Done . And now i think were finding out theyre going to buy mclaren. And listen, this is a sexy car company that makes highperformance cars, and that makes sense, because they could make a very compelling product with mclarens assets and High Performance and materials. It would be a very big acquisition for them, right . 2, 3, 4 billion, who knows what the price will wind up being. But this is for sure the strongest sign were seeing yet, aside from hiring 1,000 engineers that well see an apple car. How long will it that he . I dont think we see it before three, four, five years. But you know, if you have all those apple stores seeing a beautiful, sexy, p1 type car, hopefully an electric one, not a gas car, would be pretty amazing. And i think people will buy the car. I dont think tesla has anything to worry about. I think this is, again, a four, five, sixyear project, but this certainly starts them on second base. But josh, we had thought that apples ambitions for cars were maybe in the dashboard. It was the software. It was the way that you would actually power the car, not necessarily the body, the steel, the hard assets behind cars. Does this change your view of what apples ambitions in the Auto Industry is . And how much do you think they would prioritize this . Because 2 billion for a company with 200 billion and more in cash is just a drop in the bucket. Well, look, i think apple is in this really interesting position right now that theyve sold, you know, a billionplus iphones, kind of the luxury phone item, and theyre trying to figure out what other luxury type of items thats correct expand to. Car sure seems like one. I, too, thought it would be a software play, providing a different applelike experience when you get into the car. But it certainly makes sense that the focus in design and staying at this very high end of quality would be where theyd want to be. And look, as you said, its sort of a drop in the bucket to them to try to get into a, you know, 1 trillion market like the Auto Industry. The way apple tends to talk about this stuff, it makes me think, having followed the company for a while, that they really, ideally, like to control the entire experience from the store where the car is sold, though we know theres controversy around dealing with dealers, to selling and making the entire car itself. I mean, when you think about what tim cook has really accomplished, just sort of as a businessman and really as a technologist, its the mass production of extremely intricate and powerful Technology Just at a scale that we hadnt seen before as far as consumer products. So, if they can do that with cars as well, theres a huge amount of potential in it. We see these little moves or glimpses of these little moves and think we know whats going on, but it sort of makes sense theyd reorganize a project as it rolls along, if theyre planning to incubate something, then figure out what bigger they need to buy, perhaps. But its one thing to buy a startup and then fold it if it doesnt work out or the project doesnt proceed like apple expected. To buy a company that has a brand like mclaren. You cant mess that up. Sure you can. Well, you shouldnt. Give it time. Give it time. Jason, does it well people are checking teslas price action today to see the level of disappointment, and it has crossed into the red. But i wonder how much people had emotionally invested in the idea that it would be tesla, or will be tesla. Yeah, i mean, i think tesla is probably, when they got those 400,000 preorders for the thirdgeneration car, i think the train left the station. There was no way apple was going to be able to pay a premium on top of teslas stock price, and tesla has escaped velocity now. They have a bigger vision of becoming an Energy Company, from the solar panels to putting the battery packs on and to having the car. Anybody whos been to the gigafactory realizes the ambition level that elon and the team has is much greater than just cars. But you know, apple now is going to become a house of brands. Theyre getting comfortable with the idea, post steve jobs, i think, that they can buy brands and become a steward of the mclaren brand, become a steward of the beats brand. So were going to see a house of brands, and i think thats a great evolution for apple. Because listen, theyre not putting out allstar products anymore. In fact, theyre trying to catch up to samsung and fitbit on their current launch of the iphone 7 and the apple watch 2. So, this is a good choice for them, is to put that huge stack of cash to work buying incredible brands around the world. They were going to buy some watch brands as well, so i think they should put that chip stack to work. And we might starts seeing 10 billion, 20 billion acquisitions from apple, which would help them catch up to facebook, which obviously has no problem spending tens of billions of dollars, and microsoft buying linkedin. This is what apple needs to do, and i think its a great sign for shareholders that theyre getting this bold, if this is in fact happening. Clearly. Lets stick with apple. The eus commissioner fmarguerie spoke with sara eisen about the tax bill. What is the latest . Hi, guys. She was in new york and washington this week to try and defend her case where she has faced a wave of backlash against her ruling a few weeks ago, ordering apple to pay a record 14. 5 billion in back taxes to the Irish Government. Europe says apple got a sweetheart deal and that its unfair, it violates competition rules. Apple, of course, disputes that, as well as ireland. So, i asked margaret vest jaiga about this argument. When you said at one point pay 0. 