Good morning. Welcome to squawk alley. Sarah eisen, mike santelli. Joining us this morning, farhat manju. And also jason calicanis, ins e inside. Com founder. Shares hitting alltime highs this morning. Third record in a row. Jeff bazos speaking at the companys shareholder meeting. Now is not the time for complacency. There is no rest. We can not rest on our laurels. The competition is as fierce and challenging as ever. Speaking of not resting, amazon plans to open the door of a brand new bookstore in midtown manhattan on the site of what was once a borders book star. Farhat, one of the questions is, are they trying to make money . Are they trying to rub it in to these book sellers that they helped put them out of business . Whats the goal here . I dont think they are trying to rub it in. They are trying to make money. Thats what they do, sometimes. Stores are good for discovery, looking at electronics. They can try out lots of experimental things with the check outli list store they are trying in seattle. Amazon, they are most experimental of the Big Companies, the most willing to surprise and this is another one of those surprises. I wouldnt have guessed a few years ago that they would have opened a huge Retail Operation and they are. Im looking forward to seeing what happens. Jason, this cant be about selling books, right . If it were about selling into some category, wouldnt they be selling clothes or something. Isnt this about the ecosystem going, you can buy an echo or a kindle . Farhad issing wron th wrong experiment. It is a deliberate program, online retail. There are a number of people that havent become a prime member and havent played with the kindle. This is amazons way to do onramp retail and relationship retail. If you look at what apple did with their stores, you come in, hit the genius bar. You dont know how to use the icloud service or photos and you are not sure what apple tv is. They educate you. It services the people who are very specifically fans of your product and deepens and strengthens that relationship. It also serves as an on ramp to your entire ecosystem. If you look at amazon prime, if they were able to john board two or three dozen People Per Day in the store, which seems pretty doable. They can offer discounts on the books you get there at that moment in time. You are talking about generating tens of millions of dollars per store if you could convert 50 people to amazon prime. We all know the ltv of an amazon prime member is low thousands of dollars. Consumers are embracing physical books again, which is a counter trend to the social media cacophony of idiots. Peel want substance so they are buying books. This is an occasion to remind everybody that sears started out as mail order and became nothing but physical. We dont think thats the case. It is a reminder that even though it looks like an exception on the retail strategy of amazon. As a company, they have massive amounts of physical assets. They have huge warehouses. It is not a little virtual business that runs on software alone . Oh, yeah. Amazon is a Huge Software company but a massive presence in the world physically in a way that google is not and facebook is not and microsoft is not. They have real stuff in the real world and they know how to manage it. I mostly agree with jason. The reason i start it an experiment, a lot of things in amazon start out as experiments. They try stuff out and they are willing to shut things down. Im not quite convinced that they are going to have hundreds of stores at this point. It is still at a point where they are testing out dozens of stores and seeing how it works. It could end up huge like aws or something. It could also be like amazon fresh, which they have run for a long time in select cities but havent made a huge thing at this point so far. It will be really interesting to see if they can beat some of these brickandmortar stores. Another rough morning for uber. They say they plan to repay millions of dollars to new york drivers due to a calculation error. Another key executive exited the company. This time, it was ubers general counsel for europe, middle east and africa. Then, there is this, ham iish douglas says he thinks the Ride Hailing Service has less than 1 chance of surviving over the next decade from his comments at the annual stockholders and Financial Advisers conference in sydney. It is constantly losing money and its Capital Raising strategy is a ponzi scheme. We have reached out to uber for comments. Jason, you know this one is going to go to you. A ponzi scheme for investors . Respond. I think it is kind of laughable. If hamish would like to make a long bet with me for 10 million, ill bet my entire net worth that uber will be here and thriving in ten years. It is a silly comment. You can replace uber with amazon or google or sffacebook and tha will be as laughable. On the issue of new york drivers, i put this in the bucket of good news for uber. If you look that the case and that instance, you have uber making a mistake on calculating each market has a different calculation of how they tax and each service has a different tax. What uber did was they made a mistake in one market on one service and they quickly are making it right. I put this in the bucket of good Corporate Citizenship and owning a problem and being transparent about it and working quickly to solve it. A company thats reached tens of millions of dollars in bookings, it is laughable to say it is not a company. The hundreds of thousands of drivers who collect checks would differ from our friend from down under. It is getting close to the point that uber is taking so many hits and not dead yet. We just had linked in saying people really want to work at uber despite all these negative headlines. The alternative is lyft. They havent overtaken them. Do you think that uber is in this for the long haul . It is in it for