Transcripts For CNBC Squawk Box 20240712

Of mind blowing. Check out these numbers, the six biggest tech stocks losing more than 1 trillion in value in three days apple, microsoft, amazon, microsoft, tesla and facebook. This is kind of unbelievable on the way up, we kind of get i wont say we get used to it. Complacent. We dont quite notice it as much after the split, was apple up 40 or something remember when we were arguing about tesla at 500 a share . Look where it went eastbound the s p was up almost 60 since march. You get these crazy moves to the upside we should have been able to watch this after all these years and how quickly the corrections can come to get that move and have a correction in three days maybe we need to even revise the terms for how we talk about it given what the nasdaq has done, that perspective it is nothing it is not that shocking if you are a longterm investor, this is no big deal. If you were looking at this. Those six stocks losing a trillion in value, they are still up several trillions you are still sitting on winners. If you are a trader and there are so many traders who have come into this, then you could be sitting on pretty substantial losses if you bought into tesla when it issued additional shares last week, that falls on gains it built on several trading sessions it is down 30 this bhoel thing has been so head scratching for the past two or three months. Anybody who has come on the show and talked value has made that point. You talked, becky to cooperman a week ago now he said it when the stock splits, it doesnt just go up because people are making money in many heaven or how they think this is supposed to be happening. I dont know maybe im being cynical. I feel like we watched this movie. The pandemic play. Okay now we found some. Digital is going crazy everybody is staying at home they allow for the new normal. Thats wherewith he can go that gets to a point where 0 okay, that makes some sense. Then it triples from there it compares to where it goes based on momentum. Robin hood and all this stuff. You see where it gets. It is so far removed, this is what can happen. People buying tesla or apple or some of these other really stretched faang stocks that are piling in, maybe they do have other jobs and maybe these are the famous day traders that get in at the end of the moves and stuff. I love apple but at 2 trillion, are you ready the the soft piece tof this pushed this up and then professionals were scratching their head and jumping on the train a little bit im going to talk treasury yields well have a big interview later. Talking about a piece. I dont know if you had a chance to read through it fed is a big part of our lives there onthis slope it might be good for wall street but not so good for main street most of this is about the interviews well talk about that. Agreeing to talk about the markets. You saw the line up. It is great. Yields this morning, dont look there if you are retiring lower your expectations of quality of life. 68 now this is troubling. Wti up brent fell for the First Time Since june i got used to seeing the forehandle i guess 37 was better than minus 18 oil is easier to take care of than cows. Although cleanup is not good. That kleinup and in your face type stuff i already know about that from dogs that are basically horses telling the audience about this big show today. We have a big line up of news makers wed talk to Reed Hastings from netflix. Investor stanley drukemmiller and then from childrens hospital, and a huge lineup. So much to talk about including this astrazeneca news. Did anyone else google transfer myalitis. It is troubling. This is the one patient. Yes. It is spinal it exists. There is a reason we know all about it it exists. It can come from ms. This is a vaccine you are talking about. Well talk to dr. Scott gottlieb this is one of the adno vaccine. The adno vector does give its own immune response in addition to the added protein it should be great to talk to gottlieb about this. Well point out hes on pfizers board, so keep that in mine. So astrazeneca pausing for safety concerns. Hes up next well check out this mornings biggest s p winners and losers stay tuned to squawk box on cnbc another day, another chance to bounce forward. Lets do this. By making internet speeds fast and reliable. So you can keep up with your customers. By ensuring those speeds have wireless internet backup. So if the power goes down, your connection doesnt. And by covering all your connected devices with serious security. So we can handle this. And this. While you get on with this. And this. Be fast, be secure. Bounce forward. With comcast business. Get started with a powerful internet and voice solution for just 64. 90 a month. Call or go online today. Welcome back to squawk box. Green now. The nasdaq may be giving us a little hope in terms of the overall averages yesterday, it wasnt that bad. It got nasty when it was all said and done. Would like to see Something Like a six handle but we did. Pr pretty nice move but has been hit hard we try to keep it all in perspective. Well take it. Becky. Up 206. It was down 465 yesterday. These are some big swings. You are right. It was more gradual. This is more shocking when you watch that pull back in the span of three days. The month of august was a good one for the nasdaq and the rest of the markets. Telling you about other top stories. Astrazeneca has paused global trials after a study participant came down with an unexplained illness. Reviewing safety data. Joining us now to talk more about this is dr. Scott gottlieb form fda commissioner and serves on the board of illumina and pfizer it is good to see you this morning. Thanks. When you consider this that this was just one person with an adverse, unexplained illness maybe it doesnt seem like that big of a deal but it is shutting the trials down. What are we looking at this is not a large trial it is a 10,000case trial. One case is goes to cause them to go pause and go through the data carefully theyll probably ask for data from other trials as well to see if there could have been a case Something Like this or similar to it. This is transverse myelitis. It is associated with adults and children that could make them concerned there is a causal relationship what joe was getting at is whether or not this condition is related to the vaccine con straukt. This is an intenuated chimp cold virus. So is it related to that segment or the covid epitope or the latter. The spike protein being the part of the virus used to infect ourselves and delivering that protein, we stimulate the production of the antibodies. Is it related to the addnal viral vector or the spike protein or Something Else . Joe okay. You answered almost all of my questions there, scott just a drill down a little more on that. Adno vectors have been used a lot. Ever seen transverse myelitis before is this the same or a new chimp adno vector . It is new and has been tweaked dlirchly they have been used in other vaccines those are vaccines delivered on a widescale basis you have seen cases of transverse myelitis associated with other vaccines. It is not clear whether that is related or a side affect or Something Else there are reports of this in an extremely rare circumstance. We have seen this before you have a reason why it could be related to the is vector itself or the spike protein. Assuming the fact that it is the case i trust the reporting from the New York Times dr. Gottlieb im sorry, becky. They said me next thats why i asked we are not getting great queues on how to do this sorry, becky 0 scott. The spike protein doesnt seem like what makes you sick the spike protein, they pick that as something to generate immunity on the surface but it doesnt seem like it is what gives you covid the disease. That would be very worry some if it was the spike proten itself wed have to go back to the drawing board with all of these . Not necessarily the spike protein does stimulate an immune response we have seen rare post viral inflammatory auto immune type phenomenon you could potentially see them with covid and with the vaccine. They might occur in low enough incidents that the vaccine still makes sense. We see this with the flu vaccine. People get a response to the flu vaccine but very rarely. It is possible that epitope is the same that is causing these rare conditions we are seeing. That is something youll figure out with these trials. Thats why it is important to do these trials the risk benefit profile still wouldnt line up youd want to understand that fully. That might affect who you vaccinate as well. You might reserve it for people who are at high risk we really dont know the answer to these questions and why it is important to do these large 30,000 patient trials. We talked about what the chinese were doing to move ahead quickly which was the dirty old way of doing vax eenz. I felt good that we were trying to do something more sophisticated. Does this raise questions about this more . We do sanofi, and glachl cosmith kline entered trials with the hold style vaccine it is a little behind the moderna and pfizer product and the astrazeneca trial. Novavax also has a trial the viral vector vaccines are further ahead. Well see if this is further from the epitope if it is the viral vector. It could be it is one case not related at all you haveto take it seriously we have seen this associated with covid and other vaccines. A 10,000 patient trial, to see one case, you have to take that seriously. Theyll get some clues based on when the condition developed and the history of this patient and whether or not there were risk factors and anything that could be suggestive of this side effect right now, you have a lot of data on people who have been vaccinated put a time line on this when a pause has been put in place like the ones now being put in place today, is this 24 hours, 48 hours, a week, two weeks out . How much communication is being taken place between astrazeneca regulators and all the other Drug Companies working on vaccines that may be models on similar profiles we just talked about to the extent they are sitting around saying, are we going to have to pause right, well i think the other vaccine trials what theyll do, pfizer is one of them. Im on the board i have not talked to the company. There has been reports moderna has been contacted by regulators there has been a statement put out. I wouldnt expect other trials to be paused i wouldnt be surprised if they ask the safety regulating board to go back and look for indication that this side effect is appearing in other trials and that this could be suggestive to this side effect with the astrazeneca trial, theyll go back and look more carefully and investigate this case more carefully before they continue that trial to continue to enroll. You are looking at days and weeks. Now that youve paused it, youll want to investigate this more thoroughly. I would expect that trial to get back sorted. Theyll be able to tolerate the potential risk it will depend where they are with this particular side effect some people think this is some form of good news that it will create additional credibility for the industry and how they are approaching these vaccines given all the pressure. It used to be any time we got a little shred of good news, when it came vaccines, the market would skyrocket. We had bad news today, i would have thought we are coming off a situation yesterday where the markets were under pressure how do you see that . In terms of good news, bad news. Whether or not it is a tolerable risk it could be that this is a rare side effect. We have seen it associated with covid in rare circumstances to your point of questioning whether or not the system works. The system works we have never been in doubt whether this works you have regulators and monitoring boards when you find something that could be associated with this quick action it worked here very enlightening. Good to have you here. Well see you soon thanks a lot. Okay netflixs ceo Reed Hastings but first, we check out tesla on the biggest oneday drop ever. Stay tuned here to cnbc. [ thunder rumbles ] [ engine rumbling ] [ beeping ] [ engine revs ] uh, you know theres a 30minute limit, right . Tell that to the rain. [ beeping ] for those who were born to ride, theres progressive. Welcome back a shake up longtime executive Cindy Holland will be exiting the company. Bela is a former employee of comcast years ago. There were reports she was being recruited back to nbc universal. In a memo, it was said they wanted to simply the way content is created a new book out entitled no rules rules. I asked him about the title and how is that really supposed to work we are fundamentally dedicated to employee freedom because that has made us more flexible because weve had to change so much from dvd by mail to leading the streaming the book is about how do you give freedom and not have chaos. Part of that keeper test, your coauthor said this really amounts almost to like the hunger games to say, the keeper test you think, would i keep this employee, if you wouldnt, you are not supposed to keep them. Thats a pretty high bar . It is we model ourself on professional sports if you you are going to win the championship, you got to have incredible talent. You focus on who of your employees would you keep going to another company those are the ones you would hold on to i dont know if you read the article dowd put out she called the culture of ar owe against and fear and only now are you not too big to hate. What did you think about that . Shes talking about the hollywood contenders and us as an upstart it is natural for the new guys to be threatening. Youve got from being a small startup to a big giant yourself and global at that do you think the culture you had