Transcripts For CNBC Squawk Alley 20160919 : comparemela.com

CNBC Squawk Alley September 19, 2016

Bombings that have occurred over the last three days in new york and new jersey. Hes the same man caught on Surveillance Video at both manhattan crime scenes, so who is rahami . Not much is known at this point, but we do know he was born in afghanistan but is a u. S. Citizen. Nbcs Pete Williams reporting according to a u. S. Law enforcement official, a key piece of evidence was a fingerprint found on one of the unexploded devices. New Jersey State Police say hes also wanted for questioning in connection with saturdays Seaside Heights explosion. Officials have now officially linked all of these incidents. Earlier this morning authorities searched a Fried Chicken restaurant in biz bett, new jersey, whose owner is listed as mohammed rahami. All this unfolding as andrew cuomo says it looks like the bombing that happened here in manhattans chelsea neighborhood on this zrestreet, 23rd street, could be an act of terrorism with a foreign connection. In all, four crime scenes, two in new jersey, two in new york, including this one where the street does remain closed to the public. We should be getting more details at a briefing with new york city mayor bill de blasio, nypd commissioner jimmy oneal, that starts at 12 30 eastern. Guys . Thank you very much for that. We are getting word the president will deliver a statement relatively soon, we believe. Also the new York City Police will hold a press conference at 12 30 eastern time. Hillary clinton speaking on the attacks in a News Conference this morning. She called on americans to, be vigilant, not afraid, and she also asked for the tech communitys help in the fight against terror. Take a listen. We need to work more closely with Silicon Valley and other partners to counter terrorists propaganda and recruitment efforts online. Were going to stay focused on what will work and how we deploy a strategy that will protect america, work with our allies and partners, to take isis down and have a strong counterterrorism effort online in order to try to defeat the ideology that stands behind these terrorists attacks. Joining us with more this morning, Shelly Palmer with palmer advanced media, steven levy, editor and chief of back channel. Good to see both of you together. This is interesting, reaching tout to Silicon Valley, steven, that relationship between tech and the government has been troubled of late. Incredibly troubled ever since the snowden relations, where it turns out the government was sucking up all the information that google and yahoo and others from their data centers that they thought was private about their customers. Theres not been a lot of trust there. More recently the clash with apple, who wanted to encrypt its data there, and thats something im sure is going to come up as people talk about the bombings in the future there. Specifically what shes talking about is the recruiting online, and it sort of makes sense to say, gee, we dont want twitter or facebook or other places to be platforms to recruit terrorists, but on the other hand its hard to surgically remove those bits, which are terrorist recruitment videos from other forms of free speech. Well, so much of tech, shelly, is moving towards end to end encryption. The Companies Said users privacy is paramount, so what more can washington and Silicon Valley do together . Theres a tremendous amount. First of all were dealing with a decentralized enemy and what they are doing is using common tools now to propagate ideas, and ideas are very hard to kill. Im not sure you want to force them underground and off twitter and facebook, because they are very visible. What you want is Machine Learning algorithms to understand whats being said and how it leads to various outcomes, and that is inside our capability, both from the Law Enforcement side, as well as just from the private sector side. Being able to analyze sentiment is something advertisers have been trying to do for a very long time. They are advertising hate and advertising they are going to do harm. The same tools we used to advertise, and i hate to use this word, targets in advertising, we can identify targets in terrorism. Theres two fights. Why do you think this isnt already happening if the ability is there . It is happening. On a given day the tool sets are better than other tool sets, today were better than them, tomorrow they are better than us. They have volume on their side and we have Machine Learning on our side. At a certain point were going to pass their volume because the capabilities of the computational power will exceed their ability to use volume to beat it, but its hard. Theres no question about it. Im thinking, steven, we used to go to the post office to see an fbi wanted poster. Today everyone got it at the same time. Yes. Like a tornado going to hit. Right. In the halls of the u. N. Phones were going off with this picture this morning. No, that was impressive, and i think as a statement about that, you dont want to overuse that, to have the thing go off the all the time and say i dont care, when it turns out there is a tornado barrelling down the roads toward you. The Machine Learning thing is really interesting. Weve made huge advances of this, but i think Machine Learning is a lot better when were identifying images in Google Photos and faces even in trying to get sentiment there. All you need to do is look at the facebook trending topics and see sometimes they pick things that are fake news stories to see were not where we want to be on that stuff. I dont disagree with that statement, but id say there were two fights here, one is the technological fight, and by the way, good or bad, they are the best we have right now. Sentiment analysis have been able to analyze natural language processing, et cetera, its going to get better and better and better. The second, much more important fight, is the one against the ideology, that can recruit without physically talking to whoever it is they are