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tv   Squawk Box  CNBC  January 25, 2018 6:00am-9:00am EST

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infrastructure proposal. ♪ good morning welcome to "squawk box" on cnbc. we're live from the world economic forum in davos, switzerland. i'm becky quick along with joe kernen, and andrew ross sorkin on this day in davos, let's look at the u.s. equity futures, yesterday was an up day for the dow. it was a day that you saw those s&p with the slight pull back, but some green arrows once again. dow futures indicated up by 70 points nasdaq up by 30, and the s&p by 7 points if you look at what's been happening overnight in asia, look at where those markets closed you will see that in japan the market was down 1.1%
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similar decline for the hang seng shanghai off by 0.3% then in some early trading that we've seen here in europe, you will see things are higher in most of the markets. germany is the one counter indicato indicator. the cac is up by a half percentage point stocks are higher in london as well checking out things, the yield on the ten-year, 2.648%. yesterday the dollar skidded to a three-year low after those comments from treasury secretary steven mnuchin, embracing potentially a weaker dollar and it would be good for trade dollar down across the board again this morning the euro at 1.2413 the yen at 109.01. oil at three-year highs.
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>> whoa. >> 66.04 for wti, and brent at $70.78 a barrel. let's get to the sttop stories. treasury secretary steve mnuchin making more comments about the dollar in davos. saying the administration is not concerned about the level of the dollar in the short-term at a press conference yesterday he said the weaker dollar is good for the u.s then wilbur ross came on our show and said the media in attend dance took that comment out of context larry summers, jason fuhrman putting out notes, letters, statements, saying this was a big mistake, it would only invite retaliation but then steve mnuchin was on a panel hosted by cnbc this morning, here's what he had to say in response to all of that
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>> so my comments have been that in the short-term where the dollar is is not a concern of mine that is will fluctuate that in the short-term there's obviously benefits and issues with a lower dollar. in terms of the benefits, it's beneficial for our trade imbalances there are also issues for people who hold dollars so i want to be clear on acknowledging both in the long-term i fundamentally believe in the strength of the dollar it is the reserve currency, i believe it will continue to be the reserve currency given the strength in the markets. >> the dollar dived yesterday on those comments i thought it had come back a bit, but unch now. >> the "wall street journal" takes the trump administration to task for comments because the dollar --
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>> cite the "wall street journal" then. >> let's give it some degree of objective. >> larry summers and -- come on. >>. >> when the "wall street journal" criticizes -- >> that's better >> we have corporate news to tell you about an interesting development, and one of these companies has a major con ttingent in davos alibaba, jack ma, was here on tuesday and wednesday, and he and kroger have held some talks. that included a meeting where kroger executives traveled to china. kroger could direct customers to alibaba's site where they could buy general merchandise. this raises question about what alibaba's strategy is ultimately when it comes to the united states they say they don't want to be
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s selling into the united states, but maybe manufacturers could sell into china. maybe this will turn this big potential rivalry between alibaba and amazon will come to a head the white house is set to le lease its framework for a new immigration bill on monday senators are also putting their collective heads together. yesterday president trump told reporters he's seeking 25 billion to build the border wall and is open to granting citizenship to the dreamers. immigrants who were brought illegally to the u.s. as children the schumer offer was 1.6 billion. then that was withdrawn. now the president put a price tag on it of quite a bit more. >> president trump is hiking the numbers behind his plan to rebuild the nation's infrastructure he said the plan would result in 1.7 trillion in overall inve
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investment the plan will be detailed in part at the state of the union address next week. and a programming note, i'll speak with president trump about his message that he's bringing to davos that will start tomorrow at 6:00 a.m. eastern >> this is a huge interview. this is what people in davos have been waiting for all week >> a lot of interesting things happening. i guess president macmacron, the french president, putting into words some of the shortfalls of globalization in terms of satisfying the needs of -- >> of people >> it's weird that also suddenly tax cuts, a lot of people are optimist optimistic here. there's just a different sense here this year not just from the tax cuts,
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there's global growth, but other countries are saying corporations, more competitive, private sector, it's just a different feel here comes this guy, president trump, mr. america first, so it's going to be interesting >> how does that message resonate >> and how much does he soften it is there somewhere in the middle really where this comes? both sides agree that the other has points >> i would say here you have this bifurcated group of people who in and of themselves are bifurcated like the economic plan, strategy and what's taken place, on the other side there's some that are holding their nose and his approach in terms of -- words, let's say. >> we'll move on one other programming note when we're doing this, on our monitor, it's delayed. we don't know when we're on, when we're not i'm constantly doing something
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we have four computer screens back in new york we have none here. so this is all we have so when -- when we get caught doing something, i'm not playing brick breaker. the producers are saying this, that, the other thing. >> we're looking for any news that's breaking. >> exactly i was looking up market prices >> people are saying how annoying is it i'm sorry. you don't know when you'll be on and off. >> fascinating that this is the computer >> it is >> my advice, use a kleenex, you will get caught if you -- you know what i mean use a full kleenex, andrew >> let's transition to our first guest of the morning cigarettes are going up in smoke. our next guest is a driving force behind this movement joining us now is fda commissioner dr. scott gottlieb. great to see you >> thanks for being here >> we have so many things to talk about we'll talk about smoking and
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those issues let's talk about the flu that has been something that's been an issue around the globe and in the united states it's been virulent >> it was an early season. we think it will peak earlier. probably close to peaking. maybe a couple more weaks. weeks. the flu this season is less virulent, for the most part people are getting less sick, but that means there's more people walking around with the flew so more cases are getting transmitted because of that. that doesn't mean some people are getting very sick. the predominant strain, when they manufactured the vaccines it was a good match, but when they manufactured the vaccines, they manufacture them in eggs. you have to make the virus that will grow well in the eggs the eggs produce the antigen that goes into the vaccine when the virus was egg adapte, d
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it made it less protective so it's not as good vaccine. >> so it's a good vaccine for chickens, but not people >> that's one way to think about it. >> will we ever get to the point where we have a good flu vaccination in it seems every year the effectiveness is 60% or less >> there's two technologies. one is to grow the vaccine in cells rather than chicken eggs that is available but doesn't yield as much.l vaccine, it will elicit a t-cell response so good against any strain of influenza. so we're out of this business of trying to guess what the predominant strain will be >> how far away are we from that >> it's in development what is the cost of it >> unclear, it's going to be more expensive >> is it a five-year project ten-year project >> it's in early development, but it's in clinical trials. >> so the response now is
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antibiotics? >> you're looking to elicit a t-cell >> it's precise but makes it harder >> precise for the strain, but the strain changes every year. you want to target things on the virus that don't change. >> t-cell includes cytocons and everything that would help or just t-cells >> t-cell >> where are you on the use of antibiotics? >> he looks fine >> we had a session -- >> there's a big debate about where we are in the medical world on antibiotics and the overuse of them. you're looking at me i'm looking back >> i am looking at you you have a virus, you constantly take antibiotics >> it's once or twice a year where i have to knock it out >> you probably had a virus. we had a session here today, we
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were talking about the lack of development of drugs for multi drug resistant organisms one idea i floated is can you move away from the current reimbursement model where you pay for each use of the drug, which disincentives investment in drugs that won't be used a lot, and maybe healthcare institutions pay for access to a drug this could provide intent siece. right now the incentive is to sell more drug, but you want a drug that youdon't have to use a lot, you don't have that down the line if you pay a software fee, an maybe how many people in an institution uses it, that has a steady market for drugs that are in reserve i think we have to move away
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from the current reimbursement model. >> where are we in the flu season i read different articles. was it an acute season >> it was an early season. >> are we almost through >> i want to be careful. about a week ago we said it had peaked, and now it looks like we have a couple more weeks it should peek around february >> the mortality in the elderly, is it about average? >> theidemiology is more people are getting sick, and more people have the flu, when it's a really bad flu, people stay home and they don't spread it are there totally different symptoms depending on the individual i hear if you have a cough, sore throat, but not throwing
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up- - is it a throw-up flew or a head flu >> upper respiratory >> and people think it's a cold. >> exactly >> i walked in to cvs -- >> he takes things preemptively. >> i couldn't find anything. what is that stuff >> zicam and x-clear and kale -- >> no. >> i will stay away from product specific discussions >> smart >> commissioner, let's talk about how we started off this introduction cigarettes going up in smoke fewer and fewer people are smoking. >> in the united states. when you look around the globe, it's a broader issue >> there's hardly anybody, but once you see one person smoking, it's shocking. >> outside, we're not used to secondhand smoke anymore, i
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don't like it. i used to think it smells like james bond, now i don't like it. i look at them and i think you're an addict after all we know, you can't figure this out? >> some countries have seen dramatic declines, some have seen smoking rates go up like indonesia and egypt. we're looking to regulate the nicotine content in combustible cigarettes to render them minimally nonaddictive we take an approach like electronic cigarettes, putting them through regulatory gates for adults who still want access to nicotine but not the combustion nicotine is not the cause of death, it's the combustion >> it's a weird thing to crave you have to do it to have the craving. if you don't start it, there's no reason to just crave
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nicotine >> we want want the ends to addict a whole new generation of people to nicotine we have a large generation of people currently addicted to nicotine if we can transfer them off of combustion, the public health gains would be enormous >> i saw yesterday one cigarette a day is as bad as a pack, that's something to keep in mind you can't be one of these people who can quit completely. when we have individuals who come on and are frustrated with how we're dealing with the opioid crisis. they talk about long-term methadone use, if you need it for the rest of your life, that's better than dying is that the state of the art now for treating opioid addiction? you might be on something that's less trouble but still has a stigma
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>> there's three approved treatments for open roioid addin and they all work. there's a difference between being addicted to opioids and being physically dependent on it some of the treatments are opioid-like, so there's a view that you are still on an opioid, you're still addicted, but you're not you can be physically dependent on the opioid to prevent withdrawal simtemperatuymptomsto but not addicted people can be on long-term treatment and live productive lives. what do you know about cbd, which i keep hearing more and more about do you know what i'm talking about? >> sure. this is thc and it's in creams and things it's effectively putting marijuana in -- >> does it get in -- it makes
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its way to the central nervous system >> that's the question we have a doctor here. it's becoming a very popular product all of a sudden. does it make your skin soft or do you get high? >> no. it's supposed to -- >> we took some enforcement action against some companies who are making inappropriate claims related to some components of marijuana. but there's different components and there are products looking at therapeutic uses for these components that's different than smoking marijuana. so we do have some products in clinical development looking at vaerio various uses of cbd. >> it doesn't make you high, does it? if you extract it and deliver it, no, it won't give you the same high. they are delivering therapeutic effects of the substance and the benefits without the high. >> i got a massage in colorado i was in aspen >> it's going down fast. >> real quick on the story >> run away. >> go to break
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>> they say what scent do you want, this or that, they say we can upsell you on a different lotion with the cbd. >> give me the address of that >> i say for $40 extra, i'll try it big nothing. that was my -- >> wow >> on your back? where -- >> commissioner gottlieb thank you for being here >> any time the masseuse wants to upsell you, it's a problem. >> on the shoulders? >> they get a warning letter now, it's your fault >> probably. >> coming up, western union being billed as the fastest way to send money worldwide. we'll ask the ceo how the company is competing with the rise of bitcoin. will there be bitcoin sad ending or happy ending? that's next.
