Washington with a lot more. We are less than 24 hours into this stunning news of President Trump firing james comey, the fbi director, who is leading an investigation of the Trump Campaign and Trump Associates over ties with russia, which, of course, interfered with our election. We saw just a few minutes ago that the two leaders in the senate, republican Mitch Mcconnell and democrat, shuchuc schumer took their roles. What we have now is our democratic colleagues complaining about the removal of an fbi director, whom they themselves repeatedly and sharply criticized. That removal being done by a man, rod rosenstein, who they repeatedly and continually praised. Chuck schumer, the minority leader, had a different view, as you would expect. I will be requesting that the majority leader call a closed, and in necessary, all senators briefing with the attorney general and Deputy Attorney general separately at which they can be asked questions. But beneath those two familiar roles, we are seeing some cracks in the republican veneer of unity, specifically, richard burr, hoist republican cochair of the Senate Intelligence committee investigation, said he was troubled by the rational and the timing of this decision. It raises the spectrum of a more Senate Investigation of continued and deepened resistance to President Trump politically including on the campaign trail which raises the possibility of two things. One, paralyzing the entire republican agenda, including health care, tax reform, allege legislative changes to the dodd frank regulation law and to the possibility that you could see democrats win control of the house next year and take steps to attempt to foreshorten the donald trump presidency. Dont know whether any of that is going to play out in practice. It is an uphill fight for democrats to win control. Those things are becoming more possible due to the firestorm over this. You did say a lot of republicans or some represent quans wou represent qua republicans would be doing a gut check. On fox, grassley telling people to suck it up and move on. At what point does the market need to worry about their policy expectations being dampened . I think the market ought to be worried about it right now. Chuck grassley is the chairman of the judiciary committee. He is going to stick with his president , so is Mitch Mcconnell, the senate leader. We have seen ben sass, jeff flake, john mccain, richard burr, among others, be critical of this decision and when you have a Senate Majority that only has 52 members, that means that you can lose a small number of people and lose your ability to get things done, among other things. President trump has got to get through the senate a new fbi director and thats not going to be easy given the firestorm here. Can he appease his fellow republicans by nominating someone that they would approve of as he has done with other appointments and get them back on board . You cant rule out that possibility. It is not going to be easy. First of all, democrats are going to raise the price of any new director for the fbi. They are already saying that we will not go along with a new appointment unless we get a special prosecutor, dont know if President Trump will take that step. Because of changes in the rules, republicans may not need democratic support. Thats only true if they hold all of their members. That is no guarantee. In fact, it is a shakier presumption now than it has been at any time in the trump presidency, that he can keep all 52 republican senators in line. Well wait for more word from other republicans. John, thank you for setting that up. The Senate Democrats calling for an independent special prosecutor here to provide some insight, we are joined by former d. O. J. Jacob pringle, and former assistant attorney, doug burns. Jacob, we are trying to figure out the size and scope of the fallout from this so we can figure out how much it is going to preoccupy the white house and Congress Going forward. What do you say of that . The short answer is, were talking about optics and politics but also the need for returning and restoring the integrity of the investigation. The fbi for the longest time has enjoyed a reputation for conducting objective, integritybased investigations. I think the critical thing is for the Justice Department and the fbi, ultimately, what we really care about here at cnbc is the market and the market impact. This is not treasury or the sec speaking. This is about a plit quolitical investigation that is not market centric. There is a rule of law whether anybody does or does not accept the rationale behind the determination, can a highprofile investigation move forward with independence and can those conducting that investigation do so without being interfered with by outside and particular Political Forces . How many weeks of the already tight legislative calendar is this going to occupy for congress whether they can come up with a special prosecutor, have hearings on it, that takes away from bha they were supposed to do, figure out health care in the senate and tax reform and congress . It is extremely difficult. Working with jacobs point, i agree. We have to have a situation where the optics of it are that there is integrity in the process. There are two optics. One is it is directly related to the russian investigation. Thats why this happened. The other is, no, it had to do with the conduct of the director all the way back. Both sides are going to argue na vociferously. You are right, sarah, it takes away krchronologically, from getting the business done. They need to move forward in a way people have confidence. I am not convinced that the markets seem to care that much either way about how this is playing out in washington. Inside the d. O. J. And the f. B. I. , what is the mood likely to be, the conversation likely to be about these pretty much unprecedented moves . I