recruiting. And this narrative has to be countered and its not as simple as trying to kill the idea, because history has shown us it is really hard to kill an idea. So a counternarrative must be mounted and every human being in the world who has a cell phone, who has an online connection, has an ability to be part of this narrative. They are fighting every day to get the hate out there, not everybody, only a certain few. All of them are working towards making it bad, not all of us are trying to make it good. Its a big issue. I think people understand what you mean. Lets switch gears a bit. John ford is live at open world in san francisco, where he just caught up with mark hurd a few moments ago. John, some highlights . Yeah, carl, these topics are connected at oracle openworld. Oracle is the biggest Database Company in the world and if you want to search through a bunch of information, if you want to store and organize a bunch of information digitally, you need a database. I talked with mark hurd about National Security issues, it gets complicated globally, but right now a lot of what oracle is focused on is the cloud. Heres what mark hurd said about that focus this year. Several years ago we made the decision as part of this overall strategy to go all in on the cloud. We changed our organization to do that, we changed our incentives to do that, in addition to releasing a lot of great products. In q1, our cloud growth in dollars combined with our new Software License dollars grew 16 , so really to us its the combination of those two that are important and the fact that cloud growth was so high, we grew our cloud in q1 82 . It is a difficult balancing act, of course, when youve got a legacy business thats very large as that comes down in the cloud era and the Cloud Business goes up, but oracle trying to make the argument kind of applelike, that theyve got this vertical integration, they do hardware and hardware as a service, they do platform and database, and they do applications, of course, they Just Announced they want to buy net suite and have clearance in every country except the u. S. To do that. They are arguing they can put all that together for customers in a way that makes the cloud faster and more usable than from the likes of amazon, microsoft, but, of course, everybodys got their own argument and amazon continues to be in the lead. Well continue to see here at openworld how oracles develops. Good stuff this morning. I would love to know how youre handicapping this rivalry, which is developing faster than anybody thought. First, lets take a minute to appreciate larry ellison. The guy is older than donald trump, older than hillary clinton. Hes still in there, and i think sales force and amazon and these competitors are keeping him really super energized, out there. That said, oracle is late on this, you know, oracle, the two big breakaways from oracle, sales force and net suite, so now oracle is trying to buy net suite and coming up against sales force, they say, has their big competition in terms of concept there, right . So its tough for them to catch up. Amazon is way ahead in terms of that. Their culture is built on the cloud, whereas oracles isnt quite yet. Larry ellison in his keynote took direct aim at amazon, as we just heard, but it was sales force, shelly, that unveiled einstein deep learning hours before the event kicked off. How should we be reading between those lines . Truthfully, this entire industry is fighting not each other, but the future. Because where we are right now is where power was when everybody had a different kind of Power Company and there wasnt a municipal grid. At a certain point these companies are going to have to offer more than just storage and computing power, whether its plug and play Machine Learning, plug and play tool sets, youre going to have to be able to run your business and a normal person is going to have to be able to do it, because the high end already there is already there and the ctos who are going to make the decisions to use some kind of cloud tools already have a faithbased reason to use s. A. P. , ibm, oracle, amazon, because all technology is faith based, so were going to see how they all look at the future. You cant handicap any one of them. The biggest, baddest at the moment, but its not hard to catch up in a certain way because the technology is increasing at a rate nobodys ever seen in history. John . Your thoughts . Guys, heres what i think is interesting, especially when i look at this from an investors perspective, from a Technology Enthusiasts perspective, i look at the transition to the web back in the late 90s, open source in the early 2000 and the transition to mobile in the latest 2000s, and in those cases a lot of the Legacy Tech Companies were really slow out of blocks. This time with the cloud it doesnt look to me they are necessarily as slow out of the blocks. The question is, whether the likes of particularly microsoft and oracle are fast enough to create viable, profitable, quickly growing businesses to actually be some of the last people standing in these cloud wars that we have yet to see. My sense is they are not as far behind. Its the profitable part. This is going to quickly get kmodtized. This is supply and demand and storage is getting cheap and bandwidth is getting cheaper. If youre not value adding to that, same problem the content companies are having, verizon made a content bid, why . You tell me. You dont think they are appearing victories, steven . The comical moment to me was when he said were going to be cheaper than amazon. Oracle is not going to beat amazon on pricing. Give me a break. Safra catz joining us 1 00 p. M. Today. Were going to move on, talk samsung really quick. Selling stakes in other Tech Companies now as it looks to raise cash. Of course, they recalled two and a half million phones, something estimated to cost over a billion dollars. Meanwhile jpmorgan calling positive over the 7 at apple premature, saying sales more likely to be in line with cautious forecasts. They