in the beginning is the name or does it have to change our culture is much better than it was 20 years ago weve continued to get more honest, thoughtful creative we are focused on inclusion and all kinds of dimensions. I should mention reed is in his sons bedroom doing that interview. I should also mention that netflix mentioned it would move millions of cash to blackowned banks. I asked hastings about what he thinks the role should be on all of this talking about equality and injustice. I think there is a broad opportunity to be thoughtful in the society you operate. Costco also made a deposit in black banks as we did and many others are doing that. These are things every corporation can do to put 1 or 2 of assets in black banks which will make a difference to close the wealth gap it is the wealth gap between black families and white families that the power gap comes from i commend costco for doing that. The larger picture with silicon families and other families like your own have opened your books of what diversity looks like intheir companies. What do you make of quotas or goals . Our goal is to be more diverse in the areas we operate. Looking at top executives now are half women, half men, 25 leaders of color weve made Real Progress to tell stories that reflect our audiences. Some say we should set a goal nbc University Says you should set a goal are you a fan of goal . Does netflix have a goal our goal is do better every year we dont have a goal around membership or other kind of things our goal is to get better on a continue uous basis. We talked about a lot of things well share more later in the show ied to ask about the megadeal with Meghan Marklend prince harry and how it came about . Going to be epic entertainment. So excited about that deal they are smart they were shopping it around all of the Major Companies we put together the best complete package well do a wide range of entertainment with them. I cant tell you more about it the most exciting new contact. Will Meghan Markle be acting in think of these. Their foe cushion is on producing and Production Capacity thats the key thing theyve developed a great eye for story. Well be working with them on that basis in the next hour, well show you more on that interview with netflix ceo Reed Hastings and what he says it really means it means to work from home. We talk about his time as a board maybe of facebook. His take on whats happening on disney plus and his words on hbo max and we get into china and tiktok as well so a lot coming up andrew, i keep going around in my head about the keeper rule tell me about that im nervous trying to figure out if any of us pass that rule. The keeper rule is literally, do you want to keep the employee or not if you wouldnt kill yourself to keep them, you should get rid of them thats pretty much the rule. So the important decision is who gets to be the decider, right . Yes the decider matters a lot. Being the boss matters my favorite thing hes got a lot of confidence. You get really big and how is the culture change he said, its unbelievable but the bigger we get, the better our culture gets. Its unreal. The bigger we get, we keep Getting Better with culture. The same with squawk box. It is better and better. And we are all keepers. Yeah. We are all keepers didnt you notice that he goes, god, sometimes i surprise myself how good we are doing this you know, you can look at the stock price and laugh every morning, right exactly he has every reason to laugh. He can look at the stock price ever day of his company. I have thought there are times, you know how you go back and forth between cable and netflix and it is a pain ive found, i have just left it on netflix me too. I finally figured out how to flip back and forth. When we come back i always go back to cable there is a big nba playoff season going on. Thats right. When we come back, the six biggest tech stocks have lost more than a trillion in value in three days well talk about investors should do now. Well be right back. Waistband and 360 fit that adapts to every wild move plus up to 12 hours of pampers protection so anything your wild child does cruisers can too our best ever fit is pampers cruisers 360 fit nasdaq quickly falling into correction jeff mills chief Investment Officer and contributor and globe al fixed income cocio at river front Investment Group kevin you talk about fixed equities things like stock splits dont change anything. They get the momentum going and go to levels that are sort of unwarranted given current fundamentals a sharp pull back is not to be unexpected and may not be the end of things. I think thats probably right. If you look at 50day moving average, whether you are looking at triple qs or individual stocks, they are right there at the Technical Support. Those days would be interesting. You are right. There is a weird thought process going on driving the share prices look no further than apple and tesla. Stock splits dont drive the value. Everybody piles into those names and it drives the prices tesla was down more than 80 and was still above the average. Think about that in terms of the magnitude. You can pull back the lens a little bit in terms of growth to value. The s p up over 35 year over year within tech, a big component of growth, youve seen it contract a little bit we were at 85 to 90 stocks. Thats down to 50 now you are losing a little momentum there. But still not oversold slk still 15 . Room to the down side but the next couple of days will be interesting in terms of the Technical Support the market sees a good way of putting it. Tesla was down 26 but 80 above the average. That sums up the move up and down jeff, it sounds like you think it is not over yet i want to get to kevin now when we talk fundamentals it is tough thats why technicians are necessary to factor in what the technicals say fundamentals might not come through for, say, amazon for years. It looked like it was way over its skis but then the fundamentals catch up. Sometimes you need to go with the flow what do you think . Are we ahead on all of these definitely think we got ahead of our skis. The market went up too quickly you had a bit of a pull back here the technology highs was up over 80 . Technology up over 80 is to be expected in a short period of time we believe you should stick with technology because these stick with 28 of the s p 500. They are growing earnings and think theyll continue to grow it is not time to get off or dump but is a time to trim back and take some profits. Since you do cover fixed income so much, kevin, i might just drop the title. What should investors do to try to insure late t to insulate . Weve created a barbell and put Corporate Bonds in front of the curve and long treasuries on the back end of the curve. That is to be a shock absorber in the for the folio when we do get these pull backs in the market and these risk off moments. Overall, fixed income would be exciting when you reveal these for longer that is just for equity markets. They need to reset for a moment. Jeff, someone wants to know about banks and bank stocks and big oil names. Do you have a feeling for those and how they are setting up . Banks are at a really interesting technical juncture as well traded at these lower highs and higher lows. The question has been especially given the outperformance which direction it breaks. My guess is that it breaks to the down side. There is a catch up trade to be had. I dont think the time is now. The yield curve has steepened from about august 4 to now given what the fed has said about the average inflation targeting. The fed has said what they want to do but havent said how theyll do it. My guess the long end is that the yield curve will remain under pressure not to mention the Political Risk associated with the potentially changing regime. Banks are particularly vulnerable to that i would say that outperforming now but longer term, there is a catchup trade to be had patience is necessary for had. Thank you we appreciate it thanks to it over to you, becky thank, joe. When we come back crypto deal. Well be back after a quick break. Tmobiles new offer on iphone 11 pro is even better on our most powerful signal. Switch and get two new lines of unlimited for only 90 and 2 iphone 11 pros on us. Only at tmobile. Welcome back to squawk box we got a deal this morning Digital Currency group which backs 160 companies in the crypto space announcing a new deal in transaction this morning. Good morning to you. You are making a big acquisition, at least a big acquisition in your space and for your company, barry. Yes so dcg just acquired luno one of the bitcoin exchanges focused on the emerging an froe ining fron. What is luno . A lot of our audience know about coin base, for example in the United States. Is it fair for me to compare luno to being the coin base of the emerging markets yeah. Absolutely look, the opportunity to help educate the world and build onramps, crypto space enabled people to buy bitcoin and really create a better Financial System is a mission that luno has been on since it was founded seven years ago. We were a seed investor in coin base we watched this company grow from five people to 400 people with this acquisition we get to accelerate the growth of it and bring it to every corner of the globe. Barry, you know a lot of people have viewed this pandemic as an accelerant to the world of crypto what has it done to the business of luno during, lets say, the six months most of the companies in the Bitcoin Space are seeing some fantastic growth this year as you may know bitcoin is probably one of the best if not the best performing assets luno is seeing record month over month growth in transactional volume, in revenue and customers and were looking forward to accelerating that super quickly with the dcg Balance Sheet barry, the flip side of this is, you know, we all talk about how bitcoin and some of these other crypto currencies are supposed to be operating, if you will, quite independently. At least thats the idea from the markets. Yet when the markets have gone down and weve seen the down draft recent ly theres a down draft on bitcoin too. Sure. Bitcoin trading is not for feint of heart the downs are amplified. The ups are amplified. So far this year bitcoin has played its role as a diversifier, as an asset its performed quite well this year its up 40 this year. Barry, whats the fair market valve bitcoin . This is maybe the philosophical question here. What do you honestly think it is and how would you even decide how you would value it we look at bitcoin as the next generations version of gold gold is 8, 9 trillion asset class. Over time bitcoin will capture a larger and larger portion of that asset bitcoin is a couple hundred billion dollars in value when you have investors saying hey look its okay to put 50, 100 basis points in this asset class it doesnt take a lot of money to move a large amount of the gold market into the bitcoin market what do you make of dave portnoy and his comments about bitcoin . Hes an entertaining guy and, you know, look i think its fantastic hes bringing his followers into the asset class whether buyers or sellers, liquidity is good. Most people once you fall in love with bitcoin you tend to stake with bitcoin do you worry, those about how educated most folks are going to be about this class or is the whole idea you just want more people to know about it luno is focused on education. Were helping people thanks so much. We got to run. We appreciate it very, very much we got two big hours ahead we got two big hours ahead includten compdrucs for 50ice,n instead of paying thousands. All Commission Free online. Schwab stock slices an easy way to start investing or to give the gift of stock ownership. Schwab. Own your tomorrow. Schwab. Riaccelerate your investments to be is or pull back . Een. Change the plan or stay the course . Thats why Northern Trust is here. With specialized expertise. A history of success through every economic climate. And proven strategies rooted in data and analytics. Giving you more control. Clarity. And confidence. For now and whatevers next Northern Trust wealth management. You know your kid doesnt step around puddles. And you know cheap leaky diapers are an amateur move. You need luvs prolevel protection. Luvs. Parent like a pro. To deliver your packages. And the peace of mind of knowing that important things like your prescriptions, and ballots, are on their way. Every day, all across america, well keep delivering for you. Wall street looking to bounce back from its tech selloff that pushed the nasdaq composite into correction territory in three days. What investors need to watch is straight ahead stayathome success netflix seen record subscriber growth since the beginning of the pandemic well hear from Reed Hastings on whether the company can keep up that momentum. Three special guests on the nations Education System and the push to break generational poverty across the country well hear from Stanley Druckenmiller who may have an interesting take on the latest market moves the second hour of squawk box begins right now. Good morning and welcome back to squawk box right here on cnbc. Im Andrew Ross Sorkin along with becky quick and joe kernen. Take a look at u. S. Equity futures this hour. Were in the green things looking up after some tough, tough days. The dow about 137 points higher. The nasdaq up about 170 points higher 175 point higher the s p 500 looking to open about 25 points higher becky . The technology looks up pushing the broader markets as investors rotated out of companies that led a historic come back from the coronavirus recession. The nasdaq losing more than 10 just in the last three sessions making at any time fastest correction in history. However, you got to put that in