deal with trump. it's thursday, december 8, 2016. >> live from new york where business never sleeps, this is "squawk box." welcome to "squawk box" on cnbc. we'll start the morning with, yes, the trump rally. the dow and s&p 500 closing at an all-time high. the dow gained nearly 300 points led by home depot, ibm and goldman sachs. since the election the dow is up more than 6.5%. also dow transports gaining 2.5% in yesterday's session. on pace for its sixth positive week in a row. since the election, up 12.5% -- joe gives me the stink eye. >> you got a little wire there.

wire on the tie. >> thank you for caring. >> i'm not saying that people predicted this will happen or that i would predict it. but i have described many many times for the last month and a half the phenomenon that people say, wow this makes no sense. you can't do this. is this the top? is this the top? is this the top? we were saying that yesterday. then all of a sudden it's 300 points. not just slightly going above the last high, it's like, wow, it almost breaks out. people, human nature prevent people from getting on until they finally say, you know what? i wanted to go from newark to d.c., they finally get on in baltimore. you know what i mean? get on in philly. >> are you saying we're in baltimore. >> we might be going down to georgia. train to georgia. on a midnight train to newark,

train. i can't drive to philadelphia, it's too far. then it's in baltimore, it's like all i had to do was an hour drive to philly, why dent i get on? you see what i'm saying? >> you get on in d.c. >> there have not been two back-to-back down days in how long? down days are rare. we're even surprised. futures are down 3 points this morning on the dow. we're almost surprised to see that now. do you see what i'm saying? you admit -- people, even at this network, we say is this the top? is this the top? >> that's what everybody is asking. >> did you hear what we played at the beginning of the show? "there's a roof over my head." i don't think that's why we did it. >> is there a top in small caps -- i want to continue this. >> i thought you would say would trump's business conflicts, will that cause the market to sell off?

did you see paul ryan when you asked him that yesterday? >> i saw what he said. >> he almost -- he kind of -- he was almost incredulous. >> apparently the country is incredulous on that question. >> the country that you know, right around here. >> no, no, no this little area. there was a poll that bloomberg did yesterday, do you care about business conflicts? the majority of respondents said they did not care. >> they did not care. >> they did not care. the country is incredulous. if it was me, i would not have brought up that poll. >> i'm a fair and objective journalist, we had e. whether itwhether on my side or other sides. the russell 2000, that train has left the station, it's up more than 14%. far, far from baltimore. joseph? >> okay.

you took the train back yesterday, didn't you? >> i took a shuttle. >> you don't have time for three hours on a -- sitting there. so relaxing. >> i know. >> you get to see the countryside. >> see the people. >> be with the people. let's check the markets right now. this is going to be the story. how can it not be? u.s. equity futures at this hour. look at that. green. it it doesn't mean it will be green at the end of the day. fractional, but after 300 points, there's no giveback whatsoever. i saw europe, what's their problem? after 300 points yesterday, i guess they got their own problem. they do have their own problem. we have a guy coming on later, andrew. >> yeah. >> that i kept asking to book. >> yeah. >> david woo. >> yeah. >> remember what he said? >> whoo! >> no, can you hear me, dr. woo? he heard that his whole life. >> i know. >> i used to invite him on because he's the only guy before

the election that said there will be a boom. he wrote this thesis. people thought he was insane. good to get him back on. he says you'll see a lot of this reflected in dollar/yen. a lot of trump effect in dollar yen. that would be positive as well. would be if you get that part of the world on track. it would be like a 12 cylinder engine. i thought i looked earlier at europe, there was some red, but that's not what is supposed to happen. supposed to at least react to what happened here yesterday. but it's not. italy already did well. relative to what expectations were. >> they're waiting for the ecb meeting. >> right. >> treasuries are not going straight to 3%. they're, in fact -- well, they are in the 30-year. 2.36 on the ten-year. look at crude which is also not

necessarily reflecting demand concerns, maybe more supply concerns. that hasn't done much at this point. i thought we would be into the mid 50s now. the print was 49 when i looked tat this morning. >> among the top stories, markets will be watching the ecb meeting this morning. the central bank will announce its rate decision at 7:45 a.m. eastern followed by mario draghi's news conference at 8:30 a.m. he is expected to announce an expansion of the qe stimulus program. at 8:30, we get weekly jobless claims. president-elect donald trump announcing several key appointments. he will nominate oklahoma attorney general scott pruitt to head the environmental protection agency. pruitt joined a coalition of other attorneys jengeneral in sg the epa over its clean policy plan. trump tapping retired jenlt j d john kelly to lead the office of

homeland security. and linda mcmahon is trump's choice to head the small business administration. she is a former ceo of the pro wrestling company wwe. trump is considering turning over the operational responsibility of his real estate company to his two sons but will continue to have a stake in the company. reports say the plans are not yet complete and that trump will hold a news co s conference on december 15th. >> you heard part of that includes ivanka joining the administration in some role, also her husband joining the administration in some role. >> somewhere, somehow, al gore somewhere right now -- you remember that when he shakes his head, sighs. remember when dubya would say something, and he would shake his head and sigh. he is doing that now.

he just met with ivanka and president-elect trump. >> had an interesting conversation about climate change. >> now scott pruitt. whoa. the left -- man, talk about -- is there a better way to not use the word -- we already said panties in a bunch. >> let's not. >> we already said anti-ball crushes pants. >> "worldwide exchange." >> that was earlier in the evening. >> is it a line of products by which manufacturer? >> lulu lemon. >> it's called abc. abc does refer to -- >> is that what it refers to? already been cluhewed pachewed. >> it's a lululemon product. abc pants. it's anti- -- yeah, you know what it is. >> you're afraid to say ball? ball? it could be -- >> basketball. >> a lot of different ways. >> crushing pants.

that's the -- >> trump rally. >> abc pants. >> we have to stay focused. the rally is near 20,000. you know there are going to be hats. the trump rally approaching 20,000 on the dow. >> you making hats? >> you know there will be hats. >> remember the 10,000 hats? >> are you selling hats? >> make america great hats to d dow 20,000 hats. >> let get on that now. >> i like those kid rock t-shirts. have you seen those? >> no. what is it? >> the electoral map of the country and it's got all the red, and it says the united states of america, and then the blue ones, it's a different country they have. it has to have a -- like one of those little like dumb-blankenstan. sold out. we are in dumb-blankenstan now.

the index now about 2.5% away from that milestone level. dow transports also at a new high. yesterday down in d.c., american airlines ceo doug parker told us why his industry is, get this, taking off. huh. >> we have a business incredibly important to the american economy. and i think anyone that cares about the american economy should be supportive of the u.s. airline business. we drive commerce, we get people around the country, around the world to drive commerce and to see the world. >> let's get back to the rally. joining us now, doug cote, and steve reese global head of equity strategy at jpmorgan private bank. everybody needs to know or at least have an idea about whether they should step in here or wait for that elusive pull back which in past rallies seems -- you always end up getting a pull

back 10% higher. >> it's a new world order. >> it is? >> new world order. growth in reflation. >> how far can that take the averages? >> quite far. for the first time in a long time we have pro growth economic policies. the new world -- the old world order is allowing central banks to manage the economy, negative yields that doesn't work. that's not sustainable. but of all the policies that i'm focused on, it's tax cuts. tax cuts not only for corporations but small businesses. small businesses now have the same -- or will have the same tax rate as corporations. that is phenomenal. >> >> does he know what he's talking about? >> he does. you do want to buy today and buy on the pull backs. i think there's so many people focusing on the today, the level today. your analogy of the train is great. >> really? >> you need to think --

>> what are you rolling your eyes for? >> if you look at where the corporate profit picture could go, we think the market is trading at less than 15 times earnings on that new run rate of earnings by 2018 from lower taxes alone. it doesn't assume a pick up in u.s. growth. >> what are the assumptions behind that? 1% eps on the s&p 500 for every 1% corporate tax percent lower? >> yeah. the good news is -- our base case is 7% with no tax cut. we feel strongly about that on the energy recovery. if you think about trump potentially pushing through a corporate tax cut, he said 15. other people said 20. let's assume 20, plus some benefit from repatriation. you get well into the double digits. 12%, 13% upside on top of the 6%, 7%. >> what is a multiple the s&p too be trading at? >> on the new run rate of earnings, below 15% earnings. >> wow.

>> after the last eight years, if you watch the debate, hillary clinton would say about trickle down or growth policies, we had gotten to the point where the narrative was that trickle down and growth policies don't work. they drove us into a ditch and caused the housing crisis. that was the narrative we heard. i never understood that. if you leave money in the private sector where it can take risks, be actual capital, it seems the more you leave there the better. you want to take care of people do everything that government does. but anything left over, it would be nice to have that in the private sector, right? >> you actually get a dual b benefit, you get the supply side cut for businesses but also a demand side from lower income taxes from consumer. it's a double whammy for a tax cut, supply side and deplanned side. that's really -- when is the

last time we saw that, significant cuts like we're seeing? a long time ago. the animal spirits that you're seeing are properly discounting this. and -- i think it has a ways to go. >> think about it, andrew. 20, 30 years from now, you're sitting here, i'm long gone by then. down in florida or something. >> georgia. >> georgia. yeah. you have some young whippersnapper sn whippersnapper sitting here, like you used to say about reagan, spending, blowing the deficit out. what if you live through a period where you see pro growth, and then you turn into me and start arguing with this whippersnapper about supply side and trickle down and tax cuts. >> yep. i hope you're right. i hope you're right. >> the only thing that grows the economy is the private side. so anything you do for the private side -- it's not the government that grows the country. >> you need the taxes from the

private side to pay for those jobs. >> we haven't seen a lot of capital recovery, which is why we think the recovery has legs. >> but the bottom line is buy, buy, buy? >> buy yes, but optimize. a lot of people sitting with the defensive bond proxy there's a did so well the first half of this year, think about adding cyclical exposure, adding small cap to that. you need to think about adding international. everyone is talking about the u.s., we like the u.s. the best. there are good opportunities outside of the u.s. >> buy, buy, buy. >> there are tail risks. execution risks of trumponomics. >> but the bottom line for you is buy. >> right. but still i want bonds in there just in case. global trade, what if we get a trade war. what's going on with the european union, italy. >> all your caveats were all we

talked about before the election. so we are aware of those. bill gross yesterday warning don't get -- there are other things that you need -- that's what he was saying before. now the only thing he's acknowledging is maybe some positive things, too. and re-emphasizing the things he missed -- how about george soros? how many time december add to his s&p short bets? how is he feeling? he needs those pants. >> the key thing -- >> he is getting crushed. >> he might have flipped. >> he might have. >> same with carl icahn. >> carl did after because he was on board with trump. >> thank you, guys. coming up, more donald trump. donald trump's policy priorities for his first 100 days in office. we'll talk to a former senator, jim demint, the president of the heritage foundation. he has a lot to say on this issue. "squawk" returns in a moment.

