cheryl: markets rise to session highs on jerome powell's comments. he is saying the time for moderating increases may come as soon as december meeting. that got stocks taking off, charles payne. i call this is the cc effect but the jp effect. charles: give me a little credit. [laughter]. here's the thing, it taint over yet. remember that fed meeting we got excited from the printed

material, the q&a might really dictate everything. thanks a lot, cheryl. cheryl: you bet. charles: folks, good afternoon, i'm charles payne. this is "making money." breaking at this moment we talked about it, the speech markets were waiting for from fed chair jay powell. giving markets some comfort. remember the stock market rallied big time when the fomc meeting was over and came the q&a session it was crushed big time. we're monitoring that. we have the best in the business, liz ann sonders, phil blancato, gary kaltbaum all on deck. the inaugural edition of options schools. option strategies you can cash in on. 2:15, get out your pen and pad. janet yellen says the ftx collapse could be the lehman moment for the industry. binance ceo says the contagion is not over yet. we have john denton at 2:50. my takeaway on the not so invisible hands on special

interests, who must go to work and stay home and collect checks. that and so much more on "making money." >> all right, federal reserve chairman speaking at this moment. go to edward lawrence in d.c. edward? >> reporter: charles, there is something for everyone so to speak in this speech. the federal reserve chairman said it might be appropriate to moderate the pace of increases and december might be the first time to be appropriately moderating that pace going forward. on the other side of that he says that the chairman believes that the core inflation is moving sideways and should have started to come back down right now with the amount of significant tightening that the fed has done. powell saying that the path is highly uncertain that inflation will come back down. he says that the ongoing rate increases might be appropriate but clearly signaling that moderation for the december meeting although acknowledging that the fed has a long way to go to get inflation under control. powell looks at the labor side of the equation in the speech

people are retiring at a greater rate holding down the labor force participation rate. he argues slowing demand should bring the labor force back into balance. the other concern for the fed chairman is wage growth. he says sustainable wage growth, to be sustainable it needs to be consistent with the 2% longer target range of inflation and at the moment he says he is not seeing that. the federal reserve chairman also saying that he could see a restrictive policy for some time and more rate increases might be appropriate but again, with moderation. charles? charles: all right, something for everyone to your point. edward, listening in on the q&a session we may go back to you. meantime, folks, we had an avalanche of economic data this morning mostly confirming the economy is indeed slowing. the big question, is it slowing fast enough. jay powell speaking at brookings. we'll go back there. talk about some of the things we're seeing, the economy, we saw the gdp number for instance for the third quarter. better than expected.

real gdp number 2.9%. wall street likes that, look at construction of it, consumer spending is okay. business investment is the wild card but down here you have a housing market that is imploding and of course inventories are now down as well. then of course, some are saying well the fed want as recession. maybe they want stagflation. either way though it means you have to beat down the consumer. look at the consumer checklist. the unemployment rate, 3.%. down from 4.6% a year ago but we know the fed needs this to go maybe 5% or higher. consumer confidence is plunging from a year ago. the cpi report, okay we got a break on inflation, 7.7%. we're down from 8.2% but let's face it this is still multidecade high. this might be the real thing you need to look at. savings rate, 3%. almost 8% a year ago. how do we offset that? revolving credit, year-over-year up 15%. that right there scaring the heck out of a whole lot of

people. there are still more we need to cover. as i said a lot of things we need to look at. so the housing market, i want you to look, these are all the times that the fed went to hiking cycle. this is where we are right now. never has the housing market reacted this way. it is absolutely imploding. it will probably be more carnage there. joining me now charles schwab, chief investment strategist, liz ann sonders. we got the adp report this morning t was not exactly, not exactly a harbinger of the bls number. i do think the trends usually match up. that is what everyone is looking at the friday jobs report. what do you think of all the data we're consuming right now? >> you're right, adp is not a proxy for the bls establishment survey that gives us the payroll survey numbers. adp tried to make adjustment to be more in line but it can be a

wild card in terms of the miss relative to the establishment survey. i think what is really important on friday is not discuss the headlines of payrolls and the unemployment rate but what the household survey says. bls does an establishment survey. that gives us payrolls. they do the household survey to generate the unemployment rate. just to put this into perspective, the last seven months the establishment survey suggests almost 2 1/2 million new jobs have been created in the economy. the household survey says it is 150,000. charles: right. >> that is extraordinarily wide gap. for what it is worth, at inflection points down in the economy, the household survey tends to be a bit more accurate. charles: right. >> the payroll survey tends to be revised down. keep that in mind. that would be one sort of subset of data points that i pay a lot of attention to on friday. charles: liz ann, i have this up, you posted this when it happened. i want people to see what we're talking about here.

