tv Squawk on the Street CNBC March 30, 2021 9:00am-11:00am EDT
million pizza or something. >> i want to go back in time and be that guy and say i'll do it for 5,000 bitcoins >> from one little sushi okay great to see you, dom. >> likewise. >> join us on the meta squawk, guys tomorrow >> transcended >> "squawk on the street" begins right now. good tuesday morning futures are up moderately here as the market continues to weigh the fall out from the margin call road map begins with that margin call shares of discovery and viacom reversing they're week long tile 10 year yield hits 14-month highs this morning
and paypal allowing customers to use crypto currencies to pay onnine we'll start with arc goes breaking silence >> i think there are winners and losers here. j.p. morgan said no to these guys there are twob components. one they have better risk controls two they had judgment. i think everyone trying to figure --. my hat goes off to them. i think they really demonstrated that you don't have to be as dpreeddy as the firms that are in that chart. they had the same information everybody else had and they chose not play >> although the point was made
earlier this morning, jim, very well by houston who works for us covering banks and that was some of the smaller guys like cs and omira have to be aggressive on risk and lead on price the number 1, 2, and 3 players can afford to be a little more picky. >> well i think that we're sitting here talking about those two firms as being firms that we don't necessarily trust as much as we did. if they can't make enough money in the market they have a lot of ore markets they should be in and decide you know maybe america is too competitive because they are doing terribly. if i were trying to figure who i was going to bank with today, i would say, you know, i think i'm going to bank with j.p. morgan they are really a cut above.
that is how you get business these other firms may have to chase business we've seen firms chase business and do poorly. and i think this is a huge black eye for those companies. huge make two zblch bloomburg caught up with the julian robinson. a asked about bill wong. he was asked where his career survive. he said i certainly hope he bounces back which i don't know if you call that tone deaf or not, jim but certainly remarkable comments given what we think we already know about wong's investing practices. >> i've tremendous respect for julian robertson you have to have he's terrific and great he's chose a level of loyalty there and maybe we have to wait and see whether there are actually some charges brought but i do think the level of leverage was, let's be really kind and say
irresponsible. and i don't want my money with irresponsible people, even though julian robertson is willing to lend his support. i think it is great that he feels so again, that he feels kinship. but the judgment here is i think that you want to stay away at all costs >> right meanwhile some of the names that got dumped, archegos had a good morning. baidu. for a fech gsx. tencent. >> i think the chinese market is not that good and those guys can bounce all they want but i don't want to be there i try there were some pieces about viacom viacom has got on the a level that is now interesting and that was a piece that caught my attention as credit suisse credit suisse beats viacom back to basics, postbubble. i like that piece. shows they have waited and
waited and now they have a chance and i wish there were better risk controls. they are already good at research and this is a very smart piece. >> now people are going pack and looking at cs and how they played viacom from the research element. they up it on january 27th at 57 and now they are back to neutral. i wonder, are we going to ask questions about chinese walls and just exactly how high they are at some of of these firms. >> wow that would be bad. geez, i don't know i'm kind of speechless if they did that. because these are elemental things we know that you can't go there and do that. i think most people right now are thinking not to trust wall street and i led with j.p. morgan because i don't want to be the guy who piles on i think a lot of people are so suspicious and they also by the way they see interest rates go up they don't understand well that is
probably going to be bad for n nasdaq there are lot of people thinking it's rigged right now. lot of people people the firms up on that board they were showing they knew. and they didn't know except j.p. morgan b knew not to deal with this guy they showed great judgment and deutsche bank and they got -- this has been going on for a long time. deutsche bank is just -- for a long time. >> yeah. i know even as they try to get out of that business and shuffle some
of it off to bnp parabut a still not enough to the damages. the statement out of archegos. this is a challenging time of capital management, partners and employees. all plans are being discuss as mr. wong and the team determine the best path forward and ancillary reports about not just the phone call thursday via multiple reports but now the idea that they are being summoned by regulators how should viewers think about what the next chapter of news is going to be. >> well i think we're gonna see everybody has totally the hit to earnings i think goldman showed what you have to do you own it you sell it. get rid of it and then it is immaterial this firm destroyed a huge amount of value and they used
the word "challenging" you know, challenging. c krakatoa was challenging the main was challenging challenging? the hindenburg was super challenging. how long did they sit there and think of that word, challenging? wow. >> they went through the thesaurus. >> challenging >> we'll keep our eye on it. jim. it is one of the main stories of the day. now in its second or third day the other one is going to be the one more familiar. and that is expectations for inflation. we talked about the 10 year at the top. more discussion about what we might get out of ib infrastructure and b of a arguing finally it is going to be cap ex not by backs that is going to get the love from corporate balance sheets as they
argue basically things are old which is kind of a nice dove tail with what we think the white house is going try to argue. >> there is an upgrade american airline. and jeffries is talk about a how their younger fleet. 10.8 years versus 15 years if i were boeing i would say holy cow things could be really unbelievable here. there is just inflation. the inflation in used cars because the chip shortage is amazing. so there is inflation kind of everywhere we still don't have texas back online yet and a lot, if you have a storm coming maybe you tap on
something your windows you know what to do these guys were hit by yuriy and they didn't expect it. i think what you are seeing is you can't get them back online really fast. new systems go they don't need infrastructure to make their quarters they are just swimming in orders there is a lot good out there for the producer but then you also have freight, carl. anything involving retail. freight is bad what you have to do if you are j pal is say well this is that spike i talked about and once the spike is over things will go back to normal but there is a lot of spikes >> respondents, 61% of firms said they lost power 37% said that i had lost water 52 more forced to shut down.
52% forced to shut down an average of almost five days. now have musk tweeting about lack of cell supplies. and fox con today talking about potential material shortages and impact on apple pre market today. >> i saw apple dripping down tony saginegi, comes out and says 69 months before anything happens new york city catalyst tell you how bad texas texas has not been talked about enough i do believe that texas somebody an untold story. we got to get down there
texas, louisiana, how much damage there really was. and it is like a quiet storm all the chemical companies doing much pert than expected because of the shoshlg lots of shortages. >> yeah. no, it's amazing scarce city was a story for the consumer last summer trying to find disinfectant wipes and toilet paper and even now wood pulp potentially impacting supplies again this is not even connected with the the.
