Quintanilla with Morgan Brennan and john fortt on the New York Stock Exchange the social network looking to emphasize posts from friends and family Mark Zuckerberg writes, i expect some time on facebook and measures will go down. As facebook deprioritizes news, the former president obama was on the First Episode of lettermans new show on netflix, where he addressed the issue of news on social media listen to that whatever your biases were, thats where you were being sent, and that gets more and more reenforced over time thats whats happening with facebook pages where more and more people are getting their news from. At a certain point, you live in a bubble and thats part of why our politics is so polarized i think it was a solvable problem, but i think its one that we have to spend a lot of time thinking about. Two conversations here this morning, one is about the ad revenue impact and the share price, obviously, were going to coff cover that but longer term its a question whether or not zuckerberg sees this Political Risk weve been talking about for months as a real danger. Seems like he does. I think investors are probably taking this a little bit too hard this morning. Facebook has so many levers that they can just pull at will, that just because they are deprioritizing a certain type of content in the news feed, doesnt mean they have another level they can crank up and ramp up advertising its interesting, this announcement from zuckerberg felt familiar to me, so i looked, january 2015 facebook cuts back on promotional posts from pagers users have liked, saying we want more of your friends in the news feed june of 2016, news feed prioritizes friends and family and other core values versus things like news now once again we have basically the same announcement all over again. This is just something facebook does every once in a while, they pull a lever, push another one, and the revenue still continues to go up great youre prioritizing friends and family, but what happens when friends and family are the ones sharing inaccurate information or crazy opinions and that is now dominating your news feed . I want to see how that actually plays out. That never happens. Never for more, lets bring in david wolf and michael graham. Guys, good to have you with us michael, i guess lets start with the very near term. Why some of the downgrades today, why the shares are down having their worst day since september. Facebooks revenue model is built on user growth and engagement growth, and then ad load and ad pricing. Those are really the four growth levers facebook has. I think what this announcement does today is puts more burden on that add pricing to fuel some of the Revenue Growth. Just to give you a quick example for 2018 were modeling 15 user growth and 45 ad Revenue Growth so to make up that difference, what were seeing now is based on this announcement, users should be spending a little less time on facebook, but the quality of that interaction is going to be higher therefore, you would think that advertisers are going to be willing to pay a little more for that interaction, and i just want to say i totally agree with the earlier point, facebook does this from time to time, they recognize that the core is to protect the user experience, and i think thats what they are doing. Are we forgetting, perhaps, that facebook is not just facebook theres instagram, too, and they are, perhaps, not affected by this as much thats a great point. We know that the ad load on instagram is quite a bit lower than it is on facebook, you know, we think thats by design. And if you put this in perspective, all media types get to a point where the ad load gets too high, and weve seen that in radio and television weve seen it on search ads in the past, so i think facebook is going through a Natural Evolution where its trying to balance the need to grow the business and to grow revenue, but at the same time protect that core user experience. And, david, you own apple, you own google, a number of other stocks you dont own facebook why not . Well, quite frankly, its been a mistake we came close to buying it a couple of times. We were too conservative in our valuation expectations of pulling the trigger, and while im sitting here listening to the commentary and seeing the recent news, hopefully the market will push the shares down maybe even more and well finally get our chance where would that level be for you . Im not prepared to say right now, but well welcome any weakness to sharpen our pencils. David, overall, impact . Its been a week of interesting couple downgrades of snap in the last couple weeks, twitter is back above 25. 25 this morning when you look at the push and pull of interest from adbuyers among these different platforms, how would you rate them . Judging from your interest, i guess youre of the opinion facebook is in the poll position oh, absolutely. We would certainly go with the leader on that front we really have not had much exposure in that area. Again, we probably should have, and hopefully well get another chance to swing a fat bat, and we would stick with the leaders. Michael, is there anything to take away from former president obamas comments, combined with some of the concerns that weve seen about the way false information has been used on social networks as regards to targeting . Because more and more its not just when you pick up your phone that youre being targeted now weve got voice command devices like the echo and, you know, cortanas in the home, apple is going to have the home pod soon if were able to be targeted even when were not actively holding a device, are there dangers there for tech companies, or just opportunities . I think the whole voiceactivated device area is going to be an increasingly important one. We saw a stat the other day that 16 of u. S. Adults now have some sort of