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we usso why do we pay to havers a phone connectede days. when we're already paying for internet? shouldn't it all just be one thing? that's why xfinity mobile comes with your internet. you can get 5 lines of talk and text included at no extra cost. so all you pay for is data. choose by the gig or unlimited. and ask how to get a $150 prepaid card when you buy a new lg x charge. it's a new kind of network designed to save you money. call, visit, or go to welcome back to "squawk box," we are live there davos this morning western union is growing its digital and mobile business.
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joining us to talk about that is the ceo and president, hikm hikmet ersek every conversation we've had has been about cryptocurrencies, and bitcoin. when i think about your business, this idea of transferring money around the world and people having to trust it, i figured we have to come to you. try to understand what you think of this. >> trust is a good word. people trust people send 31 transactions every second a filipino nurse earning 1,000, $2,000, half of her salary goes back to the philippines. a child goes to school for a year, that's paid out in cash. in real life, look, currency is currency you can transfer any currency. digital currency, issued by reserve bank or not.
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as long as it's regulated, we are there. we pay out in 131 currencies globally, 30 transactions every second we are investing a lot >> and part of the premise or promise of digital currency is an almost frictionless environment. where there are few fees and people can move money around quickly. do you think of that as a challenge, an existential challenge to your business if this were to take off? >> i don't think so. western union found the first digital currency you collect dollars. you pay out in pesos it's a ten digit number issued at the sametime, that's in 2 0
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cou20 countries. at the end of the day the consumer decides, the consumer decides they want to pay daily expenses i think it's important we understand use cases cryptocurrency and bitcoins are a bubble for certain people. >> you don't think it will help -- >> 7 billion people worldwide. >> let me ask you about the business and what's going on in your world i assume you followed this moneygram transaction that did not happen with ant financial of alibaba. what did you make of that decision and 9 dethe deal gettig blocked? >> i can't talk particularly about the transaction, i can only talk about the free trade generally it's a bigger issue. i think globalization is taking a break. i think globalization is good. we see it daily. western union sends about 1$150
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billion a year, 6$600 billion, and it creates jobs. actually the pie gramigrants, we come, 85% of their income is spent in the u.s. or investing, only 15% is sent back. 6$600 billion is a lot of money that creates jobs. it's enormous to understand that western union is a big part of that. >> as we've seen the debate on immigration ramp up and get more heated, have you seen impact some examples you mentioned of immigrants sending money back home, has it made people more reluctant to send money back home or more reluctant to stay in the united states >> in western union it has not impacted the fastest growing part is
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mobile it's growing 25% immigrants are using our app to send money home. we are in 40 countries, sending money to 200 countries we see some regulatory changes in some countries to protect borders. the berlin wall fell apart, walls are built by communist parties, and in a free world we're all connected. when money novembmoves people ae better connected word wide there's about 6 billion or 4 billion mobile phones you can be connected easily. if you connect information, if you can change and have the connection when money moves, i think we're seeing that as a huge future. >> hikmet, thank you for coming out. when we come back, 2017 was
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a hot year for ipos, doubling the number from the year before. we'll talk to the new york stock exchange's tom farley after the great lakes. right now, a look at the s&p 500 winners and losers ♪ ♪ ♪ ♪ ♪ what we do every night
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♪ welcome back we are live in davos, switzerland. it is time for our squawk planner. the ecb announcing its latest interest rate decision at 7:45 a.m. eastern time, followed by mario draghi's news conference at 8:30 a.m. also at 8:30, u.s. weekly jobless claims at 10:00 a.m., december new home sales. caterpillar and 3m report before the opening bell after the close, we'll hear from intel and starbucks, which just announced plans to increase salaries for people after this tax plan we are in the green once again dow looks like it would open up about 66 points higher nasdaq looking to open 30 points higher s&p 500 up about 7.5 points. >> finally, you like the tax plan, because howard schultz --
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>> it's not that i like the tax plan because howard schultz -- i'm acknowledging that i may have been wrong -- >> virtue -- >> i may have been wrong about my early cynicism about companies that came out early on with these one-time bonuses. >> when howard does it -- when howard -- >> are you suggesting that he is trying to curry favor with the administration >> no. no i'm saying once your progress e ive demigod does it -- >> no, bob iger did it the day before >> when he raises the prices of latte to $8, isn't that just another ceo you don't like >> i like everybody. i want our economy to succeed. >> also on -- we were talking
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about the squawk planner i'll speak with president trump about his message to davos and a lot of other things. you can see the full interview starting tomorrow at 6:00 a.m. eastern right here on "squawk box. >> you are talking to him before he addresses the world economic forum. >> yes tomorrow at -- when you tune n we'll get a preview of what you're likely to hear at -- >> 2:00 p.m. here. >> 8:00 a.m. in new york >> right >> so the president takes a lot of -- takes credit for the stock market move what about the guy that runs the new york stock exchange you are not just sitting there twiddling your thumbs. joining us now is tom farley, nyse -- you did a hell of a job. 40%. >> i take full credit. i'm at the controls. >> you may not have been responsible, but you certainly enjoyed the ride >> and the ride continues.
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>> was it not a great ride wasn't that fun? >> it's a lot fun. as much fun as i'm having with you in davos, i'm jealous i'm not back in new york, because it continues this week. we'll have a record january for capital raised and ipos, nearly $8 billion five ipos raising over 7$700 million, that's never happened before in january. let the good times roll. >> not much english language tv over here. the big thing was about the scammers on wall street, it was -- >> only joe has time in davos to watch tv >> this was at night you're rubbing elbows with the elight eli elites they look at me and head the other way.
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it's been a few years since you would write a tv episode about the hot ipo market that's a barometer for business activity >> yeah. >> and it's back >> if you were a ceo, business owner, wouldn't you look at doing an ipo now volatility low, asset prices high, asset managers eager to buy new securities because the amount of cash they're managing is increasing. so, as long as we continue in this environment, the ipo environment will continue to be strong that's a good thing. >> aramco is something you're looking forward to >> i spent time with the saudi arabia delegation here there's a fairly large delegation i think with vision 2030, a lot of bankers are looking to meet with the saudi arabians. i spent time with them in davos for many years >> i interviewed nasser yesterday. he said the company will be ready in the second half of 2018
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for an ipo then he said we have to get the shareholder -- the shareholder being the saudi government he didn't indicate they were necessarily in the second half of 2018. which seemed to me, based on the interview we did with him in saudi a couple months ago, a bit of a different take than where he was before. do you have a different sense? >> i'm not an adviser of the company, i look at it objectively. they have a lot of things going on women driving in june for the first time ever. they just screened their first movie. women can go to sporting events. moderation in their society. if the ipo doesn't happen in 2018 t happens 2019, so what i haven't heard anything on it what is yoursense from investors about how they think about saudi? after that conference, there was such a great amount of goodwill, then this big corruption crackdown with the arrests and that seemed to make some people skittish about what has
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happened in the country. some people think of it as a great anti-corruption campaign, some think he may be taking out enemies. >> the sense here at davos, there's a lot of good things going on in the kingdom. certainly they're busy certainly they'll have ups and downs. seems to be trending in the right direction. >> you talk to all the leaders of the businesses that are listed on the exchange deregulation started things. things were already percolating before tax reform. that wasn't until the end of the year we were already up 30 points since the election did they mention that? do they give you concrete examples of why it's easier to do business in the united states now? >> two things. one, the global ceos who i met with -- i've been meeting with ceos all day for the last three days, i learned something surprising, the tax reform has changed their thinking and their thinking about doing more investment in the united states. in fact, i just came from a meeting from an insurer based
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outside the united states who said that. i was focused on american companies. >> and they said they want to do that because -- >> there's a lesser tax burden for new operations in the u.s. so it will make the u.s. more competitive. >> there's articles written that suddenly tax reform is hot in davos. i thought for some countries -- >> for the other countries who say we may have to bring our own rates down >> did you think of that angle, they're thinking of u.s. investment in the u.s. being more attractive. >> the thing about deregulation just the tone from the top about deregulation, you're seeing instead of new regulations being promulgated, they're not being written and issued so it's not just deregulation, it's a lack of additional regulation >> think of the energy segment, with less regulation and $66 oil, that's going to be a --
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there's going to be some ipos there. lng and other -- >> yeah. but selfishly, sure, i would love more ipos, but it will drive free enterprise down into the smallest business. the person with one well or a dream to start a business. it will make it easier for them. ultimately it will lead to more ipos, i'm focused on that as i am the big businesses in davos >> freeman is here from the nasdaq do you look at him we walk on the other side of the street >> is it like this >> yes >> you're frenemies. >> we're frenemies they serve a role in the capital markets, we serve a role we each have our niche >> competition is tough for uber, right? >> for an ipo? >> yeah. >> we do well on the large ipos. today is the 37th straight large ipo of the united states to pick the new york stock exchange. five years, 7$700 million, 37 i
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a row. we do well the competition will be intense. >> dara is here. travis kalanick is here as well. which is its own strange thing >> i will repeat what i heard publicly, dara said they will ipo. it looks like it will happen in 2019 >> i hope you're on that >> we're not rushing we're 225 years old. if they ipo now, terrific. 2019, that's fine, too. >> the nasdaq does house the preeminent show on "squawk box," on cnbc. >> i tend to watch five hours of live programming during the day that are filmed at 11:00 >> that's at the new york -- >> yeah. the new york stock exchange. >> tom, great to see you >> thank you very much coming up, when we return, global superstar usher is in davos. i sat down with him to find out how he's using his music to educate and inspire kids he told us something that he has not said awhe nyerelse
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that interview after the break it's all yours. wow! record time. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital.