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welcome back to "squawk box." stocks to watch today, lululemon after a 4.5% jump in yesterday's trading. the stock is soaring in premarket after an upbeat report. it boosted earnings outlook and announced a $100 million stock buyback program. >> you found the website?

>> yes. because i wanted to see what abc stood for. it is spelled out on the website. it's explicit what it says. >> we don't need to say it again. it's spelled out on the website. right on the website. not a blocked website like some of those other ones you try to get on. sorry. >> speak for yourself. >> retailer sears out with quarterly numbers. posted better than expected revenue. same store sales revenue fell more than expected. revenue year on year dropped for the 20th quarter in a row. we're a little over a month away from president-elect trump's inauguration. here is how speaker paul ryan on "squawk box" yesterday on the legislative agenda. >> we're been working on our tax reform legislation for over a year, healthcare legislation,

regulatory agenda, it's not just talking points. our committee -- i told our committees a year ago, assume we get the white house and congress, come 20 18 what do you want accomplished for the country to get this country back on the right track? what does that look like? plan now. >> for more on what to expect from trump's first 100 days, let's bring in jim demint, former u.s. senator, now president of the heritage foundation. thank you for joining us. looking over some of the recent comments, you were with vpe pence, you said you're trying not to be too giddy. have you felt some giddiness following the election? >> just to have the opportunity to turn things around. at heritage we're studying really how policies affect the country. the last eight years have been difficult. but we have not yet seen the

negative effects of what obama has done. that will continue to hit us. the chance to turn it around from a president listening to good policy ideas. >> election, i'm trying to think how many different types of republican there's are now. there was the no trumpers, then the pragmatists, then tea party types, that should have been, i thought, the hard core republicans, but they were pro t trumpers from the start. >> i don't think the labels are helpful. >> are they not accurate? >> i think of myself as an american. >> when there were 17, who was your favorite? >> i had a lot of favorites because i knew a lot of them. >> i didn't think trump would be the one that came out the other side.

in the beginning he wasn't focusing a lot on policy, down the stretch he did. he asked for our advice on pollities and ideas. >> heritage got on board. >> we don't endorse, but we gave him all the resources, people he was willing to take. as many good ceos do he pits good people around them. listens to ideas. anybody who can say they can get it done, he's on board. >> is the heritage foundation the shadow transition team for the trump administration? are you that involved? >> i don't want to suggest we're making decisions, but we're been working, as paul ryan said, working for over a year to collect the names of thousands of people who could fill an administration. we have been working on policy manuals, we were hoping to advise this administration. it's worked out beautifully since the convention. we've had a lot of folks,

seasoned veterans like ed meese and ed fulmer working as volunteers, but we're not making decisions, we're providing resources, collecting names, making recommendations. that's the role heritage plays. >> do you have a preference for secretary of state? the short list became long again. do you know how that happened? he had four. four pretty good ones. then it went to eight. what was wrong with those four? was someone uncomfortable with those four? >> is always someone uncomfortable. as they go through vetting, they're thinking of senate confirmation. >> do you have a preference? >> i have some preferences. >> can you give us two? no? any automatically dis qualiuie ?

>> we work with allies around the world, they need clarity, they want the u.s. to actually carry a big stick, but speak softly. it is a philosophy that works. we have been vague and weak. it's created a lot of restlessness around the world. >> so, maybe you weren't up yesterday watching, but what speaker ryan was talking about is the things to focus on. is heritage helping with the regulatory first steps that -- before you can do anything, there's things you can do regulatory wise, like after -- i think someone described it as a hand coming off the bible t can start happening immediately. >> we have a whole manuel, it lays out what you can do with regulations, the process you have to take, what you have to do with executive orders, what

you have to do through legislation. and what are the priorities in the first 100, 180 days. we've been working with members of congress for over a year to try to focus. the last thing a new president needs is 100 things to try to do. it comes down to repealing obamaca obamacare, the president wants to fund building a wall, a good supreme court nominee and take don't regulations, all the executive orders. i think businesses are responding to the thought that a lot of these regulations will stop. if all trump does is freezes new regulations, i think you'll see our economy start to grow right away. >> the response of the other side is any consolation, this is the ghastliest group of misfeets and miscreants in one cabinet, i think things are going well. >> they are.

he's put good people around him. >> what about mnuchin, wilbur ross, barely in office, these are good picks. senator, thank you. >> thank you. when we come back, the cjef sonenfeld will join us to tell us how to thrive under the trump administration. we'll talk to the professor when we return.

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welcome back to "squawk box." stocks closed yesterday at all-time highs. u.s. equity futures at this hour flat. less than a point on the dow. down less than a half point on t the s&p 500. crude up, just over $50 on wti. >> president-elect trump is in a twitter fight with carrier's union president, chuck jones. jones is the president of the united steel workers 1999. he accused trump of exaggerating the number of jobs he saved. trump said he helped save close to 1100 jobs there. jones saying it was closer to 800. trump tweeting chuck jones has done a terrible job representing workers, adding no wonder companies flee this country. the union firing back on twitter calling jones a hero who tried to save jobs. chuck jones says he has been harassed and threatened in the wake of the twitter feud.

>> goes on tv to quibble about what the actual number is. 800 is better than zero. i don't know. it's just weird. i wonder what his political -- he's a union guy. i wonder what his political -- >> the issue -- >> predilection. what was he already? >> i'm sure he was on the other side. the issue is if you say anything critical right now of donald trump or potentially his policies, is he going to come after you either by way of twitter or -- by the way, right now he's the president-elect. the only thing he can do is do it by way of twitter. he will have at his disposal the irs, s.e.c. >> he might have done what we did this time around with the irs, target liberal groups, instead of the irs target iing

>> people are on edge. >> let's test it, say something negative. >> see if he gets audited? >> i have -- i already talked to my accountant. the audit is coming. we know. okay. >> call him hitler right now. >> you said it. many ceos are excited about a donald trump economy, they are also used to dealing with traditional politics and may have to adjust expectations. joining us to discuss this relationship and what we can try to expect once trump takes office, yale management professor jeff sonenfeld. and he has an update to the 1972 jim croce song. his song goes you don't tug on sup superman's cape, you don't spit into the wind, i don't pull the

mask off the old lone ranger, and you don't mess around with donald. how do you do there? >> a fantastic job. since we were talking amongst ourselves, one of your segment producers when i suggested the jim croce piece, they had no idea who jim croce was. that's part of the issue. you don't message around with the donald. you see this union boss, chuck jones, maybe he had a heroic career, i don't know. why get into this food fight? you look at the business community, in particular ceos are trying to figure out what to do. many are alarmed. many are excited. but most of them are sort of ank shis now. in our surveys, fortune 500 ceos, we found only 6% of them were supporting him as a candidate. i don't know, 80, 85% of them didn't think he would make it. apparently they got it wrong. they should get over it. they see him as a threat to

business partners, worried about diplomatic implications. when i brought him into our ceo summits, maybe ten years ago. several people on the new business advisory group of his said the minute that donald walks into the waldorf, we're walking out. a lot did. but now they're chasing after him. he is not not one of them. a lot of people think he's a great business leader, but he wasn't part of that crowd. >> what are you supposed to do -- to the extent you're a ceo today who wants to speak out on policy issues that relate to your company that you think in a traditional world would be advantageous to talk about, for example, being pro tpp or something like that, i'm thinking of the co of boeing and the reaction to that. >> the way to approach it is to come at him not with threats. you're not going to respond.

if you go back to the insults, even ted cruz eventually learned this. marco rubio or the other 17 who fell in that primary process, you won't come up as a winner. he responds pretty tough. he talks about the counter puncher he is. don't get no that game with him? what do you get into then? don't rely on trade associations. exciting news with jamie dimon stepping into the business roundtab roundtable. ivan seidenberg did a good job leading them, stevenson, but jamie is in a class by himself. up to now the trade association, most of them, don't look like the right place to go. he's going for individual companies, individual people. there's no shared fate. they're not there to support a business leader being targeted. when it's by name, respond to the company's specific point of view. don't come back with slogane

sloganeering either. quoting anne rand or david ricardo, the god of free trade. >> you look at jamie dimon in this new role, prominent to begin with. apparently there were discussions behind the scene on whether she be treasury secretary. but he will have to go out and represent not only jpmorgan but the business community on different issues, some of which may be at odds with president trump, president-elect trump, did he put himself in the cross hairs and jpmorgan? >> it's pretty exciting. jamie dimon could be the bernard baruk, if not thinking that the -- the jpmorgan morgan himself of this current age. he has tremendous courage. some might say it's pugnacious. he's not pugnacious, just really direct. should trump throw out comments, jamie will not respond with

insults. but jamie responds to a different point of view anchored in some research, so the facts, grassroots legitimacy. i took a number of left of center academics to see him a year ago fall in sequence. i thought they'll make me look reasonable. no, he loved them. he liked them more than me. he didn't agree with them, but he pushed them hard and tried to learn their point of view. jamie always has his homework done. he'll have counter facts and grassroots support. you don't go into president trump in a position of weakness or groveling, you need strength behind you. as you see what he did with ford, make sure you have no daylight between the management team. at ford, they are all on the same page. he'll divide and conquer. >> what about the straight-up business decision that a board has to make, for example, about where to located employees? usually you run the numbers,

talk about where the numbers land, if there's enough of a margin one way or the other, dare i say you may not employ them here but elsewhere. how does that equation change? how do you math whatever donald trump may say about it out. >> the societal and political implications should always be a consideration. when ceos approach an m&a deal or asset investment decision thinking only about what it looks like, the immediate return will be, they're missing out on what will make it work. you have to look at the misguided efforts of unical, didn't understand the grassroots effort of things. cnn perhaps was going to do to abc -- >> that just between us.

