shortly as well. all the things equity investors are watching. and that could bounce prices around. meantime, yesterday's move shows you how tentative this market is. finally, just on natural gas stabilizing, although a little lower after that big drop yesterday. back over to you. >> all right, jackie deangelis. jackie, thank you. watching stocks here with a mini rally, second day in a row. haven't seen that for the first two days of a year since 2006. over to you, carl, for "squawk alley." >> good morning at 8:00 a.m. at tesla headquarters in palo alto, 11:00 a.m. on wall street, and "squawk alley" is live. ♪

good wednesday morning. welcome back to "squawk alley." kayla tausche and myself at post 9. jon fortt's on assignment and inside.com founder and ceo jason calacanis and greik-off partners ellie wheeler. guys, good morning to you both. first to our top story. a busy morning on capitol hill. just moments ago, house republicans along with vice president-elect mike pence making a joint statement on the future of obamacare. we have team coverage this morning. eamon javers in washington, john harwood outside trump tower. eamon, let's begin with you. >> reporter: good morning, carl. you just heard from the vice president-elect, mike pence, saying that repealing and replacing obamacare is going to be priority number one for republicans. he made some news in his remarks here on capitol hill, suggesting that president-elect donald trump on the day of his swearing-in, january 20th, will head straight to the oval office and remove some of president obama's executive orders and also begin enacting some of his own executive actions to create the foundation, as they're describing it, for repealing obamacare.

but you're also seeing possibly little bit of daylight here between what president-elect trump is tweeting publicly from trump tower, suggesting that republicans ought to be careful, that democrats right now politically own the political fallout from obamacare and that republicans will begin to own it as they take more action on it going forward. but not a lot of specifics here from republicans on the hill as to what they exactly propose to do to replace obamacare. you heard the vice president-elect talking a lot about market-based strategies. and a key point for republicans is adding more choice to the overall health care system. and then, of course, lowering costs for consumers. all of those are things that republicans are discussing here on the hill this morning, carl. >> eamon javers. a lot of the news this morning politically regards the aca, the fcc, and now the cia. donald trump also took to twitter this morning to talk about his doubts over claims that russia influenced the presidential election. john harwood, as we said, outside trump tower with the

latest on that. john? >> reporter: carl, you mentioned the s.e.c. donald trump has just formally announced that jay clayton, a securities lawyer, is going to be his choice to be the chairman of the securities and exchange commission. longtime lawyer for sullivan & cromwell, somebody who's represented goldman sachs, among others, a lot of mergers and acquisitions work. i think this is likely to be well received on capitol hill by republicans. but the real fascinating story this morning is this growing rift between donald trump, the president-elect, and the intelligence community that he will be directing in just a little over two weeks. it started last night when the president-elect put out a tweet saying that the "intelligence," and he put the word in quotes, briefing that he was scheduled to have from the intelligence community had been delayed until friday. and he speculated, "maybe they're trying to get their story together. very strange." then this morning he tweeted an affirmation of a statement that

julian assange, the wikileaks founder who has been hiding out in the ecuadorian embassy in london, somebody that senate majority leader mitch mcconnell and vice president biden have both called a high-tech terrorist, saying that it could have been a 14-year-old, rather than russia, hacking the dnc and john podesta and all that sort of thing. so, that is at odds with the intel community that's coming here to trump tower to brief him on friday. and paul ryan, the house speaker, is well aware that he gave an interview this morning to hue hewitt, the conservative radio host, saying that, well, donald trump's not had his briefing yet. he called julian assange a sink fit for russia and said, hopefully, the president-elect will get up to speed after that briefing on friday, we'll see. mike pence, who eamon was just referring to when he was on the hill, said that the president-elect was just expressing healthy american skepticism toward that information, but that approach is going to be tested, because

john mccain, the chairman of the armed services committee, is having a hearing on this tomorrow. blooming clash coming not just between the president-elect and the intelligence community but also between republican national security hawks on capitol hill, carl. >> going to be a busy end of the week, for sure. john harwood at trump tower, eamon javers in washington. jason, ellie, the president-elect suggesting that briefing is delayed because they're trying to make a better case. how is this all ringing out west, jason? >> well, i would say we're starting to see exactly how disastrous the trump presidency can be, tweeting first and then getting the intelligence second is the worst possible strategy you could have when dealing with cyber attacks. you don't want to force the intelligence community to tip their cards and explain how they get their information, who they get their information from, when they got it. what you want to do is meet with the intelligence community, respect the hard work that they do, the dangerous work they do, where they put their lives at risk, collect the information, and then you don't want to