blue lines are the non-farm payroll. that is the establishment. 2.45 million this is 150,000. i mean the difference is mind-boggling and again if they had just, what the household has been saying that could be maybe relief for wall street. i want to ask you what is happening in other parts of the economy, for instance with the yield curve. we're getting major signs of recession there and yet there still seems to be a glimmer of hope that a soft landing is still achievable. what do you think? >> so i think that the best-case scenario is not really a soft landing in a traditional sense but a continuation of what arguably has already been underway for much of this year which is a rolling recession. you touched on it before i came on. housing has been absolutely imploding, deep in recession territory, no question about it. the yield curve is pointing to recession. you've seen it in consumer

confidence, seen it in ceo confidence but the nature of covid and the pandemic is such that we got an initial past to the economy and inflation the good side of the economy, exclusive of housing that has now rolled every into recession territory. not where pressure on inflation is. we have that offset in terms of positive growth still on the services side. given services are larger employers that has kept the labor market relatively afloat. so me it would be a continue ages of a rolling recession that would be a best-case scenario. to me no question that parts of the economy are already definitely in a recession. charles: all right. liz ann sonders thank you very much, always appreciate it. >> thank you. >> all right, folks, as i mentioned the inversion, yield curve inversion,0%, more than 70% of your yield curve complex, i guess there is 10 of them wall street looks at, they're inverted. in fact some of them are steeply, really have steepened

and so you know talk about that, you talk about a soft landing it doesn't necessarily jibe. i want to bring in advisors group chief market strategist phil blancato. there is a lot of difference for the stock market whether there is a soft landing, a shall low recession, deep recession, they throw the terms out there but they're significant in terms of what happens to the market, right? >> they are significant. in the end the stock market will rally long before we worry about a deep recession or the fed will cut-rates or start cutting rates or. we've seen this movie before. we've seen the yield curve become inverted before in fact sometimes 20 months in advance of it. i would say to you don't panic about an inverted yield curve. doesn't mean we can't still get a very soft landing. i disagree with liz ann, i think she is brilliant, when you have full employment which you have right now, regular wage growth

you have right now you just don't get deep recessions. i say this is front of us is a soft landing not a hard landing. >> she said she might start to see revisions that change the narrative. >> that's fair. charles: exogenous events influence the stock market, and lockdowns in china and other things, how do you invest around these type of things? >> that is critical point. no one can tell what happens tomorrow, not anybody. what do you do at a time on this, earn to be paid, wait, earned to be paid around. in other words how much income can you generate right now to smooth off the rough alleges of your portfolio? what high dividend-paying stocks? what will you do in the bond market. bond market get five and 6% yield. more income you generate in the portfolio right now the softer any impact from a exogenous event for your portfolio f china

really shuts down, how do i with stand it, safeguard against it? be paid to wait around. that is what you do right now. earn the biggest dividend you can with the least amount of risk to get it. charles: we got you on that side, what about within your equity portfolio? are you, have you changed the composition of that? >> more so than ever i'm overweight large dividend-paying stocks. think about the names where you can make outsized dividend, whether retailer, energy company, utility company, to a degree banks. those where i'm overweighting right now in the mid-cap sector, and large cap sector. mid-cap value, especially mid-cap value, getting really significant equity dividends. i don't care what happens in the daily gyration. i'm worried about a exogenous event that could impact my portfolio. i get large equity dividends from places where people are spending money. that is where i with stand volatility that may come or fed may or may not do or recession or what is happening in china. charles: sounds like you're a

