tv Squawk Box CNBC November 10, 2016 6:00am-9:01am EST
♪ live from new york where business never sleeps, this is "squawk box." >> who would have thunk? we thunk. but we'll discuss. good morning. welcome to "squawk box" on cnbc. i'm michelle caruso-cabrera along with joe kernen and kayla. the dow on track for a record high at the ep. u.s. equity futures suggests the dow would open higher by 145 points, that after averages close to the all-time highs this would be the best week for the dow all year. >> everything is happening in a much quicker period. things are -- the contraction. so we went through the seven stages -- >> of grief? >> we went through it overnight. >> in those four hours. >> the 1,000 point drop. the only thing that crashed were
bill clinton's speaking fees, i think, maybe some hollywood or malibu real estate. >> egos. >> as people are selling. >> washington real estate, too. >> i bet they don't move. >> they're not going to canada? >> how much of the overnight drop in the u.s. futures on election night do you think was driven by asia and the fact that a lot of asian nations don't understand peaceful transition of power. >> you remember the morning before the election -- >> not at the end a gun, but peaceful at times. >> that monday morning how many people did we ask, wait a minute, you think the market will drop sharply if this happens? >> i won't give names, mark cuban. >> it was on and on. >> who's the car guy? the car guy that got banned from -- >> steve ratner. >> yeah. >> not supposed to say? sorry. >> no. that's why i didn't mention -- how do you go down a thousand
points and close at a new high? that's not easy to do. >> amazing. >> it's weird. we raised the question, if he wins, you get all three houses of government, tax reform at minimum, better for the energy industry, better for the financial industry, better for the pharmaceutical industry. everybody thought it would be bad. >> you cut corporate taxes to 15%, get rid of the overregulation, why are you surprised? >> he's so uncertain. >> when john podesta came out at the end of a long night, he said we still have votes to count. people thought it would be secretary clinton who would challenge the outcome of the election. >> that's the irony. >> i don't think people were willing to take it at face value at that hour. >> maybe. >> european equities, look at that. higher across the board. all of them higher by at least 1%. except the ftse, by almost there. u.s. treasury yields, this is
becoming very interesting. we've seen interest rates wising. why is that? the ten-year yield solidly above 2%. five-year yield at 1.49%. we'll talk about why yields are rising. is this because the markets think we have more growth? are they afraid of inflation? a bit of both? a whole new monetary policy regime coming as a result of this election? all interesting questions. >> we'll get back to the markets in a minute. first a developing story. thousands of people swarming the streets of several major cities protesting the surprise election of donald trump. in new york at least two groups marched to trump tower from different locations. reports say at least 30 people were arrested just here for disorderly conduct. in los angeles, more than 100 protesters shut down the 101 freeway downtown backing up traffic for miles. 13 people there were arrested. protests reported in chicago,
philadelphia, boston, washington, d.c. and portland, oregon. >> you wonder what the response would be from the media if hillary clinton had been elected and there were people marching in the streets? i think it would be probably different. i would like to say to the other side, the battle is over, the war is over at this point. >> your first point, my god, there's going to be violence in the streets because his supporters are so violent and it's going to be terrible. we'll have civil unrest. >> it was ugly this morning, the violence that i saw here with you two. usually you're not broth here the same day. the person that sits in for becky gets to sit next to me. >> we were fighting over who got to sit here. >> what are you talking about? >> you got to sit here. >> wouldn't you be lucky to sit
in between the two of us lovely ladies? >> with you two sitting in, normally you get to sit here, when andrew is not here, kayla gets to sit here. >> we didn't fight about it. i just told them yesterday i was going to sit here. >> i heard screaming. >> you think i'm kidding? i'm sitting in the middle, right? how about these repressive regimes that have given tens of millions of dollars to the clinton foundation. wait a second -- >> that's very poor roi. >> how about laureate university, do they get a claw back on what they paid bill clinton? this is not supposed to have happened. >> you do wonder what happens to the clinton foundation now if hillary clinton had won the election -- >> i would close it down and divvy it up between two people. do it the way it should have been done from the start. on today's agenda weekly jobless claims out at 8:30 eastern, followed by the federal monthly budget statement at 2:00 p.m.
st. louis fed president jumps bullard will speak today. you know who we'll talk about with monetary policy today? alan greenspan maybe? >> i'm looking forward, dude. >> you don't think he's -- he hasn't missed a beat. you're faulting him for inflating the bubble? >> i think we got two economists on today. >> david malpes it will be fed chief? >> i don't know. but he's involved with the trump foundation -- >> the freudian slip. a lot of those lately. on the earnings front, we'll hear from macy's around 8:00 a.m., and ceo terry lundgren will join us first on cnbc. >> can i tell you a funny terry lundgren story? i walk into a shoe store last week, a guy is trying on shoes. he's vaguely familiar. he has this hair. oh, that's terry lundgren. hi, how are you? the guy looks at me, it was
pierce brosnan. >> wow. >> i confused them. >> you know what? >> you've been in financial journalism too long. these people are your celebrities. >> we've always said that about terry lundgren. >> the most handsome ceo? >> in the comic books before the guy becomes the superhero, he's in a normal suit. >> maybe terry lundgren is retiring to be the next bond. >> not bad. >> whoa kn knows. >> also expecting results from kohl's and ralph lauren. we don't need to do this, he will come on. we'll hear from disney, michael koors and nordstrom. we don't lose anything when we have phil orlando on instead of terry lundgren. >> what? >> thank you. >> you're welcome. the knee-jerk selloff.
the trufull blown rally began yesterday and continues this morning. phil orlando, chief equity strategist from federated joins us. a lot of people were wrong. a lot of people who come on cnbc, their story was his speech was so different than trump the candidate. that's why the market -- it was a different guy. is that what happened? phil, why do you think the markets -- how long were they down? though didn't even open. normal trading did not occur with them down 800 points. >> you had that 5% lock limit down overnight. we were sort of hoping the markets would re-test that brexit low, so we could have the opportunity to put money to work. so we got the best case
scenario. as you've been talking about, you have the potential for tax reform, entitlement reform, infrastructure spending, more muscular defense. all of that will result in stronger economic growth, job creation, wages, corporate earnings, ultimately the market has, in a very short amount of time, figured out that's positive and gone the other way. thought we liked gridlock, divided government, checks and balances. it can give us anywhere between 1.5% and 1.75% gdp growth every year. >> generally that's what the markets look for. investors were positioned for the grinch to steal christmas. and they're waking up and realizing that trends have already been in place. the election has not changed a procyclical stance. >> so we were already doing well, even trump can't hurt the markets? nothing in his policies causing this? >> i think from now going into year-end the trends are in
place. we've been talking about an earnings -- >> if he was going to be the disaster that moody's analytics -- i love the way people say it's moody's. it's moody's analytics runde eb zandi, so next year will be horrible, right? >> we had a pro cyclical stance. >> are you avoiding what i'm trying to get at? are the policies going to be more positive for the stock market than people said the trump policies would be? >> i would say investors are pricing that into the market. people are saying it's not as bad. >> what's not as bad? >> in terms of -- >> it's not as bad. which of trump's policies are so bad? >> that the election process was not as bad as portfolios have been positioned. portfolios have been positioned in a very defensive way.
seasonality wise, going into november, december, january, that's the strongest period for the stock market. >> we've -- were you listening to phil? >> i listened to phil. i love phil, he's a dear friend. >> repatriation of earnings, dodd-frank -- >> it's all good. the one thing that the market hasn't figured out or had not figured out until yesterday was the difference between dynamic analysis and static analysis. that the conventional thinking was if we cut corporate taxes down to 15%, 20%, if we cut personal taxes, they didn't understand the stimulative ll s
phenomenal phenomenon. >> what is the bond market telling us? >> you have a situation where gdp growth has been limping along at 2%. >> if income is going up, the economy is getting better, that's usually bad for the stock market. >> you still have benign inflationary standards f economic growth is getting back to trend line 3% or god forbid 4%, you're looking at stronger corporate earnings growth and higher stock prices. >> you're nodding your head in agreement? >> totally. what the market wasn't paying attention to is inflation is coming up against the fed's target of 2%. seeing wage inflation, not broad based inflation but getting to the fed mandates of full employment and inflation and the bond market is pricing that in.
we had rates going up and the markets going up. that's a healthy sign. >> thank you, lady and gentleman. >> whoa. whoa. whoa. who wants to talk to stan druckenmiller? >> of course, always. >> he will call in. >> yea. >> we need to have time to make a promo and then promo it. >> we have a picture. >> we have a picture. i have to stall him for a second so we can do that and then start p promoing. this is awesome. >> mary ann, i think you got him to -- he's listening to this saying i have to call in here. >> we'll talk to him soon. as the transition of power begins in washington, president-elect trump will put his cabinet together. eamon javers looks at the men and women who could be inside his inner circle. greatagain.gov has been set up. a listing there about the
appointments that the president will need to make. who will be the first appointment that you think president-elect trump will appoint? >> that's a good question. i think when we talk about this, we have to admit we're playing fantasy football here. we don't really know who trump will pick. we have a sense of who his core group of insiders are, but where they shake out and which positions they take is really to be determined at this point. we know the trump aides were huddled with him at trump tower yesterday. we'll see donald trump in washington meeting with president obama about 11:00 today. as all of this takes place, we should get more clarity. just get a sense of it let's look at some possible picks for the trump administration, starting with somebody who i think people would be likely, treasury secretary steven mnuchin, he was trump's finance chair that seems to be a consensus pick. defense secretary, more questions about that. john bolton is certainly a
possibility. former bush u.n. ambassador, u.s. army veteran. jeff sessions of alabama, the senator so close to trump is a possible there. sarah palin, possibility for secretary of interior. rick perry, secretary of agriculture. former texas governor. secretary of commerce, another billionaire, maybe wilbur ross. attorney general, you could be looking at rudy giuliani. somebody he singled out from the stage during his victory speech on tuesday night/wednesday morning. there's always the possibility of newt gingrich as secretary of state. that gives you a sense of the cast of characters here. which puzzle pieces he puts in which slot is to be determined. >> i didn't hear you mention governor christie. do we expect him to be offered a job? >> he's one of those core folks. he's had a bit of difficulty
politically, but i think that he is definitely a candidate for one of those core jobs. i think donald trump looks at chris christie as somebody who can help him navigate this political process. you're dealing with a president-elect now who does not have military experience or political experience but he has business and management experience. he'll need to lean on those skills as he puts these people in place. >> the -- when the election is over it's different than during the campaign. during the campaign, you still -- he would still worry about, my god, bridge gate, the two associates -- >> but he won. >> he won. remember when obama was talking to the russians or something, look, i can't really talk. i can talk more after the election about whatever he was going to do with -- i can't remember. >> i think you're right, that sort of the political calculation definitely changes
after you get elected. >> you don't think christie will get a job? >> i think it's entirely possible. in fact likely. which job he gets -- >> talented guy to make decisions. >> i would say this, if you have a potential future scandal that is looming, that is not maybe a problem that you want to bring inside your administration. to the extent you're worried about political damage, it changes. but you might be worried about anybody who had a potential bomb that could go off politically. >> i think the media may be able to find more than a few scandals in the trump administration in the first couple of years, whether they're scandals or night. you may be right about that. that may get lost in the other stuff they're trying to see if it will stick in the first couple years. plus it's not like you have to have a democratic house and senate confirm him. >> right. >> yeah. no, absolutely. he will get his nominees. that's not a question.