explain to julian assange, you know, the pr arm of putin's organization, or to putin how you're getting your information. trump is an absolute unmitigated disaster right now. this is incredibly dangerous when it comes to cybersecurity. you never explain how you catch people. that is like a proprietary secret that you would never want putin to understand because then they can close those loopholes, they can close the access we have to their information. it's a disaster. >> well, ellie, the intelligence community is largely viewed as non-partisan just because of the way that it's structured. but i'm wondering, if you're the president-elect and you have gotten results from tweeting before -- you tweet and you criticize the congressional restructuring of the ethics organization, and then they dial that back and they completely undo what they had wanted to do. and you want to make sure that you get a straight call from the intelligence community. i mean, is there anything to be said for before you establish that relationship setting your expectations?

>> i mean, this is how he's functioned throughout the campaign. and obviously, as he's setting up for office. but no. i mean, i think this doesn't make any sense. of course it doesn't in the world in which they're operating. but it's not just the intel communities, it's also third parties that are virtually unanimous, so private security firms and cybersecurity experts across the board are fairly unanimous here, so i don't see much benefit. if you even think about it from a business perspective, politics aside, if you thought about a ceo of an organization, of course, that's, you know, how trump views himself and has been, you know, publicly disparaging your own kind of research and analytics team and saying essentially a competitor's is far better. i can't imagine that ever happening. so i don't see the parallel. i don't see how it's hopeful or productive here. >> jason, a lot of defenders of the president-elect argue, what's wrong with, as pence said, having an american, sincere, healthy skepticism?

others still point to the failures that the cia has had in the past, regarding iraq and wmd. do you just look past those things? >> yeah, i think what you want to do is you want to back your team in all things first, hear the information first, and then form an opinion. forming opinions and then spewing them on twitter at 6:00 a.m. or 7:00 a.m., without thinking about them or having collected the information is idiotic. let's not sit here and try to normalize what trump is doing. this is insane behavior. and we're sitting here trying to pretend that, oh, but he's so good with twitter, he's so good with this negotiating on twitter. this is not a normal negotiation. we're dealing with superpowers and information about rigging and dismantling our democracy. there is nothing normal about this. this is idiotic, dangerous behavior. let's not sit here and try to normalize it. >> yeah. one thing we don't know, ellie, is you know, 16 days from now,

he's inaugurated, whether or not -- and it's been long called for, long suggested -- but whether or not the tone of his tweets, the frequency of his tweets changes in any way once you're officially in office. do you think there's a legitimate expectation that that would happen? >> no. why would there be? why you're expecting a fundamental change? i just don't think that's going to happen. i think people have been saying that for months. it hasn't happened. there's no reason to think it will, even though the consequences continue to rise. >> ellie, senator lindsey graham had said that the president should draw a red line when it comes to foreign policy and tweelting. do you agree with that? do you agree certain topics should be off limits on twitter, for the sake of the country? >> of course. there are certain things that, you know, having 140 characters just does not provide the nuance required for a lot of the, you know, incredibly complicated and important topics that are being, you know, pulled down into sound bites. i mean, there's benefits, sure, in terms of getting the public

engaged, you know, in conversation, but this is going above and beyond. and of course, there should be, but i don't know how you go about doing that, how you end up actually enforcing it when it doesn't seem like our incoming president is going to care. >> as we're talking, that is president obama, also on capitol hill today meeting with house and senate democrats behind closed doors, talking about ways, we're told, in which to salvage any elements of the ac thank they can. meanwhile, we'll take a break from politics for the moment, guys, talk briefly about tesla today. watching those shares. the electric carmaker did announce that it delivered over 76,000 vehicles last year. that narrowly misses the goal of 80,000. deliveries down 9.4% in the fourth quarter compared to a year ago. that comes as ford and toyota announce a new partnership with several other automakers to help speed development of in-vehicle smartphone apps, an effort to prevent companies like apple and google from monopolizing the connected car market. a lot going on in mobility,