agree with you. I think the market is not likely to really react beyond the little bit of news and envy, the minimal turbulence so far. I think any time you have a firing of a highlevel officials and i spent ten years at the s. E. C. And was in a special prosecutors office. It is all about being able to enable the staff, the career people, to do their jobs. When they feel as if they are goi there are going to be outside forces brought to bear on their investigations, it is unsettling. It does affect morale and the move. It is important for the powers in the Justice Department. The attorney general acting through the Deputy Attorney general has an obligation for all of the United States attorney offices and the Justice Department itself to restore some sense of calm and reassure line prosecutors and investigators they can go forward with their investigations without it being impacted by plolitical or other external forces. To that end, doug, what names come to mind when you are thinking of somebody who could do what jacob just said needs to get done . In terms of the fbi director, first of all, very often as jacob knows and my late father was Deputy Attorney general in the second reagan administration. You will either use somebody very high up, a deputy, certainly, on an interim basis, that happens all the time. Then, they are going to look potentially outside. In this particular case, they are going to really have to make sure that its somebody that sends a message of strength, consistency and depolitical zation of it. The point is, working off my colleagues point, you have the interplay between career people who are there through different administrations and political people. That has to be done where the career people are satisfied that the political people are doing everything objectively and fairly and in a nonpolitical way. So, i mean, i dont have specific names to give you but i think maybe the deputy gets moved up interim and they will act fairly quickly to come up with a new fbi director. Jacob, what is the message that the fbi rank and file in particular are going to take from not only the way james comey was let go . He is on the road. He thinks it is a joke at first. The way that preet farara was let go. They think they are okay and all of the sudden, they werent . It becomes a morale issue. I think we have to roll it back to the Hillary Clinton email investigation and the discussion around the clinton foundation. We dont really know all of the details but here you have career prosecutors and investigators working on both of those investigations and watching in the Public Domain those investigations, in essence, being squashed through the political, public process. When im doing investigations for corporations or defending investigations, the one thing i always want, i want to be able to do this outside of the public eye. Thats the way the fbi, the s. E. C. , investigative agencies, prefer to function day in and day out. Thats got to be the message going back to the rank and file that there will not be these external pressures brought to bear. You will be able to pursue even politically sensitive investigations. That brings us into international anticorruption, domestic corruption. There are a lot of potential implications. I dont really see them as market, Capital Markets affecting issues. Well see what happens as russias top diplomat is at the white house this morning complicating things further. Jacob frankel, thank you and doug burns, our thanks to you as well. Inside. Com, founder Jason Calacanis is going to join us with what to expect from snaps first Earnings Report after the bell. The nasdaq down slightly hoping to post its fifth positive session in a row. The dow and s p also slightly to the down side. Squawk alley will be right back. Between disney and snap chat, a lot of earnings to digest. Inside founder and angel investor, Jason Calacanis and eric kim. Good morning to you both. Good to see you. Jason, they kicked disney around a little bit this morning. Disney is down 2. 5. Did we find out anything last night about subs and the cable model that we didnt already know . Yes. I think this is just confirmation of what we have been talking about here for well over a year, which is obviously people are core cutting and this is going to have a dramatic impact on the one company that has ridden the cable subscription boom better than anybody and thats espn. They are the bellwether of all cable channels when it comes to the impact of cord cutting. Now, its going to be a massive transition, because they just spent a ton of money on things like the nba. Thats happening, this erosion of subscribers, 1 2 of the country is going to cut the cord every month, every quarter. Na will probably continue for a couple of years. The good news and i think this is very significant news, things like directtv now and the new youtube tv, over the air television for about 35 a month. I have had both of these services. They are both extraordinary and massively addictive and both 1 a day. They are very easily affordable by americans. When you start using your smartphone as your remote control, throwing what you are watching on your ipad or having access to Live Television wherever you are, on vacation, if you are traveling, it is an extraordinary experience. I am bullish on this ability for a whole generation of p people hoff forgotten about Cable Television to reengage. Eric, talk to me about snap reporting after the bell. It is clearly snap versus instagram versus snap versus twitter. First earnings call, extremely important for management to communicate clearly. What do we need to listen for in particular . There are three things we need to look out for. Number one, what is snaps response to facebooks attacks on stories, their core product. Number two, user growth. Are they going to meet that 7 million to 9 million ad