>> the inflation with lumber is just incredible. j pal has to steel himself i'm looking for other than cocoa. there's been not that much food inflation of late. you have to hunt for areas that don't have inflation home prices just incredible. and by the way there is a shortage of homes to the point where people are knocking on your door. and the exodus from the city continues. and a lot of that i think is because there are so many people who are still able to work from wherever they want >> to your point, cnn has a piece up this morning about a woman in suburban d.c. who listed a fixer upper on thursday for about 275 k. listed it on thursday. by sunday she had 88 offers.
76 of those offers were all cash >> all cash? how much money is there out there? >> that's very good question >> or she completely misappraised need money to buy even though they are giving it away. look at that how many people have money this is continually why i say home depot and lowe's. they are the retailers because of the amount of construction and a amount of renovation amazing story. when your hear cash offers, you can imagine how flush the american consumer is we do not have enough houses will you look at that? that is not the chart -- i have
macy on tonight. mace's chart versus home depot very different lowe's even better than home depot. i really do. oh look at that >> wow, maybe ross maybe consumer balance sheet so blood they aren't going to ross. tj doing okay. >> moves on the street out of yelp on estee lauder. roku google, protect gamma, domino's
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discuss sports and join live conversations. they go beyond sports and say that athletes, writers, musicians, song writers and others can host realtime chats, ask me anything sessions, debates. interesting new chapter for spotify which has been doubling down on pod casts at least. >> people are loving these things, carl i'm -- twitter tonight trying to get yesterday for a show to confirm how well twitter is doing because of the upgrade. and on tonight, okay this is one of the most -- i can't believe how popular this is i cannot believe that places for twitter, clubhouse and now this. people have a lot of time on their hands. sit and listen and ask questions. and to me i'm reading a book and talking to my wife but yeah this is just incredible and at a time when there is not much else cooking. and by the way, i'm not getting
a good read about march madness in terms of how that is going. but this, it is a win. and i find -- jonas brothers were on. on for twitter and everyone -- 000s thousands of people. i am shocked i thought to myself, in you were going to be in this locker room. i'd probably listen. depends on the right person. extraordinary, the zeitgeists that switch to this carl people love this. >> for creators of any content it is an amazing way to get direct to the consumer without going through filters like the media. cameo is going to have a billion dollar valuation on the latest round. and i'm i think we're going to talk to them later on this morning. but that idea that you are able to directly communicate with
someone you may have long revered is a powerful thing for the consumer and by the way, maybe authors come back. authors go on the today show or the late don imus. there is no venue for an author. none maybe this is the venue. we have to pick and choose but it does seem to be interactivity is something that's been lost. tv is very flat. maybe you get involved i'm going to see who is on tonight. i get to pick who wants to ask questions. and i've got -- it is kbexciting if you are the person and obviously if you want to be promote something it is ideal. but wow, i cannot believe how hot this area is i don't know carl. does visit staying power >> well i think that's -- i keep going back to spotify.
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as we said a moment ago. ten year yield gets to 177, the high of the morning. 14-month high. you have the reopening you have got the infrastructure plan we expect tomorrow. obviously fiscal stimulus and lot of data still to come this week nonform payrolls on friday and ism. acont asxpecting recovery. trti alet the united states is giving opening bell in five minutes
morning. watching corporalic? >>mccormick? >> they do have some terrific growth the concern what will happen in the reopen most people's cafeteria they have mccormick this stock opioid up big last time.ened up big last time this would be the litmus test stock for what we saw yesterday. after the cdc talked about impending doom which i think took a lot of people's breath away so these are impending doom stocks and let's see if this can hold if it can hold you are going to see a lot of other stocks back in that cohort run again and i would look at proctor. and i would look at --
>> that comment ties in with the president who some of the states rescinded mask mandates. got to put them back in cases up 12% in the past week the worry about a fourth surge is out there although there are others who argue, you know, you have so many of the elderly in the country already vaccinated that if the litmus test is about hospitalizations and not clogging the healthcare system, it is hard to see how we get bock that to >> and i think the death count and much lower i think one of the things we have to balance is we're being -- we're vaccinating three million people a day and who gets vaccinated and obviously changing and going lower and lower. i believe we do have the -- we do need to worry about younger people moderna doing something. but i don't know
i felt the impending doom was something i wish was said a year ago. and now i feel like if they are trying to scare people to take the vaccine, i get it but i don't know if i would want to scare them the way it was done yesterday. it was highly emotional. not clinical. >> i think that is a good point. there is the opening bell on the s&p bottom of the screen as of today new york city you can get it if you are 30 or older. and as of next tuesday you will be able to get it if you are 16 or older i get my first dose on friday. so it does feel like it is starting to move. >> i think there is going to be the glut that dr. taupal talked about on "mad money. such a great follow. just look, they are making a lot of vaccines. and we're now getting in the walgreens and walmart and cvs. and it is for real you are going to get it not just
in the mask places but at the same time i think the market is flummoxed. the market doesn't know what to do are question in a situation where the fourth wave comes and we're unprepared are we in situation the economy is opening what do we buy? there is a lot of things negative at the same time the dough keeps charging higher. and too negative wait a second. are we going to be left behind if the economy returns to normal and all this stimulus and the infrastructure it is the different stocks i thought this american airlines the southwest air orders boeing europe is starting to do much better i don't want to get too negative carl, even though i was like many people gripped by the head of cdc dr. walensky just making me feel like we're back in the
stan situation you just really felt badly wow. >> yeah. and by the way if anyone missed it yesterday take a quick lan to what the director of the cdc said about this potential fourth surge. take a listen. >> i'm going reflect on the recurring feeling i have impending doom we have so much to look forward to so much promise and potential of where we are and so much reason for hope but right now i'm scared i know what it is like as physician to stand in that patient room gowned, plugged, masked shielded and to be the last person the touch someone else's loved one because their loved one couldn't there be. >> the point makes sense jim balancing what we just heard
with upgrades, the likes of which we got citi on yelp. talking about the renewed floe of advertising dollars in travel and entertainment and media. >> that's where i am look, i think my doctor, his theme is you don't want to be the last person to die of covid. when we actually medicines that should make it so you shouldn't die. and it is hard to fig -- i don't want to criticize someone head of cdc very distinguished doctor but maybe the tone should have been do you really want to be the last person to die of a disease we now have something for? more shaming than frightening. and we do need to shame everyone to get it. but i think to scare everyone to get it is going to maybe not do the job.