>> just between us. >> there's a boardroom discussion saying we can't at a time of recession sell off, a lot of journalists would be laid off. this would have been disastrous in terms of the press. you have to think about the headline reactions. >> jeff, you were asked that question and i was listening thinking there's a half full and half empty way of answering it. so, they're deciding on this, that and the other thing. what if they decide and you could have said -- what if they decide, you know what? i'll keep him here because of trump and instead of going somewhere else. i was thinking would that be a bad thing? suddenly into the equation comes i might get in trouble if i send them away, let's consider keeping them here. is that a bad things overall? >> i've been arciguing for thiso

happen forever. i've been suggesting -- >> what if it's not close? if it's not close -- >> i've been told that we're supposed to -- that shareholders are the most important thing, and this is -- this is the jack welch school of management. >> one large shoemaker told me years ago the same guy who took the company and phased down where they were in new england as an operations manager, became president when they were ramping up in the south, ceo as they moved off to brazil, as they're ramping up now in vietnam, the chinese threatened if he doesn't shut down what he's doing elsewhere they should shut him down completely. he said i could bring the jobs back to the u.s. a lot of this stuff could come back here. we have such labor saving technologies -- >> we had brandt on, he wrote a book "screw business as usual." that was the actual name of it. he was on, you were like this with his ideas, now it's trump, it's like -- >> no, no.

but -- i'll -- >> you want them to stay -- >> trump would say he was making the ties in china because that's the better rate. now it's -- >> we got to go. >> okay. >> jeffrey, love you. coming off big pays, the dogs of the dow are bouncing back. and a quick check on what's happening in the european markets now as we await the ecb decision and the press conference held by mario draghi. we see green arrows slightly across the board in europe. ma buys litt lamb. one of millions of oers on this comny's servers. accessible by thousands of suppliersnd employees but with cyber threats on the rise, mary's data could be under attack. with t help oft&t, and security that senses

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welcome back to "squawk box." who are the current dogs of the dow who led the way, and who will be the new dogs of 2017? >> i'm a dog fan, maybe this dogs of the dow thing resonates with me. you talked about the march to 20,000 if we're 2 percentage points away, a big reason for

some of the gains of the dow have been these dogs of the dow. the laggards from last year, the value trades, the highest dividend paying members of dow. you buy those at the end of each year, old them for a year and rebalance the same way next year. if you look at the dow so far, maybe closer to 12% upside year to date. the dogs of the dow, the ten highest yielding members at the end of last year up closer to 19% at this point. a much better trade. if you look at the members of the tdow, ten of them, the five biggest contributorcontributors caterpillar. if you factor in dividends, total return 49% year to date. chevron, because of the oil and gas rebound, 32% gains. ibm a laggard for a while in the dow, up 24%. walmart up 18%. and merck. these five stocks have been some of the biggest percentage

gainers in terms of dividends and price return. now if you're looking for next year fsh year, if all things close today, you have verizon, always up there on the top, pfizer, chef ron, cisco systems, large cap tech up there as well, ibm, exxon, coca-cola, caterpillar, procter & gamble and merck. these ten stocks you would hold if you subscribe to the dog mentality. joe, as a dog person, i always look at these stocks. it doesn't always necessarily outperform, but it did in a big way this year. back to you. >> it's a question -- i don't want to do cats of the dow. >> you said skunks. >> it's like hurting cats. >> you're right, all dogs go to heaven. they're basically the perfect animal. these dogs, the reason you buy them is because they're good

things to buy because they end up doing well. maybe we do have the right name. >> all dogs do go to heaven, you're right. i would say this, for these dogs, they're great payers of dividends. that's the reason why you want to own them. >> they want to go up more than everybody else. to call them dogs -- dog uses a purjorative. how many dogs do you have? >> two. >> i have three. three, and i see one that needs a home. is there a difference between three and four? yes, i'm told there is a difference. i had to do my own dooty work yesterday -- any way, you don't need to hear that. classic car sales pulling back this year, still a healthy mark market -- more healthy than art. coming up on "squawk box,"

cleveland clinic ceo tony cosgrove will be our special guest. he was named to president-elect trump's strategic and policy forum. he will join us at 7:30 a.m. eastern. "squawk box" will be right back.

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robert frank has the exclusive data. joins us now with a special guest. hey, robert. >> morning, joe. collectible cars sales falling for the first time in 2016. joining us to break it down is the ceo of haggerty. he's also the global chairman of ypo. mickael, welcome. >> thanks for having me. >> first fall since the financial crisis. are we going to get a trump bump? >> it's a great question. really the only thing to compare it again against 2015 which was an extraordinary year, but we're in line with 2013 and 2014. it was a strong year. if people are confident they buy cars. >> do you think next year 2017 is going to be better than this year? >> i think it's going to be a very strong year. of course rising prices tends to bring all of those secret little cars out of the wood work. and that's what people are

looking for. >> the big fear in this market was that the baby boomers are aging, they're selling, they're really sort of downsizing their collections. thap the millennials would never start collecting cars. are they? >> you know, much against a lot of the reports of autonomous vehicles and ride sharing and young people not getting their driver's licenses until later, millennials love cars. it's a huge generation. they were raised by baby boomer parents. and if there's anything we've discovered is that the wealthier people become the more they act alike. this year proves they're buying cars. >> what was the hottest car or types of cars this year? what's really burning up the market right now? >> you know, ferrari at the top end has always been the brand that's driven the classic car market. porsche, bmw. tends to be european sports cars in general whether it's millennials or baby boomers. baby boomers were trading out their pre-war cars and buying

sports cars to add to the collection. >> you're the global head at ypo. trump is the topic right now for businesse leaders. -- who they're hiring and what they should do with their business. >> ypo's a global organization, we have 24,000 members in 130 countries. all year leading up to this election i was answering these questions. people saying what in the world is going on. no one really knew. i think what's unique here is that people are sort of settling down thinking maybe this isn't so bad for business. the weird part is just this individual calling out of companies, individual probably naming of ceos who may be doing one thing with job cuts or moving manufacturing around. that is unique. and it's kind of rattling the ypo world. it did early on. but people are cautiously optimistic. >> but do you think -- just the

broad confidence of the level of the ypo members, are they going to invest more? are they going to hire more? has this unleashed the animal spirits of your group? >> take a drink. we have a drinking game. >> animal spirit. thank you. i was in budapest on the day of the election. and i was actually -- it was a meeting i was chairing. i was asked to stop the meeting right after the election was announced to see if they could go start buying. you know, so people were excited. they were ready to go. i think there's an underlying feeling of confidence that this could be good. >> in socialism land, they are very excited years ago about a socialist president. when that changes, it's like what do we think? he's not going to do things like europe like the last guy. he may do things different than socialism land. maybe it won't be so bad. >> we're hopeful. >> mckeel, thank you. >> the last president called out executives, people weren't happy about it though.

coming up, guest larry lindsey shares what to expect in the president-elect's first hundred days. back in a moment. they are the natural born eny of the way this are. yes, ias arecary, and ssy and fragil but unthe proper care, they become someing beautiful.

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taking aim at dow 20,000. market's on pace for the fifth positive week in a row. the dow up nearly 7% since the election. we're going to break down the trump rally and find out how much higher this market can go and where you should be putting your money to work right now. breaking news out of europe. investors eyeing an interest rate decision by the ecb. is more qe on the way and what will mario draghi say about the situation in italy? the decision and global market reaction ahead. plus harsh words about obamacare from paul ryan

yesterday here on "squawk box." >> this law is getting much worse. it is what actuaries say entering a death spiral. >> we'll speak to cleveland clinic ceo toby cosgrove about what it will look like under donald trump. as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york, this is "squawk box." >> welcome back to "squawk box" this morning. i'm andrew ross sorkin with joe kernen and melissa lee. joining us for the hour is larry lindsey. we're going to start with the trump rally. the dow and s&p 500 closing at all-time highs. since the election, the dow is now up officially more than 6.5%. also logging new all-time highs dow transports gaining 2.5% in

yesterday's session. now on pace for its sixth positive week in the row. you really wanted to get in on the small caps which are fairing well. the russell 2000 now up more than 14%. take a look at futures this morning. we're going to flip that screen for you so you can see what's going on. it's nicely in the green, i guess. up two points on the dow. nasdaq up three points. and s&p marginally down. more on markets in just a moment. in the headlines this morning, the latest cabinet nominee for the trump administration is scott pruitt. the transition team says pruitt is trump's choice to be head of the environmental protection agency. the european central bank will issue its latest policy state in less than 45 minutes. the bank is expected to extend its asset program for six months. retailers among the stocks

to watch this morning. lululemon surging after an upbeat outlook. sears posting a lost. and costco seeing more shoppers in its stores but suffering from the effects of lower prices for a wide range of products. all those stocks trading higher this morning. back to the story of the morning. that would be the trump rally. dow and s&p setting record highs. the dow is now about 2.5% away from the 20,000 mark. the dow setting a new high in two years. joining us now to talk transports chris weatherby. chris, not only have transports gained since the election, 46% from january 20th. it's been a massive run throughout the year. not just post election. how much of the gain have we pulled forward in your view? >> i think there are some of the gains that have been pulled forward. benefits a lot from tax reform. i think that has the potential

to drive significant earnings power. but i also do think that we are coming off of a bit of a bottom from a freight perspective. we have seen a rally here through the fall. volumes are up a bit. e with do think some of the -- there's also this fundamental story that could drive earnings acceleration into 2017. i think that's also what investors are looking at right now. >> within transports, what areas of the transports do you like the most or what sorts of rails in terms of what they carry do you like the most? >> the rails are an area we're focused on right now. our favorite. ic in the space is -- they have a lot of exposure to bulk commodities which are rallying as well. again, they're very diversified across a base. should generate a lot of free cash. and like i said before, this group benefits from the tax dynamic nap is something we're looking at. >> and mostly because they're all domestically oriented.

this is part of the reason we're seeing huge gains in the russell. they're domestically oriented companies. they will benefit the most. how do you think about that and how that has filtered into the market so far? >> yeah. so we have a massive regime shift, basically. you know, the markets have gotten completely used to secular stagnation. the resheikh forever basically. and now we have something more growthier and inflationary. and that changes the leadership. you go from global to domestic, large to small, from utilities to financials and industrials. and this koms after the last few years $150 billion flows from equities into bonds. that's now reversing and it's happening at a time of year where typically it's the strongest time of year for the market anyway. so you put those all together and you get basically a meltup which is what we're seeing into year end. that's what we're seeg right now. >> in terms of the reflation

trend, we witnessed stocks have runs. i was just talking to the ceo of u.s. steel yesterday. his stock went from $7 to $21 the day of the election and then went up another 80%. how should we think about the reflation trade and how much could be priced into the stocks? >> this is unusual reflation trade. usually that means dollar goes up, kind of the smaller caps go up. but we have a rising dollar, rising kmod tis, rising stock market, rising yields. that's a unusual combination. for me the key for '17 is really the dollar and the yield side, right? earnings in the first quarter and are accelerating. they're up 3%, 4% now. so that was already happening before the election. now they get a shot of adrenaline. you've got earnings growth. so earnings growth now is going to be inflationary. so how the fed leans into that i think will be a very big

tension -- >> still might be more than just a reflation trade. right? if we're going to do infrastructure and buy american while we're doing it, it might be -- >> fine. take caterpillar. i mean, the list goes long and deeper than just steel. >> steel you might actually buy steel here to do some of the infrastructure. >> i would imagine trump is going to force the issue. >> but the ceo of u.s. steel said yesterday because of lower corporate tax rates he would consider accelerate and have up to 10,000 more jobs in the united states. when you hear things like that, i would think that would be more bullish for the rails. that's something that's not necessarily priced in. that some of these jobs could come back here and there could be more manufacturing of things like materials right here in the united states. >> my god. i'm getting chills. >> i think it's a good point. when we talk about what has been priced in and what hasn't been priced in. i don't think we really priced in an acceleration on the economic growth. we've been talking about how important that is to this group.

