are now bragging about their role in protecting and preserving that industry in the United States, and so i think we have to, you know, we dont always like what we have to do, but sometimes you have to do it. You have to step up and its a profiles in courage moment, the people who are declared capitalists and who just dont like this. That might be why theres all of these talks in washington about doing this piecemeal if you had an Airline Package get passed, maybe at the same time, you would have something additionally passed for Small Businesses, how do you choose a big industry over small restaurants that have been in troub trouble. I would fight for that. Im no longer surprised at being surprised what comes out of washington or doesnt come out of washington. I would have thought that there would have been huge incentives, you know, especially on the part of incumbents on getting a deal done people would rather having the electorate being happier than sadder, more optimistic than pes mi mystic about the future, an opportunity to juice the economy, and they didnt take advantage of it. I dont really know the strategy on the republican side to let it go, unless they thought that they couldnt get it through their own caucus in the senate but that doesnt seem right to me but maybe its just deep held conviction that it was an over reach by the democrats and ideologically based t. St usua y its usually about the 10th guess, dealing with washington that it was a real id loeologic conviction maybe that was the case. It looks like the market is up even more it looks like President Trump says in his words, looks like theres a really good chance to reach a deal on covid aid, talks have reopened according to the president. Regeneron is going to go for emergency approval, and that stock is up a lot. Well let you comment on all of that, lloyd, but my overarching question, that is, every ten years, it seems like the Financial System needs a bailout. We need a different Financial System my question is about capitalism in general youre supposed to put your money down and risk it on an idea, knowing you can make it big or lose it big if we keep making it so that you dont lose, it just seems like things, you dont get real market prices. Its almost like everything is fake you cant trust the price discovery on anything youre doing, whether its debt or whether its, you know, equity or whatever it is. When does this really finally, okay, now its covid, before it was the housing crisis before, you know, it was snl, i dont know whatever it is, but when do we finally say, look, you need to lose, and suffer the consequences or else its not going to work anymore look, if you have to lose, its better that you lose at a time when everybody else is losing. And at a really tough time if youre the only loser, youre going to lose, and if youre losing at a point in time where its highly consequential and adverse in the interests of the country, for everybody to lose at the same time, you have a better chance of getting relief. Thats the practicality of it. But in concept, i dont think theres been a financial crisis that required major intervention every ten years. I dont either. I agree. Thats kind of silly, you know, you had once in a hundred year pandemic and i cant think of what happened before 08 that would have required it maybe the Great Depression the problem is i think theres a risk on the other side, in the interest of preserving moral hazard, you make it so pressi oppressive that people have to run themselves so conservatively, and hold on to cash and not use it for risk oriented purposes, again, you could turn the country into a very very safe tea bill, which has, you know, returns measured in the single basis points, and were not going to like that outcome either, so i dont want to endure a big financial crisis every other generation but if we do whats necessary to do to make sure we never have such a thing again, were going to be a much much poorer country im afraid its baked in the cake that we have to allow for so mu some of these. At the same time, you have to balance it by punishing people who, you know, are allowing the market to punish people. But, you know, if you cant sit on either of those extreming, you have to run the country and let practicality seep in, and take some moral hazard risk from time to time. Lloyd, were going o tato ta break. How is the tweeting going . Theres some people out there that arent so nice. They dont put their name on things they send in, either. You started doing that took to it pretty well, pretty quickly. Like my video with you, im not really seeing you. If i dont look at them, then theyre not there. Tweet something out for how you think its going and well check it out, and well be back, and were going to talk re imof you stick around. That would be a big moral hazard. Much more to success in a second for skin that never holds you back dont settle for silver 1 for diabetic dry skin 1 for psoriasis symptom relief and 1 for eczema symptom relief gold bond champion your skin hey, son no dad, its a video call. You got to move the phone in front of you like. Like its a mirror, dad. You know . Alright, okay. Hows that . Is that how you hold a mirror . [ding] power e trade gives you an awardwinning mobile app with powerful, easytouse tools and interactive charts to give you an edge, 24 7 support when you need it the most plus 0 commissions for online u. S. Listed stocks. Dont get mad. Get e trade and start trading today. Coming up in just a moment, a lot more from Lloyd Blankfein, plus breaking Economic News on jobs, and nen were going then talk tech with joe lonsdale, well have a lot more Lloyd Blankfein in just a moment welcome back, everybody. Lets turn back to kwour conversati our