strength this year. the mexican peso has been a reflection of the trade epps tensions, the vix for volatility index, many more. >> and the banks strong performer, the second best sector on the whole for the year having started so slowly like energy did as well. >> that'll do it for "squawk on the street." happy new year and best wishes for a happy and healthy one. kayla and "squawk alley." >> the same wish for you guys. happy new year to both of you. 7:00 p.m. in moscow, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪

good friday morning. welcome to "squawk alley." with me at post 9, kelly evans and mike santoli. good morning to both of you. carl and jon have the day off. join us today, elevation partners co-founder robert, tech and markets. we start with oir top toir, russian president vladimir putin responding to the obama administration's decision to expel russian diplomats and impose sanctions on two of the country's intelligence agencies. our john harwood is live in washington with the latest on that. john? >> we've heard from president obama yesterday. we heard this morning from vladimir putin saying he was not going to engage in a tit for tat response. now it's up to president-elect donald trump who conceded last night he's going to accept a u.s. intelligence briefing on this issue which he has dismissed in the past.

>> after he talks to them and i think they're going to be overwhelmingly certain of their evidence, he's either got to come out and acknowledge that this did happen and that it's a problem for american democracy, not just for secretary clinton, or he's going to have to come out and far more dramatically than in the past challenge our entire intelligence institutional network, and that's core to what we do in the world. i don't think he's going do that. >> another player involved, the congress, where you have democrats but also republicans, john mccain, lindsey graham, paul ryan all saying they do not think russia has the u.s.' best interests at heart and mccain and graham saying they'll seek tougher sanctions. donald trump will have to lay out where he stands going forward on this u.s./russia relationship. >> john harwood in washington

with the latest. relations between the u.s. and russia one of the many market risks for wall street and silicon valley for the next year. when you think about how far the markets have come, we started with the taper tantrum, then volatility out of china, brex it, the trump election, and here we are with major averages up, some in double digits. we not only emerged unscathed but in some cases stronger. >> i'm not sure that you can make the case we emerged stronger. we're at higher valuations and thank goodness for that. faced with the choice of dealing with uncertainty from a high price or a low price, you'd rather start from a high price. but i do think what the investors have to deal with this year is that the rules are going to be different. we know that. we just don't know what they're going to be. and there's no reason to believe that it's inherently negative for the market, but i think that as an investor how you evaluate it shgt i just think it's harder to evaluate this year than any time i've ever been in the business, and i don't see anything that changes that until

we hit a new equilibrium. we have enough experience to know what's going on. >> people come on and say the one thing we can bet on is a deregulatory kind of bent. we talked to a former s.e.c. commissioner, a republican guy, trying to encourage innovation, lower the cost of doing business, all of that kind of thing. you at least know it was going to move the that direction, or do you? >> i assume that it will, but i would like to suggest that wall street is really deregulated today. i mean, if you look at it, the growth over the last five or six years has been almost entirely from predatory products, and that's just as true of the fin tech coming out of silicon valley. >> i was going to say that's not necessarily wall street. ? that's everybody. >> cracked down so much because of dodd/frank and everything, it's pushed that activity out of that part of the country and into yours, sir. >> absolutely. what i'm suggesting here is i don't know how much more of -- you can have more of those things pip just don't know how much more deregulated you can get. what i do think you can do, though, is do things to inflate

stock prices and valuations around the world. but at the same time eventually that's going to blow up. >> the traditional banking sector will tell you, look, our hands are more tied than they used to be in certain respects. i do wonder, roger weather the spotlight on the cybersecurity, cyber warfare angle, is it anything different than what's been going on for a long time? do you expect any changes for companies approaching this area? >> i think there will be serious business opportunities created by the fear of new kinds of cyber threats. and i do believe that individual civil liberties are at greater risk and as a consequence you'll see -- i've seen interesting business plans of folks who, for example, who are doing things with video in cars so you can capture interactions with police or other drivers or road rage or whatever. >> roger, we're going to continue this conversation, but we have the musical interlude on the show. >> all in favor of musical

interludes, so let's go for it. >> for that we go out to bob pisani. >> hello, everybody. for 140 years there's been a tradition of partying and singing on the floor of the new york stock exchange and of course that tradition got a little more sedate after the great depression. one thing has never changed and that is barbershop quartets singing and communities singing on the floor of the new york stock exchange during the holidays. here's art cashin to lead in the annual rendition of "wait till the sun shines nelly." arthur? ♪ wait till the sun shines, nelly, and the clouds go drifting by ♪ ♪ we will be happy, nelly, by and by sweethearts you and i ♪ ♪ wait till the sun shines, nelly, by and by ♪ >> whooo!