jason. as we await ces and see what kind of surprises may be in store there, what's your take on tesla? >> well, you know, elon always sets his targets very high, and they have accomplished a lot. the cars are simply brilliant. and he's so far ahead of everybody. i mean, the ford announcement that they're going to have, a 300-mile-range car in 2020, is so laughable when he's delivering 76,000, 77,000 cars this year that can do approximately that range. in fact, i upgraded my roadster, which is a 6 or 7-year-old car, with a 325-mile battery from tesla last month. he is so far ahead that these other companies are getting to where he was in 2009, 2010, 2011. so, i think the distance between these companies is getting wider. and you know, now that he's playing the sort of energy game, putting batteries on walls -- i mean, people are literally putting batteries on their walls. people are putting the solar tiles on their roof.

he's got an energy company here and materials are coming in one end of the gigafactory and product is coming out the other. the factory is extraordinary. so you know, when you see a bunch of companies that are behind holding on to each other and saying, hey, if we do this together as a group, it's going to be better, that's like a bunch of drowning people who don't know how to swim grabbing on to each other. they're just going to sink faster. >> ellie, ford says it will have a 300-mile-range suv by 2020. granted, that's a few years off, but that is the same range as the highest range tesla sedan. so, if they can match all of the standards that tesla has been working so hard as a first mover to get, and arguably, these detroit auto companies have much greater resources behind them, do you think tesla's under siege here? >> no. i mean, i think they're going toward what tesla has today in, you know, four to five years. tesla will be far beyond that. generally, i think having more people working on this problem is a good thing, particularly well-resourced companies, given that it is difficult, it is

time-consuming, it is capital-intensive. but i think tesla's far ahead, as jason mentioned, and i also think that the history of a bunch of large automakers kind of coming up together to, you know, kind of deploy technology well is not a particularly strong one in their favor. i think it will be interesting to see, but i think that the answer for how we interact with vehicles going forward isn't necessarily apps built on a ford and toyota-created platform. >> interesting. you know, jason, yesterday -- >> you know, keep in mind. >> go ahead, jason. >> keep in mind that these companies were trying to deride tesla three or four years ago, laughing at them, saying that the range was the big issue. now they're totally flipped and they're like, oh, my god, we're going to have a 300-mile-range car! the truth is, when you own one of these cars -- and i own three of them and i have for five or six years and driven them exclusively -- range has not been an issue for five years

because the supercharger network tesion la deployed is so ubiquitous and so fast that these companies are thinking range is an issue. the range issue was solved by tesla four or five years ago with the supercharger network. so when you talk about skating to where the puck is going, these guys are skating to the concession stand. they're going the wrong direction. they don't know what they're doing. they're completely incompetent. >> well, certainly being underestimated -- >> it's a morning of incompetence. >> i can tell, disaster and incompetence. jason, ellie, good to talk to you guys about a number of topics today. appreciate it very much. we do want to check in on the markets. the dow trading about 100 points, or at this minute, 85 points within that 20,000 mark that we have been watching for several weeks now. take a look at where the major averages are. they're all in the green. the nasdaq outpacing the s&p 500 and the dow this morning, holding on to small but largely broad gains. north american crude slipping slightly this morning. take a look at where we are in wti. well, it was in the red, but now it's up about 0.75%.

and you have gold and the dollar moving in opposite directions today. the dollar index taking a leg down, taking a breather from a recent rally that it's seen post the election, down about 0.75%. meanwhile, gold is up fractionally at this hour. >> when we come back, our next guest says the most interesting tech trends for the new year have already found their way into your home. plus, why a new report is raising red flags over donald trump's pick for treasury. then later, a first on cnbc with the ceo of harman live from ces. we'll discuss everything from driverless cars to smartphones.