voiceactivated home speaker like an echo and some of the other products that you mentioned. I think facebook has also discussed the possibility of launching some products like that, so thats going to be a huge area thats going to continue to drive some of these major search and social media platforms further into our lives. Its absolutely incumbent upon these platforms to balance wanting to have content that is real and valid and useful with not censoring the content. And thats always the problem when you have a lot of usergenerated content, like you do on twitter and snapchat and facebook, you have to present that content to users, because thats why they are there, but at the same time youve got to be careful to make sure theres some integrity and not fake news i think all these Big Companies are applying Artificial Intelligence to this problem in a major way. I think well get increasingly good at curating content that makes sense for people to see. I think well get increasingly good at protecting users from dangerous content and from fake news types of content. And i think it will be an ongoing evolution. Clearly, these major social media platforms have the resources to keep investing against that issue and a whole bunch of others. Guys, thanks so much for that discussion huge story getting buried by some other stories today, but its important to note david, michael, appreciate it very much. Still ahead, a lot more on facebook as the stock continues to slide on the news feed revamp well talk to owner of the Milwaukee Bucks wesley edens and get his thoughts on the markets, taxes, and more, including the new Passenger Rail he is launching in florida today and the president , we do expect to hear from as controversy swirls about the language he may have used in the oval office yesterday. Well bring that in a few moments. Best twoday gain r fothe dow since november 29th and 30th alerts wouldnt you like one from the market when it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. Take a look at the shares that reported earnings, jpmorgan and black rock are rising, wells is down. Wilfred frost has more on the results. Yes, despite taking a 3. 25 billion pretax litigation expense in the quarter, wells fargo Ceo Tim Sloan cant guarantee all costs are now accounted for. I think weve made a lot of progress in terms of looking at the operations of the company, but i cant provide you with a guarantee or absolute assurance that we wont be making additional changes in the future to anything that we might find and i love to live in a world where i can give you an absolute guarantee and certainty, but thats not the world we live in. As i reflect on my first year in a quarter in this role, i think its fair to say that one of the mistakes we made at the company was that we didnt have a thorough enough review of the businesses on an ongoing basis, so our review will be continuing the fully adjusted eps to wells fargo was below forecast shares down about a percent. Despite giving specific Cost Reduction targets, loan growth also is soft, but credit quality is strong. Jpmorgan shares have rallied due to the constructive tone from cfo marian lake and ceo jamie dimon, particularly on investment banking, credit, and loan growth. Trading is poor, particularly in currencies, which was down 27 year on year equity trading, though, was fine both banks optimistic about tax reform, estimating 2018 tax rates will be 19 , well below last years roughly 30 effective tax rate guys thanks, Wilfred Wilfred frost. Americas first privately funded intercity Passenger Railroad, brightline, is finally opening to the public. The first leg of Service Starts this weekend between West Palm Beach and ft. Lauderdale, with service in miami coming in spring and expansion to orlando also in the works. The 3 billion project is being closely watched as infrastructure, again, gained momentum on the hill and in the white house. For more were joined by wes edens, cochairman and cofounder of the firm that owns the privately operated rail system wes, thanks for joining us today. Thanks for having us. Very happy to be here. So, this project has been seven years in the making for you, and certainly when you look at Passenger Rail in the u. S. , historically it hasnt been a money making venture look no further than amtrak, but you believe you can turn a profit on this railroad, whats the plan absolutely. It has been seven years. You know, theres a great history of profitable rail lines around the world in fact, the northeast corridor of amtrak is highly profitable and we thought the characteristics of miami to orlando, miami the heavily visited International City in the United States, its too far to drive, too short to fly that was the genesis of the project. Why invest in this . I know the max speeds are going to be 135 Miles Per Hour when the orlando leg comes on in two years. Why invest in this rather than high speed rail or newer technologies like hyperloop . Its a really great question. The rail lines that are behind me are rail lines put in place when Henry Flagler built the railway originally you can go at grade a maximum of 135 miles an hour. If you want to go high speed, true high speed over 200 miles an hour, you have to build a bridge for 250 miles and then put a train on that sounds hard and expensive, and its both of those things, so this is much more cost effective. We lose a little time, but to put it in context, it will take us three hours to go from miami to orlando, high speed train might be two hours and 20 minutes or 30 minutes, so a huge difference in cost and time to build and not that much of a reduction in service so its really the right model, i think, both for here and other corridors like this around the United States. Certainly, theres been a lot of talk about bringing the private sector in to help Fund Infrastructure