ultimately that's not there. we haven't enjoyed that over the course of the last couple of years. in addition to tax if we could see real gdp growth, that would be exciting for this group. >> more and more analysts coming in saying many of these trends were already in force before the election and they're just extending them. hearing that a lot. >> i think we frankly have seen pretty weak trends in transports over the last two years. i think now we have the potential to see better trends in 2017. that's something to get excited about. >> if you look at the risk markets, they all inflected in the spring when the dollar pe peaked. but now they're getting a shot of adrenaline. it's a nuance, but it's a rate of change versus an acceleration. that's what we're now seeing. >> for a lot of people it explains why they were negative on a trump presidency before it happened and now they're trying to come around to dealing with it now and revise their history so they don't look quite as clueless. >> i think one of the key points

is the speed for the economy is before it becomes inflationary. we're -- i think that will be an interesting thing to watch next year. that's why the inflation trades have all taken off. >> right now what area of the world do you like the best? is it the u.s.? >> i think it really comes down to a call on the dollar. i think the dollar actually has run probably as much as it's going to for now. so i think there are other parts of the world -- i think em actually -- even though everyone likes to down play it here because of the sort of whole regime shift, i think it actually looks kind of interesting. because it's the only thing that didn't fit the mold of the reflation trade. that's something that's actually kind of cheap here. and if the dollar's peaking at the same time, that's an opportunity. >> are we getting too

optimistic, larry? >> i don't think so. i think the media is too focused on the tweets and not enough on the substance. the real substance that's moving in washington is tax reform. the house tax bill that has been three years in the works that they really concentrated on this year led by the speaker, i was there in '81. this is going to be better than the '81 bill in terms of economic growth. it will make america -- i'm sounding like an advertisement for it, but it will make america the best place in the world in which to invest. >> is it possible that the stock market is not fully pricing in the benefit of tax policy? because there's so many people out there saying we don't know what we're going to get. we don't know if we're going to get it. but it sounds like there's more upside to this. >> well, there's certainly more upside to the economy. the caution i would tell your listeners as pointed out, we are stepping on the gas at full

employment. we haven't done that since the '60s. my bet will be the main beneficiary of what's going on are wages. it's not going to go to capital. it's going to go to wages. when you subsidize capital, create more capital, it's wages that go up, not returns. and i will bet right now we won't know this until 2021. i think this will be the first administration in 50 years in which inequality declines. >> that would be perfect given the last five years saying who can do it. and who orchestrated the inequality in the first place. >> you're going to see real wage increases. this is real wages. again, we're starting at full employment. and stepping up -- >> we've got 95 million people that might like to come back into the workforce. right?

>> well, i don't think it's quite that. >> that's what leisman told me. >> with all respect to steve leisman, i think he's overcounting. >> but at 60%, what's the current participation rate? >> well, i think we're going to reverse the declines in participation under obama. well, i'm just pencilling in that we're going to reverse obama on participation. the key thing is on productivity. i think we're going back to at least 1.2. >> and you think -- just for context so i understand, you think we are on that trajectory? >> it's silly to say that. this year is going to have slower growth than last year. we're going to 1.8% growth this year. >> that's the wrong answer. >> not the wrong answer. >> our thanks to you. coming up, we're going to continue talking fed policies, central banks with larry lindsey. check out the markets right now. we are waiting on interest rate

decisions from the ecb. take a look at stock performances since the election. going to show you some stocks right now. goldman sachs of course a big winner in all this. we're back in a moment.

welcome back to "squawk box." futures right now are indicated that we would again trade somewhere near all-time highs, maybe exceed those. looks like it's changing now on the s&p. that basically is unchanged and the dow down less than a point. nasdaq up two. president-elect trump meanwhile is putting his cabinet together. let's find out if our guest host would be interested in returning to government work. larry lindsey, president and ceo of the lindsey group and a former fed governor. he's also served as the director of the national economic council. answer this quickly. >> been there done that. >> so you're not interested in doing anything. like from here on out probably? >> probably.

>> you been over to trump tower yet? >> i went there before the election. but i'm not involved in what's going on now. it's -- again, i've been there done that and he's got some really qualified people that he's brought in. >> okay. so a guest we have on the show with a familiar name druckenmiller, stan, he was ayear ahead of you. >> we had a hot dog stand together. and i am the only person who can claim to have bought stan dru n druckenmilldruk druckenmill druckenmiller. i bought it from him for $400. >> and you sold it for what? >> $850. but, you know, it was fine. but if i left the money with him -- >> nationalize that return. >> if i analyzed with him, hundreds of millions of dollars. i really am a bad investor. >> that experience is worth a --

was very formative. the reason i bring it up is you were on how long ago when we were talking about -- >> i was on in march. >> when did the book come out? >> that's when it came out. >> march of 2016. i think we still had it in. that's "conspiracies of the ruling class and how to break their grip forever." the reason i bring it up is stan on different occasions has referenced that book and how it was kind of a premonition of this election. and maybe the mood of not just this country but maybe large parts of the world. i wish i'd, you know, i wish i'd read it the first time when you were on. now i'm going to go back to it. how did the ruling class that was just sort of rejected in this election, how did that come to be? how long did it take? how long has it been in the world? >> it's been gradually gaining steam during the 20th century.

it's the progressi ivive moveme. and it's the idea that what you need is expert government. that experts know better how to run your life than you do. and that's been creeping in. and you certainly hear it a lot in washington. i think the public said enough is enough. they haven't done that great a job. >> so it's been creeping in and the absolute summit, the peak, the highest point, the mt. everest of that thinking was president obama and the people that he brought in that were going to -- they knew exactly what we needed and exactly how to do it and they legitimated progressivism from the top down which if the people from the bottom up aren't ready for it, it's not going to work. >> if it had succeeded, i think it might have been different. but again, we had the lowest economic growth of any administration, first administration never to hit 3%. so the growth part of it didn't work. we called it arrogance and

incompetence. but the way they talk down to the people who voted i think was their big mistake. remember, they cling to their guns and their bibles. this time we hear deplorable and ir redeemable. why would you ever say that? >> in the "time" magazine piece, their biggest worry is donald trump may not be governing for all the people in the united states unlike what we've seen for the last eight years. this is just going to be too much. this is just too much. >> for context, there's the deploed deplorable comment and then the comments made by donald trump about so many american who is feel not only slighted but i would suggest that some of them today feel afraid. >> well, yes, and a lot of the fear was created in order to motivate them to vote. you might remember that. the ku klux klan was coming back. do you really believe that?

>> try walking through a progressive rally with a trump hat on and say you wouldn't be afraid. >> this was the nastiest election we ever had. i decided early on not to be involved. i voted in for gary johnson. i thought that was a safe decision because i'm supposed to be an analyst for my clients, right? >> donald trump was not the guy you thought would break the hold of the ruling class -- >> i was surprised he got the nomination. i was surprised -- i was a little bit less surprised he won the election because i think this populist movement is very strong here. it's very strong globally. davos man is in trouble. let's be honest. everyone at this table -- >> i was there for 20 straight years and i don't walk in there and people -- i mean schwab goes there's sorkin. come over here. you've got 16 conferences you're leading this. >> everyone at this table is part of the ruling class.

joe, you can be a rebellious member of it. >> okay. >> but we live differently and we should face that fact and should be humble about it and realize that there are a lot of folks out there who need us to do a better job. >> let's get back to what melissa got you to this unbelievably exciting point in the last discussion. and that is that we're going to have wage gains maybe. and in the stock market which went up 300 yesterday and is closing in on 20,000 on the dow, this may not be ready to just peak and go back down at this point given what may happen. >> you know, i -- i don't mean to predict where the markets are going to go. they're going to go up, they're going to go down. i think there's going to be counterveiling forces that maybe mean that not all of this is going to go to profits. wage gains are one. higher interest rates are another. a stronger dollar is another. >> and i don't want to -- sorry to interrupt but i just have so much i want to get from you.

i've been saying i never thought i'd say it but i've been saying that for 20 years -- i think the fed, okay, with these bad policies we had for eight years, the fed really exacerbated income inequality by staying at zero. so people owning assets made all this money. and it didn't filter to workers. is it the end of the world if margins are a couple of basis points less than they used to be but suddenly workers start to see the wage increases? i mean, does every single bit of good fortune have to go to ceos and shareholders? isn't it okay if the margins aren't what they used to be? >> from an economist point of view, it doesn't matter who gets it so much. although i think it's a good idea. >> skewed. >> things have gone from one extreme but the key here is we are going to see a gain in wages because we are throwing fuel on a fully employed economy. >> but you're not saying don't

do it either. >> look, we had a gamble. you could have guaranteed gracious decline which is what we had. or you could take a gamble on something working. we took the gamble. >> it's going to be good, andrew. >> can only hope. we've got more "squawk" coming up in a minute. back in a bit. hey steve check out is guys leg. yeah looks like a realasty moving back in with his parents. what? no. i just broke my leg. no, this is a full blown move in to the basement, you're gonna be out of work out that money from... aflac! you mighmiss your rent.f work out that money from... aww i st moved out. bummer man. hey i used to havey own place. no, no i live with my mom, but it's cool. yeah? hkeepr listyle healthythe life ywith.ve doesn't have to, aflac! ah, family holiday pty, huh greg? at least with directv from at&t,

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welcome back to "squawk box." the ecb's latest policy statement is coming up in about 15 minutes. expected to extend its asset program by six months. mario draghi will hold a conference on the meeting about an hour from now. initial jobless claims due out. economists look for being down