>> right >> what do you make of these some these the yelp upgrade as -- estee lauder a stock like el can be sort of be read as something you have long said is a dynamic on selfies and trying to look good as we're working remote but can also be read as something you got to look nice if you are going to go out. >> he's captured the chinese market he's also duty free. he follows where people go by duty free numbers and floods the zone if they are all going to brazil he invents products for brazil and he's not a great team everywhere he's also got this frontsy backsy thing if you are a older person you have to work for a younger person which i think is brilliant idea because you are selling product
because for younger people they were obviously doing a lot of things involving your skin and mask and keeping your skin clean. but they own china and you don't hear about them as being important in china that's a wig mistake. they are only 2-3% levered to department stores. lot of people short the stock. they are so not a moral play they are a play on the strength of china and maybe ultimately strength of the united states. they do skin care and smetcosme. i switched masks this one creates fewer pimple. i guess i could be shoesings stay lauder.
he's a man of the world. most people -- old procter & gamble guy but more importantly he's a person that understands the psyche has a great team sells 38 times earnings but it is going have block buster earnings truly block buster. >> we haven't talked a whole lot this morning about arc first off, there is kathy wood, removing some restrictions that sort of limit the amount of a single name that they can own. this new space exploration etf approx is going to get interesting. light of what we've been talking
about regarding margin calls, how are we thinking about arc? >> like that movie etf, when i looked at the arc space there is some companies in there that are only tangentially involved with space. john deere is in that much more of a kind of a farm play these are the stocks really in ground zero of what people are fleeing. but i do have to give her credit she thinks long-term if you judge her short-term you are going to miss moves. but short-term this most recent creation is perceived to be unneeded how about that unneeded we do have virgin galactic on later. that could be good. >> we are going to talk to them. and there is spekz news today.
talk about judging them short-term one mission or not. the people running those enterprises are thinking much longer term than any particular trade or mission. >> had kbr on last week and they are deeply involved in space and talking about 10-15 year perspective and i think this is what you have to have if you are going buy that etf when i look at what kathy wood buy, these are companies that could be unbelievable big. lot of things have to go right but she's a visionary and the ones she picks are, they look out there but she's done more work than most but i did feel that this one was poorly timed we don't need this right now we don't wow. it's too high.
john deere, carl i don't know there are stocks that are just unbelievable good and tend to be stocks that react well when interest rates are going up. and then there are these stocks that are just so bad and the younger people tend to be in the stocks that are so bad i continue see that when you look at what's going on higher, you have go at a lot of the entertainment stocks up. because that is the fall out anyway maybe we're behind, we're done with the archegos failure i shouldn't say failure. because they are still around and people still want to give them money the one i'm most fascinated by is gamestop. once again they add an amazon executive to the team. chief growth officer but the people they are adding if you want to dream team, this is a stream dream team
and i think it is have rather amazing. i got to hand it to them lot of people who are older, the gray beard, the hedge fund, the guys in suits, i got a nice suit on i got it in milan. it is a super 180. it doesn't really matter because i am impressed with the gamestop team i really am. >> elliott willky is a amazon veteran. and not sure if you told someone a year ago that gamestop was going to be recruiting from amazon that that would have been an obvious narrative of any kind. >> no. and obviously ryan cullen has a story he's telling where he is getting some of the greatest people and they are not deterred they are not -- these are people saying we know this $14 billion market cap company is something, it is -- maybe it is clay and it is going to be tushld into a
cupture.rned into a cupture. but i am blown away by who they are getting. and most of the companies in the mall would not get these kind of people they have a plan obviously i don't know what to be plan is but they have got one and it is attracting top flight people, carl really impressive. >> i'll be curious to hear what maces tells you tonight but i doubt you believe this trade is happening because of the belief of what might happen actually in the mall this is going to be an online play >> but i will say this el brands, if you told me six months they were going to have a resurgence stock was at 14. and now it is at 60. i looked at kohl's the resurgence they had. i'm starting to think maybe they are putting together something that we never dreamed of that is going to be special. because you can't attract those
people to a dying entity they can go anywhere they want, carl anywhere the world is their oyster and they are picking gamestop. so maybe there is something going on isn't it funny that today is the non essential retailer today and the essential retailers are getting killed this stuff changes every day talk about apple today it was painful because i know people are going to sell apple after listening. saying there is no catalyst. and all i say is okay so maybe the quarter is not so hot. can you get out of apple right here and then back in at 111, say? i don't know who's that good i just don't know who's that good so i am urging less trading and more longer term thinking because we do have some shortages every. but the shortageswill eventually be cured. that is what happens when you have shortages you get production it just doesn't happen quick
enough for most people >> right well that's consistent on two levels jim you have always said don't trade apple. own it and you have often been skeptical of tony's research. >> true. skeptical. tremendous respect for him because he does a lot of work. i think that in the end apple's been very hard to trade and very easy to own and i'm sure people listen and say i'll sell it now and come back to it. and that's been a sucker trade i guess some hedge fund kansas do it. i just find that's to me a non starter. why not just own it? take some pain longer team people, take some pain get used to pain go get some xanax if you can't be in this game. but i do feel apple is going lower but aim not nimble enough to want toget in and out no, it's been a pretty good stock to own.