conversation with lloyd blank ste blankfein. I know you dont want to talk about Goldman Sachs. Mike mayor said he thinks because the banks have taken big reserves and borrower health at this point isnt all that bad, he thinks were past the worst of it when it comes to what that will mean for the banks and the economy. Is that the sense you get . I can feel pretty liberated to say this because i dont know anything other than what you know but my judgment says, yes, thats right i think this is the big risk is on big loan books, but i would say every other activity is probably doing very very well in this market especially banks that are involved in trading banks, probably doing very well in this market that would be my guess. You think out of derivatives, if theres a potential rebound in coronavirus cases over the fall and winter or do you think of second derivatives and some other perspective or basically you feel bogood about it, becaue that means a lot given your analysis of risk. When you talk about i think the banks are probably making good money the question always is does that translate into higher stock valuations and you know, you can look at the behavior people dont assign a very big as big a multiple to those because of, i guess, the volatility of those earnings, i spend half my year, half my career in a private company and then the other half, a public company. Same company but went public in the middle of my career, and in the old days, you just had to make money, and you didnt have to make it evenly over four quarters or evenly over the years. You just accumulated resources and you distributed. Now, you have to earn money but you have to earn it in a way where the market will assign a higher multiple to it, and a different kind of game for management i cant predict how stock prices would react. My best guess is that the firms are making money in this market. They assign a lot of value to that, and the conditions i described. Lloyd, back to the political backlash, theres still political backlash thats around from 2008, and 2009. Now you have new backlash building up. Last week or the week before, there was a house sub panel that came out with a report, the 380 companies, the fed has been buying the stocks, have combined, laid off a million workers since march, and that got me back to the feeling of oh, boy, here we go again. Many companies were doing just fine the fed was stepping in trying to stabilize the markets do you think theres going to be a much harder time for businesses overall to run their businesses because of the amount of money washington has poured into the economy and into the markets. I think thats right. In a pure model, on either side, you know, i described that before i think we shouldnt be. I think there will be pressure on businesses. They will be concern about the Public Relations of laying off people, doing things that, for example, arent advantageous to stake holders, other than the shareholders, at the end of the day. Were going to get the claims numbers. I hate to interrupt you, and i joe biden. Rick standing by at the cme with the jobless claims rick yes, they should be popping out on the screen momentarily. We are expecting it to be the 6th week in a row where were kind of in that quasi 800,000 camp theyre not across the wires yet, and of course continuing claims have consolidated as well price discoveries, the topic youre talking about in the markets but this number always seems to create some price discovery when we get it here we go, well, its the 6th week, 840,000 on initial jobless claims pretty much as expected, arguably, and as i said, from the week of the 28th, we started with 884,000 now, this is 6 continuing claims, though, finally did make a bit of a move under 11 million 10 million, 976,000. So 10. 976 million. Obviously this is a nice improvement. I expect revisions to trickle out, but last week is unrevised, was released it was 11,767. It was upgraded a bit. 11,000,979 we dropped a million, almost exactly on continuing claims, and last week, a subtle revision from 837 to 849. We should watch the markets, my guess is this will not necessarily be market moving, and of course if it does move the markets t goes right to your current discussion when feds buying 120 billion a month of securities, how much are the markets going to tell us andrew, back to you. Thanks, rick. Actually ill pick it up there you can see the dow futures still indicated up by about 250 points and we were there before this even came out with the jobless claims numbers lets get back to Lloyd Blankfein, and this does play into what you were talking about, 840,000 new unemployment claims, continuing claims of just under 11 million, and thats the type of thing that really will have reverberations i think everybody whos leading a company, look, you have to earn money shareholders, you have to succeed, and part of success is preserving your reputation with the citizenryand the general public so there will be some compromises along the line if you had a european model where they would, you know, you wouldnt be able to fire anybody, and you would have a bad performance going on for a very long time in the u. S. Model, which is a little bit rougher and more capitalist tick, the kind of businesses do what they need to do at the cost of some dislocation to their employees, and theres more pain in the shortterm hopefully by some government supported subsidies to the affected group, but you take that action and get to a place, you know, lay off people sooner. And then the adjustment gets made quicker and the u. S. Gdp always outperforms europe over the longterm, and so those are the tradeoffs. Theres some shortterm social its the social impact versus the longterm economic growth. I generally think