context. The index is still up 63 from its 52 week low that it hit back in march mike santoli joins us with more. This is coming fast and furious. This market has been operating in a hurry all year. Its created these very rapid moves in both direction. Its not waited for these things to develop slowly. You mentioned nasdaq, fastest ever 10 drop. This is what it looks like on a more diversified index its somewhat similar to what we saw in june. I heard you guys talking last hour about the 50 day average in bull market thats supportive. Thats where it is, 3310 its in that zone in an upfriend the market will fall to the down side you dont want to see a meek bounce but it makes a lot of sense for this to be the case. Something else about the last three days it hasnt been associated with a lot of macro stress. If you look across asset markets. The u. S. Dollar, yes it did gain and bounced off recent loss. Maybe looks who knows it could be creating more of a bottom a weak dollar has been a benefit to equity market for a while its harbor to say this is a trend change you didnt see a buying panic in treasuries it seems like a shake out of out of positioning last in first out. Mike, its not just that watching some of these other moves with oil, with any of the other things like crypto currency that we talked about before its true i would say oil and crypto and gold are kind of just the direct nevi inverse of the dollar. Lumber was up huge and came back a lot. Credit spread and treasury markets and other markets of the subsectors of the market you expect to sell off if it was a bigger economic stress event like transports which were up yesterday thats not necessarily been the case. Its not a clear message that somehow this is really a panic about the recovery, it seems a little more equity market focused right now with those other Asset Classes thrown in. Mike, thank you joe . Yeah thanks, becky. Astrazeneca, weve been talking most of the market pausing its covid19 vaccine trial the phase three. A big one. To investigate an unexplained illness and that is putting pressure on the shares of the drugmaker, but it has come back from the loss. They are slowly heading lower as this premarket session comes along. M meg terrell joins us we had a long conversation with dr. Scott gottlieb i hadnt considered the possibility that the spike protein itself could, could result in some of the sickness that you get from coronavirus, that causes the covid and that would be thats worrisome reporter yeah, joe, there are a lot more questions than answers about this event this morning. It was reported late last night astrazeneca had paused all of its studies as it investigates this one event in the uk that was reported by stat news in a statement astrazeneca telling us as part of these ongoing global trials our standard review process was triggered and we voluntarily paused vaccination to allow review of safety data by an independent committee. Heres what we do know this is what they call routine action after an unplanned illness. It may be unrelated to the vaccine. They are expediting the review to minimize the impact on trial tlienl there was some speculation there could affect trials of other vaccines we reached out to pfizer and moderna and johnson johnson. None of those other companies right now see any impact on their timelines. I also reached out to operation warp speed, of course the trump administrations effort to speed vaccines to market the chief adviser telling me this pause while the adverse event is fully investigated means the science based driven process is working as it should. They have a portfolio of candidate and platforms and believe they are still on track to deliver a vaccine by the end of the year. Theres so many questions about what this event is whether it was caused by the vaccine. And what impact it will have on this trial and potentially other trials right now those are question marks and were just going to have to wait for more information. On the business side of things, meg, just watching the stock, should we tie it to astrazenecas actual income statement . I dont know how big of an event would it be . Everyone wants a vaccine, obviously and theres bragging rights and for humanitarian reasons its very important. People say it might be that much to the bottom line social we look at the action in the stock to glean whats really happening . Probably not. You know last night the stock was down about 8 . Its a scary headline. When theres a safety event in a major Clinical Trial we dont know whats happening you know for Smaller Companies their stock prices are tied directly to any whisperof news about these vaccines because it could be so meaningful to these companies. For astrazeneca, an established company with many other products that make many billions of dollars a year in revenue, they are not a Vaccine Company for the most part. They partnered with oxford on this vaccine to manufacture it and bring it through these large trials ive seen estimates for the total size of covid19 vaccines at multiple billion dollars a year for the entire market some are much higher this is likely not a makeorbreak product at all for astrazeneca. All right, meg. Thank you. Andrew coming up on the other side of this break the coronavirus helping netflix to grow its Subscriber Base by leaps and bounds Reed Hastings spoke to me about the companys success during the pandemic that interview straight ahead. Before we get to a break, though take a look at the markets right now. S p 500 up about 21 points nasdaq looking higher about 135 points higher after what has been quite a creioorctn. Well talk all about it when squawk returns after this. vo while you may not be running an architectural firm, tending hives of honeybees, and mentoring a teenager your life is just as unique. A Raymond James Financial Advisor gets to know you, your passions, and the way you help others. So you can live your life. Thats life well planned. Welcome back to box. This morning netflix growing its subscribers fast eer than any yr in history Reed Hastings says its the companys culture that made netflix grow that way. The subject of hastings new book titled no rules rules netflix and the culture of reinvention i spoke with hastings yesterday and asked him about work from home and whether this trend can persist after the pandemic i think its really valuable, and important and useful to have in person meeting, and i miss that so i would say theres nothing good about the ten person zoom call that it wouldnt rather do in person. But, in the future, in a postpandemic world how many days do you think youll be in the office well, ive always worked from home on nights and weekends. So really talking about, you know, is it the only nodality you have or is it partial . I think it will be partial some working from home and some Group Meetings together. I think many of us are working nights and weekends from home in addition to all day. I asked hastings about the success of disney plus with 60 Million Subscriber as they did and what the number he had previously expected from the competition. Oh, maybe 20 million at best. You know, theyve most companies have a hard time executing on something as radical as, you know, lets go direct to consumer over the internet and theyve done a remarkable job growing to over 60 million in less than 12 months it took us 12 or 13 years to get there. So, they are very focused, obviously, on direct to consumer but so are we. And i think, you know, we love the challenge. We want to bring the challenge to them. We want to get better than disney in Family Entertainment and thats going take five or ten years. They are very, very good at it but, you know, were very focused and we continue to learn new things whats the lesson in their growth given youve been surprised by it is there something you notice and said hey thats pretty interesting we should try that theyve had lots of incredible content and theyve been very aggressive about putting that content on to the disney plus service and then i think its the power of a great brand like disney has really carried the day. So if anything its emphasized how important it is for us to invest in the netflix brand and what it represents great series great films. That you can relax with any time let me ask you a different question about one of your other competitors which is hbo max critics said they stubbed their toe on the way out of the gate do you agree on that depending how you read the numbers. They got 3 or 4 Million People on hbo max so compared to disney 60, its a pretty small number. So i think they got a ways to go but, you know, theyve been a legendary provider of Great Entertainment for a very longtime so i wouldnt count them out well show you a lot more of that interview throughout the program with netflix cofounder and ceo Reed Hastings including some of his comments about tik tok and china as a market. So stay tuned for that becky . That is a bold prediction to think that you can be bigger than disney to the childrens market sometime in the next five to ten years think about decades and decades and decades that disney has been building up that library, that catalog, the number of characters that one i have a hard time kind of understanding the two things i thought were fascinating this idea they would invest so much in Family Entertainment and what thats going to mean and also in the brand. Because i historically asked reed about the brand before. Netflix represent as lot of things to a lot of people and i dont know if they focus so much on what netflix as a brand means. I think youll see more how they promote the company and the overall brand as well. Okay we got much more of that interview coming up. In the meantime after this, investor Stanley Druckenmiller and harlem childrens jones are going to join us to talk about the nations Education System. Well get stans take on the recent mark downturn as well lots to talk about with these gentlemen. Then we have senator ted cruz. Hell be joining us to talk about virus relief and his new legislation which includes tax relief to employers and employees. Right now as we head to a break lets look at aflac trivia question according to the Brewers Association which Craft Brewery is number one in sales volume. Well have the answer when we well have the answer when we come back. Aflac. What he said. And this unexpected bill is from. The twothousanddollar specialist. Thanks. Aflac. When youre sick or injured, aflac is there. We can help with Expenses Health insurance doesnt cover. Get to know us at aflac dot com. Pampers cruisers 360 fit can too doesnt cover. Get to know us at with a stretchy waistband and adaptive 360 fit so they can move the way they were born to [music] born to be wild pampers cruisers 360 fit its the simple joy of washing your hands,. Without ever touching a faucet. Its the Little Things that matter. Thats why we create moments to feel kohler clean, every day. This is fun. We dont normally get to actually to read the answer to the aflac trivia quiz but here it is. According to the Brewers Association, which independent craft brewer is number one in sales volume yuengling. It is the oldest operating brewery in america becky, before we get off of this subject and, sorkin, youre a piece of work but we ask you your biggest vice and you say you drink sparkling water or something in the house thats a stretch because it might be bad for dental enamel i want to gave plug to something thats the greatest invention in recent history and thats the spiked seltzer im not going to mention any brand names. One in particular thats named after a jack london novel. I tried lime, black cherry they are so good you know what happened i stopped drinking soda, right, because i dont know theres something about that sweetener maybe thats bad who knows. Anyway i can do sugar because im too fat so i started drinking these possible land springs flavored like lime so i love them those are good. Raspberry lime. I drink them and they quench your thirst so well and you dont have that after taste. Try that quenching your thirst with a spiked seltzer, sorkin its 5 alcohol, not a big deal. Just have one. How many have you had this morning . How many have you had this morning . First six go down pretty smooth honestly i had a long day yesterday at the dmv, not for me but anyway i had one when i got home and it was great. Im not mentioning any names becky. White fang have you tried that sorkin live a little, dehumidifier. Your biggest vice is sparkling water . Doughnuts. Doughnuts lets check shares of tiffany. It is set to walk away from its planned take over of tiffany because of complications tiffany said it will be suing lvmh over the deal if you look into the reasons why on this. Lvmh says that it wont be able to complete this because the government, the french government is asking for a delay because of the threat of tariffs on french products from the United States. This is another case where threatened tariffs are interrupting Global Business tiffany shares are down by 8. 