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welcome back to "squawk box" live in davos, switzerland time for the executive edge. usher is known for his dance and songs, but he's here in davos for another reason i sat down with him to talk about music and education. >> what i see in little kids is someone who mentored to me when i was 13, i considered myself a hard worker and wanting to achieve goals. my mother said if you're given this opportunity to help someone, do it so around the age of 22, 1999, i decided that i would create a new look on life through the world experience i didn't know i would be building future entrepreneurs or empowering youth ten years later, but it was a journey worth while. >> what is your number one goal for 2018 >> continue to make education and career preparation a priority the more i'm able to talk about
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and give examples of how peer to peer engagement is important and also preparational, to me is fixes a systemic issue education is my focus. i hope to continue to use this platform to make that a priority for the rest of the world. >> are you back in the studio this year? >> if you've been paying attention to my snapchat, ig, twitter, you know i've been in the studio working on something. come this year, there will be a major moment i'll be working for the rest of this year and hopefully releasing music by the middle if not the end of this year >> if you're an usher fan, that was some breaking news just there. usher and global citizens ceo hugh evans joins us for our face-to-face interview that's later today on facebook. coming up, as you can see, we are now -- we have to take a
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break and we're next to each other. >> just the guys >> becky has a panel going on. >> i was seeing some people writing in that you seem to be moving closer to my side of things >> yeah? >> yes they do say that you do know this, i didn't move that way you moved this way >> right to the right >> right >> usually we sit on the opposite side. >> coming up, motorcycle sales in india have been skyrocketing over the past decade, and eicher motors is leading the way. as we head to break, here's a quick check of the european markets now. it's green, but not big gains, but it is green. we'll be back. when this bell rings...
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change the calculus of where you build new facilities in. >> probably not right now. >> would you guess we would see nafta renegotiated >> the president has made it clear that if it's a deal that he doesn't like he won't do it. >> investment business is taking over the leadership economy. >> cyber security is probably the biggest risk that pops because it's a risk that's changing leading india motorcycle maker eicher which makes the royal enfield has seen its stock soar joining us now the, the ceo of eicher motors. you made a decision a couple of years ago to narrow the focus of
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the things you could lead the market in and that left you with what, for viewers that don't know the company >> the focus was we wanted to do very few things and do them exceptionally well when the market was all in small commuter, 100 cc motorcycles, for the last 20 years we've just been doing 350 and 500 in india that's considered absolutely huge. we stuck to our guns from 2000 to 2010 we stuck to our guns and the market moved and we were building a better motorcycle. >> this is how much of the business now, what percentage? >> when i took over the business i also sold a lot of old legacy businesses now it's about half of our revenue. the other half is actually a joint jen tour with volvo.
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it's much more than half the profit it's the more profitable part. >> i've seen eicher on the front of trucks. >> yes, absolutely. >> that's a volvo? >> they have a share in our business it's a joint venture we run that with volvo in sweden. >> you want to be global, you know we have harleys here and people love the beamers, the high end people and i think india finally -- india is now producing again in the united states is it going to be tough here for you? >> it's a very long term play for us we think 10, 15, 20 years and that's how we're playing the market the good thing is it increases the size the problem is not the number of motorcycle brands but the number of people coming into motorcycles.
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if you can encourage more people to be interested -- >> that number has gone up substantially. it went up, down and i thought it's coming back. >> the last cycle it had gone down a lot but our absolute concept is to play in the market which is very different because we will not be in heavy grade motorcycles and most of them make their bread and butter from heavy grade motorcycles. we want a true middleweight idea, concept and fun. 30 years ago they were all middleweights. >> do you ever see transport in the u.s. in major cities being as motorcycle heavy as some cities in europe and asia? >> i think it's not a total leisure sport in america but i don't see motorcycling becoming a huge thing. but i see people like us can bring back the old school style of fun and care free fun
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it's not these highly electronic and highly modern type of vehicles >> no self-driving >> no self-driving at all. >> what about due catty? do you have an interest? >> we don't do that, nothing like that. >> do you think elon musk is going to make an electric motorcycle >> it will probably come in small urban scooters first i think there's a huge potential but it's going to take 10, 15 years. people live in big apartment blocks and there's no charging infrastructure. >> thank you good luck. >> thank you. when we return, we're going to take media and deals with mike fries and you don't want to miss this, joe has an interview with guess who president trump. vo's happening right here in
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davos day three. in this hour, liberty media ceo mike fries, gary penkin and dave mckay of rbc treasury secretary mnuchin clarifying his comments on the dollar the highlights and market reaction is straight ahead after that interesting scuttle but from those comments yesterday. plus, quarterly results due out from caterpillar and 3m as the
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second hour of "squawk box" begins right now ♪ good morning and welcome back to "squawk box" right here on cnbc. we ha we're live in davos. becky will be back in just a little bit in the meantime, i want to check the equity futures this hour we are in the green once again this morning things looking up in a big way on both the dow jones, nasdaq and s&p 500. dow 70 points higher, s&p 500 about 8 points caterpillar and 3m expected to come out this hour we'll bring you those numbers when we get them among the companies out with quarterly numbers, southwest airlines
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revenue beating forecast ceo gary kelly saying that tax reform will provide meaningful savings for the company in 2018. he'll joining the gang on "squawk on the street" this morning. chronicle will sell cyber security software to fortune 500 companies. they have a huge contingent here in davos this year selling some of those services to business. treasury secretary steve mnuchin making lots of news on comments on the dollar here in davos. he said the administration is not concerned about the level of the dollar in the short term at a press conference set yesterday you might remember, he said a weaker dollar is good for the united states. the dollar then weakened after
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that then wilber ross -- then steve mnuchin went on to clarify his comments. >> it will fluctuate in the short term there's obviously benefits and issues with a lower dollar. again, in terms of the benefits, it is beneficial for our trade imbalances there are also issues for people who hold dollars i want to be clear in acknowledging both in the long term i believe in the strength of the dollar it is the reserve currency i believe it will continue to be the reserve currency given the strength and the confidence in the u.s. markets >> and the dollar weakening just yesterday. >> there's no reason -- here's the thing, andrew, i don't think
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jumping to the conclusion that the administration is going to try to debase the currency is different than saying we're okay with what it's doing in the short term here's why i think the detractors would like to believe that protectionism is right around the corner which would obviously hurt the currency. they're almost saying, look, you're preemptively saying the dollar could be weaker because of protection but if rates start heading up and we get three or four rate increases this year, it will be very difficult for the dollar to go down. >> for market participants got used to the school of robert robin -- >> all of them not just him. >> you have to say that you want a strong dollar not just for the short term but the long term but the second you acknowledge something else, whether it's "the wall street journal" coming out against you on that and the idea that other countries might consider retaliation, that's
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when people get skittish. >> we've seen other countries do well when they keep their currency low no one is saying that the united states is going to embark on a path where our export and the trade deficit is the overarching theme about everything we know that no country has ever devalued their way into prosperity. you're going the wrong way your citizens are worth less their buying power is diminished >> i hope when you see jerry baker in the streets you tell him the full story. >> jerry baker. >> the editor of the "wall street journal" who did the interview with him. >> and there was a critical op-ed today against what mnuchin had said. >> i think it was more just saying let's thinki about this. because words matter too in terms of currency traders. president trump is hiking the numbers behind his plan. hiking and sort of putting meat on the bones for the infrastructure plan.
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he now says that plan could result in about $1.7 trillion in overall investment over the next ten years. this plan is set to be detailed in part at next week's state of the union address. a programming note, we'll talk probably about this at some point. i'll be speaking with president trump about his message to davos. you can see the full interview starting tomorrow on the 6:00 a.m. eastern right here on "squawk box. cord cutting continues to be a term that people use when we talk about media there's some dissension as to whether it's in full force yet it is a little but amazon also continues to be a threat customers still crave faster international. joining us now to discuss the shifting landscape in the media and cable industry is mike fries, ceo and vice chairman of liberty global good to see you every year here, mike. >> great to be here. >> the one time we see you i always think of you as like the international cable guy but are you a mogul now?
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are you a programmer now >> well, we have some content investments. slowly but surely. we own sportsnet works throughout europe, we own lion's gate but i think we're taking a more tactical approach. vertic vertical integration is happening in the u.s europe is a much more fragmented market 80% of time people are watching their local broadcast networks we're being more tactical about regional sports and that type of content. we'll see over time. >> in commenting on what's happening, comcast reported yesterday and they're big internet players but people still watch the video ads and i think in the quarter a year ago it was 80,000 ads this time it was down 33,000 whether it's comcast or whomever you want to look at. >> we're actually improving.
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we lost 60,000 subs. a year ago we lost 150. >> it could be 150 next quarter. >> for starters, we've partnered with ott so netflix is in countries on the box a third of our customers are watching it through our service. we're investing a ton in the user experience. you can pick it up on your mobile phone that experience is resonating with customers if you're not investing, if you're not leaning into that experience, investing in products in that rope map, then you may have an issue. >> when you look at the landscape right now, even when we were in davos, the big news in media land was that 21st century fox was really struggling on their deal they're obviously now merging into disney.