0005 , a number that tim cook has called political crap. What is your view of that . Well, ive never seen math categorized like that, because we are obliged, of course, to do our case workbased on the facts of the case, not only because it can be appealed and go to court, but also because we have to do a good job. We have to make sure that we get it right and do the right thing. But isnt the heart of the matter really, especially when it comes to apple and these technology companies, the intellectual property of their sales, of iphones and other products, happens all in the united states. It is produced in the united states. So, why should the Irish Government claim the income tax on it . Well, this is for apple. Because we dont question where they book their profits. What we see is that they book a huge portion of their profits in ireland, not in the states. With the apple inc. Of the u. S. , they have this costsharing agreement where they pay every year, some years like 2 billion for the research and development. But the right to use the ip, and therefore also to book the profits, youd find that part of that is in ireland. And that, of course, makes things much more simple, because this is not u. S. Profits. These are profits made in europe, generated in europe, and therefore, i think, obviously, also to be taxed in europe. But arent those fees related to distribution and manufacturing and not intellectual property . Isnt that shouldnt apples earnings on intellectual property be a matter of u. S. Corporate income tax . Well, that you have to discuss with apple, because we were not the ones to organize this. We were not the ones to question how they book their profits. That we take for granted. What we see is that you have these profits which are generated in europe and booked in europe. And in europe, we have a very simple principle, which is that profits should be taxed where profits are generated. By one calculation under your ruling, it would compel apple to pay 40 of irelands Corporate Income tax on a given year. Does that sound right and fair . But i dont think you can make that calculation in any meaningful way, because apple is a huge company. They make huge profits. And thats the ups and downs here. Because the ireland Corporate Tax is very, very low. Its just 12. 5 . So, in that respect, its not a big number, not for any company who generates profits in europe, book them in ireland, and therefore, to be taxed by the irish Corporate Tax. Did you expect ireland to fight this, as they are doing . Well, in my experience, both my own as a commissioner, which is now two years, but also looking back, actually, this is a very common phenomenon, that Member States who have been given out illegal stata would challenge this in court. Also happens with the netherlands and Lux Yum Bourg and belgium. So this is actually very much as expected. Can you see why people look at this and say its politically motivated . Well, sometimes i can understand the feeling, but its very hard to substantiate it, because when you look into the statistics, both when it comes to state aid control, antitrust, you cannot find a u. S. Bias just as well as we do not find a european bias when we see the fine on Deutsche Bank or pnb paribas. Because one of the things we have in common, all the differences taken apart, is that these two unions build under the rule of law, and i think that is the most important thing. I think it was the number that was so eyecatching, because the last time i think that there was a fine from the commission when it came to a tax, it was a german racetrack company and it was 1. 3 billion. This goes way beyond that. Yeah, but the thing is that, actually, its the principle thats the interesting thing here, because the number is an illustration of the fact that apple is a huge, very successful company. Its global. And this is just part of the profits that apple actually do make, being booked, generated and taxed in ireland. Our sara eisen talking to vestager earlier this morning. Were going to continue that conversation. But quickly, we want to check in on scott wapner and get more on this news concerning the s. E. C. , omega and leon cooperman. These are the Insider Trading charges we just learned about 15 minutes or so ago. I did just get off the phone with mr. Cooperman, carl, who told me the following ive spent 50 years developing my reputation in a proper manner. These charges are without merit. We will be vindicated. Mr. Cooperman also told me that the s. E. C. Offered a settlement which he called unacceptable to omega and myself, those words coming from lee cooperman. I do have a letter, a fourpage or so letter theyve just sent out to investors. Ill read quotes directly from it, where mr. Cooperman says we are highly disappointed with the commissions decision to file charges and strongly disagree that the firm or i have engaged in unlawful conduct. We have done nothing improper. We categorically deny the commissions allegations. As weve already said, carl when news of this broke, this surrounds trading in a Company Called atlas pipeline in the summer of 2010. That is where the commission appears to be focused here. But again, omega is sending out this letter and say that none of the trading at issue is indicative of someone trying to position themselves ahead of an anticipated marketmoving announcement or to reap profits from insider information. They say their counsel will vigorously defend us against the commission charges. They have paul weiss working with them, wellknown law firm to many of our viewers. But that is where we are at the current time. Lee cooperman sending out a multipage letter to his