8 . This is going to be very interesting to follow with the tiffany lawsuit coming out and saying theyve done nothing. No material or adverse change on their part the french government getting involved here and it will be the one thats really driving things on this. Well see how it plays out in the court system okay. Coming up very big interview here on squawk box tan lie druckenmiller joins us with reaction to the market selloff. And his involvement with the harlem childrens zone joining us for that geoffrey canada, president and founder of hcz and kwame owusukesse. He is ceo of the harlem childrens zone. Well discuss the nations Education System, inequality and the future of the workforce. Check out the futures at this ho, 1 pnturup34ois. I feel like were forgetting something. Let me check. Xfinity home gives you peace of mind from anywhere with professionally monitored Home Security built around you. No, i think were good. Good. So when youre away, you dont have to worry. The tent. We forgot. The tent. Except about that. Xfinity home. Simple, easy, awesome. Hey look, i found the tent and, see, its safe. Call, click, or visit a store today. Learned a second languageument applied to college applied for a loan started a business started a blog shared a picture shared a moment turn your wish list into a checklist, with internet essentials from comcast. When youre connected, youre ready for anything. Welcome back to squawk box former xerox ceo said the company must to change the criteria to create a diverse work forward we know that theres a lot of talent there thats need on the boards thats not, can be delivered by people other than past ceos. So i think that its a fallacy and a structural form of racism and exclusion to say that the only people who can actually participate are people who have this very narrow set of skills and its a way to exclude people versus include people. Well continue this important conversation today with a special edition of the halftime report. A new initiative to increase diversity at the highest level of u. S. Company. Guests there include merck ceo ken frazier. I know you think i have novices in honor of the pandemic oh, my god. I want to shout out to my good friends at corona, because corona well, yeah. There you go. Thats one of my brands, anyway i think that might have been we should all try to shock each other occasionally because now im i wasnt expecting that you tell me i have no vices i asked you how many white claws you had. Thats bad you asked that because we do get crazy ones you cannot have a drinking problem if youre going to get up at 3 45 every morning they should know that. Ken frazier is an example of someone who got some, a hand up early and thats sort of what well be talking about now its not easy. Its expensive but it works the harlem childrens zone is celebrating its 20th anniversary today. What started as a social policy experiment has grown into a successful datadriven model to break generational poverty at scale across the country joining us now on whats to come, we saw the last 20 and see what happens in the next 20. Stanley druckenmiller became the ceo. Geoffrey canada, president of the harlem childrens zone and i think of as the guy who thought this up. And was early 20 years ago and kwame owusukesse. Hes ceo currently of the harlem childrens zone. So weve had this conversation before, gentlemen. And i think most people know what were talking about lets tart there, again, geoff, because it was 20 years ago. You look around and tried to figure out what do we need to do we need to look at these poor communities and structure a middle class environment for these kids whoa, how much would that cost and is it even possible. Thats what you did. It was funded and it was expensive, but you started using data early on and you got data to prove that it works does that summarize essentially what happened, geoff i think it summarizes what happened, how it happened. But i want to start the morning by doing something radical that ive never done on national tv before i want to say how much i love Stan Druckenmiller you know, weve been partners in this work for over 27 years. And none of this, the zone would not have happened and, you know what i think america can learn something about this right . Two guys from different worlds, deciding we both loved this country and america can be better than it is. And the only way we do that is we got to roll up our Shirt Sleeves and we got to really work at this really hard and weve been doing that and, you know, stan stepping down after 20 years is something that im very emotional about it. Because of what weve done but heres what people dont under about the zone when we started in harlem there was not one National Chain in harlem people did not believe you could do business in black communities. You come to harlem today, you can find every National Chain in america there and they are all doing well this is about not just whats good for these poor black and brown kids but good for america for us to rebuild these communities and thats what stan and i are involved in and passing the baton out to kwame so he can continue this work moving forward thank you, gentlemen. Love you too stan, i want to i mean i think at some point it was like, you know, it was a very to try to do it took some forward thinking and some big thinking and a guy like you stan that can write a check for Something Like that, and that money a lot of times doesnt solve a lot of things but to do what harlem childrens zone it is expense jennifer, isnt it, stan was there ever a time you said wow thats a big number would it work first time geoff told me the idea thats exactly what i said. But geoff had a plan from day one. And it was a model that was laid out and the plan looked good the most important part of the plan was geoff was going to be openminded and flexible as to what worked and didnt work. Geoff, this is not paying you back well for what you said about me on National Television but the dirty little secret about geoff is hes a data keeper 40 years ago when no one realized the value of data, one of the four pillars of the harlem childrens zone was for us to have an outside and inside evaluator on everything that worked and did not work. Basically we started with a model. A lot of stuff worked. A lot of stuff did not work. We had a lot of failures if something failed it was thrown out the window. If something worked we kept it here we are 20 years later and i think weve really built up 20 years that were willing to share, willing and anxious to share with the rest of the nation in other communities. So is it expensive yeah but thats kind of a joke because its about 3,000 per participant and i think the incarceration rate in new york city is over 120,000 a year and, by the way, no tax revenues from gentlemen and women that are incarcerated so its an absolute no brainer economically and businesswise. Yeah was i nervous about the big number yes and i think that because you started with him so early you can go to different people in terms of funding other cities, other children zones, if you will in other places it will work still be expensive kwame i want to got it, chief handed you the baton hey, kwame theres a pandemic called coronavirus thanks geoff it wasnt hard enough. Lets do this during a pandemic. That has informed the actions you had to take since you started, right absolutely. Quite a time to be transitioning into the role of ceo i feel prepared for this moment mostly because of people like stan and geoff and our previous ceo. But at the harlem childrens zone is at its best in moments of crisis and we always say we run towards the bullets we dont run away from them thats core who we are theres a real opportunity for us to take the leadership mantle in response to the covid19 in harlem but as a leading example for the nation you know, geoff, in terms of the next 20 years and kwame, you can speak to this as well, given events of 2020 and the past six months, in terms of the awareness being raised and so many people wanting to get involved and saying this is the time and corporations and weve seen all these numbers thrown around im putting 100 million here then there have been times when they said, what should we do with this . How do we use this have you tried to say, geoff, look we know what to do with this if youre wondering where to go . Cant you say weve got the answer, send it here look, i honestly believe that theres an answer to poverty that has been generational in this country and we got the evidence, outside evidence you know, we got one of the top most economists in the country who did the numbers, who knew what we were doing, we broke that cycle of poverty in this country. And its not just me stan and i are out saying to the rest of this country, if you care about these communities, if you truly believe black lives matter, then we need to make the kind of investment in these places its not about slogans like defund the police and stuff like this this is about lets really get serious about making an investment in children and families that we know we have evidence is going to work. Im telling you, that we need to take this crisis thats going on right now in this country seriously. As bad as the last six months have been, the nextsix months in the poorest communities of this country are going to be even worse so we need to begin to act with real urgency and do the kind of investments that make a difference look the corporations are wondering what they should do. We have the answer that says, look you need to make Smart Investments in places that will deliver the data that proves the efficacy of this work that were doing in poor communities. Go ahead. Okay. Sorry kwame. I agree with geoff whole heartedly on this. We know the amount of resources being invested to fight the coronavirus. We believe we have the vaccine of poverty here on the ground in harlem and spreading our model across nation. Targeting neighborhoods with comprehensive services is the vaccine and we need to be able to mobilize resource with the same intention, same sense of urgency in communities focused on place based efforts the other thing i want to emphasize when people think about nonprofit or think about the work of the harlem childrens zone i dont want to be known as best in class as Nonprofit Organization i want to be known best in class business. Weve seen with covid19 with the impact of social unrest how interconnected we are and the need with leadership so when we look at high quality organizations like the harlem childrens zone, i want folks to see centers of excellence. Whether it is high quality product and customer service, whether its general Management Practices and good governance. Whether its Strategic Planning and innovation theres a real opportunity to break mental models what it takes and invest in these organizations. Stan, you want to weigh in . Yeah. I just want to say ive seen a lot of ceos on your show who look incredibly sincere. They talked about giving money towards Racial Equity, trying to deal with this problem look, i made a lot of investments in my life the best one i ever made was hcz. I would encourage those ceos to come look at the data, talk to kwame, because if youre going to invest in Racial Equity you should invest in something that works. We have data that proves it works. We have an event tonight i would like them to take the perspective a company like ripple they are giving 5 million towards our event. That money will be put to use around the nation in six different cities as well as harlem and i would just say take a look because the one thing i hate more than anything is pouring money down a rat hole. If you give money to hcz youre not pouring money down a rat hole youre making a great investment i want to ask one sticky point and i dont care whether you answer stan or kwame or geoff. Should we think of hcz as School Choice does it go handinhand with charter . Sometimes whether its good or not there are people that dont think that Charter Schools are the way to go, we need to fix Public Schools should we think of hcz as School Choice proxy, geoff and does that hurt sometimes that you might not be able to appeal to as many different groups for philanthropy yes so this is one of the, i think fallacies about childrens zone. Yes, we have eliminated the whiteblack achievement gap in our Public Schools its something the country has been trying to do for the last 50 years weve done that. But most of our young people who are in college, over 900 young people in college right now, they didnt dprom our Charter Schools they came from the traditional Public Schools in our zones. So the harlem childrens zone is not just about Charter Schools were about great education. While im a supporter of Charter Schools i also have been fighting to make sure our public Education Systems have the technology, have the connectivity so our children can continue their education across this country and i think this is really about Great Schools and we shouldnt be pigeonholed just being a Charter School because were not. Most of our children attend traditional Public Schools all right stan, can i just get a couple of questions in on this crazy environment we find ourselves in i start with kevins oped piece and this has been a theme for a while. The fed is a big part of our lives. Might being a great for wall street not necessarily great for main street where are we now, stan kevin has written a lot of great articles in the last few years, so i would say its a very high bar. But i think its his best piece ever and i think the merging of the fed and the treasury, which is effectively whats happening during covid set as precedent that weve never seen since the fed got their independence and its obviously creating a massive, massive raging mania in class assets and it has not spilled over to main street. I would just say that i hear a lot of people on the air saying save the world and i think powell did a great job in march. I just want all you guys cheering him on to remember the maestro in 2005 and how that worked out Everybody Loves a party. Geoff loves a party. Kwame loves a party. I love a party you guys love a party. But after a big party theres a hangover and right now were in an absolute raging mania weve got commentators on your network Encouraging Companies to do stock splits. Companies then go up 50 , 30 , 40 , big Market Companies on stock splits as andrew pointed out earlier on your show that creates no value but the stocks go up look, joe, i have no clue where the market is going to go in the near term. I dont know whether it will go up 10 i dont know if it will go down 10 . I just want to remind people that theres no valuation support because we dropped 10 that hasnt mattered because were so far outside of valuation realm with the fed doing what they are doing. The next three to five years will be very, very challenging and what the fed has done, in my opinion, if you listen to their, the jackson hole speech on framework it was quite amazing it sounded like an apology because inflation has been 1. 