>> you could say that. all right. well with that let's get to rick santelli and check on yields. >> clearly in focus. and clearly in one direction two day of tens. zoom zoom zoom guns hot on treasury yield two week chart we had our dip. as a matter of fact i've been trying to put forth over the last couple of months is it isn't necessarily trying to pick a top, which is dangerous and i don't remember it. let the market show you where top of yield, bottoms of price is but the pullbacks are very, very small. very shallow and then we surge and we take out only interday levels this is really the mark of a market that you do not want to go in the opposite direction of the current trend. and the trend is lower in price, higher in yield. open the chart up and you can see that if you go all the way
back to january of 20, we've taken out everything but if you look at a 30 year bond a bit different scenario but makes it easier to trade 245 is current high close yield for 30 year bonds. if we start to trade through that even interday before settlement, look for very active follow through. any investor on the wrong side of this trade is very nervous at this point because pullbacks are so small you don't get any reward and when you try to reverse the position you have to pay up to get out. with respect to bunds, they are up a half dozen basis point so you say say well half because dozen. six batsds points isn't that much certainly is when you start minus 32 and move to minus 26. the one week chart of bundses they really are moving and really that is the story here. you can have any thought about where we are in the covid scenario but globally, u.s. is hoed and shoulders above and starting to show in the marketplace between
anti-virals, therapeutics, vaccines the market is getting pretty excite about this reopening trade and it is trying to calibrate it with some of the negatives on the global side of the same trade and it isn't easy. but one place you are seeing it show up is in the euro currency. everybody saying wow look at that dollar, best levels since november and i've been dollar friendly but the latest move isn't dollar strength it is euro weakness. look at this chart from last year you can clearly see what i mean. so mild selling to start the tuesday. dow hanging on to 33 k by about a hundred points down about 62 thanks to goldman and jpm. leading the blue chips we're back in a minute the
an eye opening report on robin hood traders and the impact on the market research shows individual investors had an impact five times the size of estimated assets in q 2 of last year robin hood demand stanley negative returns in q one. with the return effects more pronounced during the recovery in q2. five times is remarkable >> they were running in when people were running out. i know that there were a lot of people at major firms surprised to see how aggressive they were. and obviously when everyone else is kind of frozen which is what was going on, robinhood both with options of a common stock, aa lotthink now one of the feel i have is that the professionals have taken back the market and they are very, very
reluctant to own the same stocks that the robinhood people own. a lot of the people who brought robin hood bought these kind of aggressive growth stocks that are the ones that are really getting crushed. they seem to get crushed every time interest rates go up, carl. these portfolios are just getting rocked >> that sort of -- for some it remains a long-term bullish narrative, the idea that institutions have not run into those epicenter names you talk about because they're read into long-term growth and faang but once they make that turn, that's going to be an explosive move as well >> well, look, i happen to think that robinhood people -- i don't want to say they're here to stay some of them have already reached the stage of acceptance in terms of their grief. but there are plenty of -- a lot of capital and they get the stimulus checks but they have to be a little more circumspect about let's
calm the kathy wood. i mean, a lot of these people do not have an appetite for loss, and when they're riding high, it was terrific now they have to hunker down a lot of them are in stocks. they're in the twilios and door dashes and zooms i'm not saying they're forever out of favor, but right now you're being gaffed. you do feel like a blue fish that's caught. you're flopping around on the boat there >> dow is down about 117 we're back after a break the aflac post-pain show! aflac! we are back with steve, who's got two broken arms and one unexpected medical bill. i mean look at this guy, he can barely open his bill! aflac! let's look at the re-pain replay. lost the dunk challenge, the use of his arms... and his dignity. aflac? aflac would have been the smart play. they pay cash directly to help with expenses health insurance doesn't cover. should we give him a hand? get help with expenses health insurance doesn't cover.
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let's get to jim in stop trading. >> well, look. paypal is moving big now into bitcoin. they're able to make transactions it was used to buy new boots i do think one of the problems you're going to run into with bitcoin is is there a taxable event when you buy something with it? and that's what i would be most worried about.
i understand people really want to trade with bitcoin and paypal and square are the two that are front and center everyone else is a little two circum circu circumspect. they put out a little too many press releases they mean it, but you should cull your accountant it should be interesting to see what happens. >> we didn't get to the discussion about a rise in corporate income tax, whether or not finance is going to impose new taxes to help pay for infrastructure although, there seems to be some resistance among some of the moderate dems. >> yes senator manchin is monitoring the country. i think there's a sense that -- i don't know if you're buying new core or as avulcan material there's in the cavalry besides infra. i think those are the three you can buy and not be worried there's no bill. >> tonight macy's, caravan in a?
>> yes, and vista outdoor. hunting and shooting but also camelback which i like. so -- and i'm a hunter and fisher that stock sells at about 7 times earnings it's not an esg play put it that way. >> right right. jim, we'll see you tonight always fun >> thank you >> mad money, 6:00 p.m. with jim cramer good tuesday morning welcome to another hour of "squawk on the street. i'm carl quintanilla with morgan markets sustaining mild losses as we continue to watch for more fallout out of arkagos now to rick santelli >> these are really big numbers, carl our march read on consumer confidence is quite confident. we're expecting 96 now we're well over 96 we're well over 100. 109.7.
109.7. that is one powerful number. and that takes you all the way back to march of 20 20 when it was 118.8. boy, if there's any reason or any doubt as to why u.s. treasury rates are going up, this is the number you should be looking at if you look at present situation, 110 110. another huge number takes you all the way back to march of 20 to find the camp although, the comp was 166 but still, that is the next comp if you look for the next largest level. and finally, expectations. what may lie ahead 109.6. just to show you how powerful that is. the previous read is 90.8. so 109 and change is just a powerful number in all of these numbers are precovid or at covid that last number, well, i only have enough numbers here to go back to january 2020 didn't think it was going to be that strong. this is bigger than any of those
numbers. so watch rates pay close attention to 2.45 and 30s. 30s are a little tighter today that's the intraday high you want to watch. that's the current high yield close. morgan, back to you. >> pent up demand. there it is. rick santelli, thank you markets might be closed for the easter holiday economists are predicting a strong friday jobs report. steve liesman is looking at the high frequency data and what it's telling us to expect. steve? >> you didn't make a pun about it being a good friday for jobs. >> oh, man what a missed opportunity. >> i got -- i got another pun for you. everyone on wall street is always looking for seven figures. and that's true for some forecasters when it comes to the march jobs reports some economists think this could be a million jobs march. data from home base. they track employment at 60,000 bases and a million hourly employees. show hours worked rising nearly
9% compared to january the number of businesses opened rose just about 2% so the job growth is coming from existing businesses at this point. the v.p. of data for home base tells me we're seeing economic activity significantly higher than you would expect during this time of year. while the high frequently data has pointed the way to up side and downside surprises, tough tore use it to pinpoint an exact number it's a big part of the reason that several economists predict a million jobs or more in the friday report. compared to the average estimate on the street is 675,000 other data, also in the million jobs camp, ramping up vaccinations, lifting restrictions on indoor venues and reopening schools for in person learning combined with spring break are expected to have boosted employment during the month. the home base data show job growth in a place you'd expect it if it was related to reopenings restaurants and bars