currently have an overweight on the stock. Lets handle samsung first, guys. I saw a note today analysts kfring air freight say it could boost air freight, all those replacement phones. Thats crazy, thats a lot of freight. This is a brand new note7, it actually is a replacement unit. I was very clear to say to everybody the phones dont explode, the batteries explode, so thats important to understand, the defective lithium ion batteries are dangerous no matter what. You can make it dangerous by overheating it, injuring it, crushing it, so samsung is going to do the best they can and, yeah, i think they are going to have to raise a little money to cover the cost. This is going to be an expensive mistake. Longer term, theres reports theyve identified the supplier where this problem actually took place, but does samsung need to go back and rethink supply chain for future devices and future products . Definitely. They were in a rush to do this. They have apple on their mind always, and they basically blew up. They screwed the pooch on this one for lack of a better term. And the timing was so good for apple, you almost wonder how could apple have not been involved in this . It was so amazing, right . But the longterm thing is interesting because apple sort of promised for the 20th anniversary, which isnt too far away, its january, thats going to be the new design of a new phone and things like that, so weve had a big push of people who had old iphones coming up and lining up in stores to buy it now. Whats going to happen during the hollywood season with the specter of a new iphone in january looming . Thats the short term, but in practice this is an iterative iphone with one exception, the headphone jack. Theres no additional headphone jack in the iphone 7. Everything you have to buy is new and i made a joke about it. Look, seriously, you cant charge it while talking on it or listening to music without wireless headsets . You have these things. They dont sound better. Thats not an advance in technology. The interesting thing is this, the fault is not the music controls, its the siri controls. The future of the wireless thing is not about listening to music, its about having a conversation with your phone while your phone is in the pocket. As opposed to having a conversation with somebody you need to speak to with your phone on your desk. Thats old school. John, you got a question here . Well, i think the question is, what happens to samsungs reputation going forward. At some point, even before the holiday season, does this start to be about the quality of the note7 again and not about the recall . We look at dell and others who have had massive battery related recalls, doesnt seem like they took a huge reputationrelated hit, just as long as they handled it well enough. What do you guys think . I think thats absolutely right. Look, the thing that you see online now is people say samsung blows up. Thats sensationalist and shouldnt say that. They have a battery problem, youre right, batteries were rushed to market, but they found it and corrected it. Is it a longterm reputation issue . I hope not. This must be a moment, because this was the time where people were saying apples finally getting beaten on the design front. Yes, absolutely right. Theres apple saying heres our new phone, but designwise its not much different. Steven, shelly, you guys are so good together, thank you so much. Steven levy and Shelly Palmer. We are getting breaking news. Back at hq with that. Sue . Nbcs Pete Williams is telling viewers and us a man has been taken into custody after firing at police near the scene in elizabeth. Its unclear whether this is directly connected to the bombings in new jersey and new york city that occurred over the weekend, but at this point police have, according to Pete Williams, taken a man into custody after he was firing at police. He is reportedly in lyndon, new jersey, but that is only four miles from elizabeth, new jersey, which is considered the store there is considered a crime scene and police are on that site. So, were trying to confirm whether or not excuse me one second, im just taking a look at this nbc flash. A man has been taken into custody after shooting at police, and wnbc is reporting that ahmad rahami is that man. Thats wnbc reporting that. They are saying that he has been taken into custody after shooting at Police Officers in lyndon, new jersey, which once again, is only about four miles from his familys home and from the store that police have surrounded, so wnbc is reporting that he has been taken into custody. Were going to continue to follow what is a developing story and breaking news. Carl, ill send it back to you. We will definitely stay on top of that one, sue herrera back at hq. Meanwhile, we watch the market, been on a tight range all morning long, up about 100 points, nasdaq 100 set an alltime high this morning. Vics is relatively muted, oil helping out. Monday starting out with a okay price action. Telecom is the only financial in the red. We have the fed and the bank of japan both meeting this week and usually thats a bearish sign for that sector. Once we get more details on the investigation well get that to you right away. Youre watching squawk alley. Dont go away. And reunited three decades later for a tour that sold out in three minutes. And your cisco hybrid cloud handled millions of ticket orders without breaking a sweat. Before all of this, [ crash ] the experts at cdw orchestrated a cisco hybrid cloud solution. Scalability by cisco. Orchestration by cdw. Weve been telling you all morning long about ahmad khan rahami, a u. S. Citizen of afghan descent, born in afghanistan, who was sought in connection was asked to come in for questioning for the chelsea and new jersey bombing over the weekend. Nbc news reporting rahami has been captured after a shooting incident involving police in lyndon, new jersey, sources telling nbc news hes now en route to a hospital. Were trying to get s

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