6 instead of 2 the last ten years. Their mandate is price stability. Where i think 1. 6 is like to hit a home run they actually sound like theyve been too tight the last ten years and look what they are risking in terms of Financial Stability to hit that 2 mark. My own sort of central cases for the first time in a long, longtime, im actually worried about inflation. Unless everything i learned about it is incorrect, de facto, mmt which is what were doing right now because we actually have a chairman of the Federal Reserve, 3. 5 trillion deficit out lobbying congress to do more spending and guaranteeing those of us on wall street that hell underwrite it. I think its dangerous i think we could easily see 5 to 10 inflation in the next four or five years ironically, i also think hes raised the risk of deflation because i cannot find a deflation that happened because you were near the socalled zero down everybody was precede by an asset bubble and he created this massive asset bubble so ease raised two tales risk of inflation is much higher than 12 or 24 months ago the risk of deflation, im talking like minus 3 or 4 because if things dont work out and we get a bust here that is up i think the odds of us hitting the sweetspot, which i would say is around the 2 area which is where weve been has actually gone way down with fed activity. So, at this point, stan, you know, youve had to make macro calls. Thats always been one of your forts and i mean do you think we need more stimulus from congress for this or do you think whats the state of the Global Economy or the u. S. Economy right now . Is it past the point where we need more stimulus, kit go from here without it or would you still are there people that still need help, i think joe, there are some great anecdotes on the ground. I have a friend who owns a private trucking business. I used it for several years. Its absolutely booming. Theres some noise making there because you have more points ever sale with online sales than you do when youre selling big boxes. The data is so strong its hard to argue with. Then on the other hand you have, obviously, the dropoff of unemployment insurance, the additions that have been put on. The answer is i dont know i think the most important thing to do is to have an open mind. Just like the inflation outlook where you got to be openminded to inflation but you got to be openminded to deflation i think you got to be openminded about the economy here, despite the moves on astrazeneca, i think the vaccine data is very encouraging i just dont know, joe but there are a lot of signs, a lot of commodities are higher than they were precovid theres a lot of stuff on the ground so were we to get a vaccine and confidence comes back i could see things work out. So if i was congress, i wouldnt be in a hurry to dosome great addition here. I do think its a little ridiculous they cant gettogether and give some help that we talked about in problem spots. But the answer is i dont know, joe. Stan, thanks. Thanks for that. I look forward to hearing your thoughts whenever were fortunate enough to hear it and gentlemen congratulations, chief, great 27 years and kwame, you got this not the pandemic but the future looks bright, you know with what weve seen demonstrated by hcz up to this point. Geoff, i think stan still has got some when push comes to shove he might go back to that well he already said he really believes in it so i think hes all softened up for you at this point. Gentlemen, thank you very much good luck. We want to see you again, hopefully we will soon thanks for the opportunity. Thank you okay, youre very welcome youre welcome good to see you guys we should take this opportunity to tell you about an upcoming event. Cnbcs inclusion in action forum examines how Business Leaders can take immediate concrete action addressing Racial Disparities in their organizations and create Sustainable Solutions to allow for equity and opportunity for all. Programmed in partnership with the executive leadership council. It will feature conversations with leader of several companies. Join us tomorrow, september 10th, and register at cn cnbcevents. Com inclusion well be right back. Clean is a feeling. Its the simple joy of washing your hands, without ever touching a faucet. Its the Little Things that matter. Thats why we create moments to feel kohler clean, every day. [ engines revving ] its amazing to see them in the wild like th shhh. For those who were born to ride, theres progressive. A lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Welcome back, everybody. With congress back in session our next guest can give us an insider us a view for hopes of another round of stimulus. Senator ted cruz is pitching his new pandemic relief egislation the recovery act this week senator cruz, its good to see you. Thanks for being here. Good morning, becky good to be with you. Lets back this up a little bit because for anybody who is watching, this is not fun watching the sausage get made as Congress Goes back and forth and the administration steps in from time to time too it sound like right now the democrats in the house are stick with this 3 trillion number that theyve thrown out. The latest i heard they would go up to 1. 5 trillion from the administration Mitch Mcconnell has had trouble getting a trillion dollars through the senate and so hes now got a new bill that will come out this week ate skinny bill we can call it, 500 billion what do you think about in terms of what we need, would you vote for the is in they bill . Well, i expect to vote for the more targeted relief bill but ill tell you well take it up this week i expect well get all or virtually all of the republicans. But sadly were going to get very few if any democrats, and the sad reality of how washington is operating right now is that we got less than 60 days to an election and i believe nancy pelosi and Chuck Schumer have made a political decision and their decision is they dont want to deal. They dont want to pass anything so i dont think that congress is going to end up passing anything between now and election day and the reason i think theyve done that is that pelosi and schumer have calculated if they maximize economic pain, if they have the most americans home and broke and unemployed and pissed off that benefits their party and helps joe biden. Thats a very cynical approach ill tell you what we ought to be doing we ought to be focusing on recovery we ought to be to concussion helping millions of Small Businesses that have shut down, helping them reopen, helping get people back to work. Millions are hurting but unfortunately a lot of washington democrats that are playing games instead of getting the economy moving again senator cruz, you have been a vocal critic of some of the things that are in that 3 trillion bill, things like ba banking perks for cannabis companies. Im with you but you have your own pet project that has been added on to Mitch Mcconnells skinny bill and thats making sure theres a tax credit for donations given to scholarship funds for private cools. I mean im with you in terms of paring this down and making sure this is only for relief. But critics in your own party who have a problem with that addition to Mitch Mcconnells bill well, you mentioned critics in my own party. Lets wait and see the vote. I think well get all or virtually all the republicans. You want to talk about responding to the crisis ill tell you all across the country. Families are hurting and parent with kids are hurting. We got two little girls who are 9 and 12 we have been Distance Learning since march. Its tough especially tough look with us we have a two parent household for much of the shutdown i work from home heidi worked from home we had our fourth grader at the dining room table. We had our seventh grader in her bedroom. Its not easy for two parents and for all the single moms, Single Parents struggling to hold on. What weve done effectively is millions of kids their education is on hold they are not learning the basic skills of reading, writing and arithmetic its a tragedy for these kids. Its a tragedy for those families whose parentscant resume work again. And so i am a passionate, passionate advocate for School Choice and the targeted relief bill that rear going to vote on this week includes my legislation to create a federal tax credit, 5 billion a year which even in washington speak lot of money, directly focused on expanding choices for parents who are struggling and its a dollar per dollar tax credit, to individuals, to corporations that make contributions to scholarship granting organizations, giving scholarships for k through 12. By the way thats for parents to send their kids to public school, private school, parochial cool their choice they can send them anywhere. That money can go to Public Schools if parents choose but what it gives is the parents the forechoo parent to choose the demonstrate will filibuster it because they are happy not only do they want people to be unemployed right now they want kids to be staying home. And, again, thats not the right solution we need to have an urgency in washington get people back to work. Thats why my recovery bill cuts taxes, cuts regulations on Small Businesses on job creators because we got millions of Small Businesses that are on the verge ever going out of work millions of families who are hurting right now. Senator, i guess back to my point. I would like to see these things get passed for the schools and Small Businesses as well i dont think anybody likes to see anything get hung up on the way. It sounds to me that no way something will get done at this point. Do you agree with that assessment you know, unfortunately, i do you know, if we look back over the last six months, in march and april and may we saw Congress Come together in a bipartisan way we Work Together passed a whole series of major legislation. The biggest of which was the c. A. R. E. S. Act c. A. R. E. S. Act passed the Senate Overwhelmingly the vote was 960. I voted for it Bernie Sanders voted for it. That is a lot of ideological diversity. The reason that we saw that bipartisan, it was the height of the crisis, right as the pandemic struck and congress felt a real sense of urgency what has changed in the months since then is weve gotten closer to an election and i believe the democrats have made the decision they dont want to cut a deal ill tell you republicans, the president has been looking to cut a deal from the beginning on this, but you mentioned the nancy pelosi bill. Listen nancy pelosi drafted a 3 trillion bill and it was never intended to become legislation working in the capital you learn the difference between something thats just a political show piece versus legislation that actually can pass, can pass into law. The 3 trillion she drafted she didnt talk to republicans she didnt talk to the senate. She put together a democratic wish list thats designed for them to campaign on. She knew full well it would never ever become law. What were going to vote on this week is a much more targeted relief bill. Tinting thing is the democrats agree with almost every element in it but yet they are playing politics and the reason is look next month were expecting tens ever thousands of airline furloughs. Ive spoken with most of the Major Airlines ceos. They are looking to furlough massive number of people what i tried to explain to the ceos look the democrats want to see fur loss in october. Why . Because they think people who just lost their jobs who are sitting at home will be angry and the normal instinct is to throw the bum out. That means bring in joe biden. Senator, do you support targeted relief for bail outs for the airlines and what do you think the american taxpayer should get in return if and hopefully when the airlines succeed and their share price and value goes up. Should we become shareholders of those airlines you know, i think it is in americas interest to have a strong and robust aviation sector an enormous amount of commerce goes through aviation. You look at aviation much like restaurants and hotels their businesses have been destroyed by government. It is the government thats stepped in and shut them down. Its not through mistakes they made now the reason the government did so is we had a Global Pandemic thats serious, thats dangerous and we need to continue focus on protecting those who are vulnerable but at the same time we cant utterly and completely destroy our economy and so i think if a bill were moving you would see relief for airlines included but i think the democrats want the furloughs. I think stopping the furloughs in october, the democrats view that as a political mistake. I think our urgency, so the recovery act i introduce today it suspends the payroll tax for 2020 what that smaens for every employee in america you get an immediate raise. Your salary goes up so that you can go home and provide better for your family. Also means for the employer the cost of hiring employees goes down thats a strong pro growth incentive to hire employees back not only part of the recovery act says that the next 10,000 that you earn in 2020 is entirely taxfree. Its free of income tax. Why do you do that because as you know