Good thursday morning. Welcome to squawk alley. Joining us this morning from one market in San Francisco is the former ceo of twitter. Currently the siceo of fitness startup core startup chorus. Good morning. Well talk markets. Im a one word person this morning. Yeah. This is going to be a very long interview, i can tell. Lets begin with the markets dow is down 22 despite the early trade. Tech remains on a terror the nasdaq aiming for ten Straight Days of gains, touching another all time high today. S p 500 index broke the nearly two decade old record closing above the dotcom bubble you have to go back to march 27th of 20000, dick. I know you had attention on valuations within specific sectors of tech. What is your take on these levels are they important i think the interesting things that happening in tech right now is in Public Sector is that youve got this real separation that the hyper Scale Companies, facebook, amazon, apple, google, are getting from everybody else if you juxtapose those companies against the recent issues, maybe over the last year or two, everything from cloud and snap and blue apron and the like against those hyper Scale Companies, i dont think weve seen that kind of separation in a long, long time. Youve got four companies there that might be trillion Dollar Companies in the next few years while some of the newer issues are kind of struggling near there, at or near their offering price. I think thats just curious and it will be interesting to see what happens there dick, thats what makes me nervous for investors in general. How do you think thats going to play out it feels to me from the Technology Side like were running on the fumes of the last cycle. The smart phone revolution, the cloud revolution sure, those are mature now and were able to build on top of them but weve really recognized a lot of the value there shouldnt that mean that perhaps theres a little bit more danger in these investing waters than these levels seem to indicate . The short answer is, yes. And i thought that for a while and ive been worried about that for a while. A little bit longer answer is that these things always go in waves, the tech cycles goes in waves. Youve got a number of companies on deck that are still private yet to be public that appear to be doing quite well. Everything from drop box to air b b and on and on. And, you know, those companies are setting up nicely for the next year or two, i would imagine. And then youll have another wave hopefully explosive growth. Dick, just to be clear, when you were talking about cloud air, did you say you think they can be trillion dollar platforms or no . Sorry, i was referring to facebook, amazon, apple and google four companies that are really the four hyper Scale Companies that are really get ago way from the pack when juxtaposed against the newer issues that are struggling its interesting you would even, you know, sort of snap having its own issues, cloudara maybe in a completely different segment having a more attractive opportunity set. You would still lump them together i just think its interesting and curious that these bunch of these newer issues, i would put blue apron and the issues maybe a year or more out, fitpit abit others that are really struggling to escape the levels at which they offered. And the interesting thing within Silicon Valley about that and importantly is the competition for engineers out here is fierce and if youre an engineer at a company and you dont see a lot of Equity Growth potential in what youre doing, there are lots of other things to go do. So thats an important thing to realize when you think about the values of the companies. So, youre saying unless there is a path to not just a public debut but a one that goes into the green, blue apron at this point would have trouble grooming or attracting engineers. Anyones equity that is not growing in value or, you know, or have some sort of Growth Potential ahead of it or at least have a story that they can describe to engineers who are coming in, its going to be tough to attract people. Engineers out here want current compensation and Growth Equity yeah. Interesting that you say that. A Family Member of mine who has worked at google for years got an offer from snap is moving south to l. A the decision is somewhat controversial. Last cycle if you were moving from an established company into a newer one, they just gone public, of course do you that. But in these days, its not so clear. Yeah, thats right. And so i think the advantage today is for some of the still private companies that are growing quite nicely and can tell the story about their previous private rounds and private valuations certainly because if there is a down round, they get asked about it when they come to this set, thats for sure move on to some media here, dick netflix out this week with rock Solid Earnings big bets on original content paying off you have discover and scripts in merger talks there are talks to reinvent television as twitter and facebook try to make a push for original and live video on the platforms. Are you feeling that were at some Inflection Point and the way content is distributed and, i dont know, produced 100 . I mean for the more Traditional Media Companies like those you mentioned, discoveries and the viacoms, et cetera, its rough because you got Companies Like netflix and like amazon that can bring billions of dollars to bear on acquiring content. And so when you can bring billions of dollars to bear on acquiring content, you know you dont have to be able to always pick winners you can just make a lot of picks and some of them are going to be winners. The more Traditional Companies that are operating within tighter constraints and tighter shareholder constraints, its a lot harder for them to, you know, to do that so i think that youre going to see, you know, an acceleration and the quality of content that youre getting from the over the top providers which is only going to in turn accelerate the move away from traditional cable