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>> i think that deal happens, the deal in the u.k. >> sky deal? >> i think so. and the disney deal helps that in the long run. i think they'll make some concession this is all about scale. when you're competing with netflix or amazon, it's all about scale. it's fixed immobile convergence. mobile operators and cable operators are coming together. you're seeing fixed mobile convergence. secondly, you're seeing integration, like what's happening in the u.s. with time warner it's inevitable. >> how do european regulators think about these deals and do they think about it differently in the u.s.? >> the u.k. situation is very unique. >> even in the united states the conversation about whether a sprint could merge with an at&t.
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are they doing going to allow t? >> the six deals have all been approved or will be approved mobile prices are tougher. going from 4 to 3 or 3 to 2 is difficult. fixed mobile which is really important, huge synergies, huge benefits to consumers. >> who's got a better margin, u.s. or european operators >> ours are higher. >> why is that >> we pay less for content we don't have 35 to $40 going over to hollywood every month. >> the content i'm seeing over here is worth a hell of a lot less i can tell you from my own experience did you hear what i was watching >> well, you're not swiss. >> i'm not i'm watching usa that's all i got over here >> if you're european, it's a little better. >> but long term do you ever see parity
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>> no. we say $7, $8 for content. the u.s. would be $30, $40 we pay less for localized versions of discovery or usa it's just a more efficient gross margin. >> how do you think about amazon in your world, players >> slowly in a market like the u.k. they're not doing as well as netflix in germany they're doing better. they're going to experiment with acquisition. we'll see how that goes. >> given the scale that you talk about and the need for scale, do you ever see a day where mr. malone says, you know what, we're going to put all of our chips together >> you never say never in our world. >> does that make sense? >> it could. we do a lot of the same things, buy a lot of the same equipment, have the same equipment road maps potentially. the european and the u.s. market are very different in some respects but also very similar
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we're heading down the same path and we'll see. >> you study for your interviews, don't ou >> i try to. >> do you have the tv on in the background at least? don't you have cnn on or something? >> in the evening, yes >> it's a little quiet in the hotel rooms, but in having it on and just seeing where to put it, there's nowhere to put it. i'm sorry, work on that. >> nowhere to put -- >> no channel to put it on either i can't understand a word that they're saying or it's curling or something >> i love curling. >> you'll work on that for me? >> i'll work on it. >> you're getting into vertical. >> we own all the cable systems in switzerland >> real quick, within your competitor set, who do you look around and go, that guy is doing something interesting? >> comcast is doing all the same
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things that we're doing. >> what do you think they're going to do next >> good question. >> do you think they'll go to europe >> potentially we'll see. he's not very international. they don't have a lot of international revenue. they're not very diverse they did -- rumors were that they looked at the sky asset and the disney asset -- i mean the fox asset, and that would have brought them sky but unclear brian's got a great business i think he's got a great set of assets, great economics. i think he's in good shape international would make sense at some point. >> thank you for saying nice things about our boss. >> you got it. coming up, tax cuts in the state of the business. gary pinkus is going to discuss what he's hearing from clients in and all the the halls later, the head of rbc is going to talk nafta and the global market. and becky is going to come back with that interview with bill
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gates. you're watching "squawk box" live in davos, switzerland i think we should do that meeting tomorrow. well wait. what did you think about her? it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital. of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim,
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welcome back to "squawk box. let's look at the futures. i saw that they still can go down but now, look at that, up 95. >> every day
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>> that is a bit of a turnaround it is exciting to watch. we had tom farly, he couldn't wipe the smile off his face. >> if you run the exchange and you wake up every morning to green like that. >> nasdaq up almost 40 i think it was weak yesterday but getting most of it back. then the s&p indicated up about ten. our next news maker this morning constantly speaks with financial and government leaders and has his finger on the pulse of business. he also apparently in the running to quite possibly be the next head of his firm. joining us right now is gary pinkus, the managing partner for north america, the influential management consulting firm mckenzie and company good morning. >> good morning. >> this is your olympics. >> that's right. >> you spend most of your time in closed door sessions with all sorts of corporate and government leaders what would you say is the single theme -- when you write notes to all of your partners back in new york, what did you write last
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night? >> we don't do it on a day by day basis but i think the single biggest theme so far is the almost jub lance that i'm seeing here amongst the business leaders that things haven't been this good in a long time that gives you all the natural pause. >> davos in a strange way can oftentimes be a contra indicator. we were at something yesterday where they were saying is this 2006, davos feels a little 2006ish. >> that's 11 years so they can be pessimistic for 11 years and if we're only in the first year of the optimism, who knows. >> so where are you on that? >> as much as anything reflecting what i'm hearing from my clients, they're optimistic about 2018 there's a sense that as we headed into '17, we were starting to see the end of the cycle. it's been a long cycle it may have been a slow rise but
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it's been a long cycle. >> does mckenzie -- i don't want to call it a copout but it was bound to happen. or do they say less regulation, a more accommodative approach to the private sector and to business can bear fruit? >> with 1700 partners, there is no mckenzie saying anything. >> i have an impression of what i think they're saying. >> i do believe that you're seeing a combination of the tax reform in the u.s. and that money is going to flow back into the system in the u.s., perhaps even trickle down more globally. i think the deregulation is pointed. >> animal spirits? >> animal spirits comes from all of that and animal spirits can turn but for the moment they're high. >> you used the phrase trickle and people talk about trickle down you're right, there is a
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feeling, even here in davos, that it will trickle down. what i don't know and maybe you can educate me on is when the tax reform package of 1986 took place i think early on there was a sense that it was going to trickle down too and then ultimately there became questions later about whether it actually did. >> that's changing history though we know that we grew at almost 4% a year back then, andrew. when you grow faster, you can educate people all the things that you love, you have more money to use and that's what happens. >> yes, teacher, yes right? >> i . >> i'm going to stay out of the debate better to divide a bigger pie than to try to more fairly divide a smaller pie. >> i would love the pie to be bigger how can i get everybody's slice to be bigger >> that comes from education people need to learn skills to
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operate in this society and that makes money, but we'll have more money to do it with. we'll have more wealth. >> i hope you're right do you agree with that >> do we have more wealth? >> if we have more wealth we can do more things. >> i wholeheartedly agree. i think also you're on a narrative about reeducation, reskilling we've taken the notion of ai and robotics and attached this negative idea that somehow it's going to take away a bunch of jobs if history is a guide, it would be the first time. there's going to be different types of jobs and different skills. >> is your sense that companies given the tax reform bill in the united states, international companies are going to be investing more in the united states, and meanwhile there's also a conversation about whether you think foreign companies are going to change their own tax code. >> i don't personally buy this
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race to the bottom. >> race to the bottom in terms of -- >> in terms of tax structure if you look at u.s. taxes we're roughly about in the middle right now. we by no means moved to a no tax or the bottom of taxation. other countries may more or less lead the same way. >> then what happens what do you tell your multi-national clients >> in terms of where to invest >> yes. >> i think it's a combination of where are you going to get the best tax policy and where are you going to get the labor force that's going to be skilled enough todo the work required. >> when you're advising your clients, how do you talk about our -- meaning the united states -- labor force relative to others? >> you can look at the amount -- >> which goes to the education point that joe's making. >> we are in the midst -- midst is probably overstating. we are at the beginning of this reskill of the labor force -- >> is that a 20-year project >> almost certainly. we've got things in place that can make this. we've got community colleges
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if we rethought of them almost as advanced vocational schools the way you see in switzerland and germany, i think that process can accelerate much faster >> what do you think the growth rate can be in the united states >> i'll take the imf projection right now, looking at pushing 3% whether or not it goes higher than that we'll see. we know we've been able to do 4 before. >> what is your sense of what president trump may or may not say tomorrow in relation to america first and protectionism? we've had this conversation about a weak dollar policy, whether it's the policy or not or whether we're welcoming it or we're okay with it, what that means in terms of whether other countries retaliate? >> you're outside my crystal ball in terms of tomorrow. my hope is that we continue what has been basically a global view of the world that suggests that open borders without open -- in an untoward or awkward way for us have served us well.
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>> any new mckenzie terms you've coming up with like -- do you know what boiling the ocean is, andrew >> yes. >> you come up with something -- you're thought leaders. >> that probably was us. >> you personally do that or do you have people that do that >> we all do it as a team. >> awesome you got any really good ones that i can use around davos? >> key thoughts? >> he just wants clever phrases. >> i want clever phrases for the cocktail party. >> that's a trickier one to do. >> what's the so what? >> another mckenzie. >> yes >> he's checking all this. >> gary, thank you >> thank you for having me. >> you know what a consultant is. >> tell me. >> a guy from out of town who doesn't have a job. >> i thought you were going to use the old tell the watch story. >> i don't know that one
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>> someone borrows your watch and tells you what time it is. >> that's good. coming up, the ceo of rbc, dave mckay will be our guest he's a thought leader. his thoughts on tech investing in the global markets. >> i'm going to borrow his watch. >> and president trump's great a agen agenda and a programming note, i'll be speaking with president trump about his message that he's bringing to davos. you can see the full interview starting tomorrow at 6:00 a.m. eastern right here on "squawk box. take a deeeep breath in... and... exhale... aflac! and a gentle wave-like motion... liberate your spine... aflac! and reach, toes blossoming... not that great at yoga ya but when i slipped a disc, he paid my claim in just one day.