and economics what matters is the marginal incentives of the next dollar youre earning. Weve seen 51 million americans lose their joins the last six months we should have a focus bipartisan urgency on getting those folks back to work senate, on the payroll tax holiday, i completely appreciate the idea of putting more money in employees pockets, but its unclear that its actually going to put more people back to work insofar as companies are only going to hire more people a, if theres more demand. But this is still a Health Crisis so if youre a restaurant that cant operate indoors, whether you have a payroll tax holiday or not it doesnt matter so let me make three points going in reverse order starting with the last one you made i agree its a Health Crisis one of the reasons the recovery act has strong incentives for testing. Has tax credits for employers to provide weekly testing for their employees because one of the ways people will go back and feel comfortable going back is if they are confident they are safe and not endangering their health and safety and families we need to lean in vigorously on testing, testing and more testing. People are going back to work unless we reopen the economy. Were seeing at the state level, democratic governors democratic mayors who are playing politics. They are shutting the economy down i want needs to stop we need to let people go back to work and starting with the very first point you said you said gosh, if you lower the marginal cost of employees youre not going to see more employees, you and i both took economics. You understand supply and demand if you reduce the price youre going see demand go up and in this instance what i want to do is incentivize Small Businesses and employers bringing their employees back as quickly as possible theres got be consumer demand business has to have a reason to have them back but i want to reduce the cost for the employers because, listen, theres not enough money in thebuilding behind me to shovel trillions at this problem and fix it the only way to fix it is to unleash the economy. Our economy in january of this year was booming at historic levels lowest unemployment in 50 years. We can get back to that but not if government keeps man dating that everything stays shutdown until election day and heres the prediction, by the way if god forbid joe biden wins in november, the week after the election all of the politicians saying shut everything down all of the democrats i predict they will suddenly say okay everyone go back to work, everyone go back to school, everything is fine this is not to say this isnt a serious problem but it is to say they are playing politics with peoples lives and life savings and thats not the right thing to be doing. Senator, can i just to push back on that cynical view of why elected officials are taking the stance they are take obviously there are some Democratic Senators particularly in areas that were already hit hard by coronavirus back in the spring who are proceeding more cautiously i dont know that any of them would be doing this to try to say they are doing this for an election for the president coming down the road because they all have their own constituencies that are very angry. I watched it play out here when it comes to school reopening. I watched it as restaurants and businesses open. Its not an easy stance for politicians to say were not going back tropg people are sick of the lockdown. They not taking these stances because they are playing politics necessarily they may be worried because theyve seen this play out before there are a lot of people that to see schools reopen, businesses reopen but some of that, this is a chicken and egg game where youre waiting for congress to approve known give the schools the things they need so they can open safely. Or youre waiting for congress to give the Small Businesses loans so that they can get the protections that they need to reopen their business safely. Some of this is just a chicken and egg game cant open it safely until the money is there to do this the right way. Becky, i dont think its overly cynical to expect politicians in washington, particularly career politicians who have been here forever will behave politically on the eve of an election, particularly in this hyper polarized partisan environment were in beyond that, i think the democrats are making it its not a crazy political calculation that they believe they will get cover from much of the media who will blame whatever happens on donald trump no matter what so this week, youre going to see the democrats filibuster targeted relief. Relief thats provide regular leave to Small Businesses and families and tax relief and relief to parents who want their kids to go back to school. Democrats will filibuster. They will block it most of the press coverage will be putting the blame on donald trump. Now thats just ridiculous thats not, in fact, if youre actively filibustering something you dont get to at the same time claim you are supporting it and i think democrats are playing games right now with peoples livelihoods and its really wrong by the way ill say my home state of texas, you look at texas. A lot more texans are going back to work than other parts of the country and were seeing benefits texas is still too shut down we need to open up and let people provide for their families use common sense practice social distancing but dont kill the economy senator, real quick before we go you made a comment, you said god forbid joe biden wins and you talk about playing politics. I would love to hear your response to the critics who would say that the president has played politics with the pandemic from the beginning. You know, youre advocating for testing right now. There are a lot of people arguing for testing a lot earlier than this and the president was actively publicly talking about how he wanted less testing. He was publicly talking about how he didnt want people wearing masks. He was not trying to model that as a behavior. How do you react to that when you talk about tissue of playing politics look, i can tell you ive been calling for more testing and more testing and more testing from the beginning of this pandemic. This pandemic is serious treating it seriously is the right thing to do. I can tell you back in january i urged the president to shutdown air travel into and out of china and the president did the right thing. He shut down air travel into and out of china joe biden immediately attacked him and called him racist and xenophobia it was the right thing to do i chaired a hearing where i heard from customs and Border Patrol saying shutting down that air travel slowed the spread of the virus. It was the right step to do. From the beginning ive been calling for more and more testing. Its why my recovery act includes very substantial tax credits to help employers provide testing on a wide scale basis. But the focus of the testing listen we know this virus doesnt impact all communities the same we know if youre very elderly, have Serious Health ailments this virus can be deadly for young people, healthy people, the mortality rates are much, much lower and what we have done and what were seeing too many politicians continue to do, is strangle our economy rather than letting the engine of the American Free enterprise system help people get out of this great depression. Senator cruz, thank you for your time. Great talking to you always a pleasure. When we come back, can video makers survive as more workers go back to the office and spend less time on their couches well speak to Strauss Zelnick s p is higher this morning faang stocks have been slammed but the drop is affecting tech names dominic chu looks beyond the carnage. Reporter over the course of the last three trading sessions the biggest s p 500 companies along with that surge of electric car member tesla lost over a trillion dollars in market value as you can see behind me. Just for perspective thats like losing an entire Google Parent Company alphabet from the s p in three trading days that means outsize return declines as well thats the mega cap side of things now take, for example, whats happened with nvidia its up 3. 5 right now over 140,000 shares of volume premarket the biggest computer chip maker in america right now has lost around 17 of its value since closing at a record on september 2nd. Thats 60 billion worth of market value shaved off. Remember it gained over 190 from the pandemic low to that september record high. Then you got software make i adobe. Also up 2. 5 , roughly 6,000 shares premarket. It lost 14 since september 2nd. Thats 34 billion in value after rising 88 from the pandemic lowto its recent record high. Then theres a relative newcomer weve been talking about it a lot. Zoom video 70,000 shares of volume. Lost 24 of its value since its record close on september 1st which ends up being around 30 billion of lost market value but, remember, it was a stunning 300 plus run so were seeing a bounce back in the premarket for these beaten up tech names. The question is whether it can be sustained or not. So just check all your numbers from now on. Can you believe these moves . There must be times where okay i got to check that. I know you do. Youre absolutely right, joe. I double check these numbers i triple checked them. I cannot believe that a company could lose say 50 billion in two or three days, let alone the hundred or 200 billion some of these guys lost in that same time span. Its like monopoly money throwing billions and trillions around like it was nothing 2020. And anything can happen. You know what . Its only september. Theres not much more going on for the rest of the year you can relax. No volatility will die down right into november, i think its got andrew drinking coronas during the show. Thats how crazy 2020 has become where is the lime couldnt find one its early in the morning. It is im looking for a white fang white claw he were joined last hour by longtime hedge Fund Developer Stan Druckenmiller he had a colorful way of describing what he has seen. I think the merging of the fed and the treasury, which is effectively whats happening did your covid set as precedent that while weve never seen since the fed got their independence, and its obviously creating a massive, massive raging mania in Financial Assets and as you pointed out joe it has not spilled over to main street. Joining us now to talk more about the markets, paul hickey, cofounder of the spoke Investment Group paul, did you hear most of the body of stans comments or is that the first you heard were you watching . I heard much of it. I think, you know, the key takeaway and what every investor should be focusing on is to keep an open mind we dont know what will happen Going Forward. I do think looking forward, you know, were worried, dom was talking about the carnage in these big cap tech stocks. While they are such a large weight in the market they tend to move market theres a lot of other stocks out there for the individual investor you dont have to be preoccupied what the market is doing, focus what individual stocks are doing. You go back to 2000. We made a lot of comparisons 2000 the average stock in the year leading up to the 2000 peak was actually down and well into what was a bear market. From march 24th the year after that the average stock in the s p 500 actually saw a gain in that year. It was just a large gap tech stocks i think Going Forward what were looking at here is to focus on, as the economy picks up steam, these large cap tech stocks have benefitted from the shutdowns because they were the only growth in town, may see some rotation into sectors of the economy that will benefit from economic growth. So you look at theindustrials, you look at some sectors, some parts of the Consumer Discretionary sector and even the financials which were hit very hard during the initial lockdown of covid. You want to take a stock by stock approach and look at those things rather than focus on the market unless youre investing strictly on index funds you shouldnt be preoccupied what the market is doing at all so, paul, i guess we do focus a lot on short term and even intermediate term and especially this year when we talk about 2020 and everything thats happened so its hard over to think about three to five years. But one of the things that druckenmiller said was that the after effects of the fed or even the, all the congressional spending that were seeing with coronavirus and the worries about inflation and actually challenge on deflation as well will make for a tough operating environment in the stock market for the next three to five years and that we normally dont hear. We hear about the future is always, you know, we see technology and theres alternatives in fixed income we always hear long term were bullish. That didnt sound that bullish how do you feel about five years out . Yeah. Were in on unchartered territory. Were dealing with the pandemic. What will happen Going Forward i think over the long term we have had, you know, very strong returns for the last ten years in the market even with what we saw in the first half of this year so history suggests that future returns arent going to be as great as that. That being said, looking forward and over time i think the stock market has historically provided a better return to investors than treasuries have and bonds have over time as long as you were willing to hold for a certain amount for an extended period and not focusing on the short term i think for an investor with a long window, equities will certainly do better and especially in an environment where we may see inflation run hotter than normal, i think you want to be focused on assets rather than cash or fixed income all right, paul thanks we appreciate it thanks for