>> thank you. happy new year. happy new year. arthur, another tradition. playing of the bagpipes. ♪ >> beautiful. ♪ ♪

>> all right, arthur. happy new year, duncan. happy new year. thank you so much. thank you so much. and, arthur, one final tradition that is happening here in the last few years is many of the old members from the floor come down here, there's 50 or 60 of them, people who have been here, some as long as you have although where m are retired now. >> it's a great reunion time for all of us. >> arthur, of course, "wait till the sun shine, nelly." some things never change and let's hope they never do. guys, happy new year to everybody. back to you. >> thanks to art and bob for bringing us that special tradition we have on the floor. the lyrics about that song are about toasting the promise of what's to come. when you think about what the next year will bring and all of the uncertainty, do you think geopolitical risk is priced into the market? >> i think i'm going to get art

cashin in my band. >> you're overdue. >> to me i don't know whether 2017 is a good year or bad year. i literally just cannot tell what's going to happen. i think on balance the new administration will do everything in its power to make the market rise so, i think in that sense it's going to be really good. what i worry about is that the levers at their disposal right now are pretty much already blasting things out pretty intensely so it's not clear to me that they can do much without overheating the whole thing and how long that process will last. but as my former partner used to say, you know, we don't want them to cut off the market before we get the speculative blowoff we all so richly deserve. >> oh, really. thinking about your world, roger, and the floor of the new york stock exchange here, i mean, we didn't really have that many blockbuster ideas this year, but we also didn't have a high-profile unicorn implosion

like -- >> oh, i don't know about that. so i think that 2016 for silicon valley was a year where we've been forced to confront some unpleasant truths. and i look at this and go, it starts with the social companies because it's impossible to imagine the election turning out the way it did without the tools that facebook and twitter and google gave to extremists to promote their points of view. and it was the year of zenafits, and i look at that and think to myself, the real problem was that it was the first year after smartphones. we didn't have that big monster product cycle driving everybody. >> what about pokemon go? >> well, great thing for one company, right? and that's the point. we're back into what i would describe as one of those in-between times where there will be individually great

stories, right? snap presumely will get public early many the new year. s.n.a.p. is a pretty amazing -- i admire the company because they had courage not to take an offer early. they believed in their mission and they were right. i mean, it doesn't get any better than that. but this is also the year where uber is going to have to figure out how to make money or how to refinance itself because, you know, the expectations that got it to the $69 billion valuation have not come through in terms of the p&l, and so i think it's going to be a year of individual stocks, kayla, and we'll have to just watch. >> does it feel like the very big established companies actually re-establish themselves as leaders in the areas we're all watching, whether it's a.i., virtual reality, even autonomous driving cars? you hear about all that's going on inside of a google and elsewhere. >> i don't know how that's going to turn out because i think this is going to be, you know, not the year of a.i. and not the year of driverless cars. it will be another year of waiting for a.i. and waiting for driverless cars. >> a lot has been happening on

those fronts. >> of course there is but not in the way you can invest successfully. you can invest the dream. you can invest in the sales pitch, but the fundamentals aren't there yet. what we've learned in silicon valley is these things always take longer to start than you think, and once they start they happen much faster than you think. we just -- i don't think any of those big things kick in in 2017 but i would love to be proven wrong. >> we'll have you back in 2020 to talk about it. roger, happy new year. >> great to see you all. take care. we'll see you next week. >> when we come back, more on the latest from washington, d.c., following putin's wait-and-see response. then the final trading day of the year is upon us and we're breaking out the 2017 cnbc playbook. and recode's kara swisher on why silicon valley should actually be looking forward to a trump presidency. all that and more when "squawk alley" returns. ♪