home repair, it's been a stalwart in the pandemic it seems to be picking up. a strong report ukg, they measure ship worked. they had the best month since september and noted stop manufacturing job growth tomorrow we'll get the adp number thursday jobless claims and hopefully it's a good friday for the jobs report. >> right although, are we generally looking at adp now with some salt with a grain of salt in advance? >> sometimes, yeah i mean, look, everything goes into the hopper. the other high frequently data has come along in a sense adp was -- the idea of private sector data that came before the official data people use it for surveys. we have other data now, home base has gotten a lot of attention as has the ukg data. don't rule anything out. use everything and follow whatever we can. i'm saying that some of the high
frequently data pointing to a hot number on friday >> yeah. it's a great place to start with our panel. thanks steve liesman. let's bring in our guests this morning. good morning, guys good to see you both >> good to see you >> good to see you, carl >> christian, let me begin with you. to steve's point, we got all the these alternative data trackers. jpmorgan implies a seven-figure print this friday. officially they're at 650 k. are you in a seven-figure camp >> well, whether it is seven figure or 900,000, it doesn't really matter. i think the bottom line is everything for march and probably for the second quarter, everything is coming together. you have earlier it began with stimulus now reopening there's a bit of weather effect going into all of this
so this is for a short period of time anyway, a boon tide and whether it is 900,000 or a million doesn't change anything. >> and then meantime, we got yields which we talked about all morning long i see quarrels on the tape this morning saying under the new fed framework it's not the time to jump the gun, as he says on tightening i guess my question would be what happened to the idea that by the time it showed up in the data, it was already too late for the fed? does that no longer work >> so i think what we're seeing here is really the economic surge is here. it's all over the march data consumer confidence as well as our chase tracker of credit card and debit card spending for march showing a strong up tick the flash pmi on thursday should show strong up tick in business confidence so we're just beginning the surge in the economic recovery, and that's what you're seeing affect the long end of the bond
curve. in terms of the short end, it's all about that change in the fed's framework. it's really much more reactive and much more about actually seeing inflation structurally pick up. that keeps short end rates anchored so we expect to continue seeing this steepening of the yield curve as the year progresses and investors embrace the optimism about the economic recovery in both bond markets and equity markets. >> in terms of the economic surge, i mean, how much of that is already priced into the market here just looking beyond 2021, is it still a wild card? are all bets off i mean, we know this year we're getting this economic recovery and the stimulus and the effects of that in the market as well. next year potentially tax hikes, maybe more regulation. what does that do to the market? >> well, i think that is the million dollar question, more than anything else i think this year is -- there's no way for growth to slow down,
and rates probably go up and what the fed and the markets have to worry about is how things will play out in perhaps in 2022 and more importantly, in the second half of 2022. once the stimulus passes and all these contract policies come into the market, 2022 is going to be very, very different than 2021 all of these effects that are tail winds today will be significant head winds in 2022, and to some extent, i think the bond market will probably see through it so i think that's sort of in a way, caps how much the long ratings can go, especially with the front end anchored that is how much -- how steep with the yield curve be? and i think that's going to be a limiting factor in ten-year rates. 2021 is going to be superlative. 2022 is going to be a very different ball game, and i think that's what we equity investors
focussed on, 120i that much. >> we're hearing more about the synchronized recovery. certainly the u.s. seems to be spearheading the economic growth or that's the expectation this year as reroll out vaccines so quickly and wet shots into people's arms quickly. are there opportunities to be had in the u.s. or should an investor look abroad for maybe some more meaningful plays through the end of the year? >> we really believe that investing internationally is a really important piece of dialing up the cyclicality and portfolios international markets, especially europe, japan, they're more cyclical than u.s. markets. over 55% in cyclical sectors we believe the global s synchronized recovery is delayed, not derailed. europe is three or four months behind the u.s. in vaccinations and reopenings but it's coming. if you're a long-term investor,
it's worth making the positioning change now for what's to come in the quarters ahead. so we would be overweight international versus the u.s especially europe, japan and with a bit more selectivity within emerging markets and what we find is clients are absolutely not positioned for that they need to double the international exposure given the u.s. outperformance over the past decade. >> huh last question. i wonder if you agree. and if you do, how do you convince or calm investor's nerves when you get headlines like we've gotten the past few days out of brazil and turkey? >> yeah. so i think international markets from a valuation perspective are certainly far -- far more interesting. having said that, i think in the rising rate environment, you know, that's a very challenging allocation so i think for international markets to do well, we will have to deliver meaningfully higher
growth profile than what we are expecting because without that, with rates rising, they may not -- at least from a performance standpoint,they ma not do as well so i think for this trade, the international trade to work, emerging market growth has to be significantly better than what we are expecting today to some extent, if you are going to go that route, i think you have to find places and sectors where the valuations are very attractive and where the cyclicality will come into play. that's places like south africa, russia, rather than china and india. >> right love seeing you guys such great advice and insight. great to see you i think this is a relatively new gig. congrats >> thank you >> see you later >> thank you coming up, much more on the sharp drop in the prices of credit suisse. we wait for the final results on the decision to form a union
all the names in focus as we follow the margin event. part of the downfall was the inve or the's high risk appetite something leslie picker than watching this morning. >> bill wong flew a little too close to the sun here. he seems to have had an insatiable appetite for risk he grove his capital management into an investing whale in quick order, but when several positions turned against him, it didn't take much to tip his firm into turmoil, causing tens of billions of dollars worth of forced selling now, the risk levels he ran defied logic i spoke with several hedge fund managers who said they could not fathom that type of tolerance. banks were lending at ratios as high as 8 to 1 are, citing people familiar with the matter added in some trades ratios were as high as 20 to 1
that means for each share purchased, he was able to borrow money to buy 20 more eve an small move down can force significant pressure on the positions. wong also reportedly ran a heavily concentrated book with names like viacom, cbs, discovery, a group of others across the six or so prime brokers he was working with, wong was able to amass a huge portion of stock in many of his holdings in some cases, more than .1% of the shares outstand. that made it so he was practically a liquid in the names when the margin calls happened a spokeswoman for the firm telling cnbc, quote, this is a challenging time for the family office of arch jegos capital management our partners and employees. regardless, though, of the
idiosyncratic nature of the risk appetite, it's raising questions about things like transparency, about the siloed prime brokerage system and regulations governing family offices >> so many questions stick around, leslie, we'll want to talk to you about that later. bill wong maintained a low profile with investing now the mystery charity that robert frank has more on >> bill wong's charity called the grace and mercy foundation has about $500 million in assets that makes it one of the 100 largest foundations in the country. yet, it is almost unknown in the broader charity world. the foundation's latest risk filings show the foundation purchased shares of several private offshore entities that lost month and had a large morgan stanley swap that lost over $5 million. regulators saying it's unusual