companies should do more what they need to do and the governments role is to distribute the overall success of the Economic System that you get from that kind of harshness and make sure that gets redistributed into the right place, so we can preserve our social cohesion. Lloyd, as we walk into the end of the year, how can businesses be run badly or we have had payrolls forever because that will reduce the amount of wealth that could be distributed. That was the question i was going to ask as we walk to the end of the year, how concerned are you i would describe successful companies, companies that appear from the outside to be doing well, are realizing that they can be more productive, frankly, and productivity is always a good thing in certain regards but youre going to start to se more and more layoffs, both at wall street, including at your former firm, and Technology Companies and others, high paying jobs, not furloughed jobs, and when you think that the market will be able to pick those jobs up quickly or it becomes a bigger problem. This has been quite an accelerant to the revolution, in hindsight, it was slow motion, its going to happen quicker now. Look how were talking im talking on my ipad through zoom and were engaging in a way that in some respects is easier and better than had i had to, you know, face the traffic and get to your office these things are going to change we discovered that you can work from home. Maybe you dont need as much space. We discovered that you may not need as many people because guess what, everybody showing up for work, and not everybody has been productive under these circumstances, so theres going to be a much more rapid adjustment now, you could, you know, you could curse the tide and try to hold it back, but, you know, now that we have discovered this, were not going to be able to undiscover this. So i think that theres going to be a lot more rapid change in the direction of the technological revolution now, once upon a time, you go back over a hundred years to the turn of the 19th century and 20th century u. S. Have a very largely agricultural economy, and we industrialize and manufacturing, you know, accelerated in the country. And you know, jobs got redistributed. There was dislocation. But you have to make those adjustments and those are progress i think its the role of government to cushion the adverse effects of those radical changes through, you know, a tax system which is aggressive and redistributes. The idea of holding back that progress is wrong but its also futile because you cant unlearn what you have learned. Lloyd, very quickly, we have talked an awful lot about Big Technology and being targeted by government you think that there will be some sort of break up that takes place here what do you think those companies are facing at this point after being labeled monopolists. I think there will be a lot of pressure on those companies i thought this for a long time i didnt know what tack they would take, but the and by the way the in some big sociological 30,000 foot view, you can allow companies to become more powerful than our elected officials, than any other political body in the country. The political system would reject it, should reject it in a way. And again, im talking abstractly here. You cant have, you know, just think of all the cases that have come out on the subtle ties and nuances of free speech and we have Mark Zuckerberg deciding what gets out there that cant work in a democracy the democracy wont tolerate it. I wasnt sure what form the approach would take of government they could talk about the infringement on privacy. National security, for example, letting the russians in to influence our system or antitrust, monopolizing activity and, you know, eventually all of those elements will come down, and i think that its possible that theres a break up or some other element of control im not dying to have these Great Companies become utilities because its a jewel of our system that we produce such innovation, and i wouldnt want to give them a lobotomy by making them into utilities, i kind of like what theyre doing. At the same time, there has to be a lot more regulation, and perhaps even a press secretabrep our Economic System survives on competition. Its not technically a crime to be a monopoly. Its a crime to monopolize once youre a monopoly, its hard to not monopolize, and people have gone out and won the competition, and there are duopolies or monopolies in that direction, and i think the political body is going to respond to that. Again, nature bores a vacuum, but democracy concentration of power of individuals. I want to thank you for your time and a thoughtful conversation today its really good to see you. Nice to see you, almost see you. Nice to hear you come back soon. When we return, palanir cofounder, joe lonsdale. Squawk box will be back after a quick break. music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. Welcome back to squawk box, im Steve Liesman, had a chance to dig through the unemployment numbers that just came out and a couple things stand out. The first thing is that its still 840,000, its really a marker for the entire u. S. Economy. There is improvement, but that improvement has slowed we were dropping by 100, 200, 300,000 a week, and now its down to just 9,000, 840,000 remains well above the peek week back in the 09 recession of 665,000. Every week since march 28th. You have a large number of continuing claims north of 10 million. That is down a million add it all up, theres two separate programs, the unemployment claims program, the regular one and the pandemic unemployment assistance. Those two together is equal to 25 million thats down a million. And california has stopped reporting, so we dont know if