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welcome back. russian president vladimir putin saying he will not expel any u.s. diplomats from moscow following the obama administration's decision to kick out 35 russian diplomats and impose sanctions on two russian intelligence agencies. that came in yesterday. former u.s. department of justice assistant attorney general for national security, john carlin. welcome, sir. >> thank you. glad to be here. >> we've talked a little about the overt things happening from the obama administration in response to this hacking into

other matters, but there are also said to be some perhaps more covert ways in which there is going to be retaliation. can you describe some of these methods that might be at play? >> i think what you've seen here in terms of the public response are significant steps and part of those steps included the sanctions taken against both individuals and organizations but also significantly expelling not only 35 suspected intelligence operatives but shutting two facilities inside the united states. i believe that's unprecedented in terms of denying access to those facilities that were used for intelligence purposes. and also, and i highlight for all the businesses watching out there, if you're a c suite, pay attention to the code that was released by the fbi and department of homeland security. make sure that your information, technology professionals are looking to see whether your systems are compromised because what you saw yesterday was the declassification of formerly highly sensitive code including

m malware and addresses that have been linked to russian activity. i think you'll see sign os-that activity not just here in the united states but across the world. in addition to those public actions, you're right, i think you've heard the administration say there will be some things you see and some things you don't see, but the bottom line message, the important message is there are going to be consequences as we head into this next year, there are going to be consequences when nation-states attack using cyber enabled means. >> jon, is there precedent for a president taking a decisive action like this with just three weeks left in a term? and my second question is when we get confirmation hearings next year for rex tillerson, do you think that this complicates that confirmation process or do you think that possibly it gives them an even bigger leg up because it has put russia and our relationship with russia back on center stage? >> look, i don't do the politics of it all, but this is a nonpartisan issue. this is about america.

and at the end of the day, if a foreign country decides to disrupt our electoral process by attacking american institutions and stealing information, if a foreign country decides to attack a company like they did with soldierny because of the content of a movie or a financial industry, as we saw with the iranians, or tries to steal our economic property, our intellectual property as we saw with chinese actors attacking american companies, when america is attacked americans come together, republicans, democrats, independents, and say enough is enough, there's got to be consequences. and this is the fourth time now you've seen us apply this new approach of saying there are norms. just because it happens through cyber enabled means doesn't mean you get away with a free pass, but we are going to take responsive action. >> so let me just ask a little about the objects here which might be undermining the very message you're discussing. the fact it comes at the very end of this administration's tenure, jon, as opposed to over

is summer or earlier in the year when officials knew about what was going on here, you've seen the response from the russians. they're saying all right, obama administration, it's a desperate measure by the dying administration as they go out the door, and undeniably that is part of the way the message has come across the international community, so it's not as pot t potent, right, as it could have been if it was delivered months earlier. >> i think as we move towards this new approach of figuring out who did it, making it public, and imposing consequences that we have to continue to get faster at it. so what you've seen is several years ago when we ip dieted five members of the people's liberation army, that was the first action that had been taken along these lines. figuring out who did it, naming it publicly and showing we're willing to do that and imposing a consequence. and you've seen since then follow the same approach when it comes to north korea, iran, to the terrorist group that was stealing information try to use it to create kill lists. we've got to stay committed to this approach and if we can get faster at it, we can and we

should. and that will require in part the cooperation of those who are victimized. so i'm encouraged today even though we're heading into a new year, you want to make sure you take a look at what was just released to see if your system has been compromised and if it has to make sure you report it to the authorities. >> i was going to ask you in that vein you mentioned that corporate america should be doing precisely that. what about everyday americans? what about the rest of us? is there a sense attacking is strategically targeted towards groups in this case like key parties or is this the kind of thing that somehow the rest of us need to be on guard about all the time, every day, even s'more than maybe we already have been? >> that's a great question, and yes, we need to be concerned about it every day. what we're seeing is not just governments being targeted and not just companies large, small, medium sized companies by crooks, terrorist, and spies, but we're seeing everyday users. one thing they do that's particularly nefarious is they compromise your computer, in other words, they put code in it

so they can see what you're doing. they try to steal your pass words and sell them for money, but they also turn your computer into part of a larger machine, a so-called botnet, an army of zombie computers that they use to attack, and they used it to -- they used that for the attack on the financial sector that i talked about earlier, the iranians. they used it recently just this fall using things connected to the internet of things to bring down the internet temporarily. so, yes, we're all at risk and one of the key challenges this year for the new administration is going to be how can we make our systems more secure, how can we have a better partnership between government and the private sector so as we continue to exploit all the benefits of moving digitally we're not at risk. >> and the trump transition team has signaled putting high priority on cyber issues. thanks for join us. i think. now i'm terrified. john carlin this morning. still to come on the show, britain's ftse 100 hitting a fresh record high today as we

count down to the european close. and later, why investors could be in for a shock when trump takes office and what you can do to prepare. for "squawk alley" after this.