with growing uncertainty around the trump administration's tech policies, can the sector build on its 12% surge from last year? joining us is denny fish, portfolio manager. we keep hearing the theme will be waiting for secular trends like virtual reality and ai to take hold. how does that color the way you're investing in the space? >> yeah, thank you, kayla, for having me on. yeah, we actually, when we think about a couple of the key trends that are starting to really gain some steam here as we enter into 2017 and think beyond 2017 into 2018, you know, two of the biggest ones are the internet of things, as you mentioned, and artificial intelligence and

machine learning. and that combination of factors that really builds upon this trend we've seen with cloud computing over the last three or four years, and it's really the next iteration of that. so we're looking for companies that both directly and indirectly benefit from those trends. >> i want to interrupt briefly here. chuck schumer, of course, speaking for the democrats after meeting with the president this morning on capitol hill. >> for years, they promised every conservative group in america that they'll repeal the aca "root and branch." until today, they could make those extreme promises without suffering any consequences because they knew democrats or president obama would ultimately block any rollbacks in aca. but now republicans in congress are again like the dog who caught the bus -- they can't keep all the things that americans like about the aca and get rid of the rest without throwing the entire health care system, not just those on aca, but those with private insurance, into chaos!

they're going to -- one of the things they'll hurt the most is rural hospitals, right in their heartlands. the minute they enact this repeal, they're going to suffer dramatically in 11 state capitals, many in red states today, rural hospitals are protesting the republican action. so, we're here today to warn the american people that the republican plan to cut medicare, medicaid, repeal the aca, will make america sick again. instead of working to further ensure affordable care for all americans, they seek to rip health care away from millions of americans, creating chaos in our entire economy. now, as my colleagues will outline shortly, the republican plan would kick millions off coverage, whether it be medic e medicare, medicaid, or the

affordable care act. it would cause premiums of many people to skyrocket. the 75 million who are covered by private insurance, their premiums will go up, too. it would harm hospitals in rural areas and it would put insurance companies back in charge. we stand here united -- united! we are a united caucus. we are two united caucuses, united in opposition to these republican attempts to make america sick again. and now i want to turn over the podium to leader pelosi. >> thank you very much, leader schumer. i associate myself with your remarks. you covered a lot of territory there. i, too, want to join you in commending the president for his presentation this morning to us. it was one of confidence. it was one of values. that the affordable care act was transformative in terms of what it meant in the lives of the

american people and that health care in our country is a right, not a privilege. if there had been no other reason for us to pass the affordable care act, one compelling reason was cost, the cost to the individual, to families, to businesses small and corporate and to the public sector was totally unsustainable. so we had three goals. one was to lower cost, other to improve benefits, and third, to increase access. in all three of those arenas, the affordable care act has been a big success. when we talk about rolling back the affordable care act, we're also having an impact on medicare. the affordable care act prolonged the life, extended the solvency of medicare. expanded m eed medicaid. this is very important to america's families. the former speaker once said

politics is local. in this case, all politics is personal. so when leader schumer talks about the 75% of the people who get their benefits in the workplace -- and that is so -- they are affected by the affordable care act. >> pelosi and schumer on the hill after hearing from ryan, scolese and vice president-elect pence earlier, it does appear that obamacare is going to be one of the early battles that we see on capitol hill, beginning in literally 16 days. meanwhile, dow has not done a whole lot this morning, up 28 points, still within 100 points of dow 20k. i'll bring you up to speed on the markets and the internals there when we come right back. b

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welcome back to "squawk alley." we're keeping one eye on the events of capitol hill, another on the markets. we're watching the dow, the s&p and the nasdaq all in marginally positive territory. let's discuss the tech sector with denny fish, portfolio

manager at janus capital, who rejoins us now. denny, good to see you again after that brief interlude there. >> thank you. >> we were just talking about your optimism for artificial intelligence, for virtual reality, and for some of these secular trends, internet of things, that you expect will come to bear. but when it comes to individual stocks, what really moves them is earnings and the ultimate benefit that you think each of those trends will provide to the bottom line. so what do you think that benefit will be and how soon does that come to bear? >> yeah, so i think this -- as i was mentioning before, this is really as we think forward, the natural evolution of cloud compute i computing and the groundwork's been laid for artificial intelligence and internet of things for the last couple of years. and we do expect it to start flowing through to earnings of a number of companies that we've invested in. and if we think about how we've invested in the theme in general, you know, clearly the large platforms, i.e., the

googles, the amazons, microsofts of the world that have invested heavily in their compute architectures, silicon as well in google's case, as well as the algorithms and the machine learning capabilities to actually make this happen. and then you combine that with the connectivity that we have and actually pushing a compute out to the edge. and there are a number of semiconductor companies that we've invested in that we expect to get benefits as well. and so, those are, you know, two, you know, ways in which we're invested and specifically some of the names that we're invested in on the semiconductor side are zille yinkz, microchip on the microcontroller side. and in a more incorrect way in terms of thinking about internet of things, we're invested in flextronics, that's really developed capabilities over the last several years in terms of manufacturing internet of things. >> denny, s&p has some stats out this morning. we have the fewest companies, the lowest number of companies in the s&p tech index with