the numbers should be higher or lower based on california. Have to watch this and think deeply and heavily about what exactly is going on in the u. S. Economy that 840,000 Americans Still lifing for unemployment claims going to break now squawk box coming right back well, audreys expecting. Twins grandparents we want to put money aside for them, so. Change in plans. Alright, lets see what we can adjust. Wed be closer to the twins. Change in plans. Okay. Mom, are you painting again . You could sell these. Lemme guess, change in plans . At fidelity, a change in plans is always part of the plan. Lets get over to jim. Stimulus, stimulus, you know how the market moves on stimulus also, though, i mean, seriously, trump was diagnosed like a week ago, and he was standing in front of the rose garden and he looked pretty good i dont know, i think regeneron, there may be some hope there, i think, for i know its only 50,000 doses, going to be tough to make 300,000 doses but wouldnt it be nice if this actually was a way of dealing with the hard cases, i mean, that would be nice. Theres too much negativity about it in a sense, its going to be too expensive. The government has already bought a couple hundred thousands, they wont be able to make it in scale, they can, it may not be a cure. I think cure is always, we know cure is not the right word what it means is that you can reverse the implications of it its very bullish, joe, and i know that the president seemed carried away about it. At the same time, who wouldnt be giddy, if you went to the hospital and got out of the hospital and felt good in a couple of ways thats not the way the disease, the course has taken i think regeneron is making good strides and lily too, and george on the show, you give this, theyre going to be fine thats what they said, and thats what happened jim, thanks. Significant news yesterday. Yes, it was, joe. Its stage one is over of thing. Stage one is over. Definitely. No doubt about it. Anybody that says otherwise, i dont understand thank you, jim cramer, coming up, vc investor, joe lonsdale, when we return welcome back to squawk box, shares of ibm jumping, the Company Announcing it is splitting into two public companies, splitting off its i. T. Infrastructure Services Unit people liking this move. Dont miss chairman, gin ginni rometty. Public debut, one of the most anticipated listings of the year stock trading now just above 10 a share, higher than the initial price that had been the, quote, reference price. Joining us now is palantir cofounder joe lonsdale, Founding Partner of 8 vc great to see you this morning. A week later, you look at where the stock has i dont know if i want to say settled, but are you pleased, satisfied with the valuation as such . It is doing pretty well it was 17 years since we started. Nice to see news articles that say direct listing failed because it sold off 15 from the highs and it is a pretty good 22 billion failure, feeling good about it. So, of course, the big question is given that it is a direct listing, employees and investors can sell on day one. Have you sold . Youre allowed to sell for 20 of your shares and take some liquidity. Im very bullish im holding all my shares. A lot of my friends when we built this company, we were in our early 20s, a lot sold and bought houses. It is really awesome the big question in terms of valuation and im curious if you can speak to this, and we talked obviously last week to your cofounder about this, but given that the Company Still isnt profitable, it is profitable on an operating basis, but still is not a Profitable Company, how do you think about that path to profitability and especially how do you think about the concentration of revenue, meaning that most of the revenue is coming from a small number of clients right now . You know, i think it is one of those things you kind of model an you map out and you see it is growing at over 40 and you see the margins have gone up dramatically the last few years. As you noted, its operating cash flow positive, you know, obviously not quite ebitda given how much equity it gave out this year it is still attracting the very top talents and as long as it is attracting that talent, the markets is you can map this out as very clear, very good chance to be a Profitable Company in the next few weeks. Joe, you talk about palantir attracting top talent, i want to talk about talent in the valley now. There is a huge debate around the culture of these companies, what they represent, Brian Armstrong the ceo of coin base put out a memo causing quite some controversy i love that memo. I retweeted it totally agree. And he made the argument, almost a Milton Friedman style argument, that corporations and his in particular should not be in the business of involving itself in policy, in politics, in social issues, and the like and i ask about this because it is clearly something that a lot of other Big Tech Companies have gotten involved in and where do you think the balance of that debate is going to land . You know, the social issues, the policies that the companies themselves are involved in should be the ones that are relevant to their mission. You know i think it is not a job of Silicon Valley to decide on policy palantir itself is the ultimate privacy engine and forces every policy, make sure you watch the watchers, but it is not palantirs job to decide what the rules should be, they should help people do the best they can within the rules we invest in a lot of different types of companies i work with, you know, palantir has a lot of engineers, probably has more people on the moderate left than it does on the right i work with people on both sides. I think it defines the market in america, we can Work Together without having to beat