it is the last trade daigh of 2016, so we're breaking out the playbook on ways you can make money in the coming here. steve liesman has a look at what to expect from the economy. >> predictions for economy in 2017 depend chiefly on how much president-elect donald trump's ambitious agenda gets through the new republican congress. all of that leads to one easy prediction for 2017. we're about to see a whole lot more stock and bond market volatility when it comes to the making of economic policy than we've seen in the past. congress leaks like a sieve and everyone like thes to talk so the chance of one proposal or another becoming law will go up

and down with each news flash. it goes without saying that congress will become at least as important as the fed at moving if not the whole market than certain parts of it like banking stocks when it comes to reforming or repealing dodd/frank or health care when it comes to obamacare. second prediction, the fed will hike at least twice but likely three times, depending on how quickly new fiscal programs are put in place. final prediction, growth will accelerate to the 2.5% to 3% range but sustained growth north of 3% will likely elude the next president at least for next year. steve liesman, cnbc business news. >> that's our steve liesman. we are counting down to the final close of the year and across europe. see how all the major indices have done as they have closed the books at this point, mostly in the green. a very tough start to the year. you see the ftse up handily, one of the better performing indices over there. the pound took it on the chin

and that helped the performance there. german dax underperformed the u.s. markets for the full year but still solidly positive. the cac in france, similar story. mid to high single-digits gains across the continent despite the negative bond yields over there, effects of brexit. in italy, the rolling banking crisis that's been going on there as well, struggled relative to its european peer bus has had a fourth quarter rally along with the rest of the markets. as for the euro, you see the big downtrend in the last couple months although it has bounced in just this week actually sort of closing on -- closing in on some of those losses for year. not a great year as we mentioned for the pound. look at that chart. it's relatively ugly, but maybe that's a little bit of a pressure relief valve for the uk economy. >> when you think about the euro and the pound specifically,

elections in france and germany that could further weaken the euro. some strategists were surprised not to see parity by the end of this year. >> didn't quite get there. about 3% euro, u.s. dollar/euro parity. these markets have continue founded the consensus. you can only own the dollar going into this past year and that peaked january or so so we'll see how it goes this year. >> still to come on "squawk alley," why investors could be in for some big changes come january 20th. what the experts say you should do to prepare. and later, recode's kara swisher says she has seven reasons silicon valley should like trump. all coming up. thiss the od system.

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stepped of surveillance measures following the christmas market attack in berlin. a man is in custody in australia after authorities say he made threats online about new year's festivities. he was arrested yesterday on a tip from the public. he is not linked to any cultural groups. authorities are investigating what caused a train to slam into a fed ex truck in tennessee. yesterday's crash happened as the driver was turning onto a private road with no arm crossing. the fed ex truck driver was

conscious, talking about the scene. no injuries on the train either. and he was known as the panda grandpa. the world's oldest male giant panda, pan-pan, died this week in southwest china. he was diagnosed with cancer last june. pan-pan was 31 years old, which is equivalent to about 100 human years. i'm wondering, does that mean that kelly evans, are you the equivalent of 100 panda years? is that how that works? >> i'm going on one oh-something. >> who knows what that makes me? i'd be the george washington of pandas. >> old as an oak. >> we always knew you were an old soul. >> exactly. makes me feel better. see you later, bill. >> thanks, bill. back to that geopolitical story. russia's president vladimir putin says he will not expel any u.s. dimts in response to u.s. sanctions. nbc news' lucy kavanagh is in moscow. lucy? >> reporter: kayla, good evening here in moscow. the expectation was by all