the long haul. The question is whether riders and drivers stick with them. Jason could be right. This could be a completely innocent mistake in new york. I am inclined to believe it is an innocent mistake. The trouble for uber, there is no sort of no one is willing to give it the benefit of doubt. There is no massive good will for uber. Thats the difference between uber and amazon and google and facebook. We all know these other companies are Big Companies an they make mistakes and sometimes they may not do things in the interest of consumers. Generally, we sort of like give them the benefit of the doubt. They are like, well regarded by customers. I think i dont recall another tech company that is as big as uber that is so vilified by even loyal customers feel kind oficy about using it sometimes. I think it is fair they have had a rough year. When you have this much bad news, i think people are kind of piling on now. What it is doing is making the Management Team more resilient and focused and it has created a massive culture evolution at the company. Based on my knowledge, i have a little bit of inside knowledge. I am more bullish on the company and more bullish on the management than i have ever been. When you are getting this kind of microscope on you, it really makes you focus. If you look at facebook, they went through some really tumultuous times, including the largest fine in the history of the fdc and a 20year audit. This isnt unprecedented. Microsoft was the most hated company on the planet for a period of time when they were going through their antitrust. Whats important is how does the Management Team respond . They are getting there. I think they are getting there and making progress. Im super bullish and massively conflicted. Yes. Thank you for reminding viewers and listeners about your investment in uber. Finally, you had an interesting column on what you called the frightful five tech companies. We call it fang, apple, microsoft, facebook, amazon. If you had to, which would you drop and in which order . What did you learn from this exercise . I learned a lot of people would drop facebook first. I am not sure whether to believe them. Almost 60 said they would drop facebook first. I dont know if they are just saying that and they are completely addicted to instagram and facebook. Google won for they would drop that last and google and apple and amazon were pretty close there. I can believe that. I would drop google first. It has the most analogs. There is Something Else i could use. Probably the last one i would drop is apple. Because you love your consumer products. Yes, i use them every day. John is right that google has microsoft and apple as contemporaries. It is easy to give up google. When the majority of people saying, they would give up facebook, thats like lena dunham or Rosie Odonnell say they are going to moving into to canada. Completely fake news. Microsoft, maybe. I could get another word document. In the corporate environment, microsoft is pretty indispensable. Do a brackett where you put them heads up. Would you give up amazon or facebook. Google versus amazon. You give up google. I think amazon wins the day in a brackett system. They have the most unique product. They are the last ones i find it the hardest to give up amazon. Yes, me too. We would have no way to get toilet paper. We have to leave it there. Farhad manjoo. Jason cal ac jason calacanis. Our Kayla Tausche is in d. C. To set that up. Good morning. This is the score for the House Health Care bill that passed three weeks ago by just four votes. It is going to be a Material Development for the path forward on Health Care Reform and the overall republican agenda. The last time the cdo weighed in on the most recent or i should say the previous rendition of this bill, they showed that the house version at that time would see 24 million fewer people insured but premiums falling by 10 . The deficit reduced by 150 billion over the course of the next decade. Since then, the house has made some key changes to the bill. They added funding for patients with predesh existing conditiod letting insurers charge higher premiums to older people. The states allowed to seek wafer to optout of coverage. The house might have to vote on it again if the cdo finds it doesnt reduce the deficit by 2 billion. House speaker, paul ryan, said that he was optimistic about the bill, even though he didnt want a repeat of this saga, of the way they have gone about doing health care. He acknowledged that there is difficulty in the path ahead. The rubiks cube is hard. I assume the senate will change the bill. Thats how it works. Our members have traveled a long journey in the last few months to realize you cant get everything you want. Senate republicans for their part have said they need to see todays score before structuring their own health care plan. The fear is that any increase in the number of people uninsured or a decrease in savings would give fuel to democrats trying to obstruct the plan. Remember the argument of the white house has been to question the legitimacy of the cdo and in the past, they said the cdos estimates, they are good when it comes to numbers but not so accurate when it comes to people. When we come back, mark field is out and jim hackett is in at ford. What are insiders saying . Bob lutz will weigh in. We speak to an early investor in Companies Like netflix, air b b, and netflix and go daddy on the state of tech. Call it the last waltz. Walt mossberg is hanging up his gloves and will give us highlights on his long and storied career. Back in a moment. shouting more power tools. More power suits. shouting more power. Chords. With customized Loyalty Programs and datadriven insights, Synchrony Financial can help bring more. Power to your business. The Congressional Budget Office and wall street economists think the next decade will be more of the same. We reject that pessimism and say we should have gone in and assumed 3. 