investors and telling me directly just moments ago that weve done nothing wrong, we will vigorously fight these charges, and ive spent 50 years building a reputation the proper way. Carl . Scott walker back at hq. We know youll have more details coming up on the half in just about 45 minutes. Thanks so much. Josh and jason, back to apple and the conversation that sara had with vestager about the taxes. How much do they need to worry about these liabilities and the opportunities . I mean, its interesting to hear from the eu on taxes and then on the same day where theyre apparently expressing interest in a british carmaker. You know, were sort of at unprecedented scale right now where these Companies Like apple, you know, let alone google and other ones, are just operating globally with their ip thats generated in one place, where theyre not actually operating physically in all these other countries. And so, i think were starting to see what happens in this kind of new, global, multinational world, where the countries like europe and ireland are starting to go, wait a second, if youre really going to operate here or say that you are, maybe we need to take a closer look. Some of the things we might have promised you a few years ago arent coming true. I think apples going to have a real fight on their hands. Jason, i want your perspective on this. Companies like apple have options on where they invest, on where they go on how they do business. Is the eu really shooting itself in the foot here by going so unilateral in these types of demands . The commissioner kept saying huge, very successful, to describe apple to justify the size of this fine and the taxes they supposedly ought to be paying. Yeah, i mean, this is shenanigans all over the place. If you look, the whole concept of putting your intellectual property through multiple, you know, countries, its shenanigans, right . But its been an established shenanigan that has been accepted. To go back and the eu to look at apples huge pile of cash and start salivating and say, hey, lets retroactively tax them for ten years, its really unfair, right . So, the eu wants to get some profits here, and theyre going to fine google and theyre going to look at these companies that have huge amounts of, you know, war chest of capital, and theyre going to start to extract some of it. And the people this is all part of the trend we see here in the united states, whether its the epipen or wells fargo yesterday, or even Bernie Sanders and donald trump. The people have spoken. They Want Companies to pay their taxes. They want to see the minimum wage go up. And so, were seeing a balancing of consumer interests and corporate interests. And the corporate interests have gotten ahead. This whole double irish tax stuff, it all seemed like a scam to all of us. Its also unfair to retroactivate it. So, i think this is part of the cleanup process. It will probably be a negotiation. Youll probably see a third of a penalty, and going forward, people will pay their taxes. Josh, interestingly, the reason why banks dont disclose the amount of money they have in their reserves is because they dont want that to basically be where regulators start when theyre determining these price tags. Im wondering if you think well see these Companies Stop reporting how much cash they have overseas or within the u. S. , because it has been such a lightning rod issue. Well, i think this is totally right that companies are going to try to figure out how to bury some of these profits as much as they can. Part of the challenge has been we know the incredible Profit Margins that theyre making on these products, what theyre making on their phones, what theyre hopefully going to be able to make on their cars. So, we know all this cash has to hit somewhere. The u. S. Has salivated to get it back and wants it all repatriated, too. I think were right in the middle, as jason called them, shenanigans, to try to figure out how the moneys really going to flow back to where taxes should be paid and where the laws are actually, you know, right to protect this stuff. Josh elman, greylock, jason calacanis, appreciate the insight. We covered a lot of ground. Thank you. Ahead, what to look forward to in the fed decision. Plus, apples car strategy announced it has approached mclaren about a possible acquisition. Were going to break down exactly what that deal might mean. And the cofounder of lyft on his plans for selfdriving cars when squawk alley continues. Images, videos, social updates. We call it dark data. 80 is invisible to most businesses. The ibm cloud has tools that can help see dark data and put it to work. Hello, my name is watson. Working with watson in the ibm cloud, we can help an Energy Company predict pipeline corrosion. And help a startup to use social data to predict market trends. Now businesses can get more out of their data. Thats what the ibm cloud is built for. Now businesses can get more out of their data. Its not just a car. Its your daily retreat. Go ahead, spoil yourself. The es and es hybrid. This is the pursuit of perfection. Hahaha umhmmm hey nikki what are you doing here . You tell me, stephen. What . Im snapping. Youve been streaming my videos all morning. Now youre with this thing . No its not you its verizon they limit my data. I had to choose. Come on, girl. Lets get us a man with unlimited data. Why pay verizon more for data limits . Introducing tmobile one. One price. Unlimited data for everyone. Day two of the feds policy meeting is under way with a looming rate hike decision in focus. So, is the fed ready to make a move . Joining us now is bob mcteer, former dallas fed president