the question is who does he want. what kind of people does he want surrounding him. >> christie was on early. >> trump can sort through that. you have the inner circle, the kellyanne conways of the world, she has been a power player in washington for decades. she knows these people. she knows how white houses operate and what donald trump would need. that is somebody that you think could be a gatekeeper here in selecting these folks. she was so key to his victory in the last months. >> carl icahn has said he's not a washington guy. >> he doesn't work -- >> it's a big pay cut. >> he won't work for anyone. >> parlor game will be fascinating. coming up, all this week a closer look at the pillars of trump's economy. key themes that resonated with voters in thursday's historic election. we'll start by asking david walker what it will take for trump to achieve tax reform.
pillars of the trump economy, jobs, healthcare, immigration, energy, trade and tacks. we need to write those scripts that matches left to right on those pillars. let's start with taxes. robert frank is here with more. >> this is a big one because it's likely to happen. donald trump's tax plan would put an average of 2,900 back into the pockets of taxpayers, but the highest earners get the biggest tax cuts. we could have 12%, 35%, and -- 25% and 33%. this would -- he would add new deductions for child care, cap itemized deductions, eliminate the estate tax. and he would cut that 3.8% surcharge on capital gains, that goes from 28.8 to 20%.
bottom line for different income groups, let's look. couples filing jointly, those who make the median income around 51,000, their tax rate goes from 25% to 12%. those making between 127,000 and 200, see their rates drop from 25% to 33%. and the top earners go from 39.6 to 33%. if you add in all the tax provisions combined, the bottom quintile get less than 1%. the middle incomers, get 2% or 1,000 bucks. the top get 2.5% or 13,000. the top 1% get a cut of 14%, giving them an extra 1.6 million a year. nearly half of all the tax benefits go to the top 1%. this is very similar to the ryan plan. so they're very close.
>> you keep saying that. you're not saying anything bad. no value judgments here. >> just facts and numbers. >> yeah. >> facts and numbers are the willie sutton fact. that's if you're going to cut taxes, you need to started with people who pay taxes. >> yeah. >> that's why i said percentage terms. not just dollar terms. >> those who pay the most by nature when you cut taxes get 9 biggest cuts. >> you can keep my tax where they are. it looks like 50%. that's what it feels like. >> 9%, new jersey. >> combined, robert. work with me. my total tax bill. >> more about what it feels like. >> is that tough to understand adding federal and state -- >> you deduct your state taxes from your federal. >> what is it? close to 50%? keep mine where they are. this has nothing to do with with
me. this plan makes the hair on the back of my neck stand up to leave more money in the private sector and not having it go to where it's basically where it's effective. >> everybody gets more money in their pockets. that's the first thing i said. >> the intent is to have comprehensive pro-growth tax refo reform that simplifies the system and makes us more competitive on a global basis. that's the objective. the fact of the matter is this is his proposal. it is comprehensive tax reform. there will have to be negotiation, obviously. we are much more likely to get comprehensive tax reform as a result of president-elect trump's election. to use budget reconciliation --
>> people would never use that for big things. to push something through. didn't that do that on obamacare? >> the answer is yes. when you think about it, whether you talk about tax reform, healthcare reform, immigration reform, infrastructure reform, regulatory relief, all of these have a fiscal impact. what's important is to figure out what do you want to do? you may have to do it on installments, but we have a real opportunity here to make transformational reforms. not just in the tax area. but in the regulatory area. at the same time you'll have to do something about spending. >> joe makes the important point, because you're putting money back into the pockets of spenders, that's one reason the market went up yesterday. >> because it leads to growth. >> because it leads to growth and the people who own most of the stocks realize they'll have more money to invest, to spend, and to save. >> rising interest rates, people worry about them. do you know the relief i felt
when i saw 2% on there, that we can get an economy that can support above 2% on the ten-year? don't we want to do that? >> two things. normal one, people believe there's more opportunity for growth because of a combination of the kinds of things we talked about. secondly, in the international community, i travel quite a bit overseas, there was fear of trump. frankly his acceptance speech or victory speech, if you will, people are starting to understand there's a difference between campaign and governing. there's a fundamental difference. and so i think the initial apprehension is some what eased. >> one thing i guarantee, after tepper's comments about trump on your show, carried interest will be eliminated. that benefit for hedge fund managers will be eliminated. he's identified that. >> david, anybody who doesn't know you, i don't know if i -- i will -- you're former u.s.
controller. >> former controller general of the united states. >> you've been on a lot. >> you hate deficits. you hate spending. >> the key is not deficits. the key is not debt. the key is debt as a percentage of the economy. >> yeah. >> what we have to do is have pro growth policies but we have to rationalize our social insurance programs, separate the weak from the rest in terms of which spending programs are working and not working. president-elect trump talked about looking at all these things we spent money on that have not been okayed by congress. >> were you never a trumper because of his plans? >> i was not that i'm a pro american. >> okay. is it -- even larry kudlow and others are -- even david malpis will say if we near-term get
above 1.25%, we'll have more ability to tackle medicare and social security and everything else. is that okay with you? >> we need a comprehensive and innovative plan that will be implemented in installments that will help grow the economy, but at the same time we have to, within the next several years, we have to do something to deal with mandatory spending. 68% of spending in the federal budget is on autopilot. has no controls. that's social security, medicare, medicaid, agricultural subsidies, interest on the debt. we ultimately have to restructure those sustainable, secure. you can't solve the problem with growth. grow growth -- a lot of it gets invol solved.
also a new four letter word in politics, it's called math. >> don't kid yourself. >> you say we need a comprehensive plan that gets passed in installments. that's sort of an oxymoron. what needs to be done first? >> there are things you can do right off to help with revenues and expenses. repa repatriation, a few items we could do quickly. but ultimately engaged in comprehensive tax reform, you can't do that in 100 days. >> all right. >> so we have to be realistic. in order to be able to do things like how will we replace the affordable care act, repeal -- that will take more than 100 days. so there are things that you can do that could help on the spending side and revenue side, let's say in the first 100 days, but ultimately you have to develop a more comprehensivevai
get done in 100 days. >> >> the biggest earners not only get more dollars but the highest percentage of the cuts. why does that not bother you as a fair-minded person and why is he doing it that way? >> his objective, as i understand it, as i said, is to have a pro growth policy that simplifies the tax code and makes us more competitive. >> that's just one of the results, the uncontrollable results is that the high end gets the bigger percentage of the cuts? >> that i pay more taxes. that's the simple fact. >> that's true. >> he is eliminating carry-downs -- >> keep in mind, ronald reagan -- joe, in many ways, i think president-elect trump will try to govern like ronald reagan. he will go to the people with what he believes needs to be done so they put pressure on congress. he will negotiate with the
bipartisan leaders of congress, and he will kcut deals and get things done. think about reagan, when reagan did tax reform in 1986 and i was part of his administration at that point in time, he lowered the top tax rated down to 28%. there are many people that believe if you can get the tax rate low enough, you can eliminate the difference between ordinary income and capital gains. >> thank you. >> thank you. >> come back for an hour. soon. >> if you invite me. >> between now and the end of the year. when we come back on "squawk box," the election effect on tech stocks. mark mahan nshgsmahaney will jo and in the next hour, stanley druckenmiller. seriously?
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♪ >> welcome back to "squawk box" on cnbc. u.s. equity futures are pointing to yet another positive open. dow would rally by 131 points, on top of the gains we saw yesterday. the s&p 500 would open higher by 15, and the nasdaq by 42. time for our what's working series. we're focusing on those f.a.n.g. stocks, facebook, amazon, apple, netfl netflix, google. joining us is mark maheney. these stocks were down fractional yesterday while the rest of the market was up. why do you think that is.
>> backdrop here is they dramatically outperformed last year, surprisingly outperforming again this year, except for google. tradeoff yesterday, only one of those companies, amazon, was known for making negative excepts about a trump presidency. maybe that's why that one traded off. the other ones, high beta rollover. >> didn't he target all the ones? he targeted apple. he targeted jeff bezos. >> for storing cash overseas. >> for a number of things. manufacturing overseas. >> we're in the middle of a two-day investor conference in new york. over 800 investors. when we asked the executives of companies like priceline and expedia, what the effect of a trump administration would be on their business, the responses were probably no impact on the core businesses, probably a more benevolent corporate tax environment from a republican
congress and thefrom a republic president, and the ability for a cash repatriation holiday. you look at facebook, google, priceline, these companies have 60 billion, 80 billion overseas, to bring it back efficiently would be a benefit. >> would they bring it back? most of these companies don't operate in china, some would like to but isn't there a certain benefit to leaving a lot of it overseas where customers are? >> sure, or are some operations are. but this sector has changed. we have people -- companies here paying dividends, using cash to buy back stock. google is doing this for the first time. they started doing this a year ago. so if they have 60% to 70% of their cash overseas and somebody is giving them to bring it back tack efficiently and use it for share repurchases, they'll do it. that's an interesting positive development from the election
result. >> what about china? is china possible for facebook and netflix to get into with the rhetoric against china we have? >> i don't think it was possible for them to get into it before. i'm not sure that changed much. none of these companies, with the exception of priceline, have had success in china. >> we had neil ferguson on the other day on "power lunch," he admitted the chinese liked trump, they hated hillary clinton. so they were excited about the possibility of trump being president. you have a conference, the whole day. >> yeah. >> nobody asks about trump. so they're not worried about tariffs or anything like that? they think that's campaign talk and rhetoric? if he were to commit to forcing apple to produce phones here, that would be problematic for those companies. but nobody asked about that? >> we didn't have apple at the conference. this was just a technology and
media conference. that said, no. i didn't hear -- i thought it was interesting. there was almost no discussion of the impact of a trump presidency -- >> he had already won another this point. >> yes. this is yesterday and today. it doesn't seem to be an issue for investors. doesn't effect the underlining demand for the companies. >> i said at the very least you would think some people might think it's neutral, even if his pro growth policpolicies, it wot be so bad. you think it is positive for the back drop? >> these are businesses who will find probably a more business friendly tax environment, regulatory environment. that was a clear read from the companies. >> they depend on engam engagemd advertising which is more during an election season. doesn't that taper off? >> we had ten surprises at the beginning of the year. one is that we thought this election would be determined online. ironically it may have been. not in the way we thought it was
because of some of the tweets and positive responses that president-elect trump got some of those. i don't think there was a major cresting of ad dollars online this cycle. we didn't see it. >> mark, enjoy the conference. good to see you. coming up, donald trump's electoral victory means that the tpp trade deal is likely dead. china wasn't part of that deal any way, but it could reap the benefits if it falls apart. eunice yoon will explain. here's the electoral map. you know what i deduced about democrats from this, have you seen this? >> they love waterfront property? >> they love water. i'm not sure what else this says. >> waterfront property is pretty. >> they love water. >> they like the water. great lakes, they love water. as we head to break, a quick check of the european markets.