5 to 4 growth that. Would be aggressive. If we dont bring we are following the ceo shakeup at ford. Joining us now, bob lutz, who also held Senior Leadership positions at ford and bmw. Great to see you. I would love to get your take on this ford ceo transition. It seemed a few months ago, we were talking about north American Auto sales with a record. We are going to be bringing production back to this country or keeping it here. Now, this ceo moving into seems all directed at some future that seems to be coming a lot faster. Whats you initial read . My initial read is despite good performance at ford, the stock price was stagnant. They have had to cut some production. So the board was getting increasingly nervous. I think what you have got nowadays is with this future of Autonomous Vehicles and geomapping and so forthcoming at us. It is not so much what a ceo actually does in the way of day to day performance. I am sure that mark field, with decades of training at ford and who has held responsible positions, he was great oldfashioned automotive ceo, typical Harvard School graduate, steady as she goes, very well balanced between longterm and shortterm. There was no excitement coming out of the company. It is all very well to say, well, were working in the background. We dont want to make it public but nowadays, if you dont sell the sizzle, youre not going to be able to market the steak. A nice contrast in that is l e musk who is out there visionary making statements and promises mostly not to be fulfilled. It doesnt matter. His actual performance as a ceo measured in terms of profitability is an f minus. Look at the stock price in the ceos that are managing the business and going about it the right, oldfashioned way. They are not projecting a vision of the future. They are not projecting magic things to come. Wall street doesnt tolerate that anymore. Therefore, boards cant. Bob, are you saying you dont need a ceo who really knows how to run a car business to have a successful car business these days . Stockholders want flash and sizzle . Both. A good ceo has both. The last one i remember like that very well was lee iacocca, who was not only a brilliant experienced Automotive Executive and on television all the time and had the nation believing that chrysler was much more capable, more powerful, et cetera, et cetera, than the vehicles actually merited. So, no. A ceo who sits in his office, visits his operations, conducts good meetings, makes balanced decisions based on data but doesnt project the image of the company in an exciting way to the public is going to fail. Where as, so far, my view is still that tesla is headed for big trouble but you cant convince the Share Holders of that. Well, bob, well see if jim hackett can convey that sense of excitement and urgency when he formally takes over. Thanks very much for your time. Sure, youre welcome. When we come back, we top the state of tech with an early investor in Companies Like facebook, netflix, air b b and zillow. With the dow up 21 points and the nasdaq and the s p hanging in positive territory and not too far way from record highs. Looking for balance in your digestive system . Try align probiotic. For a nonstop, sweet treat goodness, hold on to your tiara kind of day. Get 24 7 digestive support, with align. The 1 doctor recommended probiotic brand. Now in kids chewables. Welcome back to squawk alley. Check out shares of buffalo wild wings. They are moving higher. They are voting for actress nominees bergen and mcguire. They have made a compelling case for change. Well have more coming up after the break. Keep it right here. Well see you in a couple minutes. S through usaa is so effortless, that you feel like youre a part of the family. I love that i can pass the membership to my children. Were the williams family, and were usaa members for life. Good morning, everybody. Once again, im sue herera. Your cnbc news update. British police raiding an apartment in the center of manchester. They arrested three more men in connection with the concert attack. The Manchester Police chief saying it is very clear it is a network they are investigating. First lady, Melania Trump visiting a vaticanowned Childrens Hospital in rome. She met with 15 children where she sat and drew pictures. As you saw, she also took some selfies and greeted young people in the pediatric cardiology department. Some incredible video of a fuel tank or truck exploding in flames. It happened tuesday in atwater, california. It was carrying about 9,000 gallons of fuel when it overturned on a ramp next to a gas station. The driver unfortunately was killed in that accident. The mysterious millionaire who purchased a 24. 1 million lotto ticket in new york city has been found. The individual claimed the prize yesterday just two days before the Winning Ticket was set to expire. The winner said the News Coverage about the ticket prompted him to search his home where it was located among other older tickets. That is one lucky guy. Thats the news update this hour. Back downtown to squawk alley. Sarah, can you imagine if it expired and you found it . No, but i can imagine losing something. I sort of understand. He is a lucky guy. Glad he found the Winning Ticket. Lets get to sema modi. A mixed session in europe. Whats notable are the gains in the uk stock market. The ftse erasing yesterdays loss following the bombing in manchester. The european off its low for the day shaking off the concerns about moody down grading chinas Credit Rating for the first time in 20 years. Lets talk financials. Deutsche bank is near lows. Democrats on the u. S. House Financial Committee have written a letter to ceo john ckreon seeking whether President Trumps and his families Bank Accounts had any connection with russia. Mario draghi saying there is no reas