lot more defensive in nature. phil, thank you very much. we'll talk more again soon. everyone agrees on one thing, that earnings are too high. that they have to come lower. obviously they certainly will be lower in first half of 2023 along with profit margins. henion and walsh president, cio, kev maugh you're in the camp that the market is too expensive. everyone is there to a degree. everything is based on earnings and profit margins. this is where profit operating margins have been. we're coming down slightly. where do you see this going because this is really, you know, where people are looking at with respect how to model or how to put a valuation on this market? >> yes, charles, and i think investors are about to be head faked about the perceived strength of u.s. consumer, per seaterred strength in u.s. retailers perceive in strength in u.s. economy thanks in large

part to the record holiday sales continue to be reported. when we peel back the onion on the what do we find? americans putting more on credit cards, dipping more into personal savings than they have in decades. look at savings rate of 3.1%. that is the lowest it has been since 2008. half of what it was prior to the onset of the pandemic. how much longer can that last? charles: to your point as this goes, almost 8% a year to 3.1, revolving credit, we weren't using credit cards hardly at all. now 15%. this is the biggest spike in 20 years. >> that's correct. charles: and then on black friday you saw buy now pay later. 72% increase. that is mostly gen-zers out there hanging tough what is latest on tiktok. some call it a trap whatever itself. feels like we're on borrowed time. >> absolutely. 70% of the growth on consumer spending fourth quarter will look relatively good but don't be faked out by that. we know they're putting more on

credit cards. dipping more into the savings. first half 2023 will look much worse than the second half of 2022 did. charles: now is the irony that is kind of good news with respect to the markets? is that, that is what jay powell wants to see. that is what he has been engineering the whole time. the other wild card unemployment rate. this is far too low. i'm thinking powell wants 5%. what do you think? some are saying though much higher than that? >> we have not even realized impact of all of these massive interest rate hikes throughout 2022. we will during the first half of 2023. that is why i believe all likelihood they scale back the 50 basis points this month. do three 25 basis point increases during the first half of 2023 then pause. to see the impact. charles: pause is a four-letter word at the fed though. >> pause to realize the impact they have done. charles: let me ask you i have less than a minute to go. in the environment you set the stage for us. you like health care. >> i do. charles: it's a big space though. >> yes.

charles: is there anything specific within health care we should look at? >> absolutely. two-ways you access health care through large pharmaceutical companies and biotech companies. both have their merits. traditionally large cap pharmaceutical companies do well when the economy slows into recession. i like company like pfizers, merck, bristol-myers squibb, pay dividends above 2% have a lot of cash on balance sheets to spend. what could they spend it on? acquisition of smile e smaller biotech companies. we see pick up in the space since may of this year. i think that continues. >> there are so many ideas, so many things we want to discuss all the time. never really enough. i invite everyone to read my market commentary. i work on it day and night. go to wstreet.com. meanwhile get out a pen and pad, the inaugural edition of options school with the very best, jon najarian after this.

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♪. charles: so even intense markets, sideways markets there is always something somewhere going on and that's why great option players, that is how they find opportunities to capitalize on. interestingly this action is often contrarian in nature, right? it is really odd. you don't see the value proposition in part because the news. joining me now market rebellion cofounder jon najarian. i'm trying to say, for instance, we're watching scenes of a rare uprising in china. folks are upset about the lockdowns, limited freedom, all of sudden that is going on the chinese stock market catches a bid. i have the fxi here. it is absolutely on fire on the verge of making a major breakout this is something you look at. you have a way of looking at it. you always seen major options activity on it. explain it to us, bullish call spread for the fxi. >> sure. well, charles, you're so right,

especially in times of uncertainty options become a go-to financial product and people and large institutions that trade you just showed is probably a very large institution, they bought 57,000 calls in the fxi. now every option is for 100 shares. so you got to put two zeros on the end of that 57,000. that is 5.7 million shares of the fxi. that's a big trade in anybody's book, i don't care if you're icahn, blackstone, whoever. you're putting a lot of money on black basically. charles: that's right. >> you're deep in the black today, charles. those calls are rocketing higher as so many of those chinese stocks you described from xpev on the e side, on the ev side to baba, all of those stocks were just double-digit gainers today. charles: let me ask you, jon, because these are february