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coming up when we return live from davos, switzerland, rbc president dave mckay on the global impact of president
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trump's tax policy, tech investing and so much more he joins us in a few minutes as we head to a break, look at u.s. equity futures. we are in the green. at one point we were closing in on 100 points on the dow nasdaq up 30 points. a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
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good morning and welcome back to "squawk box. among the stories that are front and center this morning, two big defense contractors are out with quarterly numbers and this morning northrup grumman earned $2.82 a share and hiked its dividend 10% the european central bank will be out with its latest monetary statement in a couple of minutes. they're expected to leave rates unchanged and mario draghi will
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hold his press conference at 8:30 eastern time. fiat chrysler will pay union employees $5500 in profit sharing as a result of improved performance and that's in addition to the $2,000 tax related bonus that was announced earlier this month both will be paid to employees in mid-february. nafta negotiations heating up this week in montreal canadian prime minister justin trudeau -- >> was that you? >> you're more global. >> no, no, go back >> the way you say justin trudeau, please. >> no. >> take your hand off of me. >> oh. >> go. >> we're so close here. >> we are. >> this is dangerous dave mckay is here great to see you. >> how are you doing
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>> good afternoon. we can't get used to what time it is here. >> i want to talk nafta and tax reform and understand the implications for the canadian market in the short term and then we can talk to some of the bigger issues. tax reform first. >> tax reform first in the united states, very positive for business you're seeing a number of announcements on investment and people, investment in expansion. you'll see that drive gdp. we're thinking it will drive gdp over 3%. good for rbc we're looking at reinvesting in people and expansion. >> you don't think that canada takes a hit as a result of this? >> certainly we had an advantage on our tax rates that were ma e
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margemarg nal on the cooperate side. we have a lot of assets. great people, great talent coming out of universities >> do you have a sense more globally that countries across the world are now going to start -- i don't know if you want to call it a rate to the bottom but there's going to be movement on tax rates everywhere >> you siee macron's announcements and they've done well tax competitivety is important you're going to have to respond to the u.s. president's initiative and congress's initiative you have to be competitive to attract capital in a competitive world. >> wilber ross is here, steve mnuchin is here. we're going to speak to president trump tomorrow what do you think of nafta >> we're hopeful that there is a win/win outcome across all three. >> i think everybody wants that but this goes to the can you
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have a bigger pie story. >> not everything is a zero sum. there doesn't have to be a winner necessarily and a loser to update a trade agreement. there's things that have changed in the last 30 years. >> i agree how we define the auto industry, we don't have the ip that goes into a car so should we be arguing about who makes a door to a car or who's adding the most ip into the driverless car which is not even counted in the nafta trade rules. we have to modernize the definition of what we're counting and then we have to focus on our advantages. why we invest so heavily in the united states, it's the ability to reinvent itself as an economy, look at the next technology i think the u.s. and all countries should focus on where we're adding relative value. there is an ability to get to a win/win outcome. there's negative rhetoric for sure every politician is lobbying for
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the best for their country irrespective that the 180-day clause, that just puts a clock on getting to a win/win negotiation. there's too much at stake with all three countries to get this wrong. there's every reason -- trade is balance between canada and the u.s. there's every reason to get this right. if we get this wrong it could hurt both economies. you could see market reaction to that we should get to a deal. >> there seems to be so much optimism here in davos around the markets, around the economy globally we had jamie diamond on and so many people. a number of them have said there's no iceberg in front of us right now but we had ray dali on in the week and he said it's possible two years from now we might be getting too hot >> you look at asset prices,
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look at how we're pricing risk in the market, i think we're mispricing some risk in the marketplace. >> where >> you look at the high yield marketplaces at times. assets are expensive you're still seeing aggressive buying activity with expensive assets there's a lot of leverage being taken on we're towards the latter part of this game and you're seeing froth in the marketplace, a back-up in rates you're seeing obviously asset appreciation and infrastructure and real estate will become more difficult. rates will start to slow this down you're seeing expensive prices, seeing people take leverage, a little bit of mispricing in risk and debt markets those are all signs that later stage cycle froth but not imminent. >> the old rule applied where you could look at the expected
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return on an asset class and compare it to what you get in a debt instrument. back then 4%, most other assets would be pretty attractive, but the point is when you're coming from 2% and you've got a lot of paper out that's going to float and you're going to have debt service on, that 4% isn't the 4% of old it's the 4% that's doubled to 2% but i still would think that long term, money will still go to where it's treated best and that's always been equities, not fixed income i don't think 4% will stop the train. maybe it will be a doubleheader. >> certainly rates are stimulative even though they're backing up and treasuries are backing up they're highly stimulative. >> it will help banks, help you. >> it's been great we're projecting three rate increases in canada. you'll probably see a quarterly increase in the united states.
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for us in canada it's 300 million plus in the short term income for us and in the united states around 50 million in revenue per 25 basis points. that obviously helps our margins and we're at historically low margins. we've seen margin kpecompressio for the better part of eight or nine years >> got an office in short hills, in new jersey? >> absolutely. we're expanding in new york. we're opening a number of offices. it's our city national franchise. >> do you take high net worth? >> absolutely. you're our target customers. >> national city and city national in l.a. >> right that franchise of commercial
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private banking franchise we're seeing double digit growth in the commercial asset side and the customer deposit side. we're expanding into washington, new york, boston, minneapolis, very strong california franchise. >> city national bank corp. >> there you go. that's really jumped our u.s. growth upwards of 25% of our income coming out of the u.s. we're investing capital there. >> because of all these comments you've been making, i got an e-mail from a lovely guy -- >> what comments >> about this high net worth thing. >> oh, oh. >> he said if you ever need -- he was one of those, like, do you want to -- it was a solicitation i said thanks but you got to wrong guy, something to aspire to. >> we save up our miles and get an upgrade once in a while
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i go on planes that don't have a first class so i don't have to feel bad. >> thank you earnings coming in from 3m and caterpillar. they reported a profit of $2.16 a share. the company also gave a better than expected outlook for 2018, noting growth in its construction business. then 3m earned $2.10 a share for the fourth quarter, 9 cents above estimates. they also announced a 16% hike in its dividend. coming up, a rundown of those earnings we just reported and others, as well as an interest rate announcement from the ecb. we'll bring you the market's reaction check out the futures at this hour, strong again davos prepares for mr. trump ronoh really?g's going on at schwab. thank you clients?
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in corporate news, reuters reports that alibaba and u.s. supermarket chain kroger have had early talks about working together sources say that includes a
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meeting when kroger executives traveled to china. ali baba has been testing a move to retail. interesting. >> some stocks to tell you about this morning ford reporting lower than expected fourth quarter profit the auto maker says it was hurt by rising commodity prices and currency headwinds ford expecting more pain to come from raw material costs this year qualcomm has signed sales contracts with several chinese wireless providers including leno video the deals could be worth up to 200 billion dollar o2 20billion dollars. we should tell you ecb right now the rate unchanged for all of us looking at where interest rates are going to be set by mr. draghi who will be having a news conference at 8:30. when we return, the cloud based
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applications for financing the ceo of work day is going to joining us after the break don't forget tomorrow starting at 6:00 a.m. joe's got that interview with, yes, the donald, president trump about his message to dos quk x" will be back after this i think that she's a very nice girl... you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital. we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor.
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meg whitman has a new gig. she'll start wi she'll be making short form videos for mobile use. former vice president al gore speaking in davos about tariffs on solar panels imposed by the trump administration. he said that the trade action is an overreaction by the united states but he doesn't see the tariffs as an utter catastrophe. gore said he doesn't make a habit of defending president trump, but he says that in this case it didn't start with him. he blames the private companies who initiated the trade. do you remember that debate? boy. sometimes i feel like that when i'm trying to explain something
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to you do you remember that debate? >> you know who's here i do >> neil is here. >> neil is here. i do remember that by the way, quick on meg whitman, do you know that they're trying to raise $2 billion to start this company, that the company can't really even begin without that kind of money? it's probably the largest fundraising effort for a single start-up in history. >> if you don't use it all, it's good to have it, right >> they're going to have to use it all the issue is to build the kind of library they want to build with these short form videos which you can't go buy from other providers. >> who's going to watch this >> it will be like watching the sopranos but each show would only be ten minutes long you watch it on your phone between whatever you're doing, while you're on "squawk box" during the commercial breaks. >> i'm going to have to see this, whether i like it or not. >> we got a guy who has been killing it >> he has, i know. >> sort of an amazing situation. shares of work day gained 52%
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last year. the company on track with the rise of other platforms throughout 2017 as corporate america shifts to the cloud. joining us is the co-founder and ceo of work day and we love having you here. i apologize about yesterday's little technical snafu >> i hope it wasn't me. >> it wasn't you. >> we don't think so >> so you spent a lot of time talking to ceos here in davos. it's interesting, you and some of the other big cloud guys have become proxies in terms of understanding where the global economy is what are you hearing >> people are optimistic about the global economy usually when you get this optimistic something goes wrong down the road pretty quickly. >> is there something in the back of your mind that you know about or thinking about? >> no. it's just that everybody's
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optimistic and i see why business is good business seems to be good across the board. the conversations are more about other topics right now, other topics like rescaling the workforce. i think that's probably the most prevalent topic among tech ceos and nontech ceos as we continue to invest in new technologiies like machine learning. >> we have this great -- some people debate the greatness but we have this tax reform package that's really spurred -- we feel like it's going to spur growth do you think that the proceeds from that is going to get put into rescaling our labor force >> so you're -- >> i'm going with you. i'm trying -- >> you said great but then you felt uncomfortable -- >> we have viewers on all sides of the aisle. >> is that what you were -- >> i thought maybe i was -- >> all right i know you strive for fairness in most cases.
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>> help me. >> i hope so i hope it's going to be a company by company decision. friends of companies like at&t, randall stevenson, i know he is investing heavily to retrain the workforce. it's doable. i think it needs to be done at a grassroots level it can't be a policy it needs to be company by company retraining employees or bringing people out of the or into the workforce. >> people talk about silicon valley being the hot bed of talent when you think about the rest of the country, what can a company like work day do >> there's talent everywhere as an enterprise company we have customers everywhere so i'm in all parts of the world and all parts of the country there's talent everywhere. we just have to make technology accessible to them we've got a couple programs that we've invested in. my co-founder, dave and i, have a fondness for vets so we've trained up a bunch of vets on work day technology.