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much of his campaign hammering u.s. trade deals. his biggest target was china eunice yoon joins us from china with more. >> reporter: there is a lot of concern right now across asia that the u.s. is going to disengage. at the top of the list is what is going to happen with the tpp. president elect trump has called the transpacific partnership a disaster. but the fact of the matter is that it's quite popular among american businesses. i'll tell you why. the trade pact is wide ranging. it involves 12 countries. it's designed to promote american exports, to places like southeast asia. it was also designed to crack open some of the more traditionally restrictive markets, such as japan, to american companies. beyond that, the trade pact is meant to improve the standards
of labor practices, environmental protection, as well as state funding, and that's all meant to try to upgrade and rewrite the rules of global trade. now, what happens if trump throws it out? there are actually consequences for the united states. this is a u.s.-led initiative. countries like japan, for example, have spent great political capital to try to get the tpp through their own parliament. just last week shinzo abe's administration pushed it through to ratify it. and from what i understand it nearly came to blows with that backdrop, if the u.s. bails out of the tpp, what incentive does a country like japan have to stick its neck out again for the united states? the other concern for the united states is that if the u.s. pulls out, then that leaves a gap for china to step in. china is not a member of the tpp. it's long been suspicious that
this trade pact, which comes under president obama's pivot to asia, is meant to economically contain china. and build relations between the united states as well as all of china's neighbors. so if this doesn't actually go through, china would see the end of the tpp as a win. in fact, today we already heard from beijing they plan to promote their own trade deals at apec next week. also today we learned that president-elect trump reached out to many leaders out in the asia pacific region to reassure them of the commitment of the united states to the region. we learned that he had conversations with the prime minister of australia, the prime minister of japan, as well as the president of south korea and said that the u.s. is committed to the region and stands behind these defense alliances.
however because he came in during his campaign by talking about revisiting these defense alliances with countries like japan and south korea, saying that they would have to pay for the costs of stationing u.s. troops out here, there's still a huge question mark as to where policy for asia is going to go. that has also really undermined the credibility of the united states and its reputation as a country that is a very reliable and predictable partner. guys? >> thank you very much, eunice yoon joining us from china. coming up, president-elect trump's plans for our country's healthcare. healthcare providers drop after the new government could repeal obamacare. and at the top of the hour, famed investor stanley druckenmiller will join us. we'll cover the markets, the economy and tuesday's historic election. "squawk box" will be right back.
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i really like this -- this is cool. there's the white house -- >> this graphic. >> there's the white house and there's the individual pillars. he has called it a disaster and vowed to repeal it altogether. now, yesterday senate majority leader mitch mcconnell told reporters that is one of his top priorities in the new congress. >> it's a pretty high item on our agenda as you know. and i would be shocked if we didn't move forward to keep our commitment to the american people. it was the single worst piece of legislation among many bad pieces of legislation passed in the first two years of the obama presidency. the sooner we can go in a different direction, the better. >> and i saw paul ryan say the only reason it hasn't already happened, we sent a bill to the president and it was never signed. now we've got a president that might sign it. insurers are taking it on the chin.
i guess first of all, michael, if president-elect trump or one of his people were to call you, what is the replacement that makes sense look like for obamacare and how disruptive would it be to repeal it and start over? >> thank you and good morning. you may recall a few weeks ago when i was on your show, i reported there were structural issues with the aca. and actually a lot of it developed when they did it very quickly. so a couple points i would make. there's no question it needs to be done. as it affects us, it's less than 5% of our close to 11.5 million lives. so it's a small portion of it. we happen to be doing well and it's successful for us as we're managing it. but i think if they were to call and talk about it, i would say clearly there's structural needs. there are various alternatives they're looking at. whatever they want to do, it's not something they're going to be able to do tomorrow morning.
because you do have over 20 million lives covered and you need to work through that. clearly it needs to be improved structurally and otherwise. we have the systems to do it. and we see this as an ongoing player in any new system that develops. say what are the fundamental issues and there are structural issues, number of tiers, who's covered, what's happening. and we can repair it. and i would change the name so people don't confuse it with what was historically there. >> you mean change it from the affordable care act. >> yeah. >> but that's such a great name with premiums going up 100%. you know? it's sort of like one of those names where the irony is
apparent right in there. i don't think you want to change that. the affordable care act. it's so -- i mean -- anyway. no, here's the other thing. now, medicaid. we had an individual on the other day. someone was arguing there are 20 million new people covering and this congresswoman said yeah but most of that coverage is medicaid and nobody wants to be covered at the level of medicaid. there's better ways to do it. what's wrong with medicaid? should we aspire to have everyone covered by something like medicaid? >> no, i'm not suggesting that. there's nothing wrong with it. it's high quality. the cost increases over the last three, four years. our premiums have gone up 1% a year. the quality continues to improve. there's a lot of satisfaction with it. and the population that we're covering is a very vulnerable population. >> right. >> and we're in a spot where we're giving them guidance. >> michael, we ran out of time somehow. the window's going to shut on the satellite. we appreciate your time today. we'll have to back to talk more. thanks.
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while the campaign is over, our work on this movement is now really just beginning. >> the trump rally. stocks around the world in the green and the dow is on pace for its best weekly gain in nearly five years. >> president obama welcomes his successor. donald trump heads to washington for a meeting in the oval office. >> we're not democrats first. we're not republicans first. we are americans first. >> plus the pillars of a trump presidency. we'll break down what could be next for the economy, trade, jobs as the second hour of "squawk box" begins right now. ♪
life frve from the beating of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc. i'm joe kernen along with kayla tausche and michelle caruso-cabrera. with us for the hour, glen fleming visiting fellow at yale law school which would not probably -- although it is one of the finest schools in the world. >> both the clintons went there. >> thank you. i'll take that plug. >> you know, sucking up to you a little bit. but that would not necessarily be enough to come on. he was former president of morgan stanley wealth management. and that was not the only time you've been in where you want your opinions. you know, i see stan around still. and at certain places. did you have to talk him into that? that was a pretty good move when you did that. that saved a lot of people's bacon.
>> and the nice thing about, the brand goes on. >> you orchestrated that sale at a financial crisis at a time it was expedient. >> still a lot of people there doing lots of good things. >> like when you're on air. we're going to hear from him in just a couple minutes. >> same person. >> anyway -- yes, connie chung. just whisper to me. remember when she did that? she was on tv. don't worry about people listening. >> isn't that what we have the breaks for? >> let's get a check on the markets. adding to yesterday's gains where it was already a record high for the dow. that's where it's expected to open for today. and another ten-point high for the 10-year yield. which the knee jerk reaction maybe to investors is oh, interest rates are going up. i see if interest rates could
finally go up based on better economy or the prospects for growth or a little bit of inflation, is that not something that we should just -- i mean, i haven't seen 2% in so long? >> the degree of the move yesterday was surprising. i think it surprised everybody in the market. >> the equities or the 10-year? >> the 10-year. and the bond market reaction. >> if the market had been down and the yield went up, then it was bad. >> i'm not saying bad. the notion that growth could be accelerated as much as is now being discussed and inflation moving. >> i'm going to watch you how you characterize. >> health care and financials. i mean, hard to argue that that's just based on a pure growth play and not a rollback of regulation. >> although financials, higher rates will help a lot of financials and the banks will spread income. i agree with you, the move yesterday was a notion around potentially accelerating growth. but u i think the degree of the move and some of the magnitude
of that growth was a surprise. the whole notion of where deregulation is going to occur. there's a lot of that in there. >> we'll see how soon that happens too. greg's going to stick around too. in headlines this morning, donald trump, mike pence, and house speaker paul ryan will meet today on capitol hill. they plan to discuss the best ways to hit the ground running in january with their collective legislative agenda. we'll get weekly initial jobless claims. that happens at 8:30. expecting claims to drop by 5,000 to 260,000. pfizer is reportedly looking at a sale or spinoff of its consumer unit. that unit makes products like advil and chap stick. such a deal could be worth $14 billion. all right. we've been talking about this. joining us now on the "squawk" newsline, stan druckenmiller.
it's great to have you. ready to give some comments today to us. how do you -- you've got some things you probably want to say now it's the day after the election. what's it mean for the economy and then i guess the stock market? >> good morning, joe. i'm very hopeful. and optimistic about what it means. as you probably know, i didn't support either candidate. i'm more from the paul ryan school of economics. but for me it's been frustrating to watch. monetary radicalism the last four years be the only thing addressing our issues. every time i've talked anywhere, i said could we just try deregulation and tax reform. could we just try it? and it looks very likely we're going to get that. 3 tllt be some bumps along the road on the trade side but you
remember w. imposed some steel tariffs. and i think the fears of greatly oversized relative to the benefits of the other part of the economy. this economy is so over-regulated and people are just drowning in red tape that the removal of that and then i'm expecting serious tax reform with cuts to the corporate tax rate may be a blended rate to repatriate capital. so i'm quite optimistic on the economy, as always open minded, but very optimistic. >> stan, all through this we would hear from a lot of people not just people on the left but even people on the right that said, yeah, some of these pro-growth things sound good, but if you do the math on trump's plans, they blow out the deficit so much that a lot of
even republicans said i would trust the plans of hillary clinton more than the plans of donald trump. that was never your view, i don't think. i think you thought some of the plans of hillary clinton were -- i'm not going to put words in your mouth, but you didn't think they would necessarily be good for the economy. >> well, there's this common dialogue narrative that we try trickledown economics in the '80s and we've been down that road and it didn't work. but there's a little misrepresentation of the truth there. and one of my favorite speeches was ronald reagan at the '92 convention. he started out, let me take a trip down memory lane. it was very pertinent to me because i was in pittsburgh when reagan came in in '80 and all the changes were put in. but one of the things that was totally debunked in acidemia was
the curve. that was the theory you could cut taxes and revenues go up. and the deficit went up in the '80s so the curve didn't work. actually, it did work. revenues did go up in the '80s despite massive tax cuts. >> they doubled. >> it's just they spent so much on defense, the deficit did go up. so i don't -- look, i'm not wild about all the infrastructure plans. i'm fine with them 37 but i don't worry too much about the other stuff. in terms of hillary clinton, she gave a very lovely speech yesterday and i don't want to go back and criticize anything in the past. i will say this. why are all the -- why all the discussion about entitlements this morning? i've been talking about entitlements for two or three years and hillary clinton and donald trump both and i include
hillary clinton, wanted to expand social security. so why are all the clinton supporters who said nothing about it three days ago now all bringing up entitlements all of a sudden? >> stan, it's greg fleming. how are you? >> good. how are you, greg? >> very well, thanks. question. follow-up on the trade front. in the last year, we had trade as a percentage of gdp decline from its high of 50% to 55% around the world. and, you know, that's one of the uncertainties i think that certainly markets and business community are watching. what do you think might unfold there against the backdrop of some of the challenges in europe and asia around the world with more, you know, nationalistic and country-first policies picking up momentum? >> thank you. i'm worried about it. and, you know, i'm not going to sugar coat it. i'm a free trader. tpp is good for american business.