for a charitable foundation to invest in private offshore funds or the swap trades the foundation's big gains actually came from amazon stock. in 2018 he donated to the foundation amazon shares worth $30 million. he had purchased them for just under $10 million. he avoided the capital gains tax on the 20 million gain, and also, of course, get to deduct that gift to offset his income taxes. the foundation awarded over $16 million in grants. that's at the legal level for a foundation 5.5 million going to the fuller foundation $2 million to the fuller theological seminary $1.2 million to the museum of the bible. also big gifts to schools in englewood, new jersey and manhattan. clearly, he was generous with the funds, but a lot of questions about how those funds were invested and whether those assets and investments related in any way or supported the
family office. back to you. robert, don't go anywhere as well hang tight we want to bring in husan who has been reporting this entire story. as we compare the mira camp with the morgan stanley camp and ask broader questions about what primed brokerages have learned about visibility, transparency, collateralization since the crisis >> look, i think this is a perfect example. you really get great examples of the difference in risk management, and letting it unfold in the public view. you have goldman sacs and morgan stanley, the prime brokerages in the world. they have the greatest scale and most sophistication. getting out of this trade, even before the time they had to disclose they're experiencing material losses. this shows really the difference
in sophistication. it shows that perhaps at least at the very top of the league charts that the biggest prime brokerages are have learned a lesson from previous low belowups and from the 2009 crisis and that if you're outside of the top five or six, and you're seeking to break into prime brokerage and the lead on price and to lead on maybe we'll take less collateral, that sometimes that comes back to bite you >> yeah. i'm curious. you're starting to see the reports that obviously not all banks were created equal and in terms of how this margin call played out these liquidation events across the different banks. is it really sort of a race to be first in terms of placing those sales and if so, is that something that now changes i mean, could you potentially see more communication, or not >> well, so morgan, one thing
that is very material to the question you asked is in the days before this went to the public view on friday, the five primes got together with bill hwang and they tried to have a cease fire and tried to do a more orderly liquidation and get together and say let's not all sell at once we know what it's going to do to the prices of the names. and yet, what happened the cease fire did not hold. goldman and morgan stanley went ahead. for my money, i don't understand everybody knew the stakes. in risk management 101 that when there's going to be a fire sale, you want to be early or you want to be the first part of that and they weren't and so on credit suisse, was it the fact they didn't have equity force to off load the blocks and that's why they were reluctant to sell? was it the failure of risk management i don't know
what we know is what we can see in public. it seems as though they really -- they had a failing of risk management here >> robert frank, i want to bring you back into the conversation i mean, tremendous amount of wealth amassed for this family office and within a matter of days, so much of it obliterated as well, erased i'm seeing numbers from 20 billion to 50 billion. do we know yet co -- do we have a sense of how large the holdings were for the family office and how much has been lost? >> we don't. and part of the reason is that family offices got an exemption back in 2010 as part offed to frank to not file with the sec as registered investment advisers they don't have to report their assets one of the interesting trends here is that right now wall street is dying to serve the family office market in terms of fees and generous terms on loans. so one of the causes i think of
this is that there's $6 trillion at least in assets right now house and family offices that number expected to grow by trillions more in the coming years. so banks, whether it's the swiss banks or goldman or morgan stanley, i know they're piling into this market anxious for the fees so the question will be how far out on the curve are a lot of these family offices which have traditionally been very conservative, but in the past few years have gotten very leveraged and very active in deal making? so i don't know whether this is a one off in terms of size, but more things like this are likely to happen as that family office space grows and gets more aggressive >> yeah a story you've helped our viewers understand over the past few days. leslie, i wontder how in general you're thinking about risk on the street, especially if you talk to some at sc, they argue, well, this might have not worked out for our prime brokerage
business, but being aggressive sometimes pulls off. it's a tough call sometimes. at least, they would argue >> yeah. i think it's disappointing for a lot of people who have worked in particularly the equity capital market side of cs which is seeing one of the best years if not their best year ever, because of the spac boom and the ipo boom, and secondary sales as well that have been a boom to their business to wake up yesterday and see just their stock price plummeting over some of these issues. must be an incredible disappointment you know, especially after all of the work and they had to pay out the $20,000 bonuses to junior banker who is have been working overtime so i think there are a lot of dynamics at play with regard to what's happened here it's also worth noting, and i'm still reporting this out that there were some banks that just did not do business with hwang due to being implicated in
some of the insider trading situations back in 2012 while he was in charge of tiger asia. for them, that was enough despite the lucrative fees to say you know what? i don't think we can do this kind of business regardless of the potential up side here for us, because of reputation reasons and risk reasons and so forth. so i think that's also something that will work its way into the conversation as we continue to do our post mortem today >> yeah. and with julian robertson, too at least defending wong's market this morning on the tape something we'll watch. a fascinating story. we'll cover it with your help. leslie, robert and hugh. later this hour, we'll talk about some of the port problems. more delays in global shipping caused by the massive block at the suez we'll talk to the executive director of the port of l.a. do not miss our at work summit starting today, 11:30 a.m. eastern time. i'll be talking to matthew
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it is now time for our eft spotlight. today we're looking atticer arkx debuting today it's trading down almost 7%. the space industry has been hot as of late with seven space companies announcing spac deals in the past six months don't expect to see the names in the etf for now. the funds holdings, raising eyebrows among industry experts and investors. names like netflix and deere making the cut we're going to speak to sam chorus about all of that an power lunch later today. also in the mix in the funds 39 holdings is virgin galactic. the company listing on the nyse in october of 2019, well, merging with a spac. and as you can see has performed
very well over that period despite trading flat about 150% over that period. we'll speak with that company's ceo later on this hour as they introduce a new spaceship. you don't want to miss that. it's game time, let's meet the defending champs. g. hargrave thomas, point guard. bryce matthias, forward. kim kietz, investor. oh, i invested in invesco qqq. a fund that invests in the innovations of the nasdaq-100. like next gen 3d rendering software. you don't have to be an advanced graphics architect to help realize a more vibrant future. become an agent of innovation with invesco qqq. ♪ ♪ i wish that i knew what i know now ♪ ♪ when i was younger ♪ you need a financial plan that fits
welcome back here is your covid update at this hour. the covid death toll in the u.s. is more than 550,000 that's according to the john's hopkins counts and while cases are increasing, deaths are down 30 % over the past two weeks the 7-day average is around 1,000 deaths a day and deaths in the nation's nursing homes are down 91% that since the late december rollout of vaccines in the facilities and industry group says cases are down 96%.