and economic adviser to commerce street capital. Our Steve Liesman joins the conversation as well. Bob, ill start with you, because we tend to look for tea leaves in the market on days like this. We are seeing the yields on the twoyear notes policysensitive, rising a little bit. But the dollar index is lower, fed funds futures are chocking up a 20 move. Same assumption its not happening . A week and a half ago, i was pretty sure they were going to move, but since then, all the Economic Data have been bad. We have industrial production, retail sales, the two ism reports, wholesale prices. Its all been contrary to what they would hope for. But the fed speak, steve, had been pushing against that, with so many members of the fed saying in recent weeks that perhaps its better to get this over with. And then you have little brainerd come out with a pretty dovish speech last week and now a lot of people are saying thats the fly in the ointment here. Look, kayla, we all focus on the first line of their statements, but a lot of times we all ignore the second line. The first line is, i think its okay to hike. The second line is, its datadependent. Im right with bob mcteer on his analysis. I thought all the conditions were there for a hike. I even thought the jobs data was enough for the Federal Reserve to hike, but that recent round of data, if you put that in context of a Federal Reserve thats cautious, i think what theyll do is wait to see if the data claired. What i think happened here was we had a decent start to the third quarter, and that results, by the way in gdp that could be running as high as 2. 5 or 3 for the quarter. But it looks like things trailed off in august. At least thats what the august data show. So, my guess is the fed waits here and they go with the datadependent line, which is that we will hike, we think the case is strengthening for a hike, if the data support it. And i dont think the data support it right now. But bob, theres some sense in the market that we could get such hawkish language from the fed in the press Conference Today and in the statement we get this afternoon that the market could behave as if there had been a hike, even if there isnt a hike. So, if you were investing into this market going into this afternoon, how do you think the markets going to play . Well, im afraid you may be right. We may not get the action, but we might get the reaction as if there had been one. Of course, in my portfolio, im like a deer looking into the headlights always. I just accept what comes and hang on. I wouldnt know how to time the market to take advantage, even if i knew what they were going to do. Steve, from the sidelines, it sort of looks like we end up with these situations where people think maybe the feds going to move, then the data doesnt look perfect and they dont move. And then in hindsight, its like oh, maybe they could have moved. Brexit wasnt that big a deal, et cetera, et cetera. And then at the end of another quarter, its like, ah, well, the data doesnt look perfect, maybe theyre not going to move. I mean, is there a danger after a while that its that last person who wont take the bungee jump, even though they went, climbed up all that way, and everybody expects them to do it . Well, i think, you describe it as a bungee jump, they shouldnt do it at all. To make take your metaphor too far. I would hope the making of Monetary Policy is a little less of a danger than taking a bungee jump. That said, youre right. And i think theres a lot of criticism of the feds credibility. And the criticism comes from this, that the fed looks to be making what are essentially medium and longterm decisions based on the latest Economic Data and that the Federal Reserve is too responsive to markets. In fact, one of the reasons why i think the fed is not going to go today is because the markets not prepared for it. When you look at the way fed funds probabilities are priced for this meeting, its down below 20 . If this number had been somewhat higher, even up to 30 or 40 , id say there was a better chance. So, the way these things work is that theres no reason for the Federal Reserve to surprise the market. Ive tried to think if there was some reason, and the fed has no particular gain to be had from that or benefit. We will get some answers in a few hours time. Bob mcteer, formerly of the dallas fed. Steve liesman. Our thanks to both of you. Pleasure. And up next, apple might be looking to put at least some of its massive cash forward to work, this time in autos. Weve got all the details. But first, check out shares of adobe, rallying after profit beat estimates, and it also gave some upbeat guidance for the current quarter. Were back in just a moment. Narrator the best place to find adventure. Kubo come on, this way. Narrator . Is in the forest. Kubo wow. Narrator so grab your loved ones monkey dont even. Narrator and explore a world of possibilities. Kubo its beautiful. Narrator visit discovertheforest. Org to find the closest forest or park to you. Announcer dont let salmonella get funky with your chicken. On average, one in 6 americans will get a foodborne illness this year. So, learn the right temperature to cook each type of meat. Keep your family safe at foodsafety. Gov. A report out from the Financial Times says apples in talks with mclaren about a potential takeover or major investment. Apple has declined to comment. For more on what could come out of this, our phil lebeau joins us on the phone. Phil, maybe you can give us a sense on engineeringwise what mclaren is particularly good at that apple might be interested in here. Well, its the onboard computing systems. Thats a big