in the u. S. D. C. Is starting to talk about what an infrastructure plan would look like. Do you have plans to invest in other projects like this around the u. S. Absolutely. I think that one of the things that became very clear in doing this project was that the only way it was going to get done was to privately finance it, which is what we have done i think the government has got some initiatives and programs to try to create more of a debtfunding capacity for infrastructure that i think catalogs a lot of growth im not intimately familiar with what the details are, what they are proposing to do, but with a few tweaks and access to capital, there can be a lot of infrastructure developed in the country. And fortress was recently acquired by softbank i know youve told me they didnt invest in this project, but are there plans to invest in future Infrastructure Projects whats that relationship look like the relationship is one where were an asset manager, they are our parent now they actually bought the stock of the company and took it private at the end of december, and we have a very Good Relationship with them in terms of the objectives for the firm, but on the individual investments were quite separate from what they do. I know theres been a lot of reports in recent months that you were acquired as a quote, unquote, brain trust for softbank are you advising them on some of these investments with this fund im not optimistic enough to describe myself as part of a brain trust. I dont know the answer to that. I think well find a lot of ways to collaborate with them i think theres some terrific investment expertise theyve had a tremendous track record over the years and we think theres a lot we can learn from them and hopefully vice versa, as well wes, were sitting here on the floor of the New York Stock Exchange, we have u. S. Equity indexes at record highs again today. Certainly, your focus in florida right now is infrastructure, but what is your take on the market right now . Is it getting irrational well, i think that tax reform is, obviously, a big part of the picture today, but just the reduction in regulation has been incredibly positive for u. S. Companies, and thats something we see in lots of things were invested in, so i think its very well based in that sense. I mean, frankly, certainly outpaced my expectations over the last year or so, but im not surprised when you look at the underlying businesses how well thats doing that its reflecting itself in higher stock prices wes, something i didnt see in these announcements is exactly how tickets will be handled on a system like this, in an era where more and more is being done through apps versus with paper tickets how have you planned that out for a pretty young tech savvy area where you expect people to be buying tickets . Thats a great question theres an app, obviously, weve spent a lot of time developing a consumer interface we think is going to be, obviously, terrific thats one of these things on the consumer side you start with something and hope to improve and improve and improve it we know the standards for airline apps, other transportation apps. Were very mindful of that and want ours to be just as successful very focused on it and, wes, i have to ask you, one of your former partners, mike, very outspoken champion of bitcoin and cryptocurrency what is your take on it . Is this the future coming into play here, or is this a bubble you know, mike is a big bull on it, theyve done very well financially. The firm made a big investment in it thats been successful financially. I take none of the credit for that, because it was those guys. My view is i feel like the underlying technology, the blockchain technology, has got tremendous applications. I think there will be a lot of very interesting ways to commercialize that as far as the crypto coins themselves and the valuations of them, its not really my area of expertise, so im not really the right person to have a view about it i know youre about to board that train and take it up to West Palm Beach for one of these first rides here as service kicks off this weekend, but i got to ask you about the Milwaukee Bucks. One of the rookies, sterling brown, got pranked earlier this week there was a lot of popcorn involved and a nice mercedes, whats your reaction to that its so fun yannis is not only a tremendous basketball player, but a very, very good guy, funny guy sterling was delinquent in his rookie duties, so he got a car full of popcorn as a result. Were excited about the future for those guys and excited about the present. I hope its going to be a great season we hit the halfway mark with a game against golden state tonight, so everybody is very excited about that im going to ride a train and then go out and watch a basketball game tonight. Wes, thank you for joining us here on cnbc enjoy your train ride, and thunk again. Wes edens from fortress. Thank you when we come back, you can get some hints about amazons future from looking at its patents. Our deirdre bosa is reading the tea leaves and see what the Company Might have in the works. And President Trump is about to speak in honor of Martin Luther king jr. Day. Well bring that live. Squawk alley back after this daniel jacob for every hour that youre idling in your car, youre sending about half a gallon of gasoline up in the air. That amounts to about 10 pounds of Carbon Dioxide every week. malo hutson growth is good, but when it starts impacting our quality of air and quality of life, thats a problem. So forwardthinking cities like sacramento are investing in streets that are smarter and greener. The solution was right under our feet. Asphalt. Or to be more precise, intelligent asphalt. By embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic. Then that data runs across our network, and we use it to optimize the timing of ligh