13,000 from the prior week. and the airline profit forecast is being lowered due to the rising price of oil. if profits fall next year, it would break a five-year growth streak. president-elect trump meets today with another candidate for secretary of state retired navy admiral james stavridpvridistav. and john harwood joins us now from outside trump tower. still. it's not raining, but mcgruff the crime dog has got that jacket on still, john. that's a keeper. >> reporter: crime dog is still here, joe. but the admiral stavridis is another out of the box meeting for donald trump to have. of course he was closely aligned with hillary clinton during the 2016 campaign. this comes after donald trump made two very much in the box

picks yesterday. scott pruitt, the oklahoma attorney general, class ally of the fossil fuel industry and climate change skeptic to head the environmental protection agency. then linda mcmahon the wrestling executive, supporter of the trump campaign to head the small business administration. after he made those decisions, donald trump continued to display the behavior that we saw before when he had gone after boeing which had the chief executive of boeing had expressed questions, doubt about donald trump's trade policies. he went hard after the local indiana union leader chuck jones who had criticized aspects of his deal with carrier. he went on twitter and said that the union leader had done a terrible job representing workers and that no wonder companies want to leave.

now, never mind that his vice president-elect mike pence had previously praised jones as a leader working with him to help save the jobs at carrier. that was earlier this year in march. the signal that's been sent is if you displease this president-elect, he may come after you. >> all right. john harwood hanging out in front of trump tower. meantime, president-elect trump building a nonpartisan panel that would gather business and economic growth recommendations for him as he looks to make changes. yesterday on "squawk box," house speaker paul ryan spoke to us about the plans to fix america's health care laws. >> we have a very, very bold regulatory reform platform we're going to be moving on in the very near part of the year. we're going to be doing our obamacare legislation. you have to remember this law is getting much worse. it is what actuaries say entering a death spiral.

high premium increases, high deductibles, no choices. we have to fix this problem. >> here to talk about all this toby cosgrove. he's been tapped to serve on trump's strategic forum. you were on the other side of this. you have been a supporter to some degree of obamacare. were you surprised to get a phone call from donald trump's office? how did that happen? >> well, i was surprised to get a phone call. in fact, i got steve schwarzman called me and asked if i'd be willing to do that. he thought that health care was an important part of the economy. and he thought that this should be represented. and i was honored to be included. and i think it's a nice opportunity to put some practical thinking -- >> in terms of what you hope or plan to tell the president-elect about how the reform, if you will, of obamacare should go, you plan to tell him what?

>> well, i think what we need to do is obviously there's portions of the bill that everybody likes. and that certainly is continuing to keep your health care up to you're 26 with your family. and also to have previously diseases not be an exclusion. but also we have to figure out how we are able to bend that curve. and we've seen now that the inflation rate of health care has gone up most recently 5.8% which did not fit the plan for the affordable care act. and the basic word here is affordable. >> here's the question. is there an economic model that will make some version of this -- call it obamacare, call it trumpcare, whatever you want. where you're able to cover those individuals that you just talked about and make it, quote, unquote, affordable. both for the americans that

currently have it and for the taxpayer? >> listen, there's only two ways we're going to bend the curve. one, have a more efficient delivery system. one of the things we have to do for that is we have to understand that you have to have systems. you can't have every individual hospital stand on its own and the justice department has stood in the way of consolidation on health care delivery system. that's one thing. the other thing we have to do is we have to decrease the burden of disease. you and i have talked previously about decreasing obesity, smoking. that will take steps to do these things. >> those are things that can't happen overnight. >> none of this is going to happen overnight. this is going to be a process of changing how we think about health care. >> when you read some articles that say the sort of repeal and replace, the question is what does it get replaced with and what happens during this transition period app and are people who currently are

currently covered, are they going to ultimately lose coverage? >> i don't know that. i'm not making the policy. i am -- i have the opportunity to put my input in with other capable people. but what i think is we have to start to change from paying for volume and paying for value. we have to begin to have some personal responsibility on things we ask people to do in taking care of themselves. and we have to as a nation change how we manage our system and have a real system of health care. >> larry, you've studied this issue. is there a way to keep the promises that donald trump has made about covering those that are already covered and make it work. mathematically. >> again, i think it's continuing struggle, but i think the steps that are going forward is first of all, insurance, you're going to have more

options. you had under obamacare, very prescriptive mandates for what had to be insured. that should be liberalized. you should have more ability for the insurance companies to charge more for the people with the conditions you were talking about. that's a great way to incentivize things. and i think what they're going to do on medicaid which is where most of those people went, is to block grant it. so we can have some experimentation in america before we decide. >> i don't know if you followed what went on in the past several weeks. it's been all over the map, but not necessarily positive. >> right. exactly. >> and the question is, is that -- given, by the way, how well the rest of the economy or the rest of the stock market has done, is that the right way to think about it? >> well, providers have been very badly damaged. the hospital systems have been -- stock has been way down. insurance company stocks have gone way up.

which i think says something about the difficulty that we're going to have as providers actually making ends meet. across the country just this year, we've seen almost all hospitals unless they're in a very unique situation have their margins go down and operating at a very narrow margin. >> hospitals, yes. but most of the malaise in the health care sector right now is because of the focus on drug pricing. is there an undue focus on drug pricing considering it's about 3% of health care costs? >> also biotech. >> right. but drug pricing overall. >> well, drug pricing is an issue. >> yeah. it's an issue, but i mean are we using so much energy saying look here, look here, look here when we've got a much bigger problem? >> we have a much bigger problem, no question. it needs to be addressed but it's not the only problem. >> i think the real model here should be toby. you said before you came on, you're 76 years old. which we're all amazed. we want to know what the regimen

is. because if we could get everybody on the regimen -- without a "t." >> good boy. you're not in the army. >> i was. >> he was . but what is it? >> i don't take anything. >> final question on a totally unrelated topic because it's something that we have talked about multiple times on this set together which is theranos. you were involved briefly i don't know what the state of play is. >> i never had an investment. i was never part of the company. the cleveland clinic did not -- what we offered to do is test the equipment. and verify that it worked or didn't work. we have never gotten the equipment. and our prospect of getting the equipment, first time we heard

about it would be some time in the first quarter. >> and you think that's still possible? >> i don't know. >> are you maintaining communication with them? >> yes. >> but this equipment is different equipment than the original -- it's the cube system, right? >> it is a different system. i have no idea if it will work or doesn't work. if it doesn't work, we'll tell the world that it doesn't work. >> do you trust these people? >> you know, this is about trust and verify. we haven't been able to verify. >> well, we'd love to have you back on so many other issues but also to keep track of this one too. so thank you. >> thank you. >> great to see you, sir. stocks to watch today, cost costco's first quarter profit -- switch from american express to visa cards. sluggish in the first weeks of november but have since picked up. tayl tailored brands gave upbeat guidance on same store sales for

the year. revenue topped forecasts. h&r block has reported profits for two straight years. coming up, ecb set to release its global reaction after this break. and take a look at markets. we're seeing green arrows across the board. be back in just a moment. xpressn help you take on aew job, or fill a big orr or expand your office and ta owhatever ces next. out how amecan express cardd services can help ppare you for growth at op.com

welcome back. we're just a few seconds away from the ecb decision on interest rates. the futures are now a little bit more positive than they had been. up ten now on the dow jones. the s&p up 1.3 now. nasdaq up over five. all of those would be new closing highs. i'm being told that ecb unchanged. let's check out the 10-year. 2.38%. oil is trading just above $50 for most of the morning. now you can see $50.14. and let's bring in steve leisman for more on the ecb. i guess we better pay attention to commentary, steve?

this is not always the most -- >> we're looking for one thing. maybe the guys in the back can back me up, but the key thing was not the change in the interest rate it's whether or not they were going to extend the quantitative easing program. and it looks like they did that. i'm just reading here. regarding nonstandard policy measures aka, qe, at the current monthly pace of 80 billion euros until the end of march 2017. so there it is. and from april '17 are expected to continue. it's an extend and amend if i'm not mistaken here. it looks like after march 2017 they're going down to 60 billion euros a month. and that will be until the end of december 2017. so they did an extension and they did a taper. i'm not sure both of these things were expected. the other things we're looking for and we might get those in the press conference are do they kind of tweak or amend the

purchase rules they have that allow them to get around the idea that they're kind of having some trouble with coming in and being too big a purchaser of certain issues or not being enough of the fixed income securities they're looking for out there. there's some expectation for tweaking. while we i guess next week here likely to raise interest rates. they're extending their qe for an additional six months as expected and actually saying beyond that that they're going to be stepping down to 60 billion euros. looks like the market is taking this pretty well. i don't see a whole lot of action in europe or in the u.s. >> the euro is reacting. it's jumping to a three-week high. >> the euro is strengthening on this? >> yeah. >> interesting. it's a little bit more -- it's very hard to say this with a straight face because they have just extended quantitative easing for another six months, but i'm assuming that the idea the euro is stronger means that the market is seeing this citizen a bit more hawkish than otherwise anticipated.

in that context of extending quantitative easing. take a look, guys. the u.s. balance sheet versus the euro balance sheet. you can see the tale of the tape when you look at that. there's the european balance sheet in orange. then the white is u.s. those are dollars versus euros. >> it's a low bar. >> i know, joe. but that's just the -- looking at how the market is staking it, just be a little careful. those initial reactions could be misleading. >> get your notebook out. joining us david woo head of currency research at b of a merrill lynch. still with us is larry lindsey. you stood out before the election. you wrote a piece and you're a currency guy mostly but you wrote a piece on there could be -- you described some very --

first you admitted the possibility he could get elected. second you said it could set off a boom meaning stronger rates and dollar. that was three or four months ago wasn't it? >> yeah. >> actually, have this guy on because he's like one in a million. now that it's happened, some of the trends have already started that you predicted. you should get paid more. did you tell merrill lynch you were right? >> absolutely. when i walked in the trading floor a hundred people started spontaneously -- it was the coolest thing of my life. >> what about the people that got it wrong? >> they got a promotion. no, but -- so you do have ten possibly effects that people could trade. can we go over them quickly as possible? short the five here? >> yeah. you know, i think as you know, like, you know, it's true. rates have already backed up.

