Kalshi CEO on Super Bowl Wins & NYC Housing Affordability 2/10/26

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0:47Download the latest episode and subscribe at schwab.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. Bring in show music, please. This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, one of the biggest winners of the Super Bowl may be prediction market Kalshi. Over$1 billion in trading volume on that platform on that Sunday alone. Co-founder and CEO Tarek Mansoor joins us. Kalshi was the biggest brand of the Super Bowl this year without running a Super Bowl ad. But first, New York's best quarter for office leasing in years. And luxury housing sales, they're up too.

1:32RxR's Scott Reckler on Big Apple bets and the new mayoral administration. The facts are saying people and companies believe in New York, investing in New York, and aren't afraid. Plus, President Trump's effort to limit institutional investors buying single-family homes hits snags on Capitol Hill. and tech giants like Alphabet and Amazon are ramping up their AI spend. You wonder if the spending is going to be quite this high or if this is a high-water market that then comes back down. If they think that they're building data centers in space, the spending is not stopping anytime soon. It's Tuesday, February 10th, and SquawkPod begins right now.

2:13Stand Becky by in 3, 2, 1, cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the Nasdaq market site in Times Square. I'm Becky Quick along with Andrew Ross Sorkin. Joe is out today. Google Parent, and this is fascinating now, Alphabet tapping the U.S. debt market to raise$20 billion as it looks to fund its AI ambitions. Reports say that was up from an expected$15 billion deal. The company reportedly also working on selling sterling and Swiss franc-denominated bonds, including a 100-year note in British pounds. It would be the first time a tech company sells a bond with maturity that long since the late 1990s.

2:56Last week, Alphabet said that capital expenditures this year could reach up to$185 billion. And it's just another sort of example of where we are in this sort of unique moment in the economy, the spending amounts and whether we ultimately believe that enough people are going to want to pay for all this. Yeah, and it does go back to the question of what these companies are. massive growth without having a whole lot of capex that they had to do up to this point. We've talked about that for about a year or so. Definitely has changed what they're doing. And this company that had free cash flow of$73 billion.

3:32So it's a company that kicks off a lot of cash, but not as much as they're talking about in terms of this investment. And I think the longer term question that I wonder about is, it doesn't just seem like this is initial upfront spending. Meaning there's clearly, obviously, the big spending to get some of these data centers up been running. But this now goes back to the chip piece. If you have to keep buying new chips, if you have to keep upgrading these centers, all of a sudden these are not capitalized businesses at all and they never become capitalized again. Yeah. A lot of questions as to what that means.

4:03I wonder about that. In the case of Amazon, they're definitely ramping up their spending. Amazon has gone through cycles over the course of its entire history where it ramps up to do things like build all of the shipping of fulfillment centers. And then, you know, it's able to kind of calm back down and say, OK, now we're going to milk the profits on this. And Jassy himself said that this is a once in a generation opportunity to capture some of these. So you wonder if the spending is going to be quite this high or if this is a high watermark that then comes back down. But you're right. They're not going back to being completely capital light businesses.

4:39If they think that they're building data centers in space, the spending is not stopping anytime soon. That is true. U.S. tech giants in the meantime could be in line to get tariff exemptions on imported chips that they are using to build those next generation data centers. The Financial Times says that the Commerce Department is planning to waive some of the taxes for the so-called hyperscalers on chips that they buy from Taiwan Semiconductor. Under the plan, the FT says that Taiwan Semiconductor would be allowed to pass out exemptions for its U.S. customers for forthcoming tariffs depending on how much money the Taiwanese chip giant invests in the United States.

5:16The Trump administration is looking to onshore chip production as has threatened new tariffs to reach its goals. But in a weekend interview, Taiwan's top tariff negotiator said that Washington's proposal to move 40 percent of the island's chip supply chain to the United States is, in her words, impossible. Meanwhile, the Trump administration reportedly wants tech giants to publicly commit that the data centers that they're building won't raise Americans' electricity prices, restrain water supplies, and that the companies will pay for the cost of construction. A political report now saying that an agreement between the White House and AI giants would be voluntary.

5:51It is unclear which companies could be involved. And it's also unclear, at least to me, how these tech companies could effectively pledge that electric bills won't go up because in so many parts of the country, they are not going to be fundamentally responsible for that. So unless they're going to be subsidizing. Unless there's a situation where some regulator comes in and says, hey, if this goes up, it's back on you. I don't care what contracts you've signed to this point. Probably state regulators have some power over those things, but we'll see. But this would be a voluntary pledge to the White House.

6:24So it's not even a state by state situation. I don't understand how. That's a pretty smart thing. The White House has come out and said that they are not in favor of these issues and they're really mad about it. So basically the White House is saying we're going to overrule your contracts. It sounds like that's the case, right? I don't know how they would overrule the contracts because ultimately, I mean, there's two types of contracts. There's the ones we've talked about, which are to me the ones that are the most problematic. Those are the ones which require effectively 99 points of prioritization uptime.