part of what mclaren is good at. Theyve also worked as theyve developed these supercars, the formula 1 race cars, carbon fiber. They work with that, those systems, lightweighting a car, bringing the performance of the vehicle to a whole new level. We should point out, mclaren has not yet commented on this report from the ft. But it brings up the question, why would you be interested in mclaren if you are apple . And you have to look at it from the perspective of the real value if youre apple and you go into the automotive business completely, the real value is the software, its the engineering behind the physical car. Thats where the real value lies. And mclaren brings something to the table if youre apple. And the other element of this that might be intriguing if youre apple and again, we havent heard a comment from them on this report if you were going to buy an automaker, you would not buy a fullscale automaker that cranks out a couple million vehicles a year. You would buy a niche automaker, and thats what mclaren is. They only built about 1,600 vehicles last year. So, if you wanted a little bit of capacity where you could work on vehicles that youre developing for the future, mclaren would give you that if youre apple. So, theres the value there if apple were to go forward with this. And again, we have not heard from mclaren, and apple has declined to comment. So, phil, you think its more about the software than, say, the metallic engineering, the aluminum, the production logistics, that kind of thing . There is value in the production. If youre apple and you want to build a car, you would like a production facility, and thats what you get with mclaren, and the fact that its a niche automaker allows you to say, look, im not committing to building 2 million vehicles next year if i were to buy an established automaker. I can work on whatever future vehicles i want to at our own pace. And so, there is value in that production capacity. But in terms of does apple want to go out and Start Building vehicles for 1 million apiece, which is basically what mclaren is known for . I doubt that. I think what theyre really interested in is that software and really the guts of the vehicle. Phil lebeau. Well keep our eye on this. Certainly a developing story. We appreciate you coming to the phone to walk us through it. Meanwhile, we are counting down to the close in the uk and across europe. It just happened. Seema modys at headquarters with that. Hi, kayla. European stocks poised to finish the session higher ahead of the feds decision on u. S. Interest rates. And as we await that fed announcement, theres now a wider discussion around the bojs implications on the rest of the world, specifically europe, which, of course, is also betting on negative Interest Rates and qe to kickstart growth. The bank of japan tweaking its Monetary Policy in a way that should help mitigate the cost of negative Interest Rates, which has helped japanese banks rally. The question now is will draghi follow the lead of kuroda in steepening the yield curve . Thats been helping the financials which had been hurt by subzero rates. Outperformer, europes index posting the biggest gain in more than a month, up 2 . And if we just break down where were seeing the gains in the banking index across europe, Commerce Bank up more than 3 , barclays similar gains, and bnp paribas also up about 3 . Sticking with financials, italys largest lender unicredit is higher after three bidders are said to have emerged as contend yirz to buy the banks Fund Management arm. The stock up 3. 5 . Reuters also reporting that Spains Banco Santander has pulled out of buying the williams and glen lending unit. The disagreement said to be over the price tag. Shares higher on the day. Thanks, seema. When we come back, the cofunder of lyft on his vision for selfdriving cars and rumors about a possible sale. This after a quick break. Stay tuned. [chains dragging] [eerie music playing] [crickets chirping] [owl hoots] announcer if you dont fix them, sparks from dragging tow chains can cause a wildfire. And that could be scary. Bye, smokey only you can prevent wildfires. Good morning, everyone. Im sue herera with your cnbc news update. Syrian opposition activists releasing video that appears to show an air strike on a syrian town in the central homs province. It says two people were killed with more than 30 people injured. It occurs as the syrian army declared on monday that the ceasefire brokered by the u. S. And russia was over. The Chicago PoliceDepartment Plans to add 970 new positions over the next two years as it struggles to deal with a violent year full of killings and gun crimes. The department opportunity are currently has more than 12,000 officers but hasnt had a hiring push this magnitude in years. A new study by the National Institute of health says smoking can create longlasting effects to dna that may increase the risk to chronic disease. Researchers found smokers had changes in more than 7,000 genes linked to cancer, Heart Disease and stroke. As of this week, paneras bacon will no longer include additives like sodium nitrate, which was used to cure the meat. Instead, celery powder will be used. Its also removed artificial flavorings in its bacon. Thats the news update this hour. Lets get back downtown. Jon, over to you. All right. Thank you, sue. And lyft cofounder john zimmer says autonomous driving with a human could be a reality in the next five years, but will lyft still be operating independently then . I asked him earlier this week. Take a listen. Lyft is not for sale. You know, as were responsible to our shareholders, we have to review any opportunities