dollar has backed up. the fact is if you look at consensus the next year and year after, it's stuck at 2.2%. trump said 4%. the mark is now saying 2.2%. this is the reason market is only pricing 1.5 fed hikes on next year. 1.25% hikes for all of 2018 is that consistent with 3% gdp? probably not. you know, so i think from that point of view, certainly i think the curve has much more upside. i think the five year curve is going to have 30, 45, 50 basis points more to go. >> short the 10-year versus the dollar and yen? >> because it continues to peg at just zero. you know they're buying with both feet. treasury has become so attractive for these investors. >> brazilian and mexican long bonds to sell if you have the

capacity to do that. why? >> the combination of higher u.s. rates and dollar is not good for emerging markets. this has been the best performing trade year to date until the election remains the most crowded. it gets very small when everybody is trying to get out. people are trapped in the emerging markets. >> some of these are a little esoteric. sell brazil versus -- >> mexico. everybody loves to short mexico. i think mexico is going to be the biggest winner of the trump presidency. trump has the legal authority to throw out the window. but he does not have the legal authority to renegotiate his terms and there's no support. so i don't think he's going to touch nafta with a ten foot pole. statement mexican export to u.s. is 27% of mexican g. . i'm telling you mexican economy is going to take off. >> that's the relationship a lot of people lost. the relationship between the

peso and the u.s., mexico and the u.s. is usually hand in hand in the currency market. that's what people wanted to throw away in this election. >> exactly. >> joe, you know what? there's like one thing that really keeps me up at night every night is the china/u.s. collision course. it's almost like baking a cake. the more successful trump is going to be, the stronger is going to be the dollar which means weaker is going to be the rnb. steve mnuchin starts talking about, you know, he didn't endorse a strong dollar policy. he said strong economy is in the best interest of the united states. this guy knows what he's talking about. he needs a weak dollar. as a result, the two countries with the collision course because it's impossible to have a weak dollar. so this is the biggest conundrum. >> all these trades on after the show. putting them all on. sell the euro versus the british

pound? >> yeah. i'll tell you why. the biggest story of 2017 is going to be the french election in 2017. i'm very kwrned about the french election. i think a lot of people don't understand. most likely going to basically have a run-up with the second round. this guy is campaigning on firing half a million government workers, getting rid -- he was bringing them back in the unions. the last time the french elected someone like that was 1873, okay? i think this guy is going to struggle to get any votes from the left. that's going to call into question when he's going to be able to take out. if friends go that way, i'm not predicting it will. but it would be a totally disaster. because they have nothing in common. okay. >> i love this guy. >> that's what i mean. i know. larry's going to give a standing ovation. >> i agree with everything. great minds must think alike or something like that. i think the chinese point is something that's

underappreciated here. especially if this tax bill passes. there would be a further appreciation of the dollar. there'll be a further fall in bond yields. and that puts a lot of pressure on the chinese. i think they're going to have to send the rnb down to keep their competitiveness. >> i got to do this trade, man. >> which one? >> am i buying the new zealand dollar and the u.s. dollar put spread? how am i going to -- i don't know if i could do that. >> sure you can. >> really? i can do a kiwi/dollar put spread? you've already done this. >> you're behind the trade. >> is it too late to do this? >> i'm telling you you should buy some ruble. >> one of your most compelling things, though, is the yen trade. you think that's going to be something that -- >> i like the 5-year treasury yields. you know, i was up in boston the day before yesterday with these

trades. i got so much pushback from clients. it made me a hamper camper afterwards. i tell the same stories for another three more weeks. because there's so many people who refuse to believe that we're on the verge of a total regime change. this is not just about fiscal stimulus. this is about a cocktail. this is about big bang program that's going to be designed to boost confidence to basically unleash the banks to be more supportive in creating business. this ask on shocking the u.s. economy to do what it does best which is take risk, invest in growth. >> your trade with what's going on here -- pulling the foot off the pedal, so to speak on stimulus, is that to gear up for the uncertainties coming in 2017 so they have more ammunition? >> absolutely. you know, only four months ago the german finance minister had to be said that ecb needs to be held responsible for the rise of

the far right party. >> okay. >> final word to larry lindsey. >> 2.2 is a ridiculously low estimate for growth over the next few years. it would be at least three. long bond is headed much, much higher. you said 40 basis points just near term. ultimately the 10-year is going to go well over 4%, maybe close to 5% or 6%. >> and he's a ph.d.. dr. woo. and we're going to play that on the way out. thank you. >> thank you. coming up, he's known donald trump for 40 years. richard lefrak will joins to talk about his relationship with the president-elect. for now we are up across the board. this is after we dipped low on the back of the ecb decision. back in a moment.

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where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. the march to dow 20,000. can the trump rally power on? we'll talk to investors about where to put your money to work right now. breaking news. the ecb out with its latest rate

decision. highlights from draghi's conference straight ahead. all that plus taxes, jobs, and the economy in the trump administration. we'll talk to a long-time friend of the president-elect. real estate magnate richard lefrak. as the last hour of "squawk box" begins now. live from the most powerful city in the world, new york, this is "squawk box." welcome back to "squawk box" here on cnbc. i'm joe kernen along with andrew ross sorkin and melissa lee. our guest this hour is richard lefrak. we're going to hear from him in just a bit. how about apartments total? do you know? >> no. somebody knows, but i don't know. >> bigger than a bread basket. is it like a hundred thousand? >> no. it's enough. >> well, we want to know whether we should listen to you on apartments and stuff and

commercial -- there's a place called lefrak city, isn't there? >> there is. and a place called newport city. and soon a place called solamia. >> down in miami. >> yep. >> and the hotel is now open. >> yes. the one. right. you know something. >> we're still working away in the capitalism. >> i want to know and we're going to ask you in a second, i want to know whether we should think the same thing about a booming real estate market and reflating world or whether higher interest rates make that a head wind to all that. i think you already know. >> i think i have an opinion on that subject. >> first on today's top rally, the index now away from 20,000. we've got the hat ifs we haven't ordered them.

t after the ecb policy decision. and the dow's now up 18. those are close to the best levels of the session. hard to believe with all the qe and everything else unchanged, but looked like it was actually a hawkish or at least had a hawkish tone because the euro rallied. >> initially. back to predecision levels. >> back to europe. the ecb out with the latest policy decision leaving key interest rates unchanged. central bank also saying it's going to be extending asset purchase program through december of 2017. mario draghi will hold a news conference at 8:30 a.m. eastern time. of course we're expecting more details on the central bank's bond buying program. and we will monitor and bring you any updates. we're also seeing a rise in the yield on the 10-year bund.

and take a look at the euro. spiked following the news but has since given back that gain. also, one economic report on the agenda today. we're going to get initial jobless claims in about 30 minutes. congress looking for claims of 250,000. that would be down 13,000 from the prior week. the big story obviously is the averages but there are a few stocks to watch this morning. shares of lululemon on the move. earned 47 cents a share for the latest quarter. 4 cents above estimates. also boosted its earnings outlook and announced a $100 billion stock buyback program. and retailer sears out with quarterly numbers, posted better than expected loss. however, sales at stores opened fell more than expected and revenue dropped year over year for the 20th quarter in a row. our guest host this morning, already had a few words with richard lefrak, president of the lefrak organization. is it best, richard, just to keep things really simple,

rising interest rates could be a problem for certain parts of real estate? >> well, i think there's two factors to consider right now. number one we have a new president. he's saying to everybody he's a jobs president. if the economy flourishes, if he creates jobs, that's just super for real estate because command, you know, the fundamental demand for things will improve. businesses will start. they'll expand. people will buy homes because they're more secure about their incomes. and so that's all good for real estate. the other side of the argument is that interest rates going up and the strength of the dollar may discourage some foreign investment in this country. so you've got two things kind of going on at one time. >> you've known donald, the president-elect, for a long time. >> almost 50 years. >> almost 50 years.

your dad was a pretty successful guy and so you had something to start with with lefrak, right? >> i did. >> and donald, a lot of people think that -- so you have some similarities. >> and we met when we were both in our early 20s. >> if he says he's going to create jobs, do you have a degree of confidence that he'll be successful at that? >> i have a very high degree of confidence. because he's a very laser focused kind of a person. and he's obviously accomplishment oriented. when he says i'm going to be jobbed president, that means he's going to be jobs president. he's going to focus heavily on that. i think he's made it clear he's very interested in helping people in the middle. he hasn't, you know, he's never been a pludicrat. people shouldn't mistake that. >> when people say he -- if you become president, that same ego is going to make you want to

succeed in probably a single minded way that maybe not everybody would be quite as -- >> if you want to get the kind of precursor of this -- of the intensity of how much he wants to do well, just look at his schedule the last three weeks of the election when he was written off by some of the alleged experts. and how hard he works his way into it. he's very sincere about succeeding. that's his nature. he wants to win. his vocabulary is about winning. i don't doubt he's going to do everything in his power to try to create a better america, to try to create good jobs for people, and that sunshine will reflect on everybody. not just the wealthy. >> okay. so we're going to -- we'll

revisit all this. and then -- you know, i never really understood cap rates that great. but will you explain which parts of real estate -- you understand multifamily, hotels, commercial. are some going to do better and some are going to do worse? can we talk about which one? >> which will do better -- >> i've got a new zealand dollar put trade that i'm thinking about. and i want to know whether i should maybe short real estate. >> we will come back to richard on that in just a moment. >> and then there's a vietnamese dong that rebecca -- >> she knows all about. let's get back to the record setting day on wall street, shall we? the dow closing on another all-time high. where should investors be putting money to work right now? yoining us is rebecca patterson from bessemer trust. always good to see you. this is a rally i think most people underestimated. we're here now. do you continue buying? >> i think at this point you do.

the economic data in the u.s. continues to come out strong. i mean, we have business confidence at a two-year high. consumer confidence at the highest level since the expansion started. jobless claims at multi-decade lows. these tend to be leading indicators. right? so they're telling us where actual activity is going. we have the fed meeting next week. we don't want them to get too hawkish too quickly. we have a lot of people who have been in a lot of cash and a lot of bonds. so you could have -- i don't want to call it the great rotation. >> how much upside is it -- how long is the music going to play? you remember when chuck prince said if the music's playing you've got to dance. >> right. everyone looks at your calendar year performances. if this rally's going, there's short-term investor that are going to be reluctant to get out because they can't afford not to get that number. but i think in terms of how long does it go on, at some point

next year we need to see the talk followed by walk. you need to see legislation passed and it can't disappoint increasingly higher expectations. and you need to see those animal spirits start to come through. >> you think it's a mistake to sit on the sidelines waiting for a pullback for a day when people say to themselves this is actually, this has run awhile. >> we will get pullbacks. i don't want the market to go in a straight line. i want to see days of consolidation and pullback. if you get those, you should add in. i wouldn't wait. we saw that after 2009. investors who didn't get in right after '09 said it's run too far, i'm going to wait. then here we are and they're still sitting in cash. >> you mentioned a possible take on the fed being a little too hawkish in its projections. doesn't the ecb decision today in terms of extending but tapering the bond -- doesn't that give the fed cover to be a little bit more hawkish? >> that's a great question. so the ecb, you know, they're

likely because of inflation's still low, the economy doing better but still tepid, the political risks next year. i think they will extend. so you have qe more easing continuing. weaker euro. that's going to give you a stronger dollar which actually means that the fed doesn't have to do as much as it would otherwise. the dollar is acting as a restraint on inflation, on the economy for the fed. it's going part of the work for the fed. so i actually think it actually means the fed might not have to do as as much. i'd go the other way on that one. >> okay. >> you know, i just -- having done this for awhile and watching how people think, there's just sort of this perception that we're kind of overreacting to the possible positives of a trump presidency. and there's kind of the market's on borrowed time. it's sort of -- maybe it doesn't end this week or next. but -- or next month. but maybe in a month or two. like the day of reckoning. i don't think anyone's saying what if it's four years.