6:53But that doesn't specifically get at the issue of the cost of electricity. You're not going to change the idea that somehow you could change the cost of electricity, meaning that some of these guys could control it, potentially through subsidization and the like. That's the only way I think it works. I'm not sure that that's what they're necessarily saying in this. And then there's like they're saying, please leave us alone. Well, and then there's these other folks who are building their own electric plants and, you know, that are building their own electric plants for their for their data centers.

7:26But those are not even in some cases even attached to the grid. But it doesn't matter if that would keep them from sucking energy from the grid, I guess? It would keep them from sucking electricity from the grid. But, you know, by the way, everything's fungible. So all of this is increasing the cost. It's just sort of hard to believe it's not. Meantime, President Trump's campaign to prevent big Wall Street investors from buying up single-family homes, hitting opposition in Congress, The Wall Street Journal reporting that both House and Senate lawmakers have resisted putting the idea in bills, making their way through the respective chambers.

8:02That reflects some differing ideas among those in Washington on how to get those housing costs under control. The Journal saying that the amendment, any kind of amendment like the one the president has suggested, risks derailing progress on the congressional housing bills. Now, the House passed a version yesterday by a vote of 390 to 9 and will now look to reconcile its bill with the Senate. Also, it's worth pointing out a major lobbying effort going on in Washington by some of the big real estate and private equity companies as we speak. And that to say they have power, they have power. We've talked about the carried interest issue for a long time.

8:43Trump administration preparing for a big change in U.S. climate policy. The Wall Street Journal now reporting that the administration is getting ready to repeal the government's scientific finding from 2009 that six greenhouse gases are a threat to public health in the United States. That ruling paving the way for stricter vehicle fuel economy standards under the Clean Air Act. That's what allowed that to happen. The journal saying that power plant emissions will still be regulated, but this latest move could be a precursor to those rules also being weakened as well. So a big move potentially by the administration could open up all sorts of more opportunity to create energy.

9:20But for those who have concerns about climate change or also just where money is going to be routed in terms of which energy sources are going to be used. Here's where we are. Yeah. And I think the biggest issue with this is to have wild swings every four years, depending on who's in the White House. it's impossible to set up long-term plans that cost a lot of money and a lot of capex to go into it under those situations. My view is we need more energy to power all the stuff. But I think the view, my view is all sources, all in, everything. That means whether you want to get it from fossil fuels, great.

10:02But if you want to get it from wind or solar, I think you got to get it from all these places? I think the big question, though, is what the government should be expected to fund. And in the past, a lot of these things have made sense because the government was heavily subsidizing them. Even Tesla, the reason that it was able to take off was heavy government subsidization. And when you have swings in what the government will or won't subsidize, that also sets huge changes in place. Like we saw, who was it this week that just had the huge write-off? Oh, Stellantis, right? Because of the EV things that they were adopting so much more quickly.

10:37GM had to write off some of those things earlier, too. Just big swings and big changes and things that really take a long time for these companies to develop and a lot of money to put into and follow. Cheese will be next. Coming up on Squawk Pod, more on the Trump administration's push to limit institutional investors from buying up single-family housing with chairman and CEO of RxR, Scott Reckler. It may have been a good thing coming out of the financial crisis when we had excess homes that were built that needed to be absorbed and then money invested and put back in the market. I do think the nuance of where developers are building and then renting homes to people that they could ultimately buy is a good concept.

11:20Plus, the NYC politics at play in affordable housing and elsewhere right after this break. It's smart to always have a few financial goals and a really smart one you can set. Earning cash back on what you buy every day. And with Discover, you can. Get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. It's my first day of work and I need to make a big impression. From executive producer Mindy Kaling. This is our sexual harassment training.

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12:44Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts.

12:56Welcome back to Squawk Pod with Becky Quick and Andrew Ross-Organ. Here's Andrew. Joining us on set with a look at real estate, New York City politics, and so much more. Scott Reckler is the chairman and CEO of RXR. He's also a director of the board of the New York Fed. And there's a whole lot to get to. I want to get to the politics in New York and everything else. But let's just start on the housing issue, because everyone's talking about affordability, affordability, affordability. President's been quite public about his ideas that, you know, he doesn't say it, but folks like Blackstone and other big firms shouldn't be buying up, you know, single family homes.

13:34And there's now a whole debate and fight happening in Washington. Tell us, A, what you know about what's happening behind the scenes on the fight and what you think the right answer is. Yeah, I think the concept of not having institutions buy homes is sort of a marginal impact right now. I think the real issue is supply, right? If you, whoever you talk to, there's a supply gap somewhere between four to seven million homes in this country. So the only way you're going to create more affordability, more availability, is creating more homes. And one of the biggest challenges is access to cheap capital, right?