the german city of berlin and munich are suspending astrazeneca shots for people under 60 almost all the cases of blood clots involved women between the ages of 20 and 63. the benefits outweigh the risks but investigations continue say the regulators and angela merkel is holding a news conference later today on the issue. and in london 150,000 hearts there representing covid victims are being hand painted on a wall near the british parliament. the group sponsoring the mural calling for an investigation into the handling of the pandemic thank you very much. meantime, as e-commerce boom and consumer demand remains high, it raises a few issues for the ports in shipping. courtney is looking at what kind of inventory shortages we might see later this summer. hi there, carl the consumer resilience through
the pandemic is expected to continue through 2021. and while strong demand is great for retail, it's a problem when it comes to the inventory to satisfy it so west coast port congestion that started a year ago in large part because of demand for imported goods, has only gotten worse. consumers may find empty shelves when shopping with stimulus checks in hand 93% of retailers are experiencing inventory shortages, specifically from port congestion according to a new nrf survey some seasonal goods aren't arriving on time and more than half of retailers report congestion is adding at least three weeks of delays. sure, contingency plans are in place but they could increase the prices consumers pay more than a third are shifting to east coast ports. just less than a third are using air freight. 27% are using domestic sourcing or alternate west coast ports.
an analyst sees a key indicator of dislocation at many retailers. >> same store sales at dollar tree were up about 5 % last quarter. and inventory per store were up 5% if you look at companies like walmart, target, tractor supply, it's equally incredible to see the spreads between inventory and sales. >> nike, william sonoma and five below said inventory couldn't satisfy demand due to port delays and they talked about that in recent earnings call morgan, it's interesting a lot of the time retailers are pretty tight lipped when it comes to the supply chain. it's a competitive advantage they don't really want to give us a lot of insight on it.
this problem has gotten pretty bad. they can't ignore it anymore >> speaks to how significant the situation is the suez canal blockage freed after six days now the authorities expect it to increase the number of ships moving through that waterway from an average of 90 vessels to 150. the executive director joins us now. gene, thank you for being with us >> i want to dig into the retail piece of this. first, the fact that we have a blockage removed in the suez canal, i realize the impact, the trade flows of the suez canal tend to be more asia, europe cen centric. there's a possibility we could see impact on the east coast as well not a direct impact on the west coast, but indirectly, what do you expect the ripple effects to be >> you'll see some bunching of cargo vessels in the ports of
call you may see some of the lighter companies adjust their schedules to get their ships back on schedule and miss port calls for the west coast, a strong import shipments through the middle of the summer >> and i know that you've been breaking the cargo records at the port of l.a. we're hearing about and courtney just touched on this the congestion the port congestion and what that's meant for retailers to be able to get ahold of their inventory. what does the situation look like on the ground and how quickly are you able to move those containers, move the goods through the port >> vessel productivity is up 50%. 50% compared to the presurge or prepandemic days today at the port of los angeles, 15 container vessels. but there are 18 at anchor waiting to find birthing rights. the container dwell time is
higher than it was prepandemic the time to pick up the car at the port is over four days but it's off the high of five days sitting under dwell. out on the street, dwell time is a little over six days and it had reached eight days in the month of january so we're asking our importers to pick up the cargo as quickly as they can and return the containers back to the port. >> at this stage, is this something, do you think, that policy can help alleviate or is this a matter of time and waiting for these -- this flow to abate and fit more in tune with what capacity with handle >> wem, there are several things summer number one, we need our port workers vaccinated. there are more than 100,000 folks here working we've made strides with our dock wor workers, but we still have a lot of work ahead of us with respect to truck drivers, warehouse workers and others second, as i mentioned, we've got to pick up the cargo faster.
we can mend inkrus fluidity more qu quickly. 80% is considered full capacity. lastly, digitizing the use of the port optimizer, our nation's only port community system is meant to share information across stake holder groups to be better prepared with asset provision we need more folks to participate. >> we're hearing about container shortages. rail car shortages there's a list that's contributed to the perfect storm. that said, what is it going to take how long is your timeline, expected timeline to see some of this gridlock actually be able to move and normalize? >> we've already started to see a loosening. at the peak we had 31 ships at the san pedro bay. the amount of time it takes a
trucker to drop off and pick up containers has decreased to 77 minutes from 88 in december. we're seeing the trending in the right direction. we have so accelerate this before we know it, august will be upon us and we'll start seeing back to school goods. other sales items and then year 46 end holidays. the all important season for retailers? >> peak shipping season. all eyes glued on president biden in the infrastructure plan that's expected tomorrow as well so do come back and join us. neighbor we can talk about infrastructure at the port and what that wish list could look like in the future thank you for being with us. don't miss the race and opportunity in america special 8:00 p.m. eastern time tomorrow amid the rise in anti-asian violence, we'll look at the economic and social challenges facing the asian-american community. and we'll talk to business leaders including the director
we are the people of abm. for more than 100 years, we've been a leader in making spaces cleaner, from the things you touch to the air you breathe. today, more than 100,000 of us are innovating to ensure spaces are more efficient, healthier and safer. abm. making spaces healthier for you. welcome back to "squawk on the street." markets are mostly lore tore start off the day with notable weakness in technology stocks. but among the relative outperformers this morning as you can see me, you're behind me are the financials the banks are leading the charge there as for those stocks that recovered from yesterday losses, we saw that trading yesterday and the big bank stocks. giants like bank of america, goldman sachs and morgan stanley, some of the best performers today along with the regional banks like fifth third among others and this move in financials
comes as we, of course, watch an up tick in the u.s. ten-year treasury note yield. just about 14 months 1.74% the last trade there carl, keeping an eye on the banks. interest rates always a factor back over to you guys. >> perfect segway to the cme and rick santelli with the santelli exchange. hey, rick. >> good morning. thank you, carl. yes, the perfect segway. you know, everybody, of course, is talking about leverage and a couple of big name home offices that are kind of smoking and smoldering at the moment but here's what i frame the situation as low altitude flight to safety. because that is the issue. treasuries do many things. one of the best things they do is alert us when there is a smoking issue we need to pay attention to, and how does it do that flight to safety flight to safety in the 90s, think all of the