negative preannouncements since the third quarter of 2010, only 15, assuming it doesn't change in the coming days. do you think that actually portends good things for the quarter? >> well, it's always hard to tell in the quarter, but i think what you've seen just over the last several years -- and the semiconductor industry is actually a really good example of an industry that's diversified heavily over the last several years compared to what that industry looked like in the early 2000s. and therefore, the amplitude of the cycles have just been a lot lower. and therefore, it's been easier to predict earnings on a go-forward basis for these management teams because of the diversity of their end markets. so i think you combine that with also some pretty clear secular trends as well as around cloud computing that's allowed us to get more comfortable with forecasting the growth trajectory of these businesses. >> we've got to leave it there, denny. we appreciate you being flexible. >> okay. great. thank you. >> denny fish from janus. good to see you.

meantime, counting down to the close in the uk and across europe in about 15 seconds. seema mody's back at hq. >> hi, carl. good to see you. stock markets mostly lower in europe today for the first time in 2017, but still near a one-year high after entering the official bull market territory that we saw yesterday. the euro rising against the dollar today. eurozone consumer prices up 1.1% in december. a bit of breaking news, back to carl quintanilla. >> on may 7th, 2015, donald trump tweeted, "i was the first and only potential gop candidate to state there will be no cuts to social security, medicare and medicaid." now, the point is, trump didn't just say this in passing. he didn't say it in the middle -- didn't say it at a particular interview. this was a cornerstone of his campaign. he said it over and over and over again! donald trump said he will not

cut social security, he will not cut medicare, he will not cut medicaid. therefore, one of two things are true. either donald trump simply lied to the elderly and the working people of this country and just made campaign promises that he had no intention of ever keeping. that is one reality. or there is another reality, and that is, right now, before congress wastes an enormous amount of time, donald trump has got to come forward, maybe through tweets, one of his tweets, and say clearly that donald trump will veto any legislation that cuts medicare, that cuts medicaid, or that cuts social security. and if he makes that clear to his republican colleagues, we can save us all a whole lot of time and start getting to work

doing what this country desperately needs to have done. >> good job, bernie. thank you. okay. questions? oh. we have -- >> right? >> go ahead. >> all right, we'll make you available for questions. >> great. >> you first. >> bobby, you, too, question. [ inaudible question ] >> -- that the problem for democrats on this issue is still the marketing of obamacare? saying we didn't message it right. now you're trying to salvage this against this threat by republicans. and what makes people think this will work now when it didn't work in the past? >> our biggest problem was that once aca passed, people attributed every problem they had with the health care system, whether they were part of aca or not, to aca. and our republican colleagues and their message machine did it. now they're going to own it. and all the problems in the

health care system. and there have been many throughout the years. it hasn't solved all of them. are going to be on their back. that's why they're running to do this first is a huge mistake for them and the country. it's a huge mistake for them on the basis of aca, because they don't know what to do once they repeal. one of my colleagues called it repeal and run. but it's a huge problem as well, because now they're responsible for the entire health care system. and it would be on their backs. and i believe a year from now, they will regret that they came out so fast out of the box to repeal. >> go ahead, nancy. >> well, if i just -- i just wanted to say, briefly in response to your question. the fact of the matter is that the republicans over the last six years tried to make this an ideological debate, left versus right. and what we're saying today is that is not what this is. we put the aca in place because we found a lot of people

couldn't get health insurance, their costs were going up, their out-of-pocket expenses, their benefit package was diminished. now i think the debate has to be practical. what does this really mean to the average person? if you repeal this, what you're going to do is you're going to go back to the days when you pay more out of pocket, you can't get health insurance, your benefit package shrinks and you just have some skeletal plan or a catastrophic plan that doesn't cover anything. that's the difference. we are now talking about what this repeal means practically. forget this ideological debate on the left and right. i'm not interested in it anymore, and that's i think what we're going to point out. that's what we're going to fight. we're going to fight because we believe this matters to the average person. >> yes, ma'am. >> what's your assessment of actually stopping repeal in the senate? it would just take, if all the dems come together, it would just take three republicans to turn. do you think you could do that? >> well, you've already had rand paul say that he is not for repeal without some kind of