14:04So interest rates got to come down. The regional banks that we've spoken about before, you know, are not lending today to the regional builders. So the regional builders are somewhat paralyzed. Scott, can I just stop you right there? Just in terms of the interest rates, interest rates are higher than they were, but they are historically nowhere near the highs that we've seen even in my lifetime. So it's interesting. To have a system that only works if interest rates are basically zero. But we're in this really weird spot right now, right? Because you really have this bifurcated economy. Where's the growth that's driving this macro economy?

14:35It's the digital economy. That was like 90 % of the growth, not including the wealth effect. You then go and look at the real economy, the people that are trying to buy their first home, the people that have to live on credit cards, small businesses. they're suffering, right? That's, you know, it's probably... Since when does the Fed lowering interest rates fix all of the problems? I'm not saying this is the Fed lowering, I'm saying lower interest rates, right? So if you had lower... But usually it brings up, if it's not a Fed that's just doing that, then it's an economy that stinks. Well, or you have an economy that right now is being driven by a very concentrated part of the economy, the digital economy, and the real economy isn't driving at that same pace, right?

15:09So you have this two-speed economy, and that's, you know, the K-shaped economy. It's more complex, but it's got to be... Let's go back, though, to this Trump idea for just a second. I hear this idea that you're saying it's on the margins. But part of what the president's trying to get at is the issue of supply, right? And you're saying, well, this doesn't really affect supply. It doesn't affect the physical supply. It affects the competition for that supply. And so by default, you could argue actually it creates supply in its own way Because you, the homeowner, the citizen of America, are no longer competing to buy that asset from somebody else that some bigger institution than might actually, by the way, also have different economics behind what they're able to do.

15:57The biggest being that they can depreciate the property and you can't. And so the question is whether that is a good or from a public policy question in this country, whether it is a good or bad thing to have these big firms buying up these properties or not. My personal assessment would be it's not a good thing from the macroeconomic standpoint. I think the president's right on that. I think it may have been a good thing coming out of the financial crisis when we had excess homes that were built that needed to be absorbed and then money invested and put back in the market. I do think the nuance of where developers are building and then renting homes to people that they could ultimately buy is a good concept that will actually help facilitate new supply, new home ownership.

16:39So I think there's nuances to it. So I think there is something to it. But the reason I say it's marginal is they're not really doing a lot of that right now. Most of them are focused on build to rent versus buying inventory that people would be competing to own. So it seems to me we have two issues. One is how do we actually just physically grow the supply? that's a long-term problem that will take multiple years to solve and maybe a decade or two to solve in terms of just the physical nature of creating the supply. So then the question is, while that's happening, if you think you can walk and chew gum at the same time, what are the policy choices we can make that effectively frees up supply or makes whatever supply is available more available than it would otherwise be?

17:23From that perspective, what are the things that you would do to effectuate that? So, again, I'm going to go back to capital, right? If I can create lower-cost capital, that will create supply. And, by the way, you can do targeted capital. Like, they've done this with infrastructure where they create infrastructure banks. So you can create targeted capital for home builders that are building homes that have a price point that people can afford to buy,$400 ,000,$500 ,000 in certain markets. that will then free up home builders that used to go to regional banks that don't have that access to the capital or appropriately price capital.

17:54So, but you think it's a construction story. It's not trying to free up. So, for example, I sometimes think about you heard Scott Besson. In fact, you got it. People gave him a hard time for it. He said that there's retirees who own, you know, five or six properties. There are retirees who own five or six properties. There's not not most Americans, but there are. And there's always been a question to me about whether we should change the tax policy. A lot of those people are holding onto those homes because they've taken the depreciation off of the rent that they, you know, the rental that they've had for sometimes 25 years and then feel stuck that they can't actually sell the property.

18:31And they would much prefer to pass it on to their heirs, right, so that then they get it stepped up. So you're saying to step up the basis so they. I would potentially step up the basis or get rid of the tax for a three to five year window, let's say. And there are policies like that. For people over 70 years old. I would literally set it so that people at a certain age, so that those properties can get into the market. Even if you think it's a windfall in the moment to some of those wealthier retirees. That's a fair policy. Another one like that is that the number of people around the country locked in low mortgage rates.

19:08Right. And they can't move so they don't sell their home. Make it portable. Right. And so, right, make it portable so they can actually move that if that's possible. Make it portable, but how? I mean, I know that that used to be a case when, you know, interest rates were 18 % back in the 80s. That was a big deal if you had a mortgage that you could bring with you. But to make that retroactive, you're changing the terms of the deal. I've also heard people say, look, you should be able to allow someone else to assume your loan. But that's kind of crazy if you're a bank that has lending standards to say that anybody who walks in.