i think nafta was good for american business. but you can't get everything in life you want. and i guess how i see it unfolding is probably a lot of high bluster negotiation and an occasional tariff that comes in that gives the market a big hiccup that day. but again, i think while it's definitely a negative, i think it's being way oversized relative to the opportunity on the deregulation and tax reform side. would i be much happier if president-elect trump was a free trader? you bet i would, but can't have everything in life. >> it's michelle here. why do you think interest rates are rising in the wake of the election? is it about growth? is it about inflation both? and what does that mean for investing in the stock market? >> michelle, dr. kopper, have you seen him lately? it's been rising dramatically.
he's up 4% today. interest rates have been at stupid levels. they've been manipulated by central banks. they've been held down -- they're like a beach ball held under water. i think interest rates are going to k go up. i think they're going to go up a lot and i think they're going to goup a lot because, they're just insane levels and "b," i'm optimistic on economic growth. if you look at the markets in the last two days, frankly commodities bottomed in may and they've been getting stronger and stronger. they're all suggesting the same methods. there's no -- i don't even think it's because of infrastructure. i think it's just a more optimistic view about economic growth and when you have absurd interest rate levels and you combine it with a change in expectation on economic growth interest rates have to go up. i think they're going to go up a lot more. >> for years you've been worried
about how we extricate ourself or how the fed extricates itself from this what you think are like emergency conditions eight years after the emergency. will it -- are you -- if you're bullish and feeling good, how -- will growth allow us to get out of this mess? how come you've changed on whether this is some big bubble ready to burst or something. >> i don't know. i opened the interview using the word hopeful. look, i don't know this is a push/pull thing. i just know that this is the greatest chance we have and i've said it in talk after talk which is tax reform and deregulation offset it. i mean, interest rates, increasing savings. not decreasing savings. for years and years we're having to cut back their spending because there's expected income
from had gone way, way down. if you saved a million dollars, you get zero. no, it's not ideal. it's not a panacea. it's going to be tricky. but it's as hopeful as i've been in a long time. and i think growth will pick up then we'll see what the interest rate effect is down the road. but let's get real. they are at a very low level and they're negative right now in terms of real interest rates. >> you think yellen should be the person to do it? or would you replace her immediately if you're donald trump? >> i absolutely would not replace her immediately. i think she should serve out her term. i believe in the independence of the fed. i think it's extremely important that integrity be maintained. but frankly i think the market is going to force this. the market is going to push them to raise interest rates. my hopeful scenario turns out to be right.
>> it's greg. i was going to jump in on that. that's exactly where i was going that the market may force the hand here. you have a u.s. economy that before all this was performing very well and certainly better relatively than anybody around the world. and now you have as you said, a lot of this pro-growth policy discussion and some of these things coming. so the market's going to force their hand. what would you expect then? they'll move in december and then they'll move next year three, four, five times? is that what you think we'll see? >> i can't predict them. i've been terrible at predicting them the last two years. what i can predict is markets and i don't really care. because i think the markets -- i think her term ends in january of '18. i think certainly further out to curve the market will ignore. and if they go slowly, push them even further. but i'm not going to predict what they do. because i've been astonished with the metrics they laid out three or four years ago.
and we've had -- well, i guess it's one hike. it feels like five. but we've had one hike. >> one hike. >> yeah. stan -- >> yes. >> this kayla tausche. >> hi, kayla. >> i'm wondering going forward as interest rates rise given that we're just coming out of an administration that set a record for the amount of debt that it issued, yes interest rates were at record lows, but how much more expensive does it become to service its dead and when -- or will we run into trouble doing so? >> it definitely becomes more expensive, but again, it's a -- what we've been doing is transferring massive wealth from hard-working americans who saved to the government. they thought they were going to get 4%, 5% and they've been getting zero. what this will do -- it's true. the government bill will go up fairly dramatically if interest rates rise. but incomes will go up because
that money will simply be transferred to the savers who the reason they saved the money is they expected that return over the long-term. so it could be messy. >> i'm thinking the answer is yes, but let's underline this dpp monetary policy help get donald trump elected? >> of course it did. of course it did. it was just a small part of it, but of course it did. because it caused a massive reallocation of wealth from what i would call the middle class to people like me. when you target asset prices and asset prices go up, the people on the assets get rich. my partner kevin, he said why do you think they call it the wealth effect? you're increasing the wealth for the wealthy. so it was just a part of it. you know, it's funny to see these protests going on and hear all the comments about
divisiveness. and it is sad to see the divisiveness in our country. but this is not a phenomena. i read a book that had a profound impact on me a number of years ago by charles murray called "coming apart: history of white america." and then i'll give a plug for my old roommate larry lindsay wrote a book "the conspiracies of the ruling class" two years ago. and it's just -- i would just implore all the protesters to read these books. because unfortunately, i'm one of the liberal elites. my wife and i have supported gay men's health crisis, i'm on the environmental defense board, blah blah blah. but we've been gaining share in terms of wealth and in terms of these social issues to middle america for years. and i think that's what this is about. and to the extent that this can
re-address some of that imbalance, maybe we're looking at the peak of divisiveness, not at an accelerating trend. >> and if you're going to -- you know, if you want to try to find -- for these people try to find some silver lining that they're looking for with trump, the way the ruling class has sort of been ensconced, this could be the beginning of the end of that system, stan. and i've seen people saying, you know, bruce springsteen, marilyn manson. it's not cool to protest the change. they're basically siding with the establishment and what hasn't worked and when did that become cool for rock stars to side with the establishment instead of maybe the alternative? >> i don't know. i'm happy with the gains that have been made on the issues i talked about in what hillary
referred to as her coalition yesterday, the disabled, the gay community. i really am happy with the progress they've made. >> that's separate and distinct from the ruling class issues though. >> yeah. you have to have a balance. and i think it's scary to see the divisiveness. but history has a very funny way of playing out. and i would not be surprised if we're looking at the absolute peak of the divisiveness. and while these issues that we all care about in the cities and are paramount and important to us. if you're living in the midwest and don't have a job and can't put food on the table for your kids and maybe with tax reform and deregulation, if we can get this thing going some, we can address what i think has become a shift too far toward urban wealth versus the whole rural areas. >> interestingly, though, stan, a lot of the economic advisers to trump were in the ultra wealthy class.
as the president-elect puts together his cabinet and decides who will advise him on economic issues and what exactly can get done, is there anyone that's at the top of your list? or what attributes do you think they should have? >> frankly, i'm just hoping that economic policy is deferred to mike pence and paul ryan in terms of civic details and policy. paul ryan has got a plan called a better way. i encourage all your viewers to read it. it's a simple pamphlet. it reminds me of the contract with america in the '90s. it's a specific plan of how to do deregulation, how to replace -- not just get rid of -- but replace obamacare. it's got tax reform in there. if that stuff gets implemented, i don't really care who's in the rest of the cabinet. >> people do have the ability when they become president to bring in the brightest minds.
and you mention -- not to say that trump is going to be a puppet of paul ryan or mike pence, but they have the ability to bring in people that are the best at what they do and have the best ideas. i'm not comparing trump to reagan, but i think about the way reagan did it when i was watching closely. and i didn't know if he knew the details of everything he was getting ready to do. but it would be nice to have someone who brings in private sector people. that might be a novel concept for the next eight years. -- four years. >> comparing trump to reagan is a hell of a leap, joe. >> i know. >> i'm an american. i'm optimistic. let's just hope for the best. >> but you could see where he -- you know, you expect him to dogmatically enforce all of his preconceived notions about all of these things? or once he has a discussion with other people, i don't know, with you about charter schools. with you about whatever it is. that's where a president, you know, starts to actually govern
versus trying to get elected. >> i don't know. i'm hopeful and optimistic. i mean, i sold all this gold the night of the election. all the reasons i have owned it for the last couple years, it seems to me they may be ending. and they're ending globally. this is -- you know, teresa may, this is a worldwide phenomenon we're looking at. the last people are the eurocrats. they'll be dragged kicking and screaming. but i'm hopeful and optimistic. are there concerns? i don't think donald trump is ronald reagan. >> i'm not saying that. i'm saying that -- >> and there are answers. >> i'm not saying that. i'm saying that ronald reagan maybe didn't have the details completely worked out in his mind on everything he was going to try to accomplish and that he did have help from people that come in and advise him on how to tackle certain situations. >> well, but to your point or to
whoever made it on the advisers, he had george stolz and jim bak baker. i haven't seen a lot of those names being thrown around cnbc the last few days. but i don't want to put a pessimistic message here. i'm hopeful for america and i think this could be great. >> stan, do you keep your money in gold then? where do you put it if you're optimistic? >> i basically have a large bet on economic growth. how do i do that? i'm short bonds globally. i'm short bunds. short italian bonds. short u.s. bonds. that's all reflective of zast we are deficits but with stronger growth. i like the sectors of the equity market that respond to growth, value, and materials. not things like staples and traditional growth stocks that don't. and i really like the dollar. particularly against the euro. >> stan, we talked about -- you
mentioned and i believe this for a while the rate cycle is going to go up. we're also late stage economy here in terms of the number of years that we've had growth even if it's been below recent recoveries in this cycle. what do you think about the combination of those two things? late stage economy and rates finally going up? in my eyes and yours, maybe too late in the cycle. >> if it wasn't for the messy conflict of rates rising with the stronger economic growth through policy, i would think there's so much low hanging fruit in terms of deregulation and tax reform, we could get a jolt of 4% for about 18 months. i really believe that. i do think interest rates could cut that back into the high 2s, low 3s. but i'm not sure. i literally don't know. >> thought those were gone for good. >> secular stagnation, joe.