what if it's eight years. what if we're actually in a sustained business expansion, private sector expansion. and, you know, this is, like, nothing compared to what's coming. i don't think anyone's really considering that side of things. >> it's a great point. expansions don't die of old age. even though the expansion is ten years, there's no rule. right? so if we do get more fiscal stimulus. that could give this expansion another lease on life. but the fed will tighten more. and that's what tends to snuff out the expansion. at a certain point you have higher interest rates and inflation. then we eventually roll over. it could be a couple years away. we do have higher valuations though and a tightened. >> we got to go but instead of buying the entire market, what would you do? >> i'm looking mainly at domestically oriented u.s. companies. i think we are in a strong dollar environment. that helps them --

>> so small caps? transports type of -- >> yeah. we're leaning more cyclical not surprisingly. i also am not going to abandon my more defensive stocks. this is going to be an up and down market. it's not a straight line up. having a bit of diversification in portfolio, there's a lot of stocks that get thrown out with the bath water after the election. as an active investor to go through the folks that got thrown out after the election, the consumer staples, the utilities, et cetera, there's some gems in there. if you can get them at better entry levels to get a cushion when we have those volatility problems, i think that's going to pay dividends in the end. >> all right. rebec rebecca, thank you. >> thank you. coming up, drama in the trump's twitterverse. and a lot still ahead on "squawk box." we'll head across the pond to london where one investor will tell us his stock idea, where he's putting money to work right now. plus we're waiting to hear from

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welcome back to "squawk box." a little bit of drama in the trump twitterverse. in a twitter fight now with chuck jones. jones is president of united steel workers 1999. he accused trump of exaggerating the number of jobs he saved in indiana. trump said he saved close to 1100 jobs there. jones says it's closer to 800. trump tweets, chuck jones has done a terrible job. the steel workers calls chuck a hero who tried to save jobs. trump blasted the entire steel workers union. chuck jones says he's been harassed on twitter since the feud began. but he said he was right to call trump out for misleading people about the number of jobs saved. >> bad idea.

bad idea to get in a twitter war with trump. >> another guy afraid. afraid. richard, fearful. richard lefrak -- like a safe place. because all these triggers. >> can i just say in a fact based society i think it's terrible for people to get -- >> afraid? >> no. i think it's terrible for people to get criticized for saying that something is not completely accurate one way or the other. by the way, you call me out if you don't think i say something accurate. >> no, i don't. >> there's one thing -- there's a difference in sayi ining it's accurate and saying we're hood winked and lied to. >> we had the news two days ago on softbank. when i say news, we put it in quotes. the news came out, you know, two, three months ago that he was making this investment in the united states and then it's announced as if -- and trump announces as if it's this other

thing. >> we knew it was going to be $50 billion in the united states or $100 billion with saudi arabia. >> where can you spend $100 billion of technology companies? only one way to do it. >> richard, it wasn't 1100, it was 800 damn it. >> he picked up the phone, called carrier, said whatever he said to him. my guess is it was a modest amount of intimidation in there or persuasion. he said, hey, stop that. and they did. and jobs were saved. and the union guy probably has a little egg on his face -- >> agreed. but then i think -- anyway, i'll leave it. >> so there's positive forces for most of real estate but it's going to have -- the entire industry is going to deal with higher interest rates which means lower cap. >> it means that the returns expected from owning real estate go up and the values go down a

little bit. but if demand is good, then the values go up because rents or occupancy go up. but these things, you know, they kind of balance themselves out. actually, there's a more -- much more important issue which is that the new proposed tax law or some of the proposals inside the tax law are quite different for real estate. for example, no deducting business interest. well, that's pretty cataclysmic change for real estate. and so many of the things that the real estate industry will be facing will be these new changes in the tax law. so yes they're going along with the rate, but if business interest is not deductible, that's pretty dramatic. if they say no depreciation but you can write off the investment

in the year it occurs, that's pretty dramatic. a lot of these things are floating around the ufos and they have to be identified before we know really what's going to happen. >> each one of these things have people trying to stop that from being in the law. >> yes. there's definitely a lot of fear about what -- >> what are the chances the things you described are in the final version of the law? >> i'd say at least 50%. because, you know, congress has written a set of rules. you know, at least that's the point in place of beginning. some of these things are definitely embedded in that. >> so that would be for which part of real estate? commercial real estate? >> yeah. and then you have an additional thing where they said itemized deductions will be limited. so states like new york, new jersey, and california which are

high-tax states for higher income people that would limit the amount of deductions they could get. all right? and that's pretty serious. as a posed to texas, florida, et cetera where they have no income tax so that wouldn't be that big a deal. so the politics are going to be very thick about this. but all of these things are going to have tremendous changes make a traumatic difference. >> i'm curious if you think there could be speed bumps. a lot of things in terms of all the good fiscal stimulus that could hit the economy that's out there and at the same time we're seeing mortgage rates skyrocket. we're at two-year highs. granted they're historically low, but if you're somebody who's in the market for real estate, all you know is that your rate is much higher than even a month ago. >> in buying a home, the charges could go. if rates do accelerate quickly,

it will have a dampering effect on home values. but in commercial real estate, if you have to rely on a 4% cost of long-term money, you shouldn't be in business. i mean, you don't belong in business if that's the underlying of your business. a lot of people are going to choke. but, you know, if interest rates go from 4% to 5%, they should be able to sustain themselves. and frankly rethuls in the high volatility leverage commercial real estate rules which cause the banks to be more cautious have shift ed investment away. >> if you do remove most of dodd/frank, how much -- what is that going to unleash in terms

of lending relative to the fact there are these standards and other capital requirements. >> the banks are happy they have a cocoon where they're not being overly aggressive about real estate lending. other sources of capital have come into the market. there's all kinds of other people that will lend you money. it's just more expensive. and that will have one on new development. but overall i don't -- you know, i don't see it being that big a change. because i think the banks are happy lending half. and you better come up with the rest yourself. >> fair enough. >> all right. i actually want to ask -- next time to ask, he owns hotels. how does president trump -- if

diplomats want to use it, how's he going to walk that line if people come and decide to use his hotel? is it benefitting, a trust? i mean, he's spent a lifetime building all this. >> i thought nobody cares about this. you don't care about the conflict? >> i'm just wondering how he should handle it since richard could address it. >> we'll ask him in the next 35 minutes. >> this is a time you could ask instead of irrelevant times like with paul ryan yesterday. this would be a good time. ♪

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coming up with, we're minutes away from the initial jobless claims. we'll bring you the numbers plus mario draghi getting ready to speak at a news conference. we'll bring you updates. "squawk box" will be right back.

we're seven seconds -- just seconds away from initial jobless claims. futures have improved a little bit rick santelli standing by with the numbers. >> all right. 258,000. that's down 10k from an unchanged, unrevised, unaltered 268,000 last week. and if you recall last week was a bit of a jump. maybe we're not at the lowest. maybe we're not close or below 250,000, but still low by historic standards. seems to be stabilizing. but the big news of the morning of course is that mario draghi extending but extending at a lower pace. is this the beginning of a taper? it certainly seems that way. mario draghi unlike our fed has very few trap doors to extricate himself from this painted corner

he is in. nonetheless, let's look at it from the market's perspective. the spread is narrowing. why? bund yields popped up. they shot up very close to 50. they haven't really lost much ground. the euro spiked up and it came back. we had a big equity move. many were trying to contemplate why it was one of the biggest. i'm sure it's not only about what we've learned today. but it is in part and there is some proof there. consider the way the dax looked yesterday. look at the way it was hardly skewed on its path and how much it's up in the past two days. remember there's something unique about information. we don't all get it at the same time. andrew, back to you. >> thank you for that. meantime, hedge fund manager bob bishop just making news.

his pick is rio tinto. joining us now is bob bishop founder of palo asset management. it's bond only fund is up 30% year to date. listen up because when he was at the delivering alpha conference, he picked tech resource. if you followed his advice, you would be up 315% on that stock alone. bob, tell us why rio tinto is your pick of the moment? >> okay. well, let me -- it's probably -- tech's up probably 65%, not 300% since i gave it. but yes it's up 300% for the year. >> okay. >> why do i like this stock? yeah. rio tinto, why do i like this stock? first of all, it's the world's best mining company in the world. and it's -- it has the potential to have double the earnings next year that it has this year. when you look at it, it's just

you're talking about five or six times earnings. to me you've got two to three years more. even when if you look at a 2018 case for ree owe tin toe. halfway between the lows. you're getting earnings close to $9 and $10 a share on a $40 stock. >> so if the earnings are -- if you think the earnings will double, what do you think the stock should do? >> i think the stock should double. again, we're paying 10 or 11 times for the world's best mining company in the world. even if it doubles, there's up to the earnings after that. you know, commodity cycle ten

months ago. in my mind you've got emerging markets they're all starting to feel better, starting to see economic tail winds. you've got the u.s. and europe both talking about which are all intensive. so i think prices are going to continue to move higher. you buy the dips and there's a lot of tail winds to the world economy for the next few years. >> how much, bob, is -- how much of a thesis is the infrastructure spend? i'm assuming you're -- >> i should -- >> how much does this supercharge this trade? >> let me -- yes. for compliance purposes, yes, we owned and continue to own ree owe tin toe. again, if you just took today's prices for commodity and again, i don't think we're a -- at most

we're mid-cycle. if you just took the deck for today. rio's going to be earning between $6 and $7. probably more than $7 next year. probably more like $7.50 next year. you've got people out there assuming they're only going to earn $3.50. there was a note yesterday of somebody who recommended the stock. and they were using a $55 iron ore price. i personally think iron ore has fairly good fundamentals moving forward. and so i think, you know, when people start to realize the potential here, that's when the stock will work even more so. >> okay. thank you. and we will of course watch this as we have watched your other picks. by the way, you're staying in tech resources still, right? >> yes, we still own tech resource. we own a lot of it.

very good story and syzinc and copper story. what will surprise people is tech zet is going to go down in the next year and a half or so. >> appreciate it. talk to you soon. >> thank you. >> tech resources seeing $14 billion market cap. it's amazing. >> been on a wild ride. >> 580%. >> yeah. >> let's get back to our guest host richard lefrak, president of lefrak organization. so out of all the things you have -- so you got that hotel and mostly a lot of multifamily. right? >> office buildings. >> so let's say you ran for president. which i don't think that's probably going to happen. >> yeah. >> at this point, anything's possible.