that come our way, but were focused on growing the business, and weve done that 3x year over year across the country and 10x in new york alone. In the shortterm, while were talking about people still driving cars, what is the lever toward profitability that snuv i mean, volumes have gone up dramatically, but there are still losses, no matter what company youre talking about, in this ridehailing, ridesharing market. When does that tip and actually start to show the profitability that investors, longerterm investors, expect . Yeah, everyone right now is investing in the massive opportunity ahead. Every year, 2 trillion is spent on car ownership in the united states. And as that transitions to transportation as a service, thats going to be a massive opportunity. Where people purchase transportation like they do netflix and spotify on a monthly plan. But even once that happens, if were, in fact, moving to autonomous as the method for people getting around, doesnt that entail even larger costs . I mean, i imagine you dont expect drivers who wont exist, in fact, to be buying the cars that operate autonomously on the road. Wont that be a capital cost that the company itself has to assume . Yeah, i mean, actually, thats one of the advantages that being a Transportation Network has, is that we have the ability to monetize this asset instantly. And so, that would likely be through more normal financing, rather than through equity financing. So through debt, then . Yeah, through debt, or you could imagine a third party kind of Bank Financing these mega fleets, or it could be us paying a finance fee. So, i think theres lots of different structures that youve seen in other industries to, when you have an asset thats being paid back in such a quick period of time through Something Like lyft, youre going to see lots of different financing options. So, do you then end one a situation where the traditional Business Model of drivers and the cash flow coming in from that is paying for the model of actually financing these Autonomous Vehicles that are putting the drivers out of business . Well, on the financing side, absolutely, youll be able to finance the new opportunity, the new business. On the driver side, look, this is a tenyear transition. 80 of our drivers drive 15 hours or less. 20 of our drivers drive full time, but were going to be able to manage that transition responsibly over that ten years. And youve said that between five to ten years well see this transition take place. What sort of movement have you seen as far as regulation, both at the local and National Level that gives you confidence that were going to get there . Because it seems it will take a lot of help from politicians up and down the chain. Yeah. So, first, just to make sure we paint the vision. You have ten years from now, we believe personal car ownership is all but over in major u. S. Cities, and about five years from now, the majority of our trips we believe will be in timeless vehicles. In terms of regulations, thinking back to four years ago when lyft got started, people thought what we were doing was crazy and now we do over a million riders every two days and we worked with regulators then and will work with them now to create a whole new form of transportation as we did over the last four years. And finally, how do you characterize this rivalry with uber . People tend, perhaps just in the media, tend to view it as a death match, only one will survive. Do you think that theres a future profitably for multiple car services in the u. S. And globally . Yeah. As mentioned, theres a 2 trillion opportunity here of spend every year on car ownership. We think of this like a Transportation Network. In phone carriers, you have at t and verizon, and theres likely to be once you hit a threeminute eta, which we now have on average across our major cities its similar to three bars of coverage. And then what sets us apart is the experience that we offer our customers by treating our drivers better than any other company, passengers are Getting Better service. Our thanks to john zimmer for coming on. This is tough math to me, kayla. I mean, how many human drivers does it take to service the debt on an Autonomous Car . Well, theres other math, too. If people are paying for transportation like theyre paying for netflix and spotify, does that mean theyre only willing to pay 10 bucks a month for that . How do you run a car network on that . There is a lot of figuring out exactly what the consumer demand is and how to price this on a monthly basis, if in fact, thats the direction theyre going in. Plus, theres the fact that china, the government, wants to have drivers employed, so theyre more interested in Green Technologies than driverless technologies, at least for now. Maybe some of the dd drivers will have a mclaren in a couple of years. Well find out. When we come back, take another look at adobe leading the s p today, having a great day, new alltime high on earnings. Well tell you what you need to know. Either cramer said it was going to lift from the open levels, and in fact, it has. Well talk about that in main. [suspensful music] enepeople want power. Hallenge. And power plants account for more than a third of energyrelated carbon emissions. The challenge is to capture the emissions before theyre released into the atmosphere. Exxonmobil is a leader in carbon capture. Our team is working to make this technology better, more affordable so it can reduce emissions around the world. Thats what were working on right now. Energy lives here. Coming up today on the halftime report, the latest on leo cooperman, charged with Insider Trading from the