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they all got jobs fairly quickly either at work day or our customers. the other program is year up which is a great program for high school students who are trying to enter the workforce and we both are one of their big sponsors my wife and i are big sponsors too. they work. they just have to be done across the board. >> we had mark bennyoff here, maybe the king of the cloud business he sort of stepped out and said some remarkable things about the valley and the need for regulation what do you think is happening where do you stand >> i don't think he was necessarily saying sales force should be regulated but i think he was looking more at the facebooks of the world he equated social media to nicotine and cigarettes. >> i'm going to stay out of that conversation i think in general data protection really matters. for a company like ours, it's very clear, the data that we manage and store, it's the customers' data. there's no question about it
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in the consumer internet, hther needs to be more clarity about whose data it is and how to protect it europe has been ahead of the curve with the gdpr rules and we were ahead of the curve in getting in concert with them and working with the eu to make sure that we protect our customers. >> how do you think about consolidation? re reed hoffman said there's a moment going on and scale and size really matter you've scaled on your own to a pretty good size but do you ever say to yourself for this to get to the next level i got to combine with a mark bennyoff or something? >> not at this point i think we have a great future on our own maybe that's a decision we have to make five or six years down the road my co-founder and i will make that decision with the board and if it's the right decision for
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shareholders and employees, we'll make it. right now we're growing rapidly. the market is still in the early stages of development, and frankly, a big transaction like that i think would get in the way of hiring the best employees and taking care of customers those are two things we care deeply about. >> i'm amazed at the entrenched tech behemoths didn't realize there was such a great opportunity to start from scratch. where were those guys? they could use that in their portfolio business, couldn't they >> they could. every 10 to 15 years there's a massive disruption in technology. >> did you feel like i'm going to come in here and do this because i'm that much smarter than all these people? >> i think we were fortunate timing-wise. >> they must have noticed. how many times have you had to say no along the way
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>> given our history with the oracle takeover, they don't come knocking. >> we have ten seconds thank you. i'm glad we got to do this today after the screwups yesterday it wasn't anyone's fault the power went out. another big hour of "squawk box. texas pacific, the ceo jim coulter and former defense crarash seety carter, also the ceo of humana all coming up. we'll be right back.
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good morning and welcome back to "squawk box" here on cnbc live from the world economic forum in davos where we have not frozen as much this year becky is just wracpping up a conversation with bill gates she'll join us in a few minutes. it's been pleasant and having a studio outside it's been good. other years it's like why do we have a studio outside? >> because it's freezing. >> it's warmer than it was in new jersey. >> look at you with the vest. >> you're right. let's look at futures.
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they're sizzling maybe it's warming up the air temperature here 106 on the dow the s&p up nine. nasdaq up 36 treasury yields, we're not at 270 or 280 we're still in that 263 area still hasn't -- i wouldn't say it's definitively broken out in the last 15 minutes the ecb announcing that it's keeping policy unchanged currencies have been broiled this week from comments that secretary mnuchin made where all the cool kids are this week, andrew, right? >> yeah. >> they're in davos. i'm glad we're here this year. >> you are >> this year. >> this is the first year? >> it's relevant again, isn't it the last president here was bill clinton. >> year 2000 right before bush was inaugurated. >> 18 years ago was the last time a u.s. president was here.
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let's get you caught up with corporate news abo 3m raising its dividend by 16% look at the shares this morning. you're looking at it up about 2.5% caterpillar also beating the street on the top and bottom lines and the company's full year profit guidance is upbeat cell jean up and gave a better than expected earnings outlook. tpg has its hand in some of the biggest names looking to go public including uber and spotify. jim coulter is the co-ceo and founding partner we're thrilled to see him again. the last time i saw you was davos in the dessert th this time we're doing it in the snow what is your sense of feeling? >> last year we were talking about populism we were talking about refugees this year it's a lot about open
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versus closed on the political side the twin towers of ai and block chain seem to be dominating the business discussion. i think there's an underlying tone that i call tech lash which is interesting to me. >> the backlash against tech >> yeah. i think for a long time when we met here we talked about technology enabling things and there's increasingly questions about what it might affect e-commerce is great but what about the 3.5 million people who are checkout people, the 4 million drivers that might be displaced. that's now rolling over into the political world as we're talking about jobs and change. this issue of technology being good but how will society put the seatbelt on it is fascinating. >> is that changing the way you think about valuations of companies. you own uber and spotify, two companies that i hope go public in 12 to 18 months. >> if you look over the history of technological innovation, it
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always takes society anywhere from 10 to 20 years to figure out how to regulate technological changes. when the automobile was created, it took 60 years before seatbelts were required. what you're seeing today is the economy in regulatory world that's going to react to the technology world in interesting ways. >> i'm curious where you land on the larry fink letter. i know you've been talking to people about it. we had larry on the show earlier this week. >> i think it's a big move and an important move. we are on the private equity side already doing deeply what larry is talking about doing on the public side. i think there was a long time where investment firms really went towards the andre milleu side social impact -- firms like ours
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did a lot as partners but not as firms. we manage public money we're worried we're going to get caught in the political crossfire. it's time for us to engage you talked about this the other day at the dinner. firms have to step forward and do the right thing. >> question on saudi the last time i saw you was in saudi. when i left there i thought there was a huge amount of goodwill around that country in terms of investment coming into the country. i thoug then a week and a half, two weeks later we hear about these 30 arrests -- by the way, where they're staying at the ritz-carlton where we all were how do you think the investor class is thinking about saudi arabia now >> i believe that progress has to happen there and it is happening. it will never be a straight line in technology, we put people on the moon before we put wheels on
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suitcases. sometimes things go in indirect lines. right now i think saudi in its economic revolution really has to focus internally on the 70% of its people under 30 and how its systems work i think that's what you're seeing in the aftermath of the last time we were there, is how are we dealing with their internal issues as they face the world. >> then the other question was about uber what do you think of the changes that have taken place? and by the way, you have travis who's here in davos and you have dara who's here in davos. >> we've been long-term investors in uber. we have a board seat i think we've played an important role in some of the evolution to bring dara to uber. the company now has to prove its business model and its progress and i think dara is the right person and the company is in the right place. we're highly supportive. >> private equity question in this environment where everybody is optimistic, establishing is where it's at, is there opportunity for you to
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buy stuff or do you have to sit on the sidelines and wait for the whole world to crash >> i have to say coming here, my biggest concern is how little concern there is and we continue to wrestle with this question. i think at this point in the cycle you do something different, you invest in companies like uber where the company progress and the technological progress, not the economy, will drive returns. >> jim, thank you. great to see you. >> thank you the economy is finally good but you want to invest in things where they're not dependent on a good economy >> there was a risk that we've gone from the goldie locks economy to this economy which is great. >> fundamental things underlying it though, wouldn't you say? >> i would say as an investor, i'm concerned as we move from monetary policy to fiscal policy, i explained it to my son the other day. it's like you're at a party at midnight you maybe should go home suddenly somebody brings something -- >> hopefully you'll be early
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the holy grail was the handoff for monetary to fiscal now when it finally happens it's like, i like the monetary policy economy better that makes no sense. >> i'm not commenting on the near term. i'm commenting on our view which is three years out if the party goes on longer, the next day may feel worse. >> should you be going home? that's the real question or is the after party going to take several years >> were you fully involved for the past year for the 40% move in the equity markets? >> we're essentially long always. >> do you feel like you could have been more bullish a year ago? >> yes clearly not as bullish as the markets turned out but what is clear late in the party you don't want to drink too much tequila at this point the type of thing that you do is different than it would be early in the cycle. >> i had no wine at a three-hour dinner and i didn't have tequila until the party was almost over.
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>> and you're looking great today. >> i feel great, thank you >> appreciate it the latest company to announce a tax reform-related bonus, home depot. it's going to pay a cash bonus of up to $1,000. that will be in addition to payments under a long-standing company program known as success sharing at hd. coming up, treasury secretary steven mnuchin making headlines this morning on comments concerning currency and the dollar we'll have those comments next. later, becky returns with highlights of her conversation with bill gates. then humana ceo. tomorrow, don't miss my conversation with president trump. we'll talk about the message that he's bringing to all these globalists, elitists in davos. you can see the full interview starting tomorrow at 60 m.:0a. eastern. stay tuned you're watching "squawk box" on cn cnbc [ phone rings ]
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welcome back to "squawk box" in davos, switzerland.