you had something that was like

a custodian -- >> my suggestion has been if he's not going to sell which i understand why he can't or may be difficult, is to have what might be described as a corporate monitor that effectively has access to the company, works for the public,s and one, three times a year writes a report to the public to the extent there's any conflicts. everybody can see what the conflicts are, if they're there or not. >> like a conflict czar. >> steinberg. >> that's who you suggested. >> that's who i suggested. >> it's like a nanny in the company. >> look, i'm believer sunshine is the best disinfectant. that way everyone knows. and you know or don't know. that's all it is. and you can make your own views. >> it would be up to the person -- what's it called? >> you know, how you view everything. stays in one of hose -- his

hotels one night is he going to change. they could book 10,000 rooms and it wouldn't change his mind. once he's got it in his head, it's in his head. so, you know, i think that they're going to just have to come to grips with the fact that there's a person who has a business that's going to continue to be operated by his very capable family, his children. and that he will do everything within in his power to make sure that there is -- >> here's the thing, richard. here's the thing. given so much of his campaign and campaign rhetoric was around the conflicts that hillary clinton and her family and the foundation presented, i think that -- no, no. you're looking at me like i'm crazy. this went on for years. >> but that's the key point. he's in the private sector here doing what private sector people do. she was able to build a -- >> now he's going to be in the public sector. >> but he's already got billions of dollars.

they had zero and went to a quarter of a billion dollars selling influence -- >> i'm not dismissing at all the conflicts that were presented. i said so on the air. that's not the issue. >> where was the custodian when she was secretary of state looking at all -- every bill clinton speech, his affiliations with laurel university. >> maybe there should be been. >> you didn't write a column about that. >> we talked about it constantly. and "the new york times" wrote about it constantly. they were the ones who outed half of this stuff. they did it because there were financial disclosure forms that were required. >> and that weren't done. >> perhaps weren't done. which is another reason for a corporate monitor. >> i have a great idea. he should change his name. >> that's a whole other way to handle it. >> trump is such a good -- >> the trump brand, it's a brand. he's the president. >> to the extent that we all want the president in this

country to succeed and actually be able to pursue some of these policies, the idea of having a cloud hang over this because half o'country or at least some people are going to question whether what he's doing is going to ultimately enrich the family, it seems to me why not just push that noise off to the side. >> if you go to 3.1 billion it's different. with government. >> joseph, joseph. if in four years from now or eight years from now all of a sudden they're building hotels in taiwan or they're doing something in russia or whatever, people are going to say why was this happening. and why do you even want those questions to happen? >> we don't know whether the trump name in four or eight years it's a good name to build under or a bad name to build under. >> he was doing it beforehand. it's not like he escalated his -- >> i'm not disagreeing. i'm just saying put the sunlight on it so there are no questions. >> i don't know. >> i mean, i find myself leaning more towards andrew's stance especially after he sold every share he owned in june.

why did he do is that? so there won't be appearance of clon flikts. it's the appearance of conflicts not necessarily, you know -- >> i'm just saying -- >> you need to calm down. >> by the way, democrats, others are going to try to have hearings about this every other day. why are you trying to get rid of the issue? >> because it's impossible. i think there was some merit to when he said when people voted for me, they knew exactly -- they knew who efs, they knew what we were getting into at the time. i don't think he ran for president to enrich himself. and -- >> i don't think so either. >> but i do think other people have run to that. >> if anything, he's -- he took a huge risk with his brand. huge risk. >> no question. >> right? and he's in our conversations much, much, much more focused. >> by the way, i would like to take him at his word on all of those things. i'm suggesting to you there is a

huge number of people in this country who are going to continue to ask these questions. if you could remove the questions, why not? >> well, if somebody has an easy way to vet every hotel guest that walks into one of his hotels -- >> impossible. >> we have all sorts of rules about lobbying and disclosure and all sorts of things. >> someone who in the private sector had already done really well. not someone who went from -- wh i love mostbout tempur-pedic mattresses...

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welcome back to "squawk box." mario draghi the ecb president currently in his press conference. let me tell you what's happened today so far. you've had the ecb come out and essentially say extend for six months or in six months the idea that they will view additional quantitative easing. the extension is for nine months. however, they tapered down. what this is seen as maybe a dovish paper or call it sweet and sour monetary policy. and markets have taken this vastly different ways. look at the euro. the euro is weaker suggesting this is a dovish move. the german 10-year shot up and came back down. it came back down a little bit off its highs, anyway. now 43. the long end of the curve sees this as a hawkish move. let's look at s&p futures which were rattled by it this session but came back and are now heading higher. ultimately draghi says he sees a

moderate recovery of the euro economy and still subdued inflation. christian says all this means is ecb ain't raising until 2019. >> thank you. we'll check back in with steve as he gets more headlines. iowa's governor was chosen by the president-elect trump. let's bring in tom vilsack. also former governor of iowa. secretary vilsack recently attended the u.s./china joint commission meeting in washington, d.c. what would be your advice to the new ambassador, secretary? >> well, i think he needs to continue to be tenacious. to continue to promote the quality of american agricultural products in china and the need for china to create greater synchronization with their approval process and continue to work to open up the beef market.

i think those are two really critically important aspects of our relationship on agriculture with china. >> how would you describe the relationship right now that china has with the united states and in particular its view on the incoming administration? >> somewhat of a paradox. in one case, in one circumstance, you look at the amount of agricultural products and they are our number one or number two customer. we want to maintain that relationship. i'm sure there's some concern about the statements that have been attributed to the incoming administration in terms of the relationship with china. obviously the issue with taiwan may have complicated the situation as well. that's why i think the branstad appointment may be a good move on the part of the administration because of the relationship the governor has. >> and the question is how tight is that relationship and can it withstand comments like the one that trump made about taiwan or rather the phone call that he had with taiwan and perhaps if

he's going to currency manipulate. >> you know, the chinese have many options when it comes to purchasing soybeans and other products. i think that has to be a concern. it's over $20 billion market opportunity for us. and it's something that farmers and ranchers absolutely depend on, it's a good relationship with china in terms of ag trade. it's also important for us to have a stake in all of asia. which is why it's going to be important to see what they do with trade agreements with the countries involving the tpp trade agreement. that's another opportunity for us. and there are now some serious questions about it. >> secretary, we have to keep it short today. but we'd love to talk to you. hope to talk to you again very soon. appreciate it. >> wow. it's the divided states of america on twitter today. >> yeah? >> yeah. you getting them? >> i'm getting some. actually, i've since gotten some while that interview was taking place. i was not looking down. >> andrew, you know what else?

>> what's that? >> those tax returns. we got to get those too. >> by the way, you will get them. they're coming. >> i know. i hope so. i do. up next, we got to head down to up next, we got to head down to the new york stock exchange, jim cramer will join us live with his take on today's top stories. we'll be right back. hey gary, what are you do oh hey john, i'm connecting ourrains so we cashare our buwhy dot you justo toa, amthinkorswim'chat rmse. where you can she strategies, ideas, even actual trades so we cashare our th market professiandtoa, thousands of other traders i ow. your bra told my brain before y told my face. beber? tap into the kedge of other traders on thinkorswim.

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let's get down to the new york stock exchange where jim cramer joins us now. jim, have you seen a dow 20,000 hat? i'm just wondering whether the order's in yet. we're going to need them. >> oh, you know, i remember the dow 10,000 that was just such a terrible peak. what we really need is to see like maybe a dow going better hat. i mean, that would be good. only certain stocks in the dow like first national bank of trump up another 23 cents today before the opening, i'm sorry, bank of america. it's incredible. >> s&p 22, 050 -- >> what did you think of the environmental protection guy they hire snd. >> are you baiting me? >> no. >> i'm ecstatic. >> he's anti-coal, he's pro nat

gas. >> i'm ecstatic. i've got 40,000 parts per million of co 2 that i'm talking right now and i talk a lot of it as you know. >> right. >> and to classify that, the guy at sodastream, if you classify it as a pollutant, you're putting a pollutant -- it's ludicrous to have it as a pollutant. that's not going to last. >> i've been pro natural gas since aubrey came on the show when first started. president obama would agree, it's just the epa has not done anything to be able to let's say make the natural gas case stronger. i'm hoping that they do that. because natural gas is much better than coal. >> the response to this, i watched the guy last night, tucker carlson, i don't know where he finds these -- he finds people. i don't know why they call on the show, but i watched the case being made that this guy, seriously, i mean, this guy is the worst person -- i'm surprised when he walks around

people just don't want to kill him. that's what this woman -- >> he's aggressive guy. he's kind of a negotiator. he's a negotiator in this. but look, natural gas has been the fuel of the future. i think it's been lumped in with coal. and i'm hoping that's no longer the case. >> what's al gore thinking after he goes in and meets with him and then scott pruitt gets the nomination? he sighing somewhere rolling his eyes. >> black lung antirainbow coalition they got going there. >> right. the ecb, was it more hawkish? >> the ecb is trying to give everybody something. the one to buy was deutsche bank in the cross hairs of the justice department. what an opportunity. >> yep. all right. we'll see you in under five. when we return, we'll have some more with our guest host and final thoughts from richard. stay tuned. we'll be right back. a basketball costs $14.

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our guest host this morning is richard lafrack. it's been awhile since we played your theme song. you used to come on just to hear it. >> that's right. freak out. >> since the election, have you

done anything with any of your property, said i got to do this, buy this, sell this, anything? >> no. the only thing i did was i said i got to make sure i finish all my refinancing because interest rates definitely moving a little north. >> what we try to do with some of the sacred cows, whether it's mortgage interest or charitable or any of those things to get rid of these deductions, has that ever happened? >> well, they've had, you know, big changes in the tax code in '86, for example, that had pretty strong effects in real estate. you know, that all -- it's all out there, but nobody -- >> republican congress and republican president, can it happen? >> definitely there's going to be tax reform. >> the infighting though. >> there's definitely going to be a lot of infighting and a lot of special interests pushing their own agendas, but, you know, i think that donald is -- president-elect trump is going to do what he wants to do and get a new tax code. he's made that clear. and he's usually pretty good

about doing what he says he's going to do, especially now. >> well, it's good to finally have you now it's safe to go back out there. >> the water, right? real le i'm delighted to come back and see my old friends. >> thank you. >> thank you. in the meantime, make sure you join us tomorrow. "squawk on the street" begins right now. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. futures holding in after wednesday's monster rally that took the dow, s&p, transports and russell to new highs. lots to work with today including the ecb extending qe with a taper, some whipsaw action in the euro this morning. claims below 300 k