>> i don't believe in secular stagnation. >> we know. i was being snide. mr. druckenmiller, we know you do. it has been great to have you call in. we really appreciate it. >> thank you. good-bye. coming up, we're going to talk to -- >> we're going to do this every week now we decided, stan. >> we're going to talk to trump adviser david malpass about the president-elect's plans for the economy, trade, taxes, more. we'll be right back. d aflac pay. aflac! isn't major medical enough? no! who's gonna' help cover the holes in their plans? aflac! like rising co-pays and deductibles... aflac! or help pay the mortgage? or child care? aflaaac! and everyday expenses?
economic program. my question, is that actually a rendition of the white house? are there actually six pillars on the white house? >> that's what google is for. >> joining us david malpass. adviser to donald trump. yao been there. >> 12. >> you may be going back. the chances are good. >> but trump has more to growth. there's school choice. so i don't know, it may screw up the pillar analogy. >> you can also add misogyny, narcissism. >> what i want to talk about is trade. >> anti-trade. >> no. not anti. i hope not anti. >> all right. you talked about that with druckenmiller too. >> i thought that interview was really interesting with him saying it can improve. i think that can be done through jobs through the bottom up.
so one should be small business job growth through better energy policy. of course tax cuts and tax simplification. we need all that. >> does he believe in fed independence? janet yellen stays, she goes, what is up with that? >> so the fed is independent. but their performance has not been good. we've had a really slow growth economy. so the question is will they look inside and see they're part of that problem. lots of parts of the government have been slowing the growth rate down. trump said very clearly we're going to double the growth rate. and that's going to be really good for people at the bottom. think about who benefits most from faster growth. people that didn't have a job before. so that's really the goal. so fed -- you know, i think people should move on from the fed and talk more about the other policies that will change rather quickly.
>> part of that policy on trade is bringing those jobs back from china. but we heard this morning that china announced at apec next weekend it's putting forward its own trade deals. how do we get china out of the driver's seat if we want to build an economic policy that puts america first? >> i don't think they're in the driver's seat. what they've been doing is growing fast. some of that has been coming at u.s. expense. so mr. trump has said we're going to have better negotiations of trade deals that occur. and of the trading relationship. so i think that can benefit the u.s. and that can also benefit china in the long run. so i really reject the idea that this is zero. the sus going to get more jobs by having better policies here. that's the goal and that can happen pretty quickly. >> one of the challenges to creating more jobs would be if we're in a world where -- and i was saying before when we were talking to stan, that trade a
percentage of gdp decline from the peak for the first time in the last couple of years. it was 60% of gdp. now it's 55%. if we end up in a situation where, you know, we start having currency depreciation, how are we going to create more jobs than that kind of a backdrop? >> trade's been down on a global basis because growth has been so slow. you're going to have more trade that you're citing. i'm happy to see how the markets are reacting to trump policies. copper is up. that's an indicator of global growth. bond yields are up not just in the u.s. but globally. that's an indicator that growth is coming. so these are positive developments and what stan druckenmiller said was important. that we've had too much of this -- the savers have been the losers. the middle class americans that
were saving for their retirement didn't get a very reasonable yield for their long maturity. >> who expected the headlines day after is market trades at all-time highs. wait a minute. that is not the headline. let me -- no. it's not business headline. i'm sorry. it's not the headline anywhere. greg, hard to believe. would you know the dow would hit an all-time high? most prognosticators said that, right? >> no. people were not looking at -- >> let me look and find it. maybe it's in here as many swr. >> "the new york times" didn't publish it. i'm sure that's the case. remember what happened with brexit. both camps really polarized their arguments and said if britain announces a vote that they're pulli ining out of the european union, that's going to be the end of the world. then the vote came out that way and it wasn't the end of the world. so we've got that now. people have said that trump's policies would be bad for
america. even though he said the goal was to have them be good for average workers in america. i like the way the markets are reacting. >> tell us what's going to happen in the hundred days. when will you go there and find out what your job is? do you have any questions for him? >> i do. >> all right. give me something. don't just -- you're avoiding. you're dancing. >> i'm going to give you a lot. >> who's going to be fed chief? >> think what trump has done. his first personnel choice was mike pence. how has that gone? fabulously. now he's giving more influence to governor mike pence. so trump is surrounded by two governors, by a senator that has been chairman of the senate budget committee. he's surrounded by america's mayor who went through crisis.
he's got people that can help. and he's choosing and giving them influence. one of the things he said is he wants a businesslike cabinet that could lead the country. that will be a big plus. >> when her term expires, you have been talked about in the past as somebody who could run the federal reserve. >> i don't think we should be talking about the fed today. the fed is doing what it's doing. it's data dependent. it's going to look for a rate hike in december based on whether we're going to grow faster. all the signs are that u.s. can begin to accelerate. >> okay. >> and that's wonderful for the country. >> all right. i thought we could get some more. a lot of those people have already been undercut. media has done a hit job on rudy, good hit job on christie. we got to find some new people. then they'll do hit jobs on them.
welcome back to "squawk box." among the stories front and center, kohl's beat estimates in the first of several retail reports today. same store sales fell 1.7%. that matched forecasts. we'll be getting quarterly numbers from macy's at the top of the hour. electronics retailer best buy is the latest to announce thanksgiving plans. they plan to open at 5:00 p.m. local time on thanksgiving day. though some black friday deals are available online beginning today. dow component walt disney reports after the closing bell today. they've been pressured the last few quarters on terms of shrinking subscriber numbers. coming up, tomorrow is veterans day. we're going to tell you how one bank is helping vets on wall street. and take a look at futures. positive territory. dow higher by 86 points.
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life. but one group is working to change that. giving training and support for veterans to work in the financial sector. joining us now is sunni hartford head of markets for north america who oversees the vet program at citi. welcome to both of you. an important conversation to have especially around the time of veterans day. sunni, how does this program work and how did wall street become involved in it? >> actually, wall street founded it. it came to our attention years ago. i'd say 2009 that really nothing was organized on wall street to help provide one-stop shopping, if you will, for the veteran communities. so a bunch of firms got together and decided to share best practices and see how we could make that happen. it was five firms when we started. it was over 80 firms now. law firms, print shops, everybody that's engaged in financial services. we are a full volunteer service. there's no actual organization. it is a trade mark. a ena lot of volunteers doing
weekend work, if you will. so we get together every two months to have a best practice share. they invite everybody in the network. citi in fact is hosting the air force today and all members invited to attend with their employee groups. it's really a collective effort that's been born of -- >> and you hired this guy. >> we did hire this guy. >> is he any good? >> i'm all right. >> he's terrific. he's terrific. we're happy to have gary on board. >> tell us about that transition. >> so it was a pretty interesting transition. i came from the marine corps from 2005 to 2010 i served. i got out of the marine corps and -- >> and thank you for that, by the way. >> by the way, joe brought up it is the marine corps birthday today. 241 years. so looking forward to a nice steak dinner tonight at sparks. should be a good time. anyways, the transition. it was fairly simple, to be honest with you. there's a lot of the skills that
veterans bring to wall street that are very similar to skills that are required to work on a trading floor. >> did you have your sights set on wall street? or outreach of this program -- >> i knew i wanted to work in the financial industry, but, you know, it was programs like vows coming through fordham that helped you zero in on that career path. i remember there were eight panelists from across the industry and, you know, some being in banking, some in sales and trading, some in research. and they were in my shoes five, ten years ago in the marines, army, and just to see them up there on that panel very polished, very professional and successful. and learned a lot from them and really helped me zero in on a career path towards wall street. >> the federal government has so many retraining programs. most of them i think are pretty ineffective. this seems like a much better way to do it when private industry knows what they need and does that kind of retraining. >> 100%. especially when, you know, you
have some of the brightest minds, you know, working together across the industry. and to loop veterans in too. and come together as a whole and, you know, collaborate ideas and, you know, vows is a two-sided program. it's meant for, you know, the employers to ping ideas off of each other. and, you know, just for best practices, hiring, you know, retraining and also for the veterans themselves just to kind of network and, you know, get mentors and start -- >> the private sector solution. >> does the program help with the specific transition from a skills standpoint. my career both at merrill and morgan stanley, we used to like to recruit veterans. but the key is getting them in and helping them transition. >> let me take that one. because i think the first thing vows does is provide that one-stop shop. we have a network across 80 firms now to do informational interviews, give them ideas of what's out there and possible.
hook them up for resume reviews. has a transition translation app and help translate your resume to service along those lines. we've worked across the industry to take out the buzz words that are typical on the algorithms that we use. now you put in different key words and attract more veterans that way. a lot of things like that that help them in the door. we train everybody. you have to be really on site. it's not easy for the government to do that. letting us in to get access to veterans while they're transitioning is our big thing now. we want to get access. we want to give them opportunities early on to see who's out there in our industry. >> notable since 2009 from now has hardly been described as head count expansion. >> that's right. nobody had the programs in the beginning. >> do you remember the guy in boot camp, did you have like one particular guy that was tough? you know, do you remember that? >> oh, absolutely. i had one drill instructor, i think he had tattoos up to his
neck. he must have been 6'5". >> did he make you do -- i watch what happens. did you ever cry? i think i would -- >> no. >> did you ever see anybody cry? >> you would be that one guy, right? >> i'm not kidding. i think at some point i would just start crying. no one ever does that? >> of course there is some crying. but i mean, they get filtered out pretty easily. >> it looks really, really hard. >> because it is. >> we got to go. >> i was going to say the marines, they think they're different, they feel they're different. >> i think they are. >> we're a different breed, you can put it that way. >> okay. >> thank you so much for having us. >> thank you. coming up, stocks to watch ahead of the opening bell. and the next hour, don't miss former fed chair alan greenspan. he'll join us at 8:30 a.m. eastern. it takes a real man to admit you cry. you guys are all looking at me like i'm -- it takes courage.
our gex host this morning, greg fleming. is that the actual title? because i have called you distinguished. this isn't just an adjective we came up with, it's your title. >> i appreciate you being comfortable with the adjective. >> in fact, you have a distinguished distinguished visiting fellow. i added that one onto the title for the study of corporate law at yale law school. he's also former president of morgan stanley wealth management. just quickly, you feeling any urge to get back down here? or is this what you want to do
permanently? >> first of all, i enjoy doing this. my students are watching today so it's nice. >> i don't mean to come here. but do you want to run an investment bank? i mean -- >> i'm going to go on and continue to do things in this world and i am today, joe. i mean, lots of clients i work with and the industries that we're all part of are undergoing significant change. you look at the asset management industry with the move from active to passive and the pressure. there'll be a lot of consolidation. wealth management, major changes there. regular story which we talk about. so coming out of that, there's lots of opportunity. >> is there a big problem in etfs that it's ready to come home and roost? >> from a risk standpoint? or active management? >> yeah. >> look, i think the major providers of etfs and the companies that are doing it like blackrock, it's a great firm. they run that business well. >> we're always looking for the next problem. >> vanguard, great firm.