casualties that russia would retaliate with a similar move as the u.s. kicking out american diplomats here. that is what happens traditionally. that is what's happened every time the americans have kicked out some russian diplomats. and that is what the russian foreign minister sergey lavrov went on television to announce today, that he was recommending, that the foreign ministry was recommending that russia retaliate as is their right to do so traditionally. president putin, however, threw the entire rule book out of the window effectively saying not only will the russians not kick out any americans in retaliation but also in his statement accusing the u.s. of resorting to, quote, irresponsible kitchen diplomacy saying that they will instead plan to further steps to restore u.s./russian relations based on the policies of the trump administration. putin went on to sort of twist the knife a bit to say he invites the children of all diplomats accredited here in russia to new year's and

christmas celebrations at the kremlin. so what he's doing here is two things. first of all, putin is known for these kinds of unexpected last-minute surprise decisions. he is at least domestically winning a lot of points because it makes russia look strong, it makes him look like a benevolent leader who is not succumbing to petty diplomatic tit for tats. it also effectively throws the ball in president-elect donald trump's court because putin does want time prove relations with the u.s. the sanctions have been crippling the economy here. the oil prices have of course as well. but putin is interested in turning a new page with the u.s. and is effectively by doing this move putting that ball back in trump's court. it is a move that has been received well here in russia. a lot of folks that we've spoken to on the street say they want, they expect, in fact, donald trump to turn the page, and that's how it's playing out here. kayla? >> thanks so much.

a breakdown of how the story is playing out in moscow for us. 2016 was coming to a close on a high note but now we have three down days in a row and russian sanctions are highlighting geopolitical risk as we head into 2017. joining us now is ib ra ham ribari, citi's director of global economics, and kevin koran to talk about the economy and the markets in the coming year. abraham, let's start with you. just set us up in terms of the tramg, the global economy right now. you see a real uptick in recent months in things like manufacturing indicators and global markets followed suit. are we entering the new year with the advanced economies on some kind of a role, do you think? >> yes, i do think so. i do think we're ending this year on a bit of a high note. we're seeing i think the first'ing lgs first inklings of positive animal spirits that we haven't seen in a while.

more broadly in europe, for instance,. still relatively moderately. i think we're in this 2.5% to global growth range we've had over the last few years but at least it's now positive. >> does that imply that it's a comfortable zone in terms of growth on the inflation front and for financial assets or do you think we're going to have perhaps a couple of inflation scares along the way? >> i think this positive growth trajectory does come with an uptick in inflation. even though that's been broadly welcomed by everybody, it brings the question of how supportive monetary conditions will continue to be. central banks have been a hugely supportive factor for asset prices but now in 2017 i think for the first time we're going to see a very -- at least a very slightly tightening monetary environment. that could be a challenge, but i think for the time being the poz groift environment is going to

compensate for that slight tightening in monetary conditions. >> kevin, if we can more or less agree on this growth backdrop and perhaps maybe positive policy implications for business and capital in the u.s., the question now is how much of that has already been priced in with this rally we've seen in markets? >> a fair amount of it. if you think about where we are, you've got a $25 trillion stock market sitting on an $18 trillion economy. if you look at forward estimates for the s&p 500, we're at a premium, something like 17 times earnings. that's higher than what we've seen historically. while we've increased our growth expectation looking out from here, based on expectation and better treatment of capital, we have to acknowledge that valuations are higher, so we have incorporated into our forward view a little built of a head wind from valuations, also a little bit of a head wind coming from some moderation in profit margins, wages are coming back, putting some pressure on margins. and lastly, another big thing that not many people are talking

about is the -- are stock buybacks. we're seeing maybe a little bit of a slower prospect for stock buybac buybacks, return of capital to sflors the year ahead. those are the three things that weigh against the otherwise good backdrop of improving growth. >> on one hand, you have companies still buying back their own stock, but on the other hand, as we were talking about earlier, you could potentially have tens of billions of dollars in newly issued stocks from companies like snap, uber, air b&b. do you think there's demand for that much supply to come to the market? >> i think so. if you look at net issuance, it's been a negative number the last several years. corporations have had a lot of cash flow amend there has not been a lot of capital spending. one of the things that might change going forward, particularly if we get some relief on the tax front would be a better environment for capital overall. and give than asset prices are rather full, if you look at risk

premiums, they're rather low, it seems that there is appetite in the market for some new issuance, which would be getting back to the way things used to be years and years ago, before we started to see a net drawdown of shares outstanding. so we're not there yet, but the environment seems to be setting up for something like that. >> seems to be kind of a theme going into 2017. kevin abraham, thanks for your time and happy new year. >> thank you. >> as we head to break, take a look at shares of twitter, down about 0.5%. jack dorsey taking to the platform yesterday asking user what is changes they'd like to see in the next year. topping the list, an edit tweet button, something says twitter is, quote, thinking a lot about. "squawk alley" will be right back.