calls, right? february 30. 5.7 million, the equivalent, if someone looking at this now, also i just showed the chart, looks like it could be and the cusp of a major breakout could this be something worthwhile, something worth chasing? >> i think so, charles. frequently what my brother pete and i see, unusual activities short-term in nature, sometimes just a day, sometimes a week. this one is out there a full three months into the future. something that gives you that much time to be right somebody wanted to be in the game for a while, not just a short hit but a longer trend. charles: right. >> so i really like that as a tell right now, charles. charles: let's talk about gold. you know, been something of a disappointment but you got a couple gold stocks you're looking at 2023 and again we've got this sort of thing where looks like they're certainly put in a bottom. kgc, au, both taking off. they're both down for the year

which is probably good but on the cusp of turning positive. how do you play this with options? >> you buy at the money calls. in the case of kcg, it is a 17-dollar stock, the other one, ashanti is four dollars. either of these two plays, charles, you want to buy an at the money call. one of the reasons probably the blow up we've seen in bitcoin. it was supposed to be the new gold. you and i heard that. i heard you last week talking with max keiser about you know, the new gold and so forth but the shine is off of bitcoin because of sam bankman-fried and a host of others so now gold has gotten its turn to be back in there as an asset class that people scramble to when they're looking at either. a, disruptions in the world or b, interest rates, perhaps easing back down towards that tina level, there is no alternative. there is an alternative right

now but if those rates come down with chairman powell's kind of not so hawkish statements, i think that is why you're seeing the gold bugs back. charles: i think one other good thing with gold, the risk/reward down here, right? it feels like no matter what you have very good support. >> sure. charles: it may not take a lot to get it going. jon, thank you so much. we'll learn a lot from you. i can't wait to keep doing these things. appreciate it. >> thank you. charles: speaking of crypto janet yellen says yeah, it is time for regulations but is that something we want? if we do get it how much should we expect her to really cooperate? first i want to break down the latest on consumer inflation. the conference board's dana petersen is with us on an economy everyone is trying to figure out. ♪.

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♪. charles: so yesterday consumer confidence came down for the second month in a row. in fact now it is at the lowest reading sense july. present conditions dipped but it is expectations, folks, that continues to catch my attention. remember just a few months ago it was at a multiyear low. joining me from the conference board, their chief economist, dana peterson. i was reading where the drop was driven by 55-year-old and older group and that makes sense. it pushes back on narrative there is so much excess savings out there that the economy is okay? >> i would say yes, definitely in our survey, showed folks who are 55 and older were less happy and certainly those are the folks who remember inflation and also people who may be much more sensitive to inflation especially on fixed incomes.

in terms of the income groups, it was not only the folks who are making less than 50,000 but people solidly in the middle class, folks making up to $75,000. and so i think that is you know, even though, certainly the federal reserve has this survey that shows that there is excess savings doesn't mean that savings is readily available and people are concerned about, concerned about whether they will have a job in the future that means they will be less happy, less spending. charles: you mentioned inflation. your year out edged to 7.2% from 6.9%. higher than other surveys out there. you know to me it is clear there are certainly cracks in the economy. they're starting to widen here a little bit. but at what point, could we be at a point where these cracks become more pronounced? maybe sooner rather than later? >> well i think certainly there are cracks in the economy and we've already seen it in

housing. housing activity has slowed pretty dramatically. that is consistent with the fed raising interest rates. certainly consumers have been saying they're unhappy. they have been signaling recession for months now and so i think that, that is all, we're starting to see that borne out in the data. certainly consumer spending slowed from the breakneck pace. businesses are starting to pull back on investments and some of them are even signaling layoffs. charles: dana, chairman powell still holding on to hopes of what he calls a quote, softish landing. from your work is that a possibility? >> well, it depends how you define that. if it means that you can slow domestic demand, right? meaning less consumer spending, less business investment, less housing purchases but not do too much damage to the labor market maybe that is how you can define it. certainly we think that the labor market probably won't be as bad off this round as it was