replace. you have a good number of other republicans who are really worried about this. now, the initial vote is an easy vote for them. it just says cut $1 billion. do it from somewhere. but when they come back, i don't even know, as leader pelosi said, whether they'll be able to get enough votes in their own caucus for an alternative. and i think they're going to have a lot of trouble. so i would say that they're going to have far more trouble than they ever imagined. and as they move through it, they're going to start losing people on their side. >> senator schumer, you have a number of red state democrats up for re-election in states that trump won overwhelmingly. are you really willing to tell them not to work with republicans on a replacement plan? >> we are telling the republicans, show -- if you are repealing, show us what you'll replace it with first, and then we'll look at what you have and see what we can do. we are not going to -- they're

repealing. we're not. it's their obligation to come up with replace first, and i think we have unanimity within our democratic caucus on that position. >> you don't want your red state democrats to work with them? >> will you give us an idea what president obama said specifically to the group about what he'd like to do going forward and how to stay involved? >> well, go ahead, nancy. >> let me first say to chad's question that it's a very different story to take something away from someone. so our argument in terms of the affordable care act is people have enjoyed the benefits of it. i'm sure you've seen the articles coming out of kentucky where people voted 8-1 for trump in districts, and yet, they all are enjoying -- many of them are enjoying -- over 60% of them are enjoying the benefits of the affordable care act and said i didn't vote to take that away. so, it's one thing to say to people this is what you can get. it's another thing to say this

is what will be taken away from you, and that is a different case and that is a case that we will make. as i mentioned earlier, the president's message was one of confiden confidence, confidence in the affordable care act and what it means and does for people, confidence in its implementation, confidence in the humility that we have to listen to other ideas if they have in their replace something that is -- that works, that gets results, then we shouldn't be opposed to that. but springing from not reducing benefits for people, not reducing the number of people who have access to care. this is about increasing access, improving benefits and lowering cost, and that's sort of how our conversation went. >> debbie stabenow and one last question. >> well, it's important to stress the fact that smoke and

mirrors are not going to do it for the republicans because this has real consequences. today in 11 different states, rural hospitals are speaking out against the repeal of health care that is in this proposal. tomorrow in michigan, cancer doctors that work with children are going to be speaking out at the state capitol about what this means when we put caps on cancer treatment for children, which we say that they now have a pre-existing condition -- >> now that the congress is back in session, the pressers this morning will convince you otherwise. the big question, of course, is if the aca is repealed, who holds the ball? who is responsible for any alternative? who is responsible for transition relief in between for consumers who may or may not be off the rolls? eamon javers, it's striking on this second day of the session, no one's talking about tax reform, deregulation, infrastructure, compromise. it's the aca that is going to be the hallmark showdown of the early days. >> reporter: yes, fascinating.

no one talking about immigration, the signature issue of donald trump's campaign. but you saw chuck schumer, the new leader of the democrats in the senate with that sign, "make america sick again." they are going to make republicans pay a political price if republicans repeal this, as nancy pelosi was just suggesting, and take benefits away from americans. they're pretty much prepared, it sounds from this press conference to sit on their hands and wait for republicans to design a program to replace obamacare. you do get the sense that that's what donald trump was talking about in his tweets this morning when he tweeted out an argument that democrats own the failure politically right now of obamacare and republicans will inherit the blame for anything they do if they take dramatic action now. he suggested in his tweet this morning that obamacare will collapse of its own weight. that might be the time for republicans to come in, it would seem is the implication of what donald trump is saying. i've been talking to members of congress up here on capitol hill and i just talked privately with

a member of congress who very much wants to repeal obamacare but is also a little bit frustrated with donald trump in the sense that he said that donald trump toggles back and forth, you can't get a clear sense of what he's thinking. these tweets come at you fast and furious and politicians down here in washington now having to react moment to moment to every single proclamation that donald trump makes over twitter. that's disorienting for some members of congress here on the hill as they try to navigate these new political waters. this is a very changed landscape politically up here on capitol hill, carl. >> eamon, we heard this morning from the vice president-elect, who said that the message that he wants to send is that the executive office will be willing to work with members of congress, certainly trying to strike a tone of compromise and of participation. but certainly, many of these members of congress have been using the last eight years to battle against the white house, specifically the republicans. and it would seem this morning that at least the tenor of the