they run that place very well. very client friendly, vanguard. so i think that etfs, the growth has been massive. it can't continue at this pace. but it's an important part of an investing portfolio. huge growth in etf usage. and across the street on behalf of their clients. >> what happens if dodd/frank gets repeal snd. >> you know, i think some of we were talking about this. i was talking about financials yesterday, i think some of it was around the potential repeal or rollback of specific pieces of legislation like that. >> would you be happy about that? >> i think there are, you know, stan was saying this earlier. there are aspects of a lot of this regulation that can be reworked and fine tuned. >> there's a lot in there. >> how much money was spent to come ply with it in the first place. >> that's the whole regulatory umbrella notion. >> if you're peeling back a lot, that's good for business. but the notion that maybe
capital standards would get peeled back. there was some dialogue around that. maybe the capital ratios put in place, they could be eased. >> volcker rule? >> same thing. there are aspects of that that while it might have tried to target something that was a specific problem during the crisis, that overreached. so i think the regulatory framework coming out of something like the credit crisis is clearly going to be comprehensive. there's going to be a lot the government puts in place as a result of popular backlash. and then what happens, you know, typically and this is true historically, 8 or 12 years later there's a move, start to look at it again and peel it back. that's one of the reasons why the market is as upbeat as it is right now. >> we've been in a bull market for eight years. you talked about the length of the bull market. whether it can keep going. whether the policies that have been put out are basically enough to stave off a recession. do you believe they are, what you've seen? >> i think there's a tension here. and certainly mr. trump and his advisers have been quick to
point out pro growth policies, stimulation on the fiscal side. tax cuts, the whole notion of repatriating a lot of this money from corporations back to the u.s. maybe doing it on a preferred basis. stan said a tax rate -- a one-time tax rate of less than 10%. that's all positive. i believe we're doing that against a backdrop of a later cycle economy where rates that should have been going up sooner are finally starting to go up. they're going to run against each other. so you might have had growth in stan's words of 4% or more from the positive policies from fiscal stimulation, tax rut cuts, repatriating capital. then on the other hand you've got a later stage economy. whatever you think of the growth, it's year seven eight in an economic cycle with an underlying business -- >> but nice if your rates soar and you end up at 4%. that seems long-term like a pretty good number. >> but one of the problems with where we are is in my eyes, stan echoed this, the fed has been late. and the rate cycle is rate.
when you start moving, the bond market said yesterday we're going on our own. we're not waiting for the fed. this is what we think is happening. >> all right. greg fleming, you sure you've got 15 minutes? >> it's been great to be here. >> that's it? okay. because we'll let you stay. >> i'll come back. >> all right. coming up, macy's set to roll out results in just a few minutes. ceo terry lundgren will be on set to break down the quarter. "squawk box" will be right back.
news makers and news breakers. famed investor stan druckenmiller speaking out. >> interest rates have been at stupid levels. they've been manipulated by central banks. they've been held down. they're like a beach ball held under water. >> up next, macy's ceo terry lundgren. rolling out quarterly results and getting ready for the holiday shopping season. >> plus playing for the long-term. andrew is holding court today with leading figures in finance. we'll bring the front row seat to the deal conference as this second hour of "squawk box" begins right now. ♪
live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc. i'm joe kernen along with kayla tausche and michelle caruso-cabrera. right now the futures continue to add to gains we saw yesterday. the dow needs to open at 79 points at regular trading to set an all-time intraday high. this is significant. we had been in a range it feels like for like years. between 1.5% and 1.75%. and here we are. and we've said it again and again, to most investors that would be disconcerting or worrisome. what if it really means someone said -- someone wrote in, the same guy i mentioned yesterday. he said, okay, so it's not mourning in america like reagan.
but what if dawn is breaking. what if you're starting to see the clouds separate a little. >> interest rates are going up and the stock market is going up at the same time. which could mean -- >> you heard druckenmiller. it's possible we could have a couple quarters, a year rates go up. then you go down to 3%. people do not think -- we've been believing that the new normal is 1.75% to 2%. >> and many think the u.s. could never grow at that pace again because of the demographics and aging population. >> he pointed to copper, too, which is a stunning chart if you look at it today. >> dr. copper. is this me still? >> yeah. >> billionaire stan druckenmiller joins us in the last hour. and this isn't always the case. sounding an upbeat tone.
>> this economy is so overregulated, people are just drowning in red tape. that the removal of that and then i'm expecting serious tax reform, cuts to the corporate tax rate. to repatriate capital. so i'm quite optimistic on the economy. as always, open minded, but very optimistic. >> and we'll bring you more highlights from stan druckenmiller throughout the hour. then at 8:30 we're going to be joined by former fed chair alan greenspan right at the bottom of the hour. let's take a look at some other stocks to watch this morning. kohl's beating the street with its latest numbers. earnings of 80 cents per share were 10 cents above estimates. same store sales did fall but that is what was expected. stock up close to 8%. metlife announcing a new $3 billion share repurchase program after suspending buybacks
earlier this year. it's the insurer's biggest-ever buyback program. metlife stock is up 1%. shake shack reporting quarterly profit of 15 cents per share. that was 1 cent above estimates. same store sales or same shack sales rising a better than expected 2.9%. that stock up 9% as well. astrazeneca seeing quarterly revenue fall from a year ago. the drug maker was able to counter sales for its cholesterol drug. but not enough to spark investor demand. stock is down 4%. and drug maker perrigo is looking at the royalties for its multiple sclerosis drug. holds a 4. % stake in perrigo and has been pressuring the company to boost the stock price. today the stock is up about 4%. pfizer considering a sale or spinoff of its consumer unit. it makes advil, chapstick and a
bunch of other things. it could be worth as much as $14 billion. macy's just out with quarterly results. earnings at 17 cents a share compared to estimates of 41 cents. however, macy's did raise its full year sales guidance. joining us now terry lundgren, ceo of macy's. i didn't look at this yet. what's in there that brought it to 17 cents? was there an adjusted number? >> yeah. first of all, we also confirmed our annual guidance and fall season guidance. it's just that the quarters were wrong by the analysts. we were right on track with what our own expectations were. this is the reason why my cfo would like to provide quarterly guidance and i would like to provide no guidance. because we get off track on a quarterly basis. but we are confirmed to stay within the earnings range of our earlier forecasts of 3.15 to 3.40 for the year. >> that's crazy. because you'll do more in that
quarter, obviously. >> in our industry in the fashion and apparel industry in general, the kwourt quarter is our super bowl. this is the most important time of the year. >> this is much more important in that number. you had seen same-store sales down 3% to 4% and now you're talking about 2.5% to 3%. >> we're actually improving the forecasts as we go forward for same store sales. >> why? >> there's lots of reasons, michelle. one is -- first of all, we saw the momentum. we're right on track with the third quarter. better quarter than the first half in terms of performance. the inventory is in such different shape than a year ago. most retailers a year ago were planning sales up. sales were down, negative for the fourth quarter across the board. and clearly we were in that position. so we had lots of inventory that we purchased for second and -- in second and third quarter for fourth. we were loaded with it. all we did is mark it down. >> that didn't happen this year? >> no our inventory is in perfect shape. we planned for this.
we're on our sales plan. so our inventory is fresh. it's targeted to the categories that we believe are going to be strong. it's a totally different picture and a different gross margin picture for us. >> for several quarters you've been looking to announce. today there's an announcement you're forming a strategic alliance with brookfield. how will that work? how much will that actually add to the bottom line? >> that's a big deal, kayla. because we're actually doing -- we've been selling off individual properties. doing that in a big way. san francisco were in the process of a contract. we have a number of things downtown portland. but brookfield has $250 billion of assets under management. they've got to be -- >> huge company we don't often talk about, but yes. >> most people don't. but brookfield asset management is an enormous company in multiple countries. they are so creative. i just met with their ceo a couple days ago again and talked about what the vision will be for the 50 stores that we're
doing a partnership with. and these guys just think differently than we do. we think about running a retail store. they think about creating a residential park, you know, part of our parking lots. >> what does this do for you? i don't get it. >> this is a big, big deal. we've given them a two-year opportunity to redevelop 50 of our locations into a joint venture with us working together. >> so they're not making an outright purchase of those 50 stores? >> no. we're actually contributing the property and they're doing the development in a joint venture. so this is something -- >> and then you split the revenues? you split the -- how do you monetize that? or you just take the money they give you and that's it? >> no. we're working on all of those details but we can't disclose everything about what your plan is right now. i can tell you, something we've never done before but definitely is going to create shareholder value for us. >> i didn't hear you say the consumers back or sales are going to be higher. what's up with that end of the e kwa i guess? >> i think what you're seeing
here definitely is that the consumer has money. all right? generally speaking, the savings accounts for consumer is positive. you're seeing full employment. you're seeing wage growth. so the consumer is in a position to buy. it's just a matter of them getting to the point now this is the moment. and, you know, as we were saying earlier, the fourth quarter is that opportunity for us. starting with thanksgiving and onward into the holiday season. >> but economists have said after the election there could be a hangover. there could be uncertainty. we've been talking about this voter map. on the front page of "the wall street journal." if we can show it quickly. this is the entire country. basically happy with the outcome of the election. is that consumer going to spend more money? >> i'm counting on it. >> how much more? how much more confident will middle america be about the economy now that they have their candidate in the white house? >> well, i think that's exactly the point. of course we don't know. we're a day and a half into the election being concluded. but you'd have to think that
based on what you just described here with this map, there's a lot more of the population today that are feeling positive about hope for the future, right? shouldn't that be a positive for consumption in america. >> are you going to carry trump's line? >> we made that decision, as i said on this broadcast before, we wouldn't carry hillary clinton's suit line either. >> he's not a candidate anymore. and his kids are going to run the company. >> the fact of the matter is you wouldn't want to have the product that was held by a prominent republican or a prominent democrat. because 48% of the population doesn't think that's a good idea. >> so terry, we were earlier talking to druckenmiller. >> very smart guy. >> he is. and i'm still thinking about that. 3.5% to 4%. i already said i would have cried if i went into basic training. that almost made me cry thinking that it's possible again, brought tears to my eyes that kind of growth is possible. what would macy's be able to do
with 3.5%, 4% growth? >> this would be music to my ears. of course to all retailers' ears. because as the overall ocean rises, so would all the boats floating on the water. that would be us. we would benefit from a strong economy. of course we haven't seen this for a long, long time. >> sit possible if your view? >> we haven't thought about 4% growth. but i stel you, stan druckenmiller is one of the guys i have the most respect for in terms of his understanding of the economy and forward thinking about what is possible. so i'm already positive. >> you raising guidance on this? >> i raised my sales guidance -- >> from that? >> before i heard from stan druckenmiller, but don't count him out. he's a brilliant forecaster actually. >> he is. he has not agreed to this. i said we're doing b this biweekly. i haven't heard back. he's so hard -- it's like dragging it out of
druckenmiller. >> he does look like pierce brosnan, don't you think? >> don't even go there. leave it with what michelle said and don't respond. >> can you confirm or deny you're leaving macy's to be the next bond? >> you'd rather be pierce brosnan than a superhero before he becomes the superhero? >> i just want to leave it where michelle left it. >> those who didn't see the first hour, i walked into a shoe store upper east side, i said there's terry lundgren. hi. and he stood up and looked at me and it was pierce brosnan. >> that's the highest compliment i could expect particularly from -- >> and also proof we need to get out more. >> yes. please go out and buy some shoe. >> there's no phone booths. where do you go? do it in the open? >> you know, like you were saying, it's the macy's 90th thanksgiving day parade. is that where you were going with that? >> yeah, yeah. i can't believe you're getting that in there. that is a great -- i love that. >> it's going to be