responding quickly. All right. Youre welcome becky. Thanks, joe when we come back more from the news making interview that weve been bringing you all morning long thats with netflix ceo or coceo Reed Hastings take two with Strauss Zelnick. Hell join us next on gaming during the pandemic. And what happens when people go back to work and cool. Right now you can check out shares of slack. That company Beat Estimates on top and bottom lines for its latest quarter but said its growth rate slowed thats responsible for a 17 decline in the stock this morning. Well be steaking with Stewart Butterfield tomorrow at 8 00 a. M. Right here on squawk box. Stay tuned well be right back. This was an unexpected bill not covered by my health insurance. And this is the aflac duck who helped me cover it. Aflac. These are all the cab rides to my physical therapy. And aflac paid me directly to help. Aflac. What he said. And this unexpected bill is from. The twothousanddollar specialist. Thanks. Aflac. When youre sick or injured, aflac is there. We can help with Expenses Health insurance doesnt cover. Get to know us at aflac dot com. The video game business is booming as americans spend more time at home shelterinplace stocks are sharply higher in march when the pandemic was declared. Total Consumer Spending reached Second Quarter record of more than 11 billion joining us right now for a squawk exclusive is Strauss Zelnick. Strauss, good to see you thanks for having me. Nice to be back. Lets talk about where things stand right now. We know that as people sheltered in place, things like video gaming, usage skyrocketed, went off the charts i wonder if you can tell me about engagement with your customers and if they turned down at all as people have gone back to work and School Started again. Well the first thing is we dont want to celebrate these times because they have taken such a terrible toll on people all around the world and continue to take a terrible toll on people here in america. That said were pleased were able to provide entertainment during these times when people have been stuck at home and we have seen that reflected in engagement and in our numbers. So, for example, we had another record and will gross over a billion dollars. Sold over 14 Million Units grand theft auto sold over 5 Million Units. Will sell another record this year seven years after its launch the list goes on we see it in engagement and revenue and cash flow for the company and reflected in the stock price as well. What has happened to engagement, though are people spending many more minutes with you every day more customers coming in from what i understand, numbers for Similar Companies have really been kind of hit through the stratosphere on how high those numbers have gone. Engagement in our mobile title is up 50 to 100 . Weve seen people spending more time with our titles and thats translating into spending and into unit sales as well. So we are seeing that. I think the question is now what happens is people are able at least in some parts of the country return to work we do believe that engagement will continue to be stronger than it was before the pandemic because we think theres been a systemic shift from linear entertainment to Interactive Entertainment as people realize its not just a great experience, great stories, great characters, great graphics you can engage with friend and communities in realtime while you play around the world. When people have been constrained socially thats been powerful even when less constrained it will continue to be powerful weve seen new players come in and lapse players return thats what i wanted to get to we look at all of these stocks that have done so well the we is will it last there have been so many things, i think new users for Online Banking and those people who have figured it out and who are new users are very likely to continue their online bank episcopalian as the pandemic goes you think you will continue to outperform maybe not to the levels you see now but engagement will be stronger than it was before the pandemic what would you anticipate . 10 or 15 or 15 increase over what you had seen prepandemic its very hard to know. As a practical matter what have we done about our guidance we have not adjusted up our guidance for the second half of fiscal 21 because we dont know what that will look like ane anecdotally we expect it to continue its on the order of 15 even when the world really returns entirely to normal which i hope and believe that it will so i dont think its 50 . I think its 15 to 20 none of this matters unless you make hits and our goal is to be the most creative and innovative and Efficient Company in the business thats what we strive. How has it been operating when some of your employees have been working from home how has it been in terms of trying to turn out new content you can deliver quickly . In that area weve been extraordinarily lucky. Indeed we were prepared. We have actually planned a remote work from home day on, i think march 12th then in turns out oops we all have to work from home within a week we had more than 5,000 of our colleagues all around the world up, running and highly productive. Were able to measure productivity because all of us do our work on computers at take two and our productivity if anything has been higher during this time. Certain areas are constrained. For example motion capture were now back doing motion capture in bubbles for peoples safety and security. We havent missed a beat in terms of production. I am of the view, those being able to collaboratate physically in person is really important. To business process and Creative Process and im looking forward to the time when its safe and secure to do that. Strauss, you said earlier that the market share that youve been stealing, engagement youve been stealing from customers is coming from lynn after entertainment. Who do you think youre stealing that from . Well, look the pie continues to grow. The media day continues to expand and linear entertainment has grown during this time as well weve grown more rapidly its less about stealing share and more as the media day expands which remarkably continues to do, we can grab a greater share of that day as long as we put out products that people want. So far weve been able to do that with some of the most powerful and highest grossing franchises in the entertainment business i want to thank you for your time today good seeing you and we hope you come back soon thanks for having me. A lot more squawk ahead. How much additional pain could investors expect from this latest bout of market volatility well last hour longtime Hedge Fund Manager Stan Druckenmiller said the market is in a raging mania. Well talk about stans market call but next Reed Hastings weighing in on tik tok, china and the tech stocks. More from our special interview with the cceo ois on the way. Stay tuned youre watching squawk box here on cnbc r any amount you che instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. Im a sustainability science researcher at amazon. Climate change is the fight of our generation. The biggest obstacle right now is that were running out of time. Amazon now has a goal to be net zero carbon by 2040. We dont really know exactly how we are going to get there. Its going to be pretty hard. But one way or another were going to reduce our Carbon Footprint to net zero. I want my son to know that i tried my hardest to make things better for his generation. I feel like were know tforglet me check. Ing. T xfinity home gives you peace of mind from anywhere with professionally monitored Home Security built around you. No, i think were good. Good. So when youre away, you dont have to worry. The tent. We forgot. The tent. Except about that. Xfinity home. Simple, easy, awesome. Hey look, i found the tent and, see, its safe. Call, click, or visit a store today. Welcome back to squawk box a shake up taking place at netflix management team. Bela bajaria named new head of global tv for the streaming giant, and to say she used to be a comcast employee back in the day. But meantime longtime netflix executive Cindy Hollands who built Netflix Original programming could be exiting in a memo the ceo said he wants to simplify the way the content team operates. Netflix is wellknown for its culture and candor and the subject of the new book by the companys cofounder and coceo titled no rules rules. I spoke with hastings yesterday afternoon and asked him about the title of no rules rules and now the title is thats supposed to work in this day and age. Were in fundamentally dedicated to employee freedom, because that makes us more flexible and weve had to adapt so much back from dvd by mail to leading streaming today. And if you give employees freedom you got a better chance of that success and the book is all about the subtlety of how do you give freedom and not have chaos. One of the most controversial things do you is this idea of keeper test. As part of that keepertest i say your coauthor said that this really amounts to almost like the hunger games which is to say the keeper test is if you wouldnt if youre thinking in your head would i keep this employee and if you wouldnt youre not supposed to keep them thats a pretty high bar it is you know, we really model ourselves on professional sports and if youre going win the championship, you got to have incredible talent in every position thats how we think about it we encourage people to focus on who of your employees would you fight hard to keep if they were going to another company and authors ones we want to hold on to. I dont know if you read your own interview, an article that maureen dowd did over the weekend but in it she quotes Janice Janice said netflix has a culture of arrogance and fear and at one point said now only now are you not too big to hate. What did you think of that well, she was talking about the hollywood perspective of our competitor against us as an upstart. And so its natural for the new kid in town, thats netflix, you know, to be threatening to the viacoms, the ddisneys, to the f. I got into a conversation with hastings about tik tok and its implications with china. Tik tok has done a phenomenal job on short form entertainment. So it shows theres always room for innovation i would never count anybody out. Its a wideopen market. And lots of new surprises coming given you just mentioned tik tok, there is a real question about the future of tik tok, but more importantly the future of the relationship between the United States and china. A market that youve long talked about trying to get in im curious what you think the implications of whats happening with tik tok may or may not be on your ability, netflixs ability to enter that market in the future well, we got turned down by the Chinese Government several years ago. And weve not been spending any time on china in the last couple of years theres so much opportunity for us in asia, rest of asia, india in particular, korea, japan, indonesia, then all through europe and latin america were focused on that. Its a pity from a long term perspective of the u. S. And china disengagement. But theres nothing we can do about that instead were to concussion on ent focusing on entertaining everybody else another topic why step down a year and a half ago from the board of facebook. Ive benton board for many years. So i just felt it was time we both compete for a lot of the same employees thats the primary competition so i felt it was good for me to step down. In retrospect now that you have a seat on the outside of the ring do you have a view about the role of social media and the role of facebook when it comes to the elections and southeast anxiety around that right now . Well, i month that cheryl and mark take their responsibility very seriously its clear we had a difficult situation also at twitter, at youtube. You know, these are new technologies and, you know, new technologies have some negatives and some positives and the trick is to constantly be learning how to minimize the negatives and increase the positives we also discussed the remarkable run for faang stocks. I asked hastings what he thinks about when he looks at the markets and in particular the valuations of tech stocks including netflix. From what i was reading, softbank sort of driven. Im not sure, but, you know, i really focused very little on things i cant control focus almost entirely on our employees, our customers, our series, our films because thats, again, an area i can have some impact do you buy stocks, by the way . Index Fund Investor for at least a decade thats it so no tesla for you . Theres netflix and then passive. So im very barbell. You can catch the entire conversation with Reed Hastings on cnbc. Com and also on the squawk pod later today including his thoughts on how covid may become part of hollywoods story line in the future becky. Yeah i was going to ask you just in terms of the amount that they are spending, was it 6 billion or something that they were planning to pour into new and original content how did that get changed by what happened with covid wshutdoith shutdown of things and are they ramping up its close to double that number he says theres going be more production that will be available for viewers in 2021 than there was in 2020 even with covid. So, you know, i know theres lots of questions whether there will be enough programming even by the way new york city, southeast productions are starting to get up and running so well see i think the next couple of months there may be a lack of new production for viewers going on to some of these, some of these networks im sure reed would say theres still a lot coming to netflix but i think or at least my hope from what it under is come 2021 there will be some more stuff for view stories watch and binge on cross our fingers were desperate for new content at this point. Really interesting stuff great job. When we come back, what the selloff in technology over the past few days means for your portfolio. The nasdaq closed yesterday in correction territory getting there in three trading sessions. Market cap losses from some of wasss biggest names stretched past 12 figures. Thats right use your fingers to count these nuls check out the futures this morning. Things are in the green. Dow futures indicated up by 238 points s p is up by 35. Sd inaaqs up by 150 points stay tuned well be right back. The 2020 president ial election is less than two months away a new cnbc Research States a survey takes a close look at voters in battleground states and issues important to them eamon javers joins us more with more on that front what do you see . Reporter what were seeing is a stabilizing lead for joe biden in terms of the horse race take a look at the national map. Were looking at six battleground states. Were surveying likely voters in those States States that will make a difference and voters who will make a difference in those states once again joe biden has a lead in all six of the battleground states with a margin much 49 to 45 in arizona, 50 to 44 in wisconsin. 