citigroup. >> yeah. we will be talking about them. they're on deck today with earnings. >> will you get us caught up on the markets? >> let's look at the markets. we are in davos, switzerland, a lot of the talk coming out of here has been about markets. yesterday we saw moves in the currency markets, especially with what theresa may had been saying. the dow futures are indicated up, up about 19 points. s&p futures up by 3. the nasdaq up by close to 10 points. >> let's take a closer look at what's on the docket today. a number of things we'll be paying attention to. we have december cpi, it's out at 8:30 eastern time, followed by industrial production at 9:15. at 10:00 a.m., let's see, the monthly sentiment survey from the national association of home builders, that's coming up. the fed releases the beige book at 2:00 p.m. janet yellen is speaking in san francisco at 3:00 p.m.

citigroup, goldman sachs and charles schwab report before the bell. and we'll hear from netflix after the close on the day. we should tell you that "squawk" has an extension today, because we have interviews with jamie dimon who will be with us later on sidewalk on the street, and loyal blankfein will be with us later as well. don't miss that. >> when nbc has a saturday game, it's thursday night football a lot of times on saturday. it may be in the 9:00 or 10:00 hour back on the east coast, but it's still "squawk box." >> we're just extending this. >> yeah. >> extending the programming. >> let's not confuse anyone at home. normally we have the futures in the red. rarely do we get the thermometer in the red. it's actually minus -- below

zero. >> is it right now? >> minus 3 celsius or fahrenheit? >> no, minus 3 fahrenheit. but sunny and beautiful. tobey cosgrove in the sun. look. he's glowing. let's turn now -- you can't see him. you'll see him in a moment. turning now to the agenda, which is on capitol hill. just two days away from president-elect donald trump's inauguration. confirmation hearings continue today in washington for many of his cabinet picks. among the names to watch, scott pruitt, trump's choice to run the epa. governor nikki haley, up for consideration to be u.s. ambassador to the united nations, and commