Transcripts For CNBC Squawk Alley 20170830

For a generation 25 years, you would have a 19,000 gdp per person in the United States. Its not bad. But how do you explain a tenyear that hit 2. 1 yesterday . How do i explain what hitting . The tenyear note hitting a yield of 2. 1 yesterday . Well, if i had known that was coming, i would have done a lot of things that were intelligent five years ago no, its sort of unbelievable that rates have stayed down. I mean, its not what anybody expected, at least i didnt expect that. The other people on berkshire didnt expect that and its you know, i can remember when i was a solomon in 1991 and they thought the surest trade around was the short the japanese tenyear bond because you couldnt have rates that low and 26 years later, those people are still licking their wounds they used to call that the widow maker, that trade. Well, warren, let me ask you about north korea, because i know this is an area youve had a lot of concerns about. President trump tweeted this morning and he said, the u. S. Talking to korea and paying them extortion money for 25 years, talking is not the answer. What do you think about that and how concerned are you about the situation right now, given the Missile Launch that went over japan this week ive been concerned since 1945 when the first atomic bomb was used we have developed over these 72 years, since august of 1945, the ability to, around the world, other people have developed them, too, but the ability to almost destroy civilization. And its the only real cloud on the horizon. We have a million problems always in the country in what sort or another. I think it solves this is the problem because if kennedy and others didnt behave in the 1960s, there would have been millions of people killed. You have people all around the world, you have individuals and groups and maybe a few nations that would like to inflict enormous damage on us or others in the world and we can be successful 99. 9 in thwarting the efforts, but its the worst case problem and the damage can be huge and north korea is a classic example. I mean, here is a relatively poor country spending a lot of their funds on developing an icbm, maybe that can hit the United States. Well, that doesnt make any sense if theyre doing it just because they want to play with dignitaries or something and the more people that have that ability, the more generations you go through of different leaders. The more likely eventually something happens that is the equivalent of what happened in texas in the last week, something that is a very remote probability. You can roll the dice enough times and something finally happens. And north korea is who knows what is in the minds of that fellow who knows what will be in hiss mind five years from now its a more dangerous world if more people get those weapons. Warren, i know were tight on time today, jim cramer has the lightning round and i wonder if youll play the lightning round with some of your Stock Holdings so we can get through some of these. First of all, shares of apple. You are the largest shareholder in apple im not sure the largest but 2. 5 2. 5 in apple you have been very positive on this stuff do you continue to look at it as a very positive holding, what are your thoughts on it, and how do you continue buying well, originally, about 10 million shares of apple excuse me. Originally about 10 million shares were bought by one of the fellows in the office. Todd or ted todd or ted and then i looked it a it and bought considerably more in the last quarter, the one we reported here not long ago, june 30th, he sold some of his shares i thought more than he sold. So our overall holdings went up. But his holdings were reduced by about 2 3 or thereabouts so there was a net gain for berkshire, but that was composed of him needing money for Something Else he manages 11 billion but both of the two manage about 11 billion that work for me but thats all they manage so when they get some new idea, they have to sell something. Ive got a lot of excess money around, so he decided he wanted to go do Something Else. But i never sold a share and i bought apple stock. Are you continuing to buy well, i dont think ill tell you that much. But i certainly was buying last quarter. And i dont Pay Attention to the calendar when im buying. Well, lets talk about another holding. Maybe im talking about this on the flipcoin. Ibm, last time you said you sold many shares of ibm are you still dubious about ibms Recovery Process well, they may do extremely well in the future, but i was wrong in my original analysis. That was my fault. So five or six years ago, i thought that their prospects were going to be better in the next five or six years than they turned out to be significantly better so i decided that i had made a mistake. That doesnt mean, sometimes i make two mistakes, i make a mistake when i buy and when i sell so i i still dont know that much about the future, but i feel i know more about, i feel for concern about the future as i look at a company like apple than when i look at ibm now. Have you continued to sell ibm shares there again, nice try well, a little late for the quarterly filings. Yeah, exactly well talk about the bank stocks just last night, berkshire went ahead and converted its warrants into shares of bank of america making you the largest shareholder in bank of america and in wells fargo, two of the top three banks. What is the profit there, 11. 5 billion, is that correct, over the last six years in that stock . Sounds about right. Do you continue to have faith in bank of america yeah, i actually said specifically today that a long, long time before we sell the shares of bank of america, we were happy we have 700 million shares and come on, i like the business i like the evaluation. And i like the management very much so that, i think youll see that for a long time in our holdings. Its been a similar story with wells Fargo Tim Sloan just came out recently and said because of a thirdparty review at wells fargo, there are probably going to be negative headlines that create more negative headlines for whats been happening there. Well, theres never just one cockroach in the kitchen, you know when you start looking around, that was what used to terrify me of solomon after the first time. They put the focus on the hundreds of thousands of people working for you. You may very well find it was not the one that misbehaved that you find out about it, it was more than one in the wells fargo case in the solomon case for the wells fargo are you comparing wells fargo to solomon . No, but im comparing the shock sort of, a huge Financial Institution that all of a sudden can be view in a different light. And once you put a spotlight on a certain area and start looking at everything, youre likely to find something additional. And is that enough to concern you in terms of your ownership of the shares . Not in terms of the longterm investment, no its its a terrific bank, as is the b of a. There were some things very wrong done there but they are being corrected and i guess if you look at any institution something could be going wrong at berkshire right now and i wish i knew about. We havent met them so im trying to make sure we do find out about it, but i can guarantee you with 367,000 people, every one of them isnt behaving in a way that i would like warren, let me ask you about amazon and whole foods im asking in the context of kraft heinz. This has put an enormous pressure on the grocery sellers, Something Like 12. 5 million in shares was lost in market capitalization last week that puts a lot of pressure on the Grocery Stores to then improve their margins. They will do it on the backs of kraft heinz. Do you worry how profitable the company can be with all the pressure theres been a huge struggle going on for decades and decades and decades between brands and retailers. I mean, the amazon retailers are trying to create their own brands thats why they are creating their own. The brands are important and the retail is usually important. And the retailers always try to get the upper hand on those negotiations the brand manufacturer is trying to do it through advertising and through all kinds of things. So its always a struggle. And when you get particularly strong retailers, a walmart, a costco and now an amazon, and they keep getting stronger, their position improves. And particularly packaged goods have had more trouble building followers for advertising in recent years martin sarello was talking about that the other day so that struggle is turning to the german operators coming in on discount that feature their own brands so that will always be a fight, but right now the retailer is doing better in this round of the fight. Yet, generally the way to fight against that is to get even bigger. So would kraft hei nz go after company to improve their shares . That doesnt help as much in the fight. It does help to have a group of big powerful brands negotiating with a big retailer. But what they really care about is the strength of the specific brand. We have duracell batteries and the real question, would people carry that versus carrying another brand, its how they feel the consumer feels about the brand when they walk in so if you have five items that might be served at dinner, that doesnt really make you a lot stronger than having one are you saying mondoleezas brands are not worthy . No, but theres not the adtive factor of ten brands versus one if you decide to buy a cocacola or a sprite, both from cocacola, the one doesnt influence the other. Many people probably dont know that sprite is made by cocacola. So youre positioning within the retailer, all he cares about is what is going to move, basically. And having a group of brands doesnt translate to that much more bargaining power. So im not asking this directly enough, would kraft heinz buy mondoleez . No. We will not intend this to be hostile, but it turned out the be we immediately the next day when we called it off, it was a misunderstanding very quickly, i want to go back to tim cook at apple, the ceo there. He has been fairly outspoken recently about some of his disagreements with the Trump Administration and with some of the actions of donald trump, the president. You have been uncharacteristically silent. In the past you have been outspoken about your politics. Why have you been silent now well, i worked for hillary and raised hillary and voted for hillary. I was disappointed when she lost but we have a president. And we have north korea. We have a whole bunch of i i am not in the business of attacking any president , nor do i think i should be. Ive lived under 15 president s, believe it or not. There have been 45 president s in the United States and ive lived under a third of them. And ive bought stocks net under 14 of the 15 the first one was hoover and i was only 2 when he left, so i had not gotten active at that point but roosevelt was next and i bought stocks under him, even though my dad thought it was the end of the world when he was elected. And i bought stocks under 14 of the 15 so this country will move forward. But its important the government functions well. Its important that both from the government side and the private side they try to figure out how to maximize the degree to which the Companies Move forward. So i will take a position in the 2020 campaign, the 2018, for that matter, but i wont say if my candidate doesnt win, probably half the time they havent over the years, that im going to take my ball and go home you know, you mentioned the 15 president s you have lived under, thats because youre 87 years old today. Yeah. We want to tell you happy birthday and smith linsky put together a cake that they wanted to show you. And we want to wish you a very happy birthday today. Too bad theres not enough there for you. Thats great thanks they put together all your favorite things. He always delivers. They put together some of your favorite things and i think youll get a kick out of this today. But we want to thank you very much for your time and we wish you a happy birthday, warren. Thank you thank you very much sara, back to you in the studio. 87 years old, happy birthday, Warren Buffett great interview. Thats quite a cake. A lot to digest there in terms of santoli here with me. Stock news just in the last few moments or so, Warren Buffett pretty straightforward when it comes to what kraft heinz may not buy, they ruled out the acquisition of mmondelez i think they were trying to press that it was not hostile at the time very interesting pretty reassuring things about his holdings in apple, b of a and he wont say if hes currently buying right now. He said hes never sold a share. Even when members of the team did. Its traveled among the accounts, yes. It doesnt feel like a 3 economy, more like a 2 economy. With deshare. Look, we had a 3 gdp growth in Third Quarter last year. It didnt feel like it was a new trend but maybe that can change. A lot more to talk about here here are comments on the amazon whole foods deal, Hurricane Harvey and the insurance losses as well that was Berkshire Hathaways ceo Warren Buffett who you just heard from moments ago lets bring in Jeff Matthews, former Hedge Fund Manager and author of several books on Warren Buffett and lawrence cunningham, professor at George Washington university, also the author of several books on Warren Buffett. All about investing like buffett. Gentlemen, thank you so much for being here our team of buffett watchers jeff, what stood out to you . I thought his answers on north korea were particularly interesting. And i liked his discussion of the Insurance Business it doesnt get much clearer than that doesnt like Flood Insurance because its hard to make money. And he talked about why they hadnt, they had taken all their exposure down to the catastrophic business over the last few years and it turned out to be dead right. Lawrence, what about you . Also got some comments on sort of buffetts position on politics he invests under different administrations, whether he campaigned for them, like hillary clinton, or not. And hes not really there to criticize them, even if his candidate doesnt win. Hell take a position in 2018, but if his candidate doesnt win, hes not going to pick a fight or come out and criticize them thats right. Warren exercised considerable restraint there because im sure he has strong views on National Political issues but his job is to run Berkshire Hathaway and that means allocating capital, dealing with his staff, keeping his ceos happy and executing. And the best way to do that is to stay out of politics. And historically hes stayed out of politics. His public support of hillary was a relatively unusual Public Statement over his 40 50year career he usually stays out, and it is wise to do it doesnt help Berkshire Hathaway to get into the political buzz saw. Whooik, whmike, what did youk about his investments in bank of america, which hes done well on, he still likes the evaluation, and wells fargo, what did he say, there are more cockroaches in the kitchen he likes management and evaluation, so he will hold the big position there with wells fargo, the business is largely similar any huge Financial Institution that starts to be viewed in different lights after the revelations of misdoing, misbehaviors come out, are going to be under more scrutiny and youll find more somebody is going something wrong at Berkshire Hathaway. I wish i knew about it, but if you look closely enough, he compared wells fargo to solomon brothers, there was a treasury scandal there. Interesting, he does say when it comes to wells, it doesnt change the longterm investment or his longterm view of the franchise, which i guess is somewhat interesting but also impliciting the fact he hasnt sold any stock. Lawrence, when you hear Warren Buffett say it doesnt feel like a 3 gdp in the economy right now, to whom does that sort of give solace, those who want to take actions to see faster growth or how do you read that i think you just call it like you see it hes thankful for a 2 economy, which is less than a lot of people hope, but he was also emphasizing thats pretty good and we do that for 25 years, it will increase the average gdp for the american by 19,000 a piece. So i think hes just observing what he sees and its not a bad situation to be in jeff, how do you think about his answer on amazon whole foods, so how he portrayed it as the ongoing battle right now between the retailers, the supermarkets and the brands. And how theyre always sort of competing. And he says, the retailers have the edge right now because a lot of Companies Like kraft heinz are suffering and shut down the idea of kraft heinz getting bigger by buying condelez what does that tell us what kraft heinz might buy next i thought that whole discussion was interesting his perspective of brands shifted over the last few years. He always pointed out the campbells soup as the number one selling soup back in the Great Depression and still the number one selling soup. Thats the power of a brand. That was always his example. And clearly that environment is changing and the fact that its changed to the point where he can declare on television that 3g is not likely going to pursue mondelez is fascinating. It is a shift in his profound thinking and i wonder what will happen to the other investments down the road along those lines. And theres mondelez share that is gave up some of the earlier gains after the comments down 1 . Lawrence, do you agree with the idea that buffett is changing the way he views brands . And companies that have billiondollar brands of investments . I think jeff is right the other thing he stressed was the addition of multiple brands under one corporate roof doesnt help very much the fact that gdp is a powerhouse along a couple programs, whether one item is what Consumers Want and what grocers will stock i think or would guess that there are regular ongoing conversations among the shareholders, potential shareholders, potential merger partners, particularly after kraft heinz stumbled so i think warrens ability to say he doesnt see them acquiring mondelez is confirming what has generally emerged as something that should be wellknown yeah, absolutely. Its hard to jump around here, but were just getting sound in of buffetts comment on the economy, which is really interesting in light of the 3 growth number for the Third Quarter. He says, this doesnt feel like a 3 gdp economy listen does this feel like a 3 gdp economy for you . No, it has been at 2 since the fall of 2009, eight years. And its been remarkable close to that most of the time the way they report the quarterly numbers, they multipl it by four, its not year over year so it gets trick dy that way if you are off by. 10, with seasonal adjustments, you dont want to take the quarter too seriously. I would guess were in about 2 growth economy now and as ive said, every now and then we think its accelerating and every now and then we may maybe theres a doubledip or something. And it just seems to be a couple percent. And Certain Industries will pick up quite fast. Mike . Jeff, clearly be buffett doesnt necessarily want to revision his business for anything other than the 2 economy we have. In that light, is itsurprising that he printly said he got the bond market wrong and doesnt see why they are trading down . I find it interesting that he kind of says, yeah, its a slow and sluggish economy, but i would never buy bond at these levels well, i think what hes really doing, mike, is making a very rational call in the long run. I think youll look back at the period where bonds were at this level and say, that was not a great investment what is going to change that i dont know is it going to be one quarter where the annualized rate ticks up to 3 not. But in the long run, buffett is a longrun kind of guy he doesnt look at things based on what is going to happen this quarter or next quarter. And what hes been saying for a long time, as he said, bonds are not a great investment at this level. Some day hell be proven right just like hes been proven right on the fact that catastrophic insurance wasnt a great deal over the last few years. And he probably looked wrong on that, too, for some time. Since were speaking about things he mentioned he was wrong on, we mentioned ibm but he did say he was wrong on the analysis there. He didnt give clues if hes continuing to sell the stock, but it is interesting the position between apple, that hes taking a closer look at and continuing to buy, and ibm going the other way. Yeah, he didnt reveal his what assumptions were incorrect. I assume that its about the prospects for watson and for ai and it looks like apple is just a lot sharper and more forward thinking but the biggest problem facing Berkshire Hathaway is they need to find one or two very big major acquisitions at a price that will add to the real power at Berkshire Hathaway. I think that worries him most, aside from other things. Why isnt that happen whats your theory theres an enormous amount of capital competing for a limited number of highquality assets right now. So prices are very high. And berkshire will not commit capital unless they have an assurance of a significant margin of safety so just difficult to find those opportunities, difficult to outcompete the private equity supply of capital and others but i think its a positive in a sense, its a problem, but it reinforces the sense that berkshire has a disciplined approach to acquisition. Very averse to losing any money, very averse to making mistakes so i suspect well hear of a big acquisition within the next year or two, but its a big problem, it takes a lot of time to work through. Yeah. Well watch that cash pile grow. Gentlemen, thank you so much for being here and reacting to this interview. I think we covered a lot at the highlights there, but both authors of many books about Warren Buffett, his investing style, thats Jeff Matthews and lawrence cunningham. Thank you, both. When we come back, much more from the interview with Warren Buffett. And shares are down 2 after buffett shot down kraft heinz. And a big interview to tell you about, ubers investors faceoff and Steven Mnuchin will be right here on squawk alley in a cnbc exclusive at 11 30 a. M. Eastern tomorrow a busy hour when squawk alley comes back i was wrong in my original analysis and thats my fault. So five or six years, i thought that their prospects were going to be better in the next five or six years than they turned out to be significantly better so i decided that i made a mistake. That doesnt mean, sometimes i make two mistakes, i make a mistake when i buy and when i sell so i still dont know that much about the future, but i feel i know more about i feel more certain about the future as i look at a company like apple than when i look at ibm now. [vo] progress is seizing the moment. Your summer moment awaits you now that the summer of audi sales event is here. Audi will cover your first months lease payment on select models during the summer of audi sales event. Your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Lets go right to sue herrera with the news update hi, sue. Good morning, mike. Heres what is happening at this hour joel osteen placing a flood of criticism on social media today accused of failing to open his houston churchs doors to flood evacuees in a timely manner. He defended himself on the today show earlier this morning. Our church doors have always been open. In fact, we took people right in when the water started to recede, which was just a day or two after the big storm hit. They didnt need us as a shelter right then if we needed to be a shelter, we would have certainly been a shelter right when they first asked. Best buy says it is deeply sorry following accusations of price gouging after a photo posted online showed cases of water at one of the houston Stores Selling for more than 42. The company says the sale was clearly a mistake on the part of a few employees at the store who multiplied the price of a single bottle by 24 because that is what is in the case to get the price of a case of water united, delta and american ceos arriving at the state department for a meeting with secretary of state Rex Tillerson to discuss open skies. They want the u. S. To restrict persian gulf carriers from expanding many the u. S. Because they say they are government subsidized and youre uptodate. Thats the news update at is urth were back in just a minute. Tropical storm harvey making landfall today following record downpours that brought the city of houston to a standstill we are going to Contessa Brewer following the latest storm developments as we enter day six here reporter so here we are, day six, and sara, there are long lines at this walmart and the walmart right across the freeway. There are long lines everywhere where a business is open and im just looking at this line that stretches all the way back we have seen it growing. Maam, how long have you been in line about 30 minutes. Reporter and what do you need so desperately to make you stand in line in the sun a loaf of bread and bins to put wet stuff in reporter how did you weather the storm . We did fine because we were at my daughters house built way up high. Reporter thank you so much for talking to us today. Just to let you know, we did get new numbers from fema here about the number of people needing assistance there are 230 active shelters now, some 30,000 evacuees. 195,000 people have registered for fema assistance. And fema has already paid out 35 million in aid to these people so far. Come around with me here so that you can see the way that theyre letting people now into the walmart. Were hearing from a lot of people, it is groceries that they needed, but they were prepared for a power outage with nonperishables but in this case, they need food, meat and vegetables. And they need perishable things, they have the power, the refrigerators are on, they need to fill it, and the walmart is open its not flooded we have seen flooding around the area that receded. So here we go, they are letting them in in an orderly fashion. Well keep on top of this throughout the day sara, back to you. Contessa, im wondering, as were starting to see patches of sunlight at times in the area, is there the sense that the wor worst is over . People are able to get the supplies they need, and perhaps in some areas that we are very much into the recovery phase today . Reporter in some areas thats the key phrase. Because in other areas, we were out there and the water was high, i watched it receding, but in those places, they are going to see drying out, but then theres the issue of getting debris off the roads and in many places in the middle of the road, even if the floodwaters recede, youve got disabled vehicles that were stranded at the height of the storm that still need to be moved so people have access. So this is one slice, sara no, we can see it in your face and hear it in the voice that the focus has turned a bit to recovery and luckily the businesses are opening so hopefully people can get what they need. Contessa brewer, thank you still to come on the show, Warren Buffett just speaking out on the air who weighed in on amazon and whole foods that deal, what it means for big brands, reti waconhen squawk alley comes right back. Im melissa lee in for scott walker today Hurricane Harvey hit stocks that may have been punished too much creating opportunities for investors. And were trading what Warren Buffett likes and doesnt like after becky quicks interview today. The traders takes on apple, amazon, bank of america, wells fargo and the insurers all that and much more on the top of the hour on the halftime report. Jon, over to you well see Rick Santelli now at the cme group with the santelli exchange. Rick thank you, jon. We have some important data today. Look at the tenyear yield numbers when i talk about this and yesterday we did a good deal of work as you see on the left side of the twoday curve under the close at 2. 125 we had 230,000 in a positive revision thats the eighth release being august and 230,000 is the fourth best number of the year. So you have eight numbers, its not looking too bad. If we look at what happened with our second look at Second Quarter gdp, 3 . If im correct, i believe the last time we walked away holding a three handle on any single quarter was one of 2015. So it has been a while and while all that goes on, the yields started to slip already in the point of this is, one of the big stories is the debt ceiling. I know it seems like a really ugly record that just keeps playing on the old photograph or a cd you have been trying to toss or a dvd, but it keeps showing up these guys just cant seem to get it together or do it early wouldnt it be nice if we didnt have to wait for deadlines but the point is that yields are going down debt is going up and debt ceiling questions are going up it doesnt seem very congruent it doesnt seem very logical, does it . I dont think so and it goes to the real story of this hit and that is negative feedback. They are mia you know, a lot of bad behavior, even more potentially done for the right reasons has made markets tough. If the Federal Reserve ends up subsidizing all this debt by buying treasuries and other securities and putting out balance sheets, that takes away the negative feedback loop the negative effects take away the feedback loop. The markets are affected real quickly while talking about yields, well go to the chart quickly to do a little tech talk this chart goes back to may of 2012 basically what i wanted to bring up is two things weve had double bottoms right around and under 1. 40 in july of 12, july of 16 then since the last double bottom, double bottoms are huge reversals in treasuries. Weve had two double tops in the 2. 60s. So 2. 60s twice we are playing around with the june 2016 low yield close of the year you add them up, divide by two, it is pretty interesting to come up exactly at 2 this market is going to try to get to 2 . Its going to pull it down like a magnet but by the general look of the chart, the double top after the double bottom, its certainly looking technically like the market may slowly drift to the levels, but many auger and technicians agree, it still looks like the biggest move well get in the future of the 25 basis points outside adrift is still probably to the upside of the 260 level to Pay Attention to jon ford, back to you. Thank you, Rick Santelli right now we are looking at joint air force base andrews with President Trump departing washington for a trip to missouri there is him border air force one. Its been a busy week for the president. Yeah, hes trying to change the conversation hes going to the heartland to pitch it to the american people. It will help the middle class to get tax cuts why it will help people in the American Dream we were told according to reports, not so much specifics on the nitty gritty in terms of which loopholes go and what hes projecting on the business tax, but more to get the conversation started a day after his trip to corpus christi, texas. Yes, indeed squawk alley will be right back as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. We are following alexa to meet cortana and we talked to Warren Buffett on amazon buying whole foods. When you get strong buyers at walmart, costco and now amazon, their position improves. And particularly, packaged goods have had more trouble building followers through advertising in recent years martin andscarelli was talking about that the other day and the struggle to retailers. Well bring in inside. Com founder Jason Kalakanis and mark, does this frame how you think amazon will do with its own branded merchandise or the own, even branded Food Products sort of white label stuff that we expect to see before too long heres three thoughts, jon. One is that martin may have missed one thing the cpg advertising dollars may have shifted over to amazon. People are looking at that as in Marketing Advertising looking aa marketing and advertising platform for the first time in scale. Second, i think thats part of the play behind this whole foods acquisition. Youre going to start seeing more of the private label products yao g youve got the whole foods amazon private label products on amazon today and youve got the brand with the consumers to make more of that happen. Not only in groceries, but in its core business. Theyre doing this in linens and with basically household items, batteries, et cetera i think theres more opportunity for amazon there and its good for amazon shareholders. Jason, what grade do you give amazon on the first couple of days of amazon whole foods they seem to have rolled out a few price roll backbacks that h seem to have gotten peoples attention. This is multiple shots across the bow of every other retailer in the world they should be terrified right now, because jeff bezos has made it very clear not only is he going to go on an m a acquisition free, hes going to disrupt every business that he touches. Them taking 30 to 40 off certain items in the store is them telling the world, they dont need to make a profit off of whole foods whole foods could be a loss leader or a breakeven can you imagine what other retailers are feeling right now . Theyre waking up in the middle of the night screaming jeffs name and for consumers, this could be the tax break that trump cant get done, because if we can all save 10, 20, 30 on great things that we have to buy in the world, whether its whole foods or if he buys a hotel chain next or buys an airline next, this is just the beginning for jeff bezos. Hes going to keep lowering the price on things we buy every day. 400 stores, 65 million amazon prime members. This could double the number of prime members. And the distribution of those 400 stores and what theyre going to be capable of on the last mile front is absolutely extraordinary. This is a real shot in the arm for the American Economy i also want to talk about uber with you guys ubers board of directors finally sending an email to its employees naming current expedia boss dara kaushrashowy and the food with benchmark capital. I think its the Perfect Choice if you look at the experience at expedia over the last 12 years, hes actually 12x the value of the company. Hes beloved by everyone he doesnt shy away from solving problems and hes a leader so were all very, very happy and excited about him joining. Hes the Perfect Choice. Jason, i see youve got an uber hat on. A little costume change while we were listening to shervin. Does this change significantly at least the optics about uber in the Investor Community . I mean, nothings really changed yet, but there is a ceo named. This is absolutely fantastic. Its a great sign that the board is becoming more functional and that everybody, you know, who is super qualified, wanted to compete for this job you had jeff and meg and dara. And dara, who some people considered the dark horse candidate, i think, the reason hes the consensus candidate, as shervin said is, this is one of the great Public Market ceos of course, jeff and meg are extraordinary, as well but if you look at daras background, he plays three positions very naturally he was a cfo he was a dealmaker at alan and company, which by the way, took a couple of companies public, if you do a little Google Search there, with youll see some notable names. And hes been the ceo and he wants the job and hes hungry. And if you look at what expedia does is, they Service People one, two times a year. If you look at what uber does, they Service People one, two, three times a day. So he, like other ceo candidates, were extremely excited about this opportunity and if you look at the quarterly growth, its been unprecedented and amazing. The job of taking over a prePublic Company like uber from the founder has only happened one other time in history and it make eric schmidt a billionaire many times over. And it was the crowning achievement of Eric Schmidts career so this is huge. And i want to take a moment to say, all of this is based on the hard work and the effort that travis put in. I know that hes taken a lot of hits and i know that there were mistakes that were made and they need to be corrected, but travis built a 70 billion company that the greatest leaders in the world wanted to run and now he got one of them. We knew you would be a defender we know youre an investor mark mahaney, let me ask you, i know you dont cover it, its a private company, but would any of this fly at a Public Company . Yes, theyve got a new ceo that everybody is praising on both sides of this argument, but they still have deep board room dysfunction. And outstanding lawsuit, and this question mark of what happens to the founder and prior ceo. So, look, a couple of points here actually, i got another example for jason. Priceline, its an example where a ceo came in and created more shareholder wealth over that same period of time than dara did at expedia but that said, look, ive known darra for 15 years i tracked him the entire time hes been the ceo of expedia i think hes one of the best ceos in a public internet space. He made a few mistakes along the way, but hes learned. And i think in a lot of ways, he checks really good boxes for uber hes got a lot of regulatory experience you have to have that in order to run an Online Travel company. Hes had very good progressive Employee Relations in the entire time hes been there and hes run a really complex business expedia actually does 70 billion in bookings on an annual basis with 20,000 employees. So this is a person whos used to complexity. And i love the fact that he came in and nobody even knew that dara was going to be a candidate, because he didnt talk to the press. He didnt try to speak up his candidacy. I thought that was a real sign of tact and this is what this person is like a very professional manager, perfect for uber we dont always like that in the press, but the man can keep a secret that might be one of his best qualifications squawk alley is back right after this we cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Warren buffett on our air earlier this hour, making some comments on mondelez that sent the stock down now a little more than 2 , 2. 5 . Knocking down the idea that kraft heinz, which he has a huge stake in and partnered with 3g on to merge with heinz for kraft, would buy mondelez, which is something that has been out there in the market. So shooting this idea down, saying its not a problem of big brands needing to add big brands the retailers have the edge. Also shot down another unilever. Also knocking down the notion that you need to bulk up across the breath a wide breath brett of brands. Maybe the other food stocks is going to be a rethink. With that, its time to send it over to policmelissa lee and half thats hit for squawk alley. Halftime starts now. Welcome to the halftime report. Im melissa lee in today for scott wapner investors a investors are closely watching two major events for the mark markets. A renewed push for the markets and q2 gdp hits 3 with us, kerry firestone, and rob seechen of ubs private wealth management, one of barrons and forbes top 100 Financial Advisers also with us, cnbc senior economics reporter, steve