during the pandemic, also during the great recession. we think the unemployment rate might rise by about 1% from where it is now and that is really not so bad. you would still be in the mid 4% range which is a really tight labor market. charles: ironically a lot of folks on the street think the fed needs to see 5% or more. dana, great works as usual, thanks for coming on to explain it to us. thank you. >> thank you. charles: as the global economy teeters on the edge of recession and americans grapple with that and runaway inflation, my next guest says you ain't seen nothing yet. buckle up it will get a lot worse. jibbing rickerts predicted worst economic crisis. in his new book he has new prediction, collapse of the global economy. jim, should i call you mr. happy on the way out? congratulations on the book. it is out next tuesday and can get their copy, reserve it right

now. the talk this week is centered around the federal reserve and jay powell. every week in the stock market we get more away from the fundamentals and more on this kind of stuff? >> that's right. this is season 1 episode for jay powell. he gave a speech august 2th, jackson hole hole. september 21st at the fed meeting. he said the same thing today. it is a little more explicit and definite, there will be recession. they don't use the word recession. clearly implies that. unemployment will go up. rates have to go higher. look, it will being 50 basis points at the december meeting. not 75 basis point. so, powell was pretty clear about that. but he also said, but, there may be a longer series of rate increases. charles: right. >> you have the 2023 calendar. february 1st meeting. on march 22nd. maybe two more rate hikes after december and a very long pause.

the market taken up the pivot narrative which the fed will somehow have to stop earlier to cut rates but powell said no, that is not what we plan to do at all. yeah i think he is making it very clear if the market has a different view, that is one thing but, powell has said, he used the word pain in his jackson hole speech. he kind of repeated that. charles: i will ask you a little bit. i will tap into other parts of your knowledge, talk about the idealogical divide in this country that is severe but now seems to be becoming economic and business divide. elon musk allowing free speech to americans who were previously banned from twitter has advertisers fleeing. the white house now saying they're monitoring him. apple may be ready to cut the chord to millions, potential hundreds of millions of customers. tim cook on his way to d.c. to meet with republican lawmakers. what do you make of this? i'm really worried where this is going? >> yeah. i think elon musk is doing more

for free speech than anyone since james madison wrote the first amendment. he is advocating for that. tim cook is getting hammered from both sides, one miss support for china. what is going on in china genocide that killed 20 million girls at birth. you know concentration camps, atheists communists and worse. i have a little more sympathy for his situation there. at least spent 30 years building up the operation in china. you can't shut it down overnight but as far as free speech is concerned, take twitter off the apple store platform i would hope that the congress would react pretty vigorously consider antitrust action. cook has to decide what side he is on free speech or not. charles: jim a little minute to go, less than a minute to tell us about sold out. why and when the global economic collapse will happen so i need to know when i build my bomb healther. >> start now. the economic collapse is already happening.

we see in china not because of zero covid and protests which is a normal reaction to the lockdown, china is slowing down, probably negative growth. they lie about their numbers but they're probably in negative growth. europe is the at point of recess. u.s. showing a little more strength but i see severe recession coming because fed is overtightening. powell is at the terminal rate. he doesn't know it. he will be the last to know. market right inflation will come down, coming down a lot faster than people expect. that is not good news for stocks. rates are coming down buy tech stocks. rates are coming down because we're heading into severe recession. we explain in the book. supply chains never go away, been around 3,000 years back to the bronze age. hyper efficient system is broken down. so you break in the can't put it back together. we'll have a new vase. we'll have college of nations where democratic local societies trade with each other but china

is out in the cold. charles: wow. you know what, there is a lot of economic purists who will hate that idea. i love it. i cannot wait to read the book, jim, very much. appreciate it. >> thanks. charles: coming up, folks, binance's ceo warning that the crypto contagion is far from over. we'll ask crypto law founder john deaton about that and his battle with gary gensler. but first jay powell has spoken. the markets are listening. gary kaltbaum my friend who has been somewhat cautious right after this. ♪.