issues whether it was tiebot or some of the big famous funds that blew up what happened? treasury yields. price went up. yields went down think about brexit what was the first knee jerk reaction yes, but what happened this time around what happened this time around when leverage and margin calls were rattling everything around the world? crickets show me a chart in the last couple weeks where we had a real big jump in prices drop in yields and treasuries. any high quality sovereign piece of paper anybody? anybody? no, because it wasn't there. now, that doesn't mean with this big sugar buzz that's going on, there aren't a few cavities. because there are some cavities. and faangs getting hurs isn't a laughing matter. we don't see it because of the liquidity washing up and the vitality along with the potential epilogue of what's going on with covid. leverage is the toe keeper of
monetary stimulus. ultimately there's one issue with computer trading models and all of the horse power that goes into some of the systems that is ultimately, and the final analysis, i end up at the same destination, the same positions and big name stocks. so it's inevitable that we're going to get hiccups in the final analysis, don't confuse what's going on with leverage to what the ultimate game here is that zoom zoom zoom has the gasoline hits the fire and the fire is the reopening trade. morgan, back to you. >> rick santelli, thank you. low altitude flights here a little bit later in the show, we'll talk high altitude flights as well. owrgin galactic adding to the gring fleet. we'll speak with the ceo next. stay with us
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exclusive is michael frazier, co-ceo great to have you on the show. >> great to be here. >> congratulations on the new spaceship. talk us through what makes us different from the previous generation, says ship 2. >> this is the first of the spaceship 3 case, ss-imagine and it's the start of our fleet. we'll need many ships in our fleet eventually, but this is the second one out it has been built in a way that allows it to be i would say maintained and turned around in a faster rate because not only do we need many ships but the ability to fly many times a year so all the direction that's gone into the test flight program in our test ship unity has been brought into the spaceship 3 class and we expect it to have better performance. >> a lot of performance on the modular design aspects of this you've said that you're looking to get service to 400 flights per year how does this new generation of spacecraft enable that trajectory >> so part of the design process
allowed us to learn from unity, through the testing and say, okay, these are the places that after every flight we know we're going to inspect we know we're going to maintain and so we've created greater access for those places there, and the engineering of the ship is built to fly multiple times in a row before we have to do more routine maintenance against it, and so while we'll eventually need mini spaceships for everiship that we operate, getting the start of the fleet going is an important milestone. >> how big will the fleet be eventually >> so, we're not exactly sure. we think we'll need high single digits, low double digits for every space port in which we operate, so clearly that needs more of a production line there, and we've already pivoted to our even next generation, the fourth generation spins that will be more of a product vehicle for us. >> yeah. >> meantime, actually getting to the point of commercial
operations, spaceship 2, the rocket-powered test flight in december another attempt was expected in february you mentioned on earnings last month that you're now targeting may and then further test flights this summer. the is that still the game plan? is that still the timeline >> still the timeline. so when we went in december what, we ended up learning is there were electromagnetic interference going on the ship and we paused in our flight program to go tackle that at the source, and so that's what we've been doing that's what's been going on testing on the bench, testing on the ship, and we are on path and on plan to go back to space in may, and then following that we've announced three more flights. the second will be with a full crew of internal mission specialists and then we'll do another flight, and richardranceon, our founder, will join us, and that will really demonstrate the private astronaut experience and following that flight which we expect will have a lot of appeal we look forward to reopening up a tranche of sales forall the other people who are aspiring to go to space.
>> a lot of space news in general today. spacex as well today and jarred isaacman with inspiration 4 unveiling more details around that or notal first all civilian mission that's supposed to take place as soon as later this year i wonder what you think about the emerging more broadly, the emerging space tourism market. will you be competing for some of those i guess passengers and dollars in the future against the likes of spacex, or is there room for everybody >> i think what's really important is that the idea of space travel starts to become normalized you know, this is a very new thing that most people didn't think would happen in their lifetimes and yet here it is happening today, so i think you'll see spacex. you'll see blue origin do amazing things virgin galactic is going to own our part of space. we are incredibly focused on taking individuals up, giving them this glorious perspective back on the planet, and taking
that memory and sharing it not just at the next cocktail hour, i think it will be chaired for the rest of their lives so we're very confident what we'll be doing in space and we're cheering everyone on we want the whole industry to rise. >> we've seen seven space startups announce they are going to go public, the verger via spac virgin galactic was the first within the industry to basically pioneer this investment vehicle type as we do see more companies come to the park, the arc space exploration, etf begin to trade today, i wonder what your words of wisdom would be not only to ceos of these companies that are looking to go public but also to investors as space is technically hard timelines tend to slip, especially when you're talking about human space flight how -- how should folks be thinking about it when you're the reporting quarterly results and right to meet some of those key targets? >> well, as you say, you know, space is audacious, and the physics are very challenging and
hard to overcome so the engineering has to step up to that task. human space flight has to be safe as we go, and so all these companies are ground in a safe experience, and that means as we go through flight test programs we're going to go step by step and evaluate things at each time so my advice would be recognize this is the launch of an industry and a long-term plan. we're going to do amazing things in the short term. we're going to bring people up to space, but i think we are doing so for a company that's going to be built over decades, and we are making sure that we take it step by step each time so while real report out quarterly, we're really focused on the long term. >> yeah, michael colglazier thanks for joining us today. >> thanks, morgan. >> shares of virgin galactic up 2%. >> now for the all civilian mission, thousands applied but simon proctor and kristin borowski who both work will be
joining isaacman and health care worker, haley arsenault, a cancer survivor and this mission is raising money for st. jude's. they will launch no earlier than september 15th for an expected three-day flying that's the new crew at kennedy space center this morning. it's going to be flying since any human since hubbell in terms of the trajectory. jarred isaacman is going to join us here on "squawk on the street" on thursday morning. don't miss that. meantime, spacex testing its latest starship rocket ship prototight in texas, crash landed after another clean uncrewed launched and the fourth high altitude test since december they continue to generate these prototypes and test them really at a rapid dip, at least by space standards. carl >> yeah. meantime, morgan, do not miss