bun bundles to over the top suppliers. The big surprise for me in this environment is youtube. It seems like youtube should be killing it right now i mean they practically invented online streaming video that can you watch from the browser they got the huge numbers of people watching in general but its netflix and amazon that really seem to be running away with the premium video story at this stage do you see it that way was there a mistake that youtube made in focusing on long tail, User Generated Content too long . Whats going on . Its you know, thats a great question i think the world of the person that is running youtube. Shes extremely smart and talented operator. Im sure shes got a great strategy over there. I think that i wouldnt count them out youtube red is going to make a big push into the same space that some of these other folks you mentioned, netflix and amazon, are competing in i think susan is going to try to possibly have it all with youtube red and youtube tv and the sort of long tail and trunk of content where you see some of the where you see facebook also competing. Dick so she may be able to do both things what about your alma mater, twitter in the video efforts here what do you think the strategy should be there . Well, youve heard from jack and anthony and the rest of the team there theyre making a big push into live theyve been doing that for the last couple years now. What you have to understand about the specific space that at which timer is operating in and seeing this a bit now with snap is that when youre competing directly against facebook, they can just bring enormous market leverage to bear against you and so you have to look for, you know, flanks, if you will, into which you can operate and move and create a beachhead and i think twitter moved to live content that matches very, very well with the twitter being the pulse of what is happening right now in the world is a smart move and im sure theyll execute well against it. Its been a fascinating move. Even krayem they are morning saying its quiestly become a bullish name at which timer is wol above 20 now. We want to get your take on google john just brought up youtube theyre coming out with the personalized feed product to give people personalized links from hobbies and travel to sports some say itdirectly targets at which time and facebooks news feed google does not report reports this week that facebook is working with news publishers on creating a pay wall for articles within the platform what happens when you have were talking about competing against giants but what about when it is giant versus another giant listen, in giant versus giant here, specifically google versus facebook, people come to think of the products and platforms for a specific thing i think people think about facebook when theyre interested in going to a feed based on a social graph people think about google when they think about search. And i dont see googles move into having a personalized news feed in the search app as particularly challenging to facebooks core. So, dick, do you think that facebooks move in separating messenger out of the main app which really seemed to turbo charge its growth, you know, its method of buying instagram and keeping it as a companion product thats going to continue to be the future, that efforts like this google to build the fee into their existing app just wont work i do. And i think mark and facebook have been very smart about the way they thought about the space of those different applications and the way they work with each other and support each other you know, for example, just tow l to elaborate on that, instagram is the platform through with theyre really going after snap. And then theyve got the mess enki e mess enking application thats they can do the more bot testing with Customer Support and purchases. And so theyve got the pieces that can support each other, that they can use to advertise and promote each other and thats just its an extremely powerful position to be in. Finally, dick, before we let you go, as were talking, elan musk tweets and im quoting here, just received verbal government approval for the Boring Company to build an underground new york, fill yishgs baltimore, d. C. Hyper loop would take you new york to d. C. In 29 minutes. And weve talked about musk before and his aspirations in space, on highways and i guess now underground. Give us your thoughts on where he is right now . How do you think thinks aspirations will match up with reality . He may be proof that time travel exists. He seems to have either more hours than n. The day than the rest of us have or, you know, or hes from the future hes just in all seriousness, im laughing because his ability to think cogently and thoughtfully about such a wide range of topics while running these multiple companies and seeming to be running them well is just i mean, its like it makes you shake your head. Its remarkable. I am pulling so hard for this look, who needs you know, dick, can you take to the airways. Can you try to revolutionize, you know somebody maybe theyre working on some sort of point to point flying thing. But elan musk has the tunnel machines going in l. A. , doesnt he he does it sounds crazy but were desperate for solutions here listen, when you say it sounds a little crazy, hes landing a rocket on a drone ship at sea i mean this is something hes done so you just, again, you just have to shake your head at what hes been able to accomplish and then what hes able to publicly announce hes going to try to do and then goes ahead and does in a number of fields all at once its just extraordinary and i think that i just dont think there is anything else out there like it. I think a generation ago we had steve jobs and bill gates who in a way were two sifdz the same coin. This generation we have elan musk and jeff bezos who are both, i mean, all over the place in terms of space and groceries and, you know, electronic cars but well see who can execute, right . Yeah, jeff also appears to be