extraordinary. and i just want everybody to come out. >> you've been working on your lungs to blow up the balloons? >> yeah. balloon inflation night is now attracting more than a million people on the streets of new york. just the night before. >> we need some inflation. >> anything to bring people together, macy's thanksgiving day parade can do that. >> i love your seat there. you and tina. who do you know? coming up, donald trump and mike pence are heading to the hill to meet paul ryan. we'll talk to sean duffy about what we can expect from a trump presidency. and programming note, don't miss prince bin talal at 9:00 a.m. ♪ ♪ ♪
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>> you stuck with donald trump the whole way even through some of the toughest moments for him. what do you say to the protesters trying to shut down major streets of cities last night? >> we had rough and tumble elections in america. we hit hard on both sides. but we have a great tradition. when elections are over we put it behind us and move together forward as one country. i think it's disappointing that you have these protesters out there who lost in the election. this goes back to the campaign as well. you have folks from the democrat side coming in and rabble rousing in donald trump's rallies, attacking some supporters, burning cars and destroying property. listen. let's get beyond this. we should be able to have a civil debate, a vote, and move forward. but i'm not in chicago or new york. >> how confident are you that donald trump in the white house follows representative ryan's
plans for legislation? what do you think should be the first thing that gets done now that the republicans control all branches of government? what's priority one? >> well, i don't know that mr. trump's going to just completely adopt the house agenda, but i think he has adopted a great portion of the house agenda which means we need to repeal and replace obamacare. american families are getting slaughtered by the cost increases. we need to work on immigration reform and tax reform. really big parts of our economy that we think if we get right, we're going to see substantial economic growth. but i also hope that both of them -- >> what about -- >> i was hoping they were going to work with us on dodd/frank, repeal and replace. we've been working on that. a great proposal. we won't get it through this year because obviously president obama is there and wouldn't sign it. but i think there is an understanding that financial services is the plumbing of free enterprise. if it doesn't work, if it starts to shut down, the economy
doesn't work. so we're hopeful that both -- i know speaker ryan is with us. but donald trump will join us in reforming dodd/frank. >> house speaker paul ryan. can we -- there was all this discussion, is he going to survive. now suddenly it seems to use andrew's phase, all kumbaya. has that been put to rest or is there still question about what happens to paul ryan and the speakership? >> i think there's a chattering class in the media that warranto create a story. i don't think it's true at all. i've been on all the calls with the republicans in the house. paul's well respected. people love him. they might of disagreed with him on how he's handled a few things during this election, but they know he's been the one guy that's out there raising money to make sure we bring back a strong republican team. i mean, frankly to only lose as few seats as we did is a testament to paul ryan's leadership. he's a great communicator. but he's also the thought leader. if we're going to get these big
reform ideas through congress and get president trump to sign them, you need a leader. and paul ryan who has worked on tax reform wrote down our budgets throughout the course of his tenure in congress, you need that kind of a guy who can talk to the american people but also to the representatives in congress. and to mr. trump and his team to bring everyone together to get these kind of big packages through. >> representative duffy, thanks for joining us from wisconsin. one of the key nights during that -- key states during that very long night. good to have you here. >> yeah. it was a big night. thank you. coming up, where in the world is andrew ross sorkin? he's live at "the new york times" conference today. we'll check in with him up next.
welcome back to "squawk box." the futures right now are strong. but not as strong as earlier. they were up triple digits most of the morning. now indicated up 89. big gains yesterday, but didn't close on highs yesterday either. but very close to all-time highs in some of the averages. s&p is back well above 2,100. remember when it fell under? we were worried. wow. that's another high in yield. now 2.11%. do i hear 2.25%? is that on the horizon. >> we need to start adding copper to this. it's interesting.
>> the spike. up 5% just today. >> lots of positive feelings about the economy. >> isn't there a scary saying about copper? every bull market has a copper roof? >> yeah. >> it's also a little bit of a leading indicator for junk bonds. but in this case people are indicating -- >> but by the time it goes, isn't it already over? what does that mean? >> that's what google is for. >> and for trying to swing elections. but anyway. as you may have noticed, andrew is not on set this morning because he is hosting the annual conference today. what do you have on tap? >> hey, kayla. we've got a big day ahead. 48 hours after the election we've assembled a list of what may be the biggest names in business to try to help us sort through the election and what it means. but for the economy and their businesses. here's what we have on tap this morning. eric schmidt the chairman of
alphabet, google will be here this morning. then roger goodell from the nfl. pepsico will be with us as well. we're going to deep on obamacare. the future of health care insurance. aetna is going to be here as well as the obamacare health care czar sylvia burwell. the secretary of health and human services going to join us this afternoon. that's going to be an interesting afternoon. howard shultz from starbucks also going to be with us this afternoon. we're going to talk time warner/at&t with the ceo of hbo, a unit of time warner. he's going to be sitting with tom rutledge. and then later this afternoon, priscilla chan is going to talk to us about philanthropy. we're going to hear from goldman sachs and bill ackman. and finally a real treat, she has not spoken publicly.
sherri redstone in the viacom deal or no deal. she's going to join us later this afternoon. so that is the big day ahead. >> that's unbelievable. i mean, andrew, i wish you were here but the power of "squawk box" that allows you now to be so prominent to be able to bring all those people together is -- right? that is -- congratulations. that's amazing. >> i don't believe he was able to cobble that together in 48 hours after the election. >> is he gone already? >> we just made a couple phone calls after the election. said could you come on by. >> could you go there with goodell, nobody does. colin kaepernick? >> we will. >> it's like, weird. they said it was the election. we'll see. the election is over. but there's some people who think that has not helped. >> we will talk about that, the brand that is the nfl nop doubt. >> excellent. and you get to do the jacket and the -- >> and a little bit of this. i know you like that. >> and table cloths.
look at that. >> fancy. are you back tomorrow? >> i will be back there with you, joseph. >> okay. >> right there in the morning. >> it was ugly this morning the way these two were fighting for the seat next to me. which is out of control. >> i am old enough to be her mother. i sit where i want. okay? >> that's not true, by the way. coming up, we're going to break some economic news and then hopefully we can fix it. then we'll try to get it right. and then weekly jobless claims. and then our morning of news makers continue. former fed chairman alan greenspan. i think maybe we'll play a stan druckenmiller sound bite and let greenspan respond to it. stay tuned. you're watching "squawk box" on cnbc. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't.
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♪ welcome back to "squawk box." here's what's making headlines this morning. a busy day ahead for president-elect donald trump. he'll meet with president obama at the white house today and will also have a meeting with vice president-elect mike pence and house speaker paul ryan to talk about their collective legislative agenda. and we are just seconds away
from weekly jobless claims. got a little time so we'll check the futures boards. now back up triple digits again. up 107 on the dow. the s&p indicated up 13. the 10-year has moderated a little in that rise we saw in yields. there it is at over 2.10%. rick santelli, the numbers, please. >> 254,000 and that follows an unaltered 265,000. so of course we're down 11,000. and this puts us in that zone that we haven't seen really since the early '70s. it's obviously not bad news if you're studying the labor market. the real issue continues to be how to get more horsepower ourt o ut of the economy. we're in the winds of change. the equity markets are tasting something that may create a better landscape, a more fertile landscape for business, growth, productivi
productivity, and of course with all that comes higher price pressures. we've seen the reverse of that when everything was weak and pricing was low. if you have both branches, both chambers and the executive branch of the same party and everybody seems to be pretty much in agreement on things like corporate tax reform, general tax reform, how we deal with health care costs, i think the stock market's on to something. but i think what gives it credibility is what's going on with rates. we've seen a lot of faux moves where we try to convince ourselves that there was really growth and the rates were really going to move up for the right reasons. i think right now we are actually seeing that. look at bund yields. you're back to 30 base points getting close to 2%. guild to yields once again testing levels we haven't seen since brexit. so all parts are moving in a logical direction.
that means the forward looking mechanism of the stock market works again. it's like somebody put the battery back in that energizer bunny. it certainly looks to be continuing as we're going to test historic levels today. michelle, back to you. yeah, what's going on, joe? >> absolute from stan druckenmiller that he used the three word and four word for possible gdp growth at some point in the future of the united states. which i've been told is impossible from here on out. but he seems to think we could do 3.5% to 4% if you got government out of the way. >> listen, joe. i'm not alone. you've been there, many have been there. there actually are areaing of low hanging fruit that could get a whole lot more horse power to the economy. everyby who's ever worked on a car, let me tell you, one wire off in the wrong place could make that thing run horribly
rough, inefficient, bad gas mileage, you could tinker with everything. but simple fixes garner much more efficiency. i think that's the area we are at. is it a sure thing? is it a shoe in? nothing in life is a shoe in. but i agree with you joe. >> rick, steve here. i love your ranges. you're so great at telling us where the ranges are. we were talking about a 10-year on a 180. is r we at the top of the 180 shift or is it shifted upward? >> i think we're shifted upward. we're in a repricing mode. markets are moving into new ranges. everything is moving, all the parts are moving. i do suspect that the area i'd put the biggest dot on all your charts is unchanged for 10-year which is a 2.27% yield. that's going to be an important
area. i also think now if i had to look at a floor for yields, it's 1.83% to 1.86% area below us? is it going to keep going straight up? no. but right now the aggressive pivot is around 1.98%. meaning if we don't retrace into the 1.80s i would think we get closer to the 2.27% unchanges in a much more aggressive fashion. >> all right. rick, thank you. hard to believe. 4%. i don't believe it. anyway, we spoke to stanley druckenmiller earlier. we were just referencing him. but shehere is what he had to s about frustration with the latest administration and his hopes for the new trump administration. >> to me it's been very frustrating to watch monetary radicalism the last four years be the only thing addressing our issues. and every time i've talked
anywhere, i said could we just try deregulation and tax reform. could we just try it? and it looks very likely we're going to get that. >> and joining us now, alan greenspan, former fed reserve chairman. president of greenspan associates. he served under four presidents during his term and is here to weigh in on all of this. what happens with the fed, and what president-elect trump needs to tackle first once he's in office. mr. chairman, always great to see you. an honor and privilege. you know, i know that irrational exuberance was a good term. how about monetary radicalism? i might write that down. will we hear you using that any time soon? >> i have never used it. i'm not even quite certain what it means. >> well, let me -- let's go back and just start. when the outcome of the election was apparent, as someone in the
past that has been a proponent -- you know, i don't want to just say you're a supply sideer or any of those labels but maybe someone that thinks responsible for prosperity. was that a good day for you day before yesterday? or bad day? >> i think the whole political structure that's been in a state of chaos for the last several years has not been good. i hope things will improve for the future. but it's going to require some very important and very tough political judgments. >> when you -- i don't know. you maybe didn't see the whole druckenmiller interview. but he has been frustrated for years about the i guess timidity or the slow pace of the federal reserve removing the emergency conditions that it instituted. at this point, do you feel that
it's taken too long and it's actually having an adverse effect at this point? >> i don't want to comment on monetary policy. but i'd love to see dodd/frank disappear. i think it was a mistake and key regulatory structure that we've been looking at. there's been no change in the fact that when money supply accelerates after awhile inflation picks up. but my concern now is actually stagflation. i think we're in a period because of fiscal reasons for a sluggish economic growth rate for awhile. but superimposed on it are very early signs of a pickup of inflation. that pickup of inflation is going to move profit margins up temporarily. but it's a false dawn.