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we're in the green in a big way right now. the dow up about 114 points. lots of news taking place here in davos, switzerland at the world economic forum. treasury secretary steve mnuchin grabbing headlines with his comments on the dollar cnbc moderated a panel with mnuchin earlier this morning he didn't say i didn't say those things but he certainly filled in the blanks on what he was thinking. >> yeah. i asked him three times and by the time i finished asking him three times, even the audience i think had had enough at that point. i didn't know steven mnuchin had such a great sense of humor but he said, well, you've got 53 minutes left on your panel, let's move onto something else i think he did help fill in the blanks a little bit for the currency markets who took his statement yesterday and ran with the ball let's have a quick listen to a
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clip, does he believe that the u.s. dollar should be getting weaker from here that's not exactly what he had to say let's hear what he said. >> i'm not making a comment whether it's implicit weakening or implicit strengthening. let me be clear, in the short term where the dollar is is not a certain of mine and it's not something i spend a lot of time thinking about there are benefits of where the dollar is and there are costs of where the dollar is depending upon which side of the table you're on. what i am focused on is longer term, where the dollar is. >> of course we're all waiting for president trump to come up the hill and congratulations, joe, on having that interview later. we're looking forward to that very much. i did ask the treasury secretary, i said, look, you've arrived here in davos, we had the french president yesterday saying that we don't want cutting taxes to be a race to the bottom for anyone. steve mnuchin had an answer forr
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that let's hear what he said. >> to a competitive tax rate, so we're not looking for a race to the bottom and quite frankly, we restructured around having a system that encouraged our companies to do business in tax havens that had very low rates we've transformed the system away from that to encourage people to invest in the u.s., bring jobs to the u.s. and we couldn't be more pleased with that so no, this is not a race to the bottom in any way. >> i think the treasury secretary actually did a really good job of positioning the white house's view on policy right now. we'll let the dollar go where the dollar goes. we are not after trade wars. this is about fair trade of course tax cuts are important for stimulating the economy. i think he got his message across really well and of course the other panelists i think all took on board those messages
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>> you're from here -- >> well, i'm from the u.k. >> you're from socialism land is my point. >> we're not all socialists, joe. >> you know what i mean. you've been here every year. >> absolutely. >> there's optimism this year. it has something to do with what's happening in the states, wouldn't you say >> absolutely. i think that there's clear evidence of a pick-up in growth. you can't distort the data points the data points don't really lie unless they're coming from some countries in asia that tend to manipulate the numbers there is clear evidence that we've got global growth. the one provie zero i will say, people like james gallman and bill winters are walking around saying, you know what, this feels really too good to be true and that's where you start to ask a few questions about the
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underline. >> this is the first time i think we've all been together when there's been this level of optimism but i remember being here in 2005 and it felt similar. >> i remember. >> it's been a long ten years. >> tax reform is different and it takes 40 years to do things like this. it's not just a dot com bubble it's not a housing bubble. it's a fundamental difference now i think. and then you throw in technology and the productivity gains that come from just this pace of technological innovation and everything that we talk about. our kids are carrying around spare computers that took up five floors of a building 20 years ago. >> health care, genetic sequences -- >> i know you've been to paris
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there's a good reason to go back to paris because if you listen to mr. macron, even he said -- this is the president of france we're talking about -- that it's a good idea to cut taxes. >> he said globalism may not deliver everything that's promised and it might be okay to think about my my country first in trade deals that's one of the questions i'll probably ask the president, is that is there somewhere in the middle where globalism and america first can meet, and are they converging even before you got here i think to some extent -- [ sirens ] >> i hope that doesn't tell us someone is coming up the hill. steve mnuchin said the reason we have these politics is we've had a decade where people felt they were left behind i said to him, america's not the only country in the world where the people feel that way just look at the rise of some of
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the extremist parties around europe people are ticked off. >> the brexit vote. >> absolutely. >> great to see you. >> thank you when we come back this morning, we'll have highlights from my conversation with bill gates and hear what he told the davos crowd about his plan to try and change the world stay tuned "squawk box" will be right back.
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welcome back to "squawk box" in davos, switzerland where we are at the annual meeting of the world economic forum let's show you the futures real quick. that was ash carter by the way we'll introduce him properly in just a moment. dow looking up about 123 points right now, nasdaq 43 points and the s&p 500 up about ten points. another morning, another string of green arrows. >> political concerns are front and center among many conversations in davos this week joining us is ash carter, former u.s. defense secretary of the obama administration, now director at the kennedy center good to see you. >> good to see you.
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>> there was a point in time that was a little surreal i think when we went from buttons being this size or that to north korea saying we're sending a delegation to the olympics and it might even be a joint delegation there was a point in time that tensions seemed to ease, no? >> well, joe, i'd be careful about that i'm all for it because i'm all for the olympics i think that if north and south minimized the chances that they have a provocation between the two of them which is one of the ways that this whole thing could uncoil, and that's minimized, that's all good. but i do not think that this will have any bearing on the -- >> they've still got the nuclear -- >> they do if you need a reminder, note that the north koreans planned a big military parade for right before the olympics. if we don't make that point, they will. i think that it's still -- it's
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a good thing but it's separate we need to stay on the track to protect ourselves. >> our envoy is andrew don't you feel better? >> selfishly i feel better for those two weeks, for the world the question is whether that manifests itself in some other way on a longer term basis, but i'm probably with ash to the degree that maybe it helps in the short term the question is how does it help in the long term. >> we get back to china and what they're trying to do and what they're able to do >> i've been watching this a long time and first worked on this in 1994 when i was actually planning a strike on the north korean nuclear program in those days that i thought we were going to carry out turns out we didn't. so this has been building now for some decades they tested their first middle east in 1998, their first nuclear warhead in 2006, so it's been going on for a while.
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i don't know what my successor, jim mattis, is doing and secretary tillerson, so i can't obviously speak for my government i do know what i hope they're doing and what i would do which is two things. the first is to attempt a kind of coercive diplomacy. i call it coercive because it's not a military or a diplomatic thing. it's a mixture we've seen that work from time to time for short times over the 25 years or so i've been working on this. but -- and i can say more about that. >> with economic sanctions >> it's an important ingredient. but since that might not work out, we have to remind ourselves all the time deterrence in defense. we have 28,500 americans there i thought about them every day our slogan there is fight
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tonight, not because we want to but because north korea needs to be constantly reminded that if they start war on the korean princip peninsula and this is a level of violence the world hasn't seen since the last korean war or world war ii, but we will win and we will destroy the north korean armed forces and the north korean regime. they need to have that certainty. that's what deterrence is based upon that's why we have to do exercises for example. and also defense, that's why we have missile defenses. that's why we built them six, seven years ago and i was criticized for that at the time. i said i don't want to be in a situation where the north korean get there, where they can have a ballistic missile with a nuclear warhead on it capable of being delivered and we don't have a defense against it to get to the diplomacy part, what has worked when it has worked at all in the past, is if
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we marshall all of the carrots and sticks of the united states, south korea, japan and china just think about that. we have the big stick, right we don't have much in the way of carrots. we don't give north korea anything and we're not about to give north korea anything. china has carrots. south korea and japan who are also in the gun sights of north korea and therefore have to be part of this, they have carrots and sticks as well we put all that together in one pile, we're much more powerful the second thing that has worked is a kind of step-by-step thing. instead of waiting for them to launch something and taking action, you say to them in advance, launch another long-range missile, here's what's going to happen to you. don't do it and here's what can be done for you. no more underground nuclear tests, if you do it, here's what's going to happen we need to get in front of this
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so we're not only reacting that may or may not be effective. i think we need to give it a try and make this choice theirs. obviously we all hope that the choice they make is for the path that leads upward and not the path that leads downward. >> if we had another four hours, we could talk cyber and iran but we don't they're playing music, but i think this was probably the most important thing to talk about while we have you. secretary, thank you. >> thank you for having me when we come back, a new era for global health. we'll hear from big gates right after this. and a programming note, joe is sitting down with president trump to talk about the message that he is bringing to davos he's talking to joe before he addresses the world economic forum here and you can see the full interview starting tomorrow at 6:00 a.m. easternim te.
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good morning, welcome back to "squawk box." we're live at the world economic
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forum in davos, switzerland. lots of stories to tell you about the american airlines beat estimates by three cents revenue beating street forecasts. profit did fall from a year before on higher labor and fuel costs. the european central bank left key interest rates unchanged president mario draghi is just beginning his post meeting news conference and is expected to face questions about the surge in the euro. he may get some questions about steve mnuchin's comments we'll keep an eye on that. claims from the labor department coming in at 290,000 compared to 216,000 from the previous week becky. we just wrapped up the new era for global health panel here in davos bill gates discussing how policy and business models can actually shape health outcomes and gates is the right person to be
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talking to because the bill and melinda gates foundation has spent $12 million in health care over the last five years gates praising regulators, including current fda commissioner scott guiley. >> if we could live forever? >> yes we're not working on life extension but there are books that start to speculate that as famine and disease become solved problems and we have this longevity, what would it mean. that's still probably a generation or two away from being a big problem. both fda and the european regulator have been great to work with. it's very strange. they're called to work on things like malaria drugs where there's no domestic burden, and yet they
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do it on things like tv drugs because it's a multiple drug regimen. they've had to create special approaches for us. i'd say the last several fda commissioners, including the current one, scott gottlieb, have been very willing to understand the special needs that we have they still are going to be incredibly demanding, like if we had patient dropouts they always score that against you as though you had bad side effects but we have a good regulation. >> so that again was gates talking about the regulators they are working on trying to get regulators in china and india and other countries to kind of speed regulation along because something that might take six to nine months to come to market in the united states may take four to six years or longer to come to markets in some of those areas. again, the idea of being able to live forever, it's a bit of a joke but theytalked about how
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over the last century we've expanded in the developed world our life span from 40 years to 80 and yeah, they really do think that there are some massive gains that can continue to be made because the improvements are coming faster and faster in health care. >> we need the basic science, optimistic, where we're at a point where the base science catches up to the basic science. i worry about the outer limits of the life span where you have to deal with the actual cell itself if you get to 80, you can maybe get to 100 but something seems programmed into us that makes going past 100 -- maybe i'm greedy but 400 sounds good. >> quality of life was good too. the panel talked about that. that's a huge issue that they're trying to just find easy ways to improve quality of life at the
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end. >> the great news is the science but talking about the mortality rates turned the wrong way in the united states based on economic factors. >> it's the developed world problems, issues like obesity, diabetes, all the things that go with that that are now being exported around the globe too. but overall the rates are phenomenal >> we can all agree that we're going to get flu shots when we're 76 we're not throwing in the towel at 75. >> exactly >> zeke is not at 76 yet >> no. i may go the full -- even at 80 i may still get a physical. >> heck yes. i will. >> of course you will. >> wisdom, as you have learned there's wisdom that comes with living a long time >> yes coming up, humana ceo, talking more about health care, and the changing world of what we were just discussing, the