each other throats about policy disagreements all the time. How much of this is being driven the decision by companies to take on policies is being driven by the Employee Base that is on slack all day, that has been given a megaphone in a way that employees havent had before, and to the extent a corporation decides no to the participate in that is that a negative, is that a disadvantage you know, it is i think it is actually quite an advantage i think it is a sign of strong leadership what youre seeing is youre seeing these companies have people, lots of different views, but a very, very loud 5 or 10 on this very extreme, very far populous left in Silicon Valley. And they love to attack everyone who doesnt agree with them. And a lot of weaker leaders just dont gogh right go along with it, they dont want to be attacked. And a strong leader stands up to that and says, listen, there is people that disagree with you that may not be saying it loudly, our company is not going to stand for your view just because youre loud and other people are quiet and it is not the job of the company to express this specific policy a lot of us agree we want to make america a better place, a lot of us, myself included, working on all sorts of policy to help improve the country. A lot of us disagree on the means to get there you dont have to agree on a means to work on a company together i think thats why we have Companies Made for run the economy and building things in the economy. And we have nonprofits and other groups made for arguing about policy and forcing them together is not how the country is supposed to work joe, let me ask you a different question, about policy, but around also tech we talked to Lloyd Blankfein earlier about this, becky quick asked lloyd about it how do you think about the Big Tech Companies now and the cl m claims most recently from congress that they are monopolies and abusing their quote unquote monopoly power you know, ill tell you what i think. I think it is a shame that people in Congress Care so little about what actually matters to our country it is clear it is a giant show i own billions of dollars in number three Commerce Company which is a competitor to amazon. So my book is to go after the Big Companies and take them down and there is things to criticize google and facebook for, section 230, how to they change dialogue in this country, if you want to attack a monopoly that matters in this country, they would be attacking healthcare thats a place were spending three times too much money the guys running the big Healthcare Companies are not celebrities, not zuckerberg and bezos and et cetera, these guys are bringing in celebrities to try to get their ratings up because it has become about populism and it is disgusting. People dont care about the country, dont care about the issues that matter im embarrassed for our country theyre putting than giant show versus solving the things that actually matter. So you would seek to break up the Healthcare Companies, the Health Insurers . What are you suggesting . The providers, the insurers, both of them lobby like crazy to stop modern competition. Health systems built for profit and nonprofit raise prices in hospitals 3x where they need to be thats what is hurting this is the definition of a monopoly we should be using Consumer Impact it is obvious to Healthcare Companies, three times too much money. The tech companies, it is like, are you worried youre spending too much money on your tech now . The monopoly power of tech, sure, something 20 to watch, but the problem is the social media ruins our dialogue thats a healthy conversation to have to focus on tech monopolies versus healthcare monopolies shows they care more about celebrity, care more about pomp and circumstance, they dont actually care about what matters for consumers. It is a fascinating perspective that probably deserves more attention. You mentioned social media, are you of the view that social media is going to become if it isnt already a problem when it comes to democracy now you know, it seems like it is clearly a problem. Seems like you know in general, markets are good at optimizing for a lot of positive things in this case, the market gets people to click through click bait, taking 100 x and probably not very healthy for our dialogue and probably needing a nuanced discussion there is no easy answer there. It is easy to question section 230, if someone krecensors some things, should they censor other things joe, were going to run out of time. There is so much to talk to you about. Fascinating. Want to get your sense of spacks you have backed some spacks before but does feel look a frenzy. Number 12, listen, hes doing great work with that ive been pitched by every single bank about spack. It is true that we did all these enterprises that are valued in private markets that sometimes half what theyre valued at the Public Markets even palantir. Public markets are valuing things and in many cases much more highly, palantir is reasonable where it is a lot of stuff is way overvalued if you want to raise money, raise it in the Public Markets now. Well see what happens still looks like the next year will be a lot of spacks. Were at a hard break at the end of the show. We have to have you back we appreciate you joining us and waking up early on the west coast. Thanks so much. Good morning thanks. Make her you join us tomorrow. Squawk on the street begins right now. Good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber futures are set up for another gain as the president says the stimulus talks he called off on tuesday are going well adds hell quit next weeks debate, which is now slated to be virtual as he recovers from covid. Futures you can see there, jobless claims 840,000 today