discussion is still all or nothing when it comes to policy. >> reporter: yeah, absolutely. mike pence has clearly -- you know, a lot of white houses have a legislative liaison office, the person whose job it is to handle capitol hill. it looks like in this trump administration, that's going to be mike pence's role very much, as it was maybe for joe biden as a former senator in the obama administration. here you have somebody in mike pence who is experienced on capitol hill, who knows them. you saw the warm welcome that he got from paul ryan and the other republicans that say we have worked with him, we know him, we've been in the trenches with him in the political fights and trust his judgment. pence will be shuffling back and forth between donald trump and house and senate republicans explaining the politics, translating the tweets into legislative ease up here on capitol hill in a way republicans can understand. that's going to be a difficult challenge going forward over the next six months. >> eamon javers on capitol hill. we'll check back with you as the morning moves on. it has been a busy morning in washington, but it's also been

an interesting morning in the markets. it's the first time in a decade that the three major averages have all been up the first two days of the year. so, we'll keep an eye on that. up next, though, the headline that's raising red flags over treasury secretary-designate steve mnunchin. discuss.

big hour of "halftime" ahead. mark hasry, chairman and ceo of avenue capital group, where he sees opportunity after the

inauguration. we'll talk to him live right here on the set. plus, bank of america picking winners and losers in the energy sector. one of the stocks up for debate today is chevron. and the chart that just made josh brown extremely bullish on one dow component. "halftime report" top of the hour. kayla, see you in about 15 minutes. >> all right, thanks, scott. see you then. a leaked memo calling into question the role of treasury secretary-designate steve mnunchin's business practices during the foreclosure crisis in california. joining us now vorter who broke that story and author of the book on the foreclosure crisis "chain of title." he's a reporter for "the intercept." david day. it's good to see you. i want to dive right into this memo, which is fairly long, which you got a hold of, about an investigation that was attempted in the state of california by the attorney general about the foreclosure practices of one west bank. what did you read in that memo that told you that it was more than just bad customer service? >> yeah, this was an

investigation by deputies in the consumer law section, which is a division of the attorney general's office. and they did a review of thousands of publicly available documents that one west filed with the state during the foreclosures that they practiced and conducted here. and thousands of violations were found, including the back-dating of these documents, problems with the foreclosure sale auctions, as well as not honoring various notice requirements and timeline, waiting period requirements. and they extrapolated that there could be perhaps tens of thousands of these violations in a more widespread investigation. so, these deputies wanted the attorney general to file a civil enforcement action so that they could get full discovery and do a full public accounting of what one west was doing during these foreclosures, but the attorney

general chose not to move forward with the case. >> david, there have been so many companies that were either failed, were rebought, that were acquired by other companies during the financial crisis that have created so many problems for even the largest of wall street institutions. and they generally point to activity that happened before they acquired the bank. and of course, indymac failed. the fdic put it up for auction, then steve mnunchin and some others bought it, rebranded it and sort of refurbished it and resold it. was this activity happening when it was indymac, back before it failed? or was this activity that happened under steve mnunchin that he should have done something about? >> this is all one west. these are all foreclosures that were completed by one west in california, and the number is about 35,000 between 2009 and 2012. and so, there are very precise steps that you have to take in order to duly follow the laws of

the state of california in the foreclosure process, and the findings in this memo were that there were, you know, suggestive of widespread misconduct, to quote the memo. and so, this is something that, you know, as ceo, steven mnunchin is probably going to have to answer for, whether in senate finance committee hearings or wherever. and certainly, this is something that he's going to have to, you know, make an explanation of. >> although you use the words like suggestive and extrapolated. reading through the piece, what's the most definitive thing you can say either about the ag's decision not to pursue some of these or even ma nguyen chin's involvement himself? >> right, this is a limited investigation because of federal preemption laws, but just in one set of documents there were 913 documents that the attorney general's office found, and they found that 909 of them were back-dated. so while it's suggestive in the widespread sense, almost all of