49 to 43 in michigan 4947 North Carolina and 4946 in florida so biden runs the table there. It translates in to an overall lead of 4945 for biden over trump. Thats been remarkably stable during this summer despite the political conventions, the National Protests that weve seen these numbers are really hardening. One statistic that is trending in trumps direction is the rebound in oatism about the economy which climbed back up to 50 in september so thats something that can be beneficial to an incumbent president is that optimistic number on the economy. Although theres a raging Global Pandemic, Intense National protest, the Biggest Issue for voters in swing states is the economy. At 43 followed by political corruption at 38 , then covid19 at 35 , law and order at 29 and racism at 27 so the economy once again the deciding factor in a president ial election. Is there anything different about it this year i mean, i have a hard time thinking that any of the things weve learned in the past necessarily will count in a year where weve seen such upheaval, shutdowns of the economy, so many people whohave kind of been tossed and turned around by this yeah. Look whats remarkable to me is you look at this list of issues. The economy at number one. You know that goes back to bill clintons 92 campaign its the economy, stupid the economy has been a dominant issue forever. With this year with these titanic events happening the economy is still at the top. The big difference is how much the economy is intertwined with tissue of the virus. Can we he restart the economy, get kids back to school. Authors economic issues. People are really feeling the uncertainty there when they say the economy is now their biggest worry, far ahead of the virus. One more question i hate to put you onthespot. Do you know what the margin of error is looking at some of those state race, in the swing states that matter so much, states that are in play its gotten closer some of these are close to the margin of error. I dont have the exact number. Its narrow. North carolina toggle back and forth a little bit over the summer but right now you see biden, you know, sort of slof solidifying lead 4943. Some of these others, North Carolina is really tight ueno at 4947. So, there is a margin for error here of course, the big question this year in the polling that we dont really know the answer to based on 2016 is, is there a quiet trump vote out there the Trump Campaign will tell you that there are people who support the president who wont tell pollsters about that, wont respond to pollsters call or lie to pollsters and have one up on them when they call. So how big is that effect . You know, we dont know because its by definition unmeasurable. But there presumably some shy trump voters out there and if thats enough to make a difference thank you good to see you. You bet you too the tech stocks led the market higher. Now leading it lower for the last couple of session nasdaq in correction territory just three sessions, three sessions after seeing a record close. Thats the fastest ever. Josh lipton joins us now with a look at some of the biggest decliners and some of them are the biggest names, josh. Reporter thats right, joe this tech tumble continues lets start with apple closing below that 2 trillion market cap now trading nearly 20 off its all time high. A slow start to september. Thats following five straight months of gains. Also remember just how far and fast that stock has come still up 50 so far this year. Apple is hosting an event on september 15th usually this is when ceo tim cook would take the stage and introduce lots of new products but this year analysts do think the focus will be on the watch and ipad with the official iphone launch perhaps coming in october. Then theres the smh, the etf that tracks the chips. Surge on that work from home trend now trading about 10 off its most recent high among the names getting hit, applied materials, qualcomm and nvidia important event coming up for chip investors, the election and questions how that could impact u. S. China dynamics. Big Software Names are not unscathed. The etf that tracks that subsector is about 10 off its record high. Microsoft, sales forks adobe and zoom coming under pressure zoom down 30 now from its all time high reached on september 1st. Back to you all. Josh, thank you i wish we could see the future who knows. Three days and up a little bit today. Well see whether thats the beginning of a come back thanks, josh lipton. Becky. Thanks when we come back jim cramers first take on whats shaping town a big day for the markets and not so evident benefit of stocks latest slide. Tomorrow on box box doesnt miss honeywell ceo miss honeywell ceo stay tuned wlle ghbae brit ck you should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. I feel like were forglet me check. Ing. Xfinity home gives you peace of mind from anywhere with professionally monitored Home Security built around you. No, i think were good. Good. So when youre away, you dont have to worry. The tent. We forgot. The tent. Except about that. Xfinity home. Simple, easy, awesome. Hey look, i found the tent and, see, its safe. Call, click, or visit a store today. America can be better than it is and the only way we do that is that we have to roll up our Shirt Sleeves and we will to really work at this really hard. That was geoff canada, president of the harlem childrens zone joined by billionaire investor and philanthropist zuk a miller. There are times when we are not sure where to go, advertising or how to spend the money to try to solve these things and there is a model at harlem childrens zone where it has worked tru druckenmiller has been one of the driving forces behind it a couple years ago he was the biggest philanthropist in the United States, 705 million i think back in 2009 or so but its expensive jim, what do you think of Charter Schools . I asked them and they point out harlem childrens zone is not just charter zones, most of the kids are Public Schools. I dont know its such an intractable problem. Druckenmiller is amazing, committed throughout thick and thin and a person who is inspirational to a lot of people i have felt that the best thing to do is support the Public Schools because the Public Schools particularly in new york are not that good. My wife went down the block and wrote a check and give it to the principal of Public Schools. Wow, now we can get some books and some paper i follow stanleys lead. Hes been true north for such a long time, that was a great interview and i think more people have to think long and hard about schools, but also giving jobs. The governor from rhode island who is a venture capitalist before, she just corralled Big Companies and said, look, the people in our state may not have the credentials but they have the comp thens ray theen and salesforce are hiring people. The more druckenmillers we put on, you have to give now dont mail until youre older. I may disagree with him at times about the market but who cares the big issues hes the best. I mean, its you know, you hear about reparations, i dont its such a big number, but to take a poor neighborhood and make it middle class for kids and thats what harlem children zone does, from when they wake up in the morning, before school, during school, after school, that night and thats expensive i dont know any other way i dont know any other way to do it it would be cheaper than a 14 trillion move, but whatever we do it is going to be hard work, roll up your sleeves and these guys have a model for it and i think its moving to other cities i think the more that we can bring it to peoples attention the more we need to do that. We should be replaying ray mcguire from citi, we have his comments over and over because hes inspirational, too. There are people out there who are committed, its weird, but the government isnt big enough to help or doesnt want to the people have to help. I think that business is the greatest platform for change stand druckenmiller, ray mcguire, these are people who are using the platform of business to change lives its such a great thing. Joe, its new. People didnt do that, of course, stan has done it for years but now people are doing it left and right. Jim, thanks we will see you in a couple minutes. We will have a lot more on tech and Everything Else thats been happening. Thanks, jim. We will see you in a little while on squawk on the street. Andrew thanks, joe meantime, weve been talking all morning about the big selloff in tech youre looking at the markets getting a little bit better this morning but other sectors have also been getting crushed. Look at the financials and energy yesterday joining us right now is jim paulsen chief investment strategist for the luithold group i read your report recently that looked at where we are now but also looked at history and where we may be going. I know you have an optimistic take but i want to throw at you a little bit of the conversation that we had earlier with stan. He says we are in a mania right now. I dont necessarily agree with that. I think that, you know, theres been this idea, theres been this big disconnect between wall street and main street i think there is a pretty good evidence of a connection here. You know, weve had on main street we went from a minus 32 real gdp growth to i think in this quarter probably plus 30 weve never done that before we went from losing 22 million jobs in two months and then regaining almost 11 million of those jobs in the next four months weve never done that before weve had huge bounces in retail sales going back to record highs and housing on fire. In other words, there is been an incredible bounce on main street and thats exactly what the stock market has done as well. Jim, but none of that has been, quote unquote, organic it has all been the effect of the Federal Reserve which has also never done what its done, the u. S. Government has never done what its done and i think the argument that Stan Druckenmiller is making is that there will be a hangover effect to all of this spending. Well, i think first i would say this bounce were having, i would say that the collapse was not organic the collapse was artificial because all we did was turn an off switch on the economy and then a couple months later we decided to turn it back on and thats very artificial it wasnt because Balance Sheets were bad or it was more just a recession by proclamation and then a recovery by proclamation. A big part of that jump i dont think was organic, either. I agree that the policy stimulus is going to have big impact and i think it hasnt even started i think next year it takes about a year lag to really have impact and i think, andrew, my view is its going to create a boom. Thats my best guess i think we are going to have a big year in 2021 with growth and were seeing some of the evidence of that it amazes me that we are talking about the need for more stimulus in a quarter where we are growing at 30 of real terms and weve created 2. 6 million jobs on average in each of the last four months. So you would not advocate jim, you wouldnt advocate for any more stimulus . You think if theres no more stimulus thats fine i think were going to do okay i think weve added more stimulus already than we added anywhere close to what we added in the 80, 82 double dip recession, in the dotcom collapse, in the financial crisis of 09. I think its going to work, andrew, it just takes about a year and next year were going to see i think some pretty colossal Growth Numbers in the economy. Okay. Jim paulsen, always good to see you to get your insights and your perspective and see a little bit of this back and forth with two people i respect to have very different views about where the markets are headed. Thats right. I want to thank everybody joe and becky, cheers. Cheers to you. Corona, corona, corona. Youre nursing that thing youre nursing that thing. Take a drink take a drink youre nursing it. Squawk on the street begins right now. Tap water good wednesday morning, welcome to squawk on the street, im Carl Quintanilla with jim cramer, david faber another wild overnight in futures as you know, stocks will try to get back some of the worst three day stretch for the s p since june a lot of news on lululemon, slack, tiffany and of course the vaccine makers our roadmap begins with the tech tumble the nasdaq now in correction territory, but futures do point to a bounce. Tiffany shares down more than 10 ahead of the bet this has lvmh tries to get out