because i think so we will emerge our way as we're going now into a state of stagflation. i don't know whether stan agrees with that or not, but that's my view. and i think it's very well within reason. >> alan, it won't be the first time joe and i heard somebody say something and we had different takes on it. what i heard stan saying among other things was the idea that it's been -- the fed has been the only game in town and he seems to be heartened by the economic outlook from the fiscal side joining in whatever way -- in this case, it may be tax cuts and deregulation. but central bankers around the world have been complaining that it's been a monetary policy only game out there. does it make you more optimistic now that there could be some assistance coming from the fiscal side which could ease some of the pressure on the monetary policy side to do everything? >> i think fiscal policy is number one, two, and three. monetary policy may be number
four. >> and what do you mean by that? what should fiscal policy be doing? >> fiscal policy should -- well, let me just go back a minute. we have a rate of increase in entitlements which since 1965 has been 9%. what is occurring currently is that the entitlements plus gross domestic savings is as a percent of gdp has been absolutely flat back to 1965. that essentially says for every dollar increase in entitlements, you're getting a dollar decrease in gross domestic savings which also affects gross domestic investment which is the core of output per hour and our levels of gdp and prosperity.
if we don't bring that under control, everything else we're doing is irrelevant. >> but nobody's talking about that, dr. greenspan. >> i am. >> certainly not the president-elect and not the democratic nominee either. it seemed as if the whole entitlement issue was off the table. and by the way, i think a legitimate complaint from republican side would be, oh, wait a second. now they're in office and you want to handle entitlements? and it seems like it's a lult bit hypocritical now all of a sudden we're going to put entitlements on the table just as the president-elect wants to step forward and start to reignite the economy. >> look, the age of american population is going up. throughout all of the developed countries, the ratio of the proportion of population age 65 and over is moving up fairly rapidly and that is causing a
major increase in entitlements, social benefits around the developed world. it's far more relevant here in the sense that it's beginning to have a very significant negative impact on economic growth. that's where our problems are. i agree with you. during all the debates that went on during this election and upcoming up to it, nobody used the word entitlements. >> right. and in addition to talking about the fed in terms of staying with emergency rates, druckenmiller also said it had nothing to do with the lack of fiscal coordination. he also said that staying at zero causes money to be moved from one side of the ledger to the other. it goes away from savers and it basically accrues to the government. and the longer that happens, the longer we, you know, we prevent prosperity from blooming again.
>> well, i've stayed away from commenting on current monetary policy. and i'm going to stay there. >> okay. can you at least -- was steve right that, you know, if they just had no -- because of the terrible tea party republicans, president obama was unable to do anything fiscally and therefore it was the only game in town so they were justified in staying at zero. is that true? >> well, let me put it this way. the issue is unambiguous. entitlements are growing at a rate which is unsustainable. but it's being determined basically not by economics but by the age structure and other elements within our society. so that this is a fundamental
issue -- >> dr. greenspan? >> yes? >> why are interest rates rising in the wake of the election? >> rising? >> yeah. we've seen the yield moving higher. >> first of all, the rates we've seen are not only the negative interest rates but the long-term say the 10-year and 30-year and going down the rate structure have all been suppressed by various different forces. i don't want to get too involved in it, but the point here is that going back historically rates have been stable going back to ancient greece, for god's sake. they've been raised not significantly different from what we've seen the last 20, 30, 40 years. but that's human time preference which is stable, but it's a good
deal higher than -- >> i was just wondering if you thought it was inflation or growth that was driving it. >> well, i was about to say that rates would have moved up irrespective of the fact of inflation beginning to move. the combination of both -- i mean, the 10-year yield spiked the other day. day before yesterday, i think. or was it yesterday? but these rates are going to move. they're way below normal. i've said recently i expect the 10-year note to go anywhere from 3% to 5% and remember, we've been up very significantly higher than that. so things are changing. they require major fiscal policy adjustments. >> all right. so are they lower because the fed is mistakenly held them down at much too low levels and that's why -- i'm kidding. i'm not going to ask you that. i was going to try one more
time, but i'm not. we appreciate your time today, mr. chairman. and maybe, you know, put -- do some more memoirs. i know you've already done some. but tell me what you really think in a book maybe. will that work? >> well, i'm in process of writing jointly an economic history of the united states. >> maybe i can read between the lines and get it there. >> you can read on top of the lines. >> okay. excellent. thank you, mr. chairman. we appreciate seeing you. >> then when he carries it in his briefcase, you can judge how big the briefcase is. >> the briefcase indicator of the good old days. >> steve, you've seen the great woody allen movie where someone is quoting marshall and he hears the guy saying it, and this is what he really meant. and he's able to bring marshall over and say you're absolutely -- i messaged druckenmiller about what he meant about whether it was a lack of fiscal -- he didn't get back to me.
>> i just heard what he said. he said we're getting away from the time when -- >> thought they had artificially kept things way too low. >> i agree with him and yellen agrees with him. central bankers around the world have been saying it's been on the back of monetary policy authority. and he said he welcomes a time -- isn't that what he said? >> let's go. all right. coming up, what does a trump administration mean for the at&t/time warner deal? we'll head to l.a. to find out. as we head to break, take a look at copper. rising sharply. stan brucken miller pointed out dr. copper earlier. stay tuned. you're watching "squawk box."
welcome back to "squawk box." what will a donald trump administration mean for that proposed megadeal between at&t and time warner? julia boorstin joins us now from l.a. julia, we've already gotten more rhetoric from candidate trump than we normally get on these deals. can we read between the lines? >> kayla, concerns that donald trump will follow through on his vow to block the acquisition of time warner, sending shares 1.5% lower yesterday. president-elect trump saying three weeks ago, quote, as an example of the power structure, i am fighting, at&t is buying time warner and thus cnn app a deal we will not approve in my administration because it is too much concentration of power in the hands of too few. jeff stephens said in conference yesterday, quote, we look
forward to working with president-elect trump and his transition team. his policies, his discussions about infrastructure investment, economic development, and american innovation all fit right in with at&t's goals. now, some analysts in here, greenfield saying the legal basis for blocking the at&t time warner deal remains unclear to us given trump's campaign trail commentary and his distaste for time warner's cnn division throughout the campaign, the odds of regulatory approval appear to have dropped. in fact, needham estimates chance of the deal achieving regulatory approval have declined from 30% to a range of 15% to 20% saying that this is also probably bad for other consolidation media efforts in the works. now, in addition to cbs and viacom, which are examining a merger, there've been plenty of other deals speculated about. so this could dampen some speculation about a google or an apple buying a media asset,
kayla. >> yeah, thanks, julia. you know, there's candidates and there's president elects. that sort of just summarizes it all, i think, at that point. especially when you're running as a populous. now, if someone were, let's say, to come to president trump and say here are the advantages with scale and with advantages to the consumer by putting these two companies together. this is a private sector guy who's done stuff in the private sector. so at this point -- and also if you said, and here are the laws in terms of regulation with the fcc and ftc and this is what is determined and you don't use that hiesenberg whatever it is from 1930, do you remember what that's called? it's a stupid thing they used in the last -- >> for the concentration of competition, lack of it, yeah. >> i'm just telling you that if it's a reasonable presentation
that's bad, i wouldn't necessarily -- what'd you say went from 25% to the likelihood of 20? >> about 30% to 15 to 20%. but a lot of other analysts say there -- >> candidate versus president elect, we'll see all of these things whether you're running as a populist how many actually becomes just as set in stone as prior to the election, right, julia? >> yeah, i mean, a lot of analysts say there really isn't a legal reasoning to block the deal because it's vertical integration. >> that's what i mean. >> all right. >> you know who else we're going to see? thank you, julia, jim cramer. we're going to talk stocks with him next. a great school, but it the right the one for her? is this really any better than the one you got last year? if we consolidate suppliers what's the savings there? so should we go with the 467 horsepower? or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. ok. sure. but are you asking enough
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let's get down to the new york stock exchange. jim cramer joins us now. jim, earlier this morning stan donald trump said he sold all his gold on election night and putting a big bet on economic growth. is he onto something? >> well, i've got to tell you a couple years ago at delivering alpha, stan was saying rates were, you know, way too low. and then rates subsequently went lower. i put that as a caveat. i've known stan for years and i actually agree with all his positions today. i think versus italian bonds remarkable short.
i think the italian economy is actually going to come back very fast. now that they're cleaning up their banking system. i think he's right u.s. treasuries are short. i think we've seen the lows for the euro. and i think the growth we can continually get ahead of ourselves buying freeport, caterpillar is the proxy, a lot of people are short these stocks. they didn't see a trump presidency coming. they felt they were layup shorts, not anymore. not if we do a $500 billion 30-year treasury infrastructure bond that i'm hoping that trump does. >> we got some time for that. first meetings taking place today in washington. we'll see how they go. jim, we'll see you in about five minutes. >> thank you. plus, don't miss a cnbc exclusive 9:00 eastern time, prince alwaleed will join "squawk on the street." we'll be right back.
let's get a final check on the markets. be interesting to see if it holds the early gains and then adds to them because there is that intraday high. it would just be weird after the election to have all the averages trade at new highs while rates were backing up to levels we haven't seen in a long time. so quickly before anyone did anything. >> well, we heard when the economy returned to growth it would happen.
>> i know. but nothing's happened yet. >> the election happened, joe. >> yeah, but january 20th the same guy's there still going to be there for another, you know, how long is that? >> it's a discounting mechanism. it's a forward looking thing. >> not that i'm counting the days. >> and the minutes and seconds. >> make sure you join us tomorrow. "squawk on the street" is coming up next. ♪ good thursday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange. what a morning we have for you. david faber is at the liberty media investor day in new york city. he's going to have an exclusive with chairman john malone coming up. we'll talk exclusively with prince al-waleed bin talal. best week in five years on hopes of trump's administration. europe is slightly positive, that 10-year yield is near