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at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect. charles: federal reserve chair jay powell just wrapping up the street in washington. edward lawrence what he said about a soft or softish landing. reporter: in that q&a session

you talked about where it started to affect the markets. he did a lot of the q&a talking about the moderation, saying he sees restrictive policy for sometime with that moderation. he was asked about the soft landing. powell says he sees the window for a soft landing but sees it as narrowing. he define ad soft landing basically slowing down demand in the economy without pushing it into recession and seeing somewhat after small increase in the unemployment rate. taking car driving on the shoulder not completely off the road into the ditch. he believes in seven or eight years of an expansion we can get back to 3 1/2% unemployment rate, record low with low inflation although he refused to say if they could see that scenario while he was still currently fed chairman. he has three more years left on his term. charles? charles: all right. edward, thank you very much. meantime my next guest says the market is quote a big bowl of

slop. joining me caught obama kaltbaum capital management gary kaltbaum. gary, you're over the fed. jay powell moving the needle a little bit today. the market would simply love the fed to simply go away. >> i'm a big believer, it is not the news, but how markets react to the news. excuse me, october, the date we gapped up nine hundred points the market ran off of the inflation number. now you got this. so this is good news. you're getting some decent reactions. if we can break above the last three weeks highs, we've been very tight range for the last three weeks, we're going to have another leg up into the end of the year but you need a closing move above for the s&p, nasdaq, and nasdaq 100. today goes a long way for that to happen. we can get here talk, what he says, how he says it. i weep that one man's whims and thoughts is going to move in a

20 trillion-dollar economy and 40 trillion-dollar market. it just boggles the mind. charles: began with the greenspan briefcase. all i'm saying. we're looking at a briefcase, folks! our life is depending on a briefcase. you talked about the nasdaq 100 versus the s&p. let's just put that in perspective because the nasdaq 100, it had almost a decade run. just obliterated the s&p. that obviously came to an end late last year. we're tripping pretty much here. feels like we're at a point, gary, do-or-die or make this reversal. is that what you are waiting on before becoming more constructive or aggressive? >> look all i've been doing is buying boring because the nasdaq and nasdaq 100 have been comatose. in this rally off of the lows in october, it has been a really big-time down move and the nasdaq, nasdaq 100 are hardly off the lows now. hopefully today is a wake-up call. i said if we break above the

next three weeks you get some more upside but overall i'm really worried that a lot of those names are down for the count. just remember, when we topped out after that gargantuan move in '99, stocks went wayside, b, never came back. they had their moment in time. remember a lot of the companies in nasdaq had gargantuan move. not talking small, medium, large, gargantuan. they get to the point of ridiculously overvalued and now is the comeuppance. we'll watch them. charles: 24% of these companies are zombie companies as the money draighs up. ask you about oil i know you're not in there, right? this divergence. crude oil has been hammered but doing great today. draw down of 13 million barrels. the street was looking less than three million. along with china reopening. at what point do you say okay? if oil stocks held up with crude oil getting hammered, if crude

oil comes up could we see a major break out in oil stocks? >> we've seen a lot of weird things this year, charles. one of them oil prices have really tanked pretty much since the highs in the summer but you have like hess, hes, right at the highs, a bunch of others. i will watch. if some of the names start breaking out of range, hes at 150 bucks f it breaks out of that others join in. yeah i will be looking at it. it is really weird because usually the stocks will follow the commodity especially a commodity that is really been hit but they have held up well. it may me something for the commodity going forward. charles: yeah. >> if i start to see the new yearly high list pick up with some of these oil names you know i will be in there. charles: sounds good, gary. appreciate the guidance. all we ask for. appreciate it. talk to you again soon. coming up, folks, my takeaway on the not so invisible hands of the special interests, the power they have over our lawmakers is

sickening. first janet yellen calling for more crypto regulation in the wake of the ftx debacle. i want to talk to john deaton about that and when will justice be served? next. ♪. the first-ever all-electric chevy equinox ev. up to 300 miles of range on a full charge. and a starting price around $30,000. evs for everyone, everywhere. chevrolet.