s. E. C. I spoke with mr. Cooperman a short time ago, and he is firing back against the government. We will have the latest. Mr. Gloom, boom and doom, marc faber says the dow could hit 100,000, but at some point, the market will run out of steam. Hell join us live. And another big name as well, Mario Gabelli is here. Viacom is one of his top holdings. They cut the defensive dent. The interim ceo is leaving. What does gabelli think about the whole thing . Well ask him. And will the fed surprise everybody today . Its a big hour on halftime, noon eastern. See you in about 15 minutes. Sounds good, scott. Lets get to the cme group, Rick Santelli and the santelli exchange. Good morning, rick. Good morning and thank you, kayla. Well, i got a lot of emails between about 1 00 a. M. Eastern and 2 30 2 45 a. M. Eastern. Of course, the latter was the comments by the japanese regarding what they had done earlier in their Monetary Policy meeting. To me, the only way to kind of consider whats going on is to think that the fix is in in fixed income. They want to fix the tenyear. Their jgb, japanese government bond, theyre sovereign at zero to steepen their yield curve. So, lets ponder this. Lets look at their twoyear, because we look at 10s and 2s to be a reflection of the yield curve. Looking at the twoyear note over 20 years, we can see that even in the minus 20s, it has been more negative. If you close that chart up to yeartodate, you can see in were at some point minus 35 basis points. And today, actually, on the announcement, subsequently we did see that twoyear note yield move less negative. Now, this is key. This is key. Because in order to steepen a curve, if youre going to nail to the wall the tenyear, that steepening has to come at the expense of the shorter maturiti maturities yields moving lower, potentially in negative territory in this case, because i dont think an advertent curve will be anything theyre going to strive for. But heres the problem what price are they going to pay for this steeper curve if negative maturities become cemented, engrained in their financial landscape . We already know Insurance Companies and Pension Funds around the globe have issues. We know what the demographics are in japan. I mean, at what price . I had mark olson, former fed governor, as my guest today, and he immediately jumped to the notion that japans a special case and he doesnt believe that fixing anything, meaning fixing it to a certain rate with regard to their fixed income sovereign market, is necessarily a bad idea for them. He doesnt agree with it, but theyre unique. He said they need to weaken their currency. Is that what its really about . Lets look. Lets look at a july 1st chart. A dollar yen, euro yen, pound yen. It certainly has had that effect, but its had some counterintuitive moves as well. We certainly hope we dont see a counterintuitive move in their yield curve, because inverted curves by the short end have a tendency to be called lean in moment. But in the end, all of thez things will have an effect on our fed. Why . Because the more negative rates are if the fed normalizes it puts a real crunch in Foreign Investors and their structures trying to find those dollars so, once again, it becomes a dollar issue. Pens the fed in to other Central Banks bad policy. Kayla, back to you. All right, rick. Rick santelli, thank you. When we come back, the fight against isis and extremism is happening on social media. Former white house middle east adviser Marc Ginsburg joins us next to discuss. We had to think a little more seriously about saving money for the future and for the kids and for their college funds. We thought, well this airbnb is actually a great way to pay those extra bills. Every bit of extra money helps these days. We have a Retirement Fund of our own and i take a draw on it. I dont want to take too much either because i dont know what life is going to bring to me. I get to keep 97 of my rental price. The extra income i get from airbnb has been a huge help. Airbnb has helped me so much financially especially starting my own business. San francisco is such an expensive place to live. The way people work and travel is changing. The guests are now able to stay longer, stay five days, enjoy another day in San Francisco and spend more money in the neighborhood. My guests are able to extend their stay and spend more money on activities and restaurants. The extra income that i get from airbnb has been a huge impact in my life. We need to work for closely with Silicon Valley and other partners to counterterrorist propaganda and recruitment efforts online. Not only to take down terrorist propaganda, but to do everything we can to intercept and prevent radicalization and recruitment. Government cannot do this without the close participation of Tech Companies and experts online. When it comes to balancing privacy and security, what do social media platforms like facebook, twitter, and youtube need to do when it comes to antiterror efforts . Joining us this morning former senior white house middle east policy advisor, ambassador mark ginsberg. Good to have you back. Good morning. Good morning. I wonder what you think clinton or trump for that matter expects from Silicon Valley and what they are prepared to give. Well, the problem of lone wolf radicalization is egregious. Over the last 15 terrorist attacks in the united states, the online radicalization largely through the deceased yemeni cleric. The fbi has disclosed that most of the radicalizations have occurred because of watching youtube videos. If you go on youtube, youll see that anwar al alaqi has the says most egregious calls to the murdering