number. Number three, how well is their mon etty zation going . What snap chat is going to do is the most important thing to look out for. Jason, i wonder how important user growth is. They say they have it. They dont want to follow the facebook model of becoming ubiquitous. What are the metrics they are going to try to emphasize here . Obviously, what makes snap chat super unique is that it has got a more private feel. Thats why young people are very much drawn to the service. While those same young people might have Facebook Accounts and they might check out facebook, even daily, they are not going to share their coachella videos or what they did on those public open services. You really have a hard time understanding this Company Unless you are a young person who is out and about, living their lives and single. People with kids who are watching or parents, they just dont understand why this is such an important service, because it is so opaque. I think snap chat is the antifacebook in a way. Facebook wants to have every Single Person on the planet on it. What snap chat wants is to have the most valuable niche, which they believe will be the millennials, generation c, people born after the year 2000, part of that connected generation. They are not going to try to compete for the global user base in the same way facebook is obsessed with strog ehaving eve in the phone book. They dont want everybody. They want to be the black book of the cool kids and monetize them in a way that facebook cant. Facebook doesnt have them and it doesnt have them for hours a day. Snap chat is going to get themselves into trouble if they get into yahoo s problem, a constant comparison to google. Snap chat has to establish they are Something Different and they are going to grow at a different pace and have a different user base who engages ten times as much as other platforms. I would be very cautious with the stock. It is fully valued. Part of that, eric, equation, is getting the street educated, so to speak, in that business model. We talked about this prior to the ipo and on ipo day. You are dealing with a street that hinges on every word. Why should snap be any different . Thats correct. This is compared to when facebook went public and twitter went public. This is a completely different model. If you look at their revenue versus their profitability. They need to focus on engagement. How long are people spending on the app. They dont have the profitability. They dont have the user growth that facebook does. They are onetenth the size of facebook on a dau basis. To compete, it is about the engagement and can they serve up those ads in a meaningful way. Thats not going to turn off users. It is important to remember in the last q1 survey, facebook got to greater market share of stories for the overall population. A lot is for the older group. It is up to the millennials. Which one are they going to choose, snap chat or facebook . It is a battle over that very valuable demographic. Jason, it seems to me, in a way, espn and snap are facing a similar challenge in question. That is, can you slice the audience thinly enough and provide enough value to them that either they are going to pay more to subscribe, if they are sports fans or advertisers are going to pay more to get to them if they are the young people on snap chat . What do they have to do to succeed in that . Is it about Quality Content . Is it about some other kind of differentiation . Yes. I think espn is at a particular crossroads, because, as all of us know, when some amazing play happens, back when we were kids, ten years ago, 20 years ago, we would turn on Sports Center to watch the highlights. Now, you are watching the highlights in real time with commentary from citizens who are just holding up their phone and recording their tv. You have this up to the minute twitter, facebook feed of amazing content. Espn is not part of that right now. They have to become part of that dialogue, which is why you are seeing them hire some young correspondents who are very active on social media. They will also do a direct to consumer play. That will be the real highlight for espn. Lets say they lose one or two percent of their subscriber base. If they can start gaining a couple hundred thousand people a quarter subscribing to espn to get a unique package of archival footage and millennial content that has more edginess to it in a way mtv had edginess to us. What if espn has a direct to Consumer Product with 300, 400, 500 million customers, they are watching their patterns. This could be a very hard transition or it could be very profitable. I am excited about hulus live tv product. Once you use these 35 unbundled services, a small, skinny package, you are going to get rid of your cable subscription and you are going to move to it, because it is more effective for your family, specially if you have kids, to just have an account online and manage it all via an app. One last thing, eric, this is more broad on tech. We talk about the Market Action narrowing to these five big names on the nasdaq and yet others argue those are the names with secular growth in an economy that is hungry for secular growth. Are they overrepresented too much in terms of both sentiment and buzz and even valuation . I dont think so. I think we are actually just in the beginning of huge growth for all these names. The reason being is simple, networks effect. Facebook, apple, netflix, google, all these players are dealing with Massive Network effects that are going to get better with scale over time. I think the secular trends are there for these players to continue to grow. I dont think it is overrepresented by the market now. I think we are in the first inning of a very long ball game for these players. I would add to that, the facebook, amazon, alphabet, apple, and microsoft index, these companies now have virtual monopolies. They