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i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about. ♪. charles: for ftx customers will feel like more insult to injury as sam bankman-fried will start yucking it up pretty soon at "the new york times" deal book event. disgraced founder of ftx exchange made a lot of waves and headlines he is now a regular chatter box. sadly the more he talks, the more people simply want to throw up. crypto law founder john deaton. john, sam bankman-fried, he continues to suck all the oxygen out of the room. he keeps casting this today, shadow over the entire crypto world. so my question is, why isn't he doing the perp walk yet? really, it is just, you think of all these sort of things and i just don't recall bernie madoff

making the rounds like this. from journalistic point of view you want to interview these folks but people are wondering billions are missing why is this guy walking around? >> you brought up bernie madoff. he was arrested the day after he confessed. sam bankman-fried has confessed in his twitter feet, i don't know, two things you can do. what you do, arrest now, there is enough information under 18 usc 43, that is the wire fraud statute there is enough in the wire fraught statute. he looked like crypto safe year and goes to blockfi, i give you the loan but you have to deposit your client money in my ftx account. of course he steals that money to run his ponzi hedge fund. so if i were in charge i would have had him arrested, introduce him to a three-by-five cell. remind him what russ who did much less with silk road, serving two life sentences plus 40 years. charles: hearing more about that. it's a story we all kind of

forgot about. i want to bring you back to talk more specifically about that but there are so many headlines. this interview with sam bankman-fried, if you had a chance to ask him any questions right now, what do you want to hear? what hasn't he blurted out yet we need to know? >> great question. first thing i get him to agree the user agreement specified that the funds were client only funds. so he then commandeered those funds illegally and then sent them to alameda. that needs to be brought up. second, he had a backdoor. that backdoor allowed him to conceal the transfers from ftx to alameda but he claims, charles, he doesn't know how to code. who did it? who did it. you need to ask those questions. charles: i'm not a arc truck or know construction but i know how to open the door. he didn't have to code it. you see the schematic how the company was built. it was built day one to pull off these kind of thefts. janet yellen speaking today. she doesn't like crypto, you

know that. this is a great excuse for regulators to come down hard on it. on top of that, i saw the tweet with mr. well. eight congresspeople tried to stop the sec inquiry back to ftx in march. five of eight received donations from sam bankman-fried. what bothered me i interviewed the folks. i thought they were on the side of crypto investors. with all the millions floating around i don't know what to think anymore. >> but this in context. i read the letter, charles. it doesn't mention ftx. charles: okay. >> what you said, gary gensler sent hundreds of voluntary requests for information. when the crypto companies gave information they got investigative subpoena. they got sued like ripple, library, dragon chain, blockfi. nothing happened. they have not done any registration. guess what, charles, sec is the second largest creditor in the blockfi bankruptcy. charles: that is absolutely amazing. >> janet yellen this is a lehman

like situation for crypto. charles the only reason or way it will be like lehman if no one goes to jail. that is the only way. this is not a lehman moment in crypto this is a bernie madoff moment in crypto. this is theranos moment in crypto. that is what this is. let's make the right comparisons. >> john, thank you very much. my takeaway on not so invisible hand of special interests in government. they dictate who makes money and who doesn't. it is getting worse. we'll be right back. ♪.

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# charles: just a couple of hours ago, the house pass add bill to avert a rail strike and impose a labor agreement. it forces workers to accept an agreement that four unions have rejected. the house also considering a separate measure that would add seven days after paid sick leave. this is a industry so overlooked and underappreciated and it's hard to imagine they have no sick days to begin with. meanwhile, tim cook has gone down to lawmakers to meet with key positions as gop becomes the majority in the next congress. i don't know what he'll say about apple, but it has become a business bully. i'm not an advocate for breaking companies up and i hate the idea of congress making people work against their will. you know, how ironic is that all of this that the same folks that made people -- who are making rail workers go to work let a

lot of folks not work the last couple years and made it so lucrative not to go to work they'll stay home instead of punch a clock. from ftx debacle to a lot of other issues plaguing our nation, lawmakers have lost their way. they talk a good game, dot finger pointing stuff really well but the lack of fresh ideas and answers to solveable solutions is taking a major toll. moreover they must find ways to work for people for the american public and stop working towards top don donors. it's a problem for a long time and free markets and individual determination and achievement, we need to remove the roadblocks and i hope lawmakers do it sooner than later. happy bir birthday to my wife ad hand off to liz claman. liz: two birthdays. charles: i'm broke, liz. can you lend me soey