of americans. Now, facebook and twitter have been more cooperative voluntarily, but i have to say this with all due respect to my friends in had Silicon Valley that Google Youtube is complicity in aiding and abetting terror because it has failed to voluntarily do what is necessary to remove the most egregious calls for murders americans by homegrown lone wolves. Ambassador, where should the line be . What is the line that twitter and facebook are drawing voluntarily that you think is the acceptable line that youtube itself should adopt that doesnt trample on Civil Liberties at the same time . I think its very clear here that because Civil Liberties and terms of Service First amendment rights clearly need to be protected, but theres no First Amendment protection or terms of Service Protection for the calling of murdering americans. There are youtube videos where anwar al alaqi directly encourages the killing of americans. Take down that stuff. Take down the stuff that is most egregious that actually calls for the harm and insightment coming to americans. You can put this stuff up directly in black and white and no one can disagree that thats the most egregious stuff that youtube has propagated. The more you allow some of these actors, some say, to participate in online conversations, the more data you get about them, the easier it is to track them. What would you say to that . Not true, because the Encryption Technology that now bars us from being able to monitor what is being watched online and the communications that, for example, on whats app and telegram and the other services, app willing ths that t encrypted makes it impossible. Were not really able to do that. What were able to do is encourage social media to be more disciplined in its approach and to use the new technology that is available to it to remove the most egregious insightful hate speech. You point out that to a large degree, youtube is relying on a 96 law that shields social platforms from Third Party Content liability. How difficult is that to rescind or to find workarounds from . Well, im convinced that congress is going to have to reexamine that act because the Communications Decency act was passed long before the outbreak of homegrown terrorism, and its really inappropriate that youtube in particular hides behind the cda and content liability content liability from being able being forced to, in effect, voluntarily cooperate. I want to see the Communications Decency act at least amended to encourage and require social Media Companies to use their best efforts to remove the most egregious content. Right now facebook and twitter are doing great. Google as far as im concerned is unpatriotic in its approach. Certainly i think we understand the spectrum of concern as it regards different companies, mr. Ambassador. Were going to watch that. Thank you for your time. Sure. Ambassador Marc Ginsberg talking about the issue of Silicon Valley and tech. Well find out why adobe is hitting alltime highs. A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley fresh ingredients, tokyostepbystep recipies, delivered to your door for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. [baby talk] [child giggling] child look, ma. No hands. Children i, j, k. [bicycle bell rings] [indistinct chatter] [telephone rings] man hello . [boing] [laughter] man you may kiss the bride. [applause] woman ahh. [indistinct conversation] announcer a full life measured in seats starts with the right ones early on. Car crashes are a leading killer of children 1 to 13. Learn how to prevent deaths and injuries by using the right car seat for your childs age and size. Welcome back. Adobe shares in rally mode. Up 6. 5 . Trading at alltime high levels back to its ipo back in 1986. This comes after earnings topped analyst estimates and the company gave upbeat guidance for the current quarter. Adobe saying its Creative CloudSoftware Package is adding more subscribers, guys. Adobe has become in my mind the poster child for cloud transition. I mean, of course, there are Companies Like sales force, like work day that were born in the cloud, but adobe was that Package Software company, photo shop, illustrator, acrobat. They took this risky move to push consumers, to push creatives into the cloud, and it has absolutely worked. They have this balanced revenue stream, recurring revenue, Creative Cloud revenue wasnt as high as some analysts expected. Document cloud is surging. Their marketing arm. Its leading the s p. The world has moved its way, right . Were all interested in doctoring, editing, online, sharing accounts, working a photo, working video. Thats what theyve been building toward this for decades. Yes, but the world is also moving against them because people are using instagram filters. Theyre not necessarily going to photoshop to do that stuff anymore. That bet that was made on the marketing cloud on buying omniture and becoming a Data Repository is paying off in spades. A lot of people thought he was cra crazy. No one has been able to truly it is still best in class. The nasdaq is the leading indexes of the three major indexes. Big day here. Lets get back to headquarters. Scott wapne and the half. Thanks so much. Welcome to the halftime report. Im scott wapner. We begin with the stunning news surrounding one of wall streets most celebrated investors. Owe mega leon cooperman charged within the last hour with Insider Trading by the s. E. C. The commission focussing on trades made in a Company Called atlas pipeline summer of 2010 saying mr. Cooperman generated substantial i will lift profits in securities in that company in advance of a deal it was involved in. T