ready to participate in the cross fit games. So i wouldnt get too close to him and say anything negative about amazon that would be a showdown. You know, we used to have battle of the Network Stars on abc in the 70s costelo and baezos doing tire pickups. Jeff would hurt me with his left hand. I wouldnt get too close to. That. Dick, always a pleasure having you thank you for your time. Hopefully next time youre in new york thanks. We should mention, markets are lower. They hit the lows after Jeff Sessions was denying he would step down in a press conference this morning the dow down about 30. Yesterdays report that more than 130 people fell ill at that chipotle with symptoms of neurovirus they said while the restaurant was closed multiple teams performed complete sanitize to allst businesses and then earlier this morning, we showed you some disturbing video from a dallas chipotle location where rodents fell from the ceiling. A spokesperson responding saying, we learned yesterday that mice got into a restaurant and we immediately contacted professionals who identified a small structural gap in the building as the likely access point. Were having it repairs. Additionally, we reached out to the customer to make things right. This is an extremely isolated and rare incident and certainly not anything we would want our customers to encounter. Going back to shares of chipotle, theyre down a little bit more nearly 2 . Ive been in a lot skanky restaurants in my life its amazing to me thats at the chipotle footage that gets out number taco bell, burger king. Every single chipotle problem, we see it. Food is a tough business. When we come back, former sec commission oern the president s plan to wipe out red tape and roll back dodd frank. How sears is hoping alexa can turn arent companys fortunes later, californias plan to make it safer for selfdriving cars object road. Well talk to the director of the california d. O. T. When squawk alley comes back. [vo] progress is seizing the moment. Your summer moment awaits you now that the summer of audi sales event is here. Audi will cover your first months lease payment on select models during the summer of audi sales event. Theyre 5 00 sell raritying plans to stop rules including a review of the doddfrank financial reform joining us now is paul add the atkins good morning you to. Good morning. Thanks for having me so, you know, how much now that there is this renewed focus on whats going to happen with attorney general sessions and maybe even robert mueller, does that affect the deregulatory event of this administration i dont think so. I think i mean, regardless of what is going on the political front, if you look at the agencies and the departments of the government where a lot of this work is getting done at staff level and, you know, under secretary and below level, i think things are going along in a very good way. With review of the past eight years and regulation thats were pushed through that were done, you know, in the most, like, for example, doddfrank, the various agency tots last one that each one in the most onerous and costly way possible. So the law of demand and agencies look at cost benefit. I think thats now what the government is turning to do and its high time yeah. It was interesting Morgan Stanley streams and they were vocal about the need for tax reform what did you think of jamie dimons comments im sure you saw them. He sort of went off about the inability for things he had done in washington and talked about it being an embarrassment, you know, when he is traveling globally so for all that president s trying to do on the, you know with, that agenda, there is this feeling that, you know, that its holding a business right now. Well, i think jamies comments were really more aimed at, you know, the status quo the way the new people have found it and so and then the push back from various special Interest Groups and the Minority Party in congress that says, no, none of this stuff should be touched that was done in the past. And so i think jamies call and i heard him say this before and im glad he said it in that context of that call but is to call on people in washington to look at the cost, look at the potential benefits of having a regulatory structure hes right when we look at our competitiveness versus other countries, were really behind the eight ball on this big overhang of costs and debilitating rules that people have to deal with. So let me ask you about this. Heres what the president told the new york times. He said doddfrank is going to be modified. He wants rules and regulations he said you dont want to choke. People cant get loans to buy a pizza parlor banks wont loan them money anymore. We heard a little bit of this from other groups as well. So what might a change to that bill look like or are we talking about a repeal change on the bill will have to change on the statute will come through congress. You know what that means when we read about other things. So well see in the first instance, theres a lot that can be done in the regulatory agencies and like i mentioned with, you know, taking a new look at these things, putting them out for comment like, for example, the Labor Department has done, thank goodness with respect to the duty rule that the Previous Administration pushed through and really i think almost a travesty of a Regulatory Impact analysis so its high time the Labor Department look at that and before it goes into effect in january, you know, do something about that ule, for example, which will have really negative impact on average investors and people with small accounts who actually need advice so there is one example right there that government can do to good effect. And were seeing it like, for example, at jamie dimon is raising where banks are really ham strung becausest various ad hoc capital rules that Bank Regulators have imposed. And so i think for the various regulators to look at those things, that will help free up capital and make the loans that youre talking b because