top picks in tech. we're talking alphabet, facebook, microsoft, and yahoo. we'll crown the winner of the halftime portfolio challenge of 2016. all starts top of the hour on "the halftime report." see you then. >> sounds like a strong finish to the year. thank you. president-elect donald trump taking the oval office in 22 days from now. with the new administration comes new policies that may impact your tax bill. cnn.com's kelly grant joins us at post 9 with tips for the year

ahead. hi, kelly. >> great to be here. the big question for investors is going to be what will trump do that will impact your 2017 financial plan. there are smart things you can do at the outset of the year. first thing you want to think about the using your bonus to frontload your 401(k). great opportunity to lock in the pretax contributions early, which will give you more money in your paycheck later to be able to pivot for smart investment moves or saving depending on how we see the trump policies shake out. you want to check with your company policy that could end up losing some of that employer match if you do your 401(k). stretching your i.r.a. contributions. but there is a proposal that will go in front of trump early next year that could change the tax advantages, could limit it for anyone inhairing a i.r.a., you have to pull that money out within five years. some advantages you might want to think about to bift an adviser would be looking at things like certain types of

trusts, life insurance, or converting to a roth i.r.a. monitor some of the tax strategies early in the year wm we'll keep an eye on that. >> i have questions about donor advise funds but i'll save that for another time. >> will be a big one. we saw lot of changes this year. >> didn't know much about them before. ch kelli with an "i." rick santelli has "the santelli exchange." rick? >> hi, kelly. my prediction for 2017 is that stock markets might track a lot higher. 20,000 and beyond. a new frontier. witness the voyage of the dow jones. its mission, to seek out all-time highs with new growth and productivity, to boldly go where it has never traded before. yes, i'm pretty excited. i think that there is always uncertainty in the markets. the current uncertainty about the new frontier is that we have a president who's really never been a politician.

we have a republican senate and republican house is that that's still filled with establishment politicians and that ultimately it's all about the legislation. and i couldn't agree more. but i think that's an added bonus if most of that passes. i really think that part of the reason we are rallying is because we are going from klingon to cling-free. what do i mean by that? whether it's foreign policy, whether it's how we deal with russia, how we regulate markets, how we look at markets, whether we consider the fed, who has really less control in the entire marketplace now than it ever has before when you consider look at all the issuance in corporates, trms of dollars, look at all the high yield. none of that really was controlled by fed, maybe ecb played an indirect hand in making it juicier because they said, hey, i think we're going to buy those and the entire world rushed to race them on that trade. but i think going from a klingon establishment mentality to

something completely cling-free, we're going to see things that have been on the books for so long, today there was an article about sarbanes/oxley. yeah, it cost a lot for small entities and it really hasn't captured any large criminals, has it? all of these things are saddle bags. we can argue about how much bigger the economy is the as the mule in this metaphor will be, but there is no doubt when you lighten the load, even if you have the same animal carrying it, you'll go a lot farther and a lot faster. kayla, back to you. >> all right. thanks so much. rick santelli, the final "squawk alley" "santelli exchange" of the year. when we come back, recode's kara swisher on seven reasons why silicon valley should be looking forward to a trump presidency.