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health care industry then tomorrow don't miss my interview with president trump you can see the full conversation starting at 6:00 a.m. eastern stay tuned u' wchg quk x"n yoreatin"sawbo o cnbc
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welcome back to "squawk box. futures right now up on the dow at least up triple digits for most of the morning session, now up 141 those are the highs i've seen so far. 140 points the s&p indicated up ten
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nasdaq would get back all of its losses from yesterday if it were to close, up 46, 47 points suddenly, what happened to the sun? >> sun's gone and the wind's picked up. >> went down like 15 degrees. >> put my gloves on. u.s. tax reform and health care have been two of the most hotly debated issues of president trump's first year in office our next guest finds himself at the intersection of both of those issues joining us is bruce brassard, the president and ceo of humana. good morning. >> good morning. >> good morning for our viewers back home. good afternoon here. so many people are talking about health care but in the united states we're at a bit of a critical inflection point. you guys have kind of lived through all of this from the pivot of the aetna deal, watching aetna hook up with cbs. i know you can't talk about financials but why don't you scope out where you see things headed, why kindred and how that
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fits into your grand theory of where the company is headed. >> that's a great question i think in general health care in the united states is moving from this concept of coverage which is really what eca was about, to affordability. when i think about affordability, it is really moving and trying to find where the financing is which is what we do and in addition where the care coordination is it's the integration of that and you see that happening in different parts of the industry. in our particular circumstance the kindred acquisition is really the beginning of that coordination of care in the home a lot of our members are senior members with a lot of chronic conditions and a lot of those conditions are managed at home >> it's a really interesting pivot to see the idea of you teaming up with hospital and i guess when you explain it that way it sounds much more similar to the aetna/cbs deal. you need to find ways that you can have an actual place where
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you're dealing with the people and doing what >> coordinating the care it's around having that primary care doctor help navigate people through the health care delivery system that really focuses more on the health as opposed to the treatment. when i talk about affordability, it's this movement of maximizing the silos. so i maximize the pharmacy silo, the hospital silo, to really how do i coordinate care and improve the health outcomes of the individual when we think about affordability, it's more focusing on the health outcomes as opposed to the maximizing the treatment. so the aetna/cbs transaction is an example of this care coordination around the pharmacists and using their local retaal locations to make easier. >> is that a way of saying that the health care insurance business is no longer going to
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be viable on its own >> i think it's where you can find societal problems and to me it's where society is needing to focus on this affordability and really preventing disease from progressio progression, having a person with diabetes not having a foot ulcer, not having blindness. if you're only focused on serving the foot ulcer and not focused on preventing it, then that cost progresses as the disease progresses really what the health care system is trying to do and it's very difficult, is to pivot to this more health oriented fashion as opposed to maximizing the treatment. the transactions you see happening today, a lot of them are around this care coordination concept as opposed to maximizing the silos. >> we have watched the affordable care act kind of get chipped away and have the manda out. i guess you were one of the ones who pulled out of those
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obamacare exchanges, decided not to be there anymore. what should we think about what eventually comes next? you pulled out because why you couldn't make a profit >> we pulled out for a different reason we pulled out because we find when we can have a deep relationship with the customer and impact their health over a long period of time, we have a great impact so our average customer stays with us seven to ten years what we were finding in the exchange is it was much more transitory, much more around i'm going to get my coverage, i'm going to get my treatment, and then i'm not going to have my coverage for us, we couldn't build that relationship, so it was less about the changes that needed to occur and it was more around it just didn't fit our business model. >> what you're talking about, the type of changes that the industry is going through right now, changes that the interest rate is imposing on myseitself we've been talking about what the government needs to do to
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try to help the outcomes you think it's private industry that's going to do it itself >> i think there's this private public partnership is important. private industry cannot do it on their own. standards of inner opperablety is a good example of that. medicare advantage where you encourage someone taking the full responsibility of somebody on an individual basis, being rewarded for quality and being able to be successful through helping the individual out are great programs and i find that the government can stimulate innovation and stim you la the government can stimulate innovation and stim you lalate e outcomes as opposed to the treatments. >> what would you like to see coming from the administration or whoever it is you're dealing with in washington >> i think there are a number of things that washington can do for the industry overall i think continued advancement and payment reform
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we've had a lot of conversation about coverage but payment reform that moves to more value-based payments that's the real key, that you move it from, as i said, maximizing the silos to maximizing the outcome the more that the federal government can push the health care industry into that is important. >> but you're going to get a lot of pushback from hospitals and from the people charging you who have built their practices to say, okay, i need this machine and in order to pay for this machine i need to run this many people through it. >> change is happening at that level too where hospitals are beginning to start to look at value-based reimbursement. i was even visiting with a pharmaceutical ceo this morning that they are looking for more health outcomes. so everyone wants to move that way but there needs to be more massive change and payment reform would be that way. >> in the end you think we'll just see a bunch of big operators that encompass all of
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those areas from the pharmacy to the hospital to the insurance all built into one >> i think there will be more collaboration across that their value chain will be more focused on how do i participate in that. i don't think one entity can solve it but i do believe that interopablety is a key component. unlike the financial transaction that moves fast and deep, in the health care industry because it has been siloed, has created these silos that doesn't allow that velocity, so that collaboration around quality and cost becomes really difficult. people are only focused on their particular area. >> bruce, thank you for your time today. >> thank you. >> we appreciate it. >> have a great day. when we return, the governor of cnbc's top state for business, jay inslee then you don't want to miss this joe curranen, yes, that joe curranen, is going to interview the president, president trump you can see the full
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conversation starting at 6:00 unto eastern time. bod make lots of news right here on "squawk box. back in a moment from davos. ♪when sundown pales the sky i want to hide a while behind your smile ah, but i may as well try and catch the wind♪ our mission is to make off-shore wind one of the principle new sources of energy. not every bank is willing to get involved in a "first of its kind" project. citi saw the promise of clean energy. we're polluting the air less. businesses and homes can rely on a steady source of power. this will be the first of many off-shore wind farms in the u.s. ♪for standing in your heart is where i want to be and long to be ah, but i may as well try and catch the wind♪
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welcome back live from davos switzerland this morning joining us right now is governor jay insling. what are you doing here? >> i'm enjoying a place we can help grow an economy in the state of washington. you named washington state the number one place to do business in the united states that's a high honor. >> ydon't thank us, you won. >> this is a small world, i've met six executives looking at new investments in the clean energy field in our state. a fellow wants to build a solar facility, electric hybrid system to build an electric ferryboat it's interesting i met people in davos to help continue to build the clean energy revolution we're building in my state. >> when you look at the trip like this, is the goal a year later and say who has come >> part of that is that, making
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connections can help build your economy. but there is a part of just trying to share ideas. ideas do come in value in public policy we had the ceo at siemens and he was talking about the necessity of why we develop artificial intelligence to develop an economy to make sure half of the people are not dispossessed of a job by the ai and make sure we have a more equitable society. it was an interesting listening to a ceo talk about the fact in davos, where you have the top half percent income folks who understand the importance of an economy that functions for everyone. >> talking about the race among states for business in the united states. did you ever have a conversation with jeff bezos about h2q? >> i have not talked to him specifically we'll make sure amazon continues to go to washington, which it is doing. we felt good about amazon's future in our state.
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they have 6,000 openings right now. they'll continue to grow in my state. and when they share that with other places to make sure amazon can continue to grow, that's not going to be a bad thing for our state. we feel good about it. i'm sure he'd welcome you if you come out next week, opening his three glass domes in the the new amazon building. >> jobs, one of the things they have opened is effectively one of these test shops supermarkets where there's no physical employees. >> yeah. yeah. >> how do you as a governor feel about that >> i feel it is going to help people feel more efficient, hopefully might spend less time and that's a good thing for your economy and we embrace technology in our state big time it's our bread and butter, we don't have oil or gas or coal. we have really smart people. those folks developed a way to have more efficiency in our economy. but, our society and our economy has to realize that we are going to have people in jobs that
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women not exist 10 to 15 years from now we have to develop an economy that will make sure those people have training and make sure those people have some transition in their lives. artificial intelligence is going to be something very powerful. >> what's the lesson of the tax reform package that went through that seems to be spurring a whole kind of great sense of optimism here in other countries now there's conversations whether they need to lower taxes but what is the lesson of the united states also in terms of blue states and red states and what the tax rates ultimately are going to be? >> there's a couple of lessons that are not happy lessons from that i know there are some corporate leaders that are happy to get a tax cut. we're all happy at christmas time in that regard. however, there are a couple of things in it that are concerning to us governors, one of which, it is going to increase deficit spending in our state. so instead of having an infrastructure program to build a new infrastructure that is st sadly deficient in our country,
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it's going to increase our defer sit and retard the ability to make investments that are so critical number two, the way it was done is unfortunately it punished a lot of states that have had good economies, including california, new york, washington and punished my taxpayers. i'm not very happy about that, to make my taxpayers pay a disproportionate -- >> it's going to force you to reduce your tax -- >> there's a concern that this will put more of a burden on municipalities because this will dry up the ability to finance n inf infrastructure from the federal government all is not rosie in this particular plan and america will have to do what it has done on many occasions after republican presidents have come in, we'll have to restore the balance of our fiscal condition it happened when bush blew up the deficit and we're going to have to do that again, where we have another democratic
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administration to fix this deficit. >> that's a hard platform to run on >> it is. >> raising taxes >> it is, i'm not saying that is part of the necessity of it. to run the deficitses we're running is dangerous and i wish the republican party would have listened to its own rhetoric for years and first thing they do when they get in power, blow up the deficit and put that debt on my grandchildren what i'm expressing to you is not everything is perfect in the tax law. >> wow wow. >> we need to extend the show. >> all i can say to that is wow. governor, thank you. >> we will dk be-- becky and i promise to come to washington. >> joe, you're welcome i'll show you something you like. >> we started at 20 trillion after the obama administration, are you worried about that >> all -- >> the last -- >> all of the those count.
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>> we'll clean up or fiscal house again, as they always do. >> it happened in the clinton administration and it happened in the obama administration. we righted the deficit for -- >> the democrats are known for that -- >> it's true. >> we'll talk about the big market movers. "squawk" will be right back. finally. hey ron! they're finally taking down that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab. a modern approach to wealth management.
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president trump arriving at the world economic forum just a short time ago tomorrow on "squawk box", don't miss my conversation with him. you can see the full interview starting at 6:00 a.m. eastern. we'll be back for our fourth day of coverage tomorrow make sure you join us on that day. "squawk on street" coming up next ♪ good thursday morning, welcome to "squawk on the street." i'm quintanilla and david faber at the new york stock change cramer has the morning off 90 points of this is caterpillar and 3m alone a lot to watch with the president now in davos,


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