the documents that they found had these violations. and back-dating is a felony under california law. as far as why the attorney general chose not to prosecute, there was no explanation given to these deputies. they have not come forward with an explanation as to why. and i think that kamala harris, who is now a senator and will have to vote on mnuchin's nomination has a lot to answer for as well in this case. and it's very well known the failure to prosecute any high-ranking wall street executives during the financial crisis, and i would say that this is some blowback of that. >> no, they didn't prosecute any high-ranking executives, david, but what a lot of attorney generals offices did was they worked alongside the doj and the agencies that do enforce laws at the bank level because they have federal charters, they're federal institutions, and they're insured as such, to actually bring some of these cases. i'm thinking specifically in the mortgage fraud case where you

saw any number of attorneys general offices bringing charges or inking settlements alongside federal institutions. why didn't the california ag's office enlist federal agencies to assist them with this if the findings this the findings were to dire sm. >> you'll have to ask the california attorney general's office that question. i certainly did. and there hasn't been a real satisfactory explanation as of yet. karm lahar ris' office along with 49 other state attorneys general did file that national mortgage settlement against big banks. one west was not involved in that. these are clear-cut violations according to the memo, and the question of whether there should have been a more wide spread investigation, some enforcement action that would have given the discovery rules under the legal structures to do more investigation of this is an open

question. i think it's one that, you know, practically all law enforcement has to really answer for us since there's this real hunger on the part of the public to get accountability in the wake of this terrible crisis. >> we'll see how much real estate this particular issue does get during the confirmation hearings with now senator harris involved in the confirmation as you rightly point out. david, i appreciate your time and reporting on this issue pchlkts we did reach out to the trump transition team for a comment. it was not immediately answered. still to come, we go live to the consumer electronics show in las vegas and speak the ceo of harman. that's a first on cnbc interview. we'll talk about smart homes to connected cars when "squawk alley" returns. esceut a0, pto yy

much within a narrow range all morning long. a programming note, billionaire hedge funds manager marclasry coming up in six minutes. inhe etom ove

busy, busy morning. started out kayla, with the focus on the auto sales numbers come in with aware. ford motor, the best s&p gainer of 5%. we pivoted to politics mid morning as we see the showdown with the aca taking shape on capitol hill and it's going to pivot yet again after lunch when we get the fed minutes, inflation, maybe the incoming administration. >> on the ac we have seen the stocks of the insurance companies move down. they've been trying to tweak their pricing in the markets that they comply with obamacare. but interestingly, there's some

expectation that whatever the republicans bring to the table wouldal lieu insurers to cross state lines. more competitive market, perhaps less pricing power. what that does to those companies bottom line still unknown at this point. >> really, there's that old saying it's hard to replace the engine when you're going 55 miles an hour down the highway but that's essentially what this is from a policy standpoint, you want to pivot to something more effective in the republicans' eyes but not without alienating those some would argue benefiting from the current status quo. >> but interesting to see the market in positive territory on a day when the conversation turns away from large-scale tax reform, away from reinvestment and infrastructure which had been some of the two pillars really that was underpinning this market from a multiple expansion standpoint. >> we're going to be getting donald trump's presser next week, a monday jeffers in

washington. farewell address in chicago at the enof next week. but clearly there's going to be a lot of questions hopefully answered in the next ten day or so. no a monday, i thought we had him in washington but we herely don't. we'll talk more about rates as the days goes on. >> we do see the consumer discretionary sectors leading the market. autos are helping that. you are seeing some retailers that are up as well. little follow-through from the holiday season. so we'll see where the afternoon session brings news that space. >> comments out of toyota as they reflect on their own auto sales numbers. saying that the run rate is a clear reflection on consumer confidence and that definitely is backed up by some of the gainers today, under armor, kohl's, car max, gap, just the second biggest s&p gainer behind ford motor. so it looked like december was colorly a tail wind for some consumers and see if that

carries over into the new year. some say it's a relief from having the election over. >> right. take a look at shares of twitter, up 2%. >> really? >> twitter is really driving the news flow for us, for other media organizations, newt gingrich has said you better get used to it because it's going to be eight years of tweets. lasri on "the half." let's get back over to judge at hq. >> all right, carl, thank you. welcome to the "halftime report." stocks are moving higher yet again today. inching back towards that milestone. but with stocks up 6% now since election day starting a new year how much juice is really left in the trump rally? with us for the hour today joe, josh brown, brother s najarian and ceo of