welcome back. the white house forcing russia out of a compound in glen cove, new york, as they respond to those sanctions that were just slapped down. >> we'll keep you posted on that. as we count down to the final days of 2016, let's look forward on what silicon valley will look like next year and how will the election affect silicon valley? one of kara swisher's latest pieces digs into this. it's entitled "forgive me,

techies, but here are the seven reasons why silicon valley likes donald trump." kara swisher is the executive editor of recode. she joins us now on the cnbc news line. you admit in the piece you write it somewhat >> you do say that the transition team has been much more engaged with the tech community than in the past. how so? >> well, they just feel like they're getting communication -- better communications with them and that they're going back and forth much -- in a much easier way. i don't know if that's entirely true. i just think they're surprised they're getting any communication since they were so opposed to the trump campaign. so i think that they're getting any pleasant communications is a surprise to them. >> what do you think the first policy moves from companies will be? i mean, these tech companies are among the -- i would say most common offenders of the fact that they store, you know, multibillion dollar cash piles abroad. do you think that they will

actually respond to some of the policies that have been discussed so far with their actions? >> i think the repatriation of all that money. it's not like obama didn't try to do this. trump can do it because he has the house and the senate. they want him to cooperate. they want to see. it's not like it hasn't been wanted to be done before. it's just how we're going to do it. how much taxes are safe. what they're going to demand for doing that. what kind of side deals they're going to do. are they going to be required to create manufacturing facilities in the u.s. or invest in retraining or something like that? i think that that money is coming back. what will be interesting is what the companies do with it. whether they hand out to shareholders or create these manufacturing -- whether they buy up companies. i think that's probably the thing you're going to see is a whole lot of m&a activity. there's a lot of money flowing back. that will be interesting to see

what they buy and what they don't buy. >> right. it seems people are salivating. mike, you were pointing out, how do we translate the amount of money that's over there into the amount of cash that people actually spend back here? >> yeah, the estimates vary about in terms of how much is actually held over there just in ready cash, how much is investments, how much is profits that are built up in some other assets. also, these big -- the very biggest companies that have the vast majority of the cash, microsoft, alphabet, and the rest, they don't lack for cheap capital right now. the question is if they are incentiveized to bring it over here, will they feel like that's kind of a windfall that they want to put to use as opposed to, you know, just using in the regular course of business, and that, as kara says, m&a is a likely beneficiary? >> i wonder, kara, when we talk about other ways that they could invest or use this capital, what about this whole cyber issue? i mean, is it possible that with all the hacking and with all of the vulnerabilities and a lot of the technology that's been deployed -- not necessarily talking about stuff coming from the big companies, but, you know, even the cheap internet

enabled devices that we have all around us now, if it the trump administration starts really trying to crack down on some of this stuff, does that put silicon valley in a vulnerable position, or how will they respond? >> i think we're already in a vulnerable position. most of our phones are manufactured in china, right? that's the interesting question. should we see returning some of the -- they'll make that argument that some of it should be returned here for those issues alone, and, you know, i heard all kinds of things that we should be making phones in the u.s. now, i think -- i don't know how much real impact it's going to have or else it's just a p.r. release. you know what i mean? the stuff like sprint and soft bank which -- they were bringing them -- they were going to make them the best.

there's going to be a lot of dicht things that had will happen with money, but it's not clear at all what that is. >> you and i have discussed before this idea that, yes, these companies are creating or pledging these new jobs, but it comes after a multi-year cycle where they've laid off 53,000 workers. i'm wondering what you think the state of journalism will be in 2017 as we all seek to keep fact checking this administration and the companies that are working with it. >> i think it's very easy to blame the media. it's the media's fault.

there's major secular issues happening in this economy around jobs. first in manufacturing, which is going to have an enormous affect on job growth and job creation. when a lot of jobs are replaced by robots and drones and ai and stuff like that. >> clig global manufacturing going around the world and these companies moving. again, fine, go ahead and blame the media, and if it makes you feel better, but the media. that's not really the outcome rupt so that this behavior is unchecked. i mean, i don't mind being unpopular. it's fine. you just have to continue to focus in on -- on infractions and problems that -- and that's just pointing out some of the

lies that happen here. >> that's a major secular issue. >> kara swisher, always good to hear from you. we wish you a happy new year. >> thanks a lot. >> all right. coming up, how netflix is giving parents a hand on new year's eve. squawk alley back after this. ri you got the amazing new iphone onhe house by ching at&t... what??....and you t limited data because you havedi? (lghs self in disbeli okayjust aore eps... get thipho ousit's ol! and unlimid data when you stch to at&t and have directv.

netflix is giving parents a hand on new year's eve. they've created countdowns to 2017 featuring viewers' favorite netflix tv and movie characters. they've been available since wednesday and allow children to celebrate a midnight countdown on their own schedule. last year peak viewing for the countdown