19:34This is not a simple fix. I'm not disagreeing. I understand with making those from this point on, saying let's get you caught up for something that you can take with you. But I would assume that that's a different risk perspective for the mortgage lender. Yeah, and the government's going to have to backstop it because that's not going to – the market can't stop it. So then taxpayers are going to have to backstop to say that if you no longer pay them – Listen, we have an affordability crisis, particularly on housing, right? And this is – I mean, we've lent$4 billion to housing this past year. We're going to do$10 billion next year.

20:02It needs capital because the regional banks aren't there today to provide that capital. What happened to the regional banks? As we've spoken before, coming out of the savings and loan crisis, coming out of the... Just the fewer of them, they've gotten more. They can't afford to compete with the big banks. They can't afford to make sure they insure the deposits the way they are. And so they don't have the capacity to be able to be lenders. But you think that's a huge problem in the housing affordability crisis? I think it is, because if you think about it, the top 20 home builders, they don't need regional banks, right?

20:30They've got their own balance sheet. They're very margin-focused. they'll lay it out. When you go beyond that, these are the local home builders that understand their market, that play on thinner margins, that can build where there's actually real demand. They're frozen out of that market right now. They don't have capacity right now. I want to talk New York City politics for a moment. I want to talk taxes, and then I want to talk weather. We'll talk about the weather in a second. On the tax front, I interviewed Mayor Mamdani, it's going to be two weeks ago now, and he is committed, as you know, to raising taxes on the wealthy.

21:01He's also committed to the corporate tax, raising the corporate tax. We're talking about corporations that are making an immense amount of profit. And what this is about is redirecting to ensure that that profit is also something that helps the city remain strong, that helps the city also get back on a firm financial footing. Because right now what we're seeing is there's an immense amount of money being made in the city, but that prosperity is not reaching enough New Yorkers' lives. What have you seen in truth, in reality, right now? Meaning, are there tenants that are not taking rentals because they're saying they need to get out of the city?

21:38Are there people leaving? Are there people not coming? Or is nothing happening and that this is all a threat without teeth? Right. So if you remember, right after the primary, I was here and we were talking about it. I said three things you've got to look at. You've got to look at, drown out the noise and look at the facts on the ground. You've got to look at what they're actually doing, right, in terms of what he's actually doing in terms of policy and what the governor's doing. Those are the three things. Yes. On the noise side, what you're seeing is the opposite, right? We've had the strongest office market that we've had since 2019.

22:11It was one of the top three in the last two decades. So companies are growing, taking space. They're not just committing for this year. They're committing for 28, 30, 32. Ken Griffin just announced that he's buying the 350 park interest. So people are committing to New York. Housing, right? If you look at rental housing, a 1.5 % vacancy rate. This is where people are coming to live. Luxury housing. You know, we have had 30 % higher levels of sales of luxury housing in Manhattan than we've had before. So the facts are saying people and companies believe in New York, investing in New York, and aren't afraid.

22:45In other words, he may be making a fool, though, of all of the people who said, look, we're leaving New York in droves. And by the way, I was interviewing him last week or two weeks ago saying, are you worried that people are going to leave? And he was saying, no, no, no, no, no. But we heard religiously from people for months that, you know, look at California. The people are leaving. They're all going to go to Miami and New York. Why has that not happened yet, if that's the case? Right. So I think that New York is this magnet of people wanting to be here for a lot of reasons, which we talk about.

23:21But as it relates to the mayor, you know, the big thing is ultimately execution. The other point I raise when we're here is my concern about experience. And you brought up the weather. You know, one example of where this lack of experience has been an issue is these homeless encampments. You know, over the last four years in New York, if you had homeless encampments, you'd call the NYPD. they'd come with sanitation social workers clear it out the same day there was a ideological policy change uh in mayor ramdani's administration that they wanted the department of homeland services to come do this we've had homeless encampments come up in our buildings people doing drugs lighting fires on the street we call the nypd they can't do anything i call the mayor's office they say there's this new policy that's happened in the last few weeks this happened three weeks ago i called the mayor's office this happening right now and and my point to you on the weather is why do you think 18 people died right so here was a I think a well-intentioned ideological policy which is the view of they've had homeless services bring them in they're less likely to maybe back end up on back on the street but the execution of it was very poor because you got to realize that you need to think through how do you do it in the past how do you phase it in how do you get that done they want Department of Homeland Security doing it the homeless service homeless services oh department of homeless services uh last piece uh do you give him credit do you give him blame what do you do about not the weather itself but this whole snow situation i say it because i think people gave him credit in the day or two about clearing the situation and then obviously uh it's been a tough road for the past two weeks i also accept that the weather has been colder than it's ever been in the city for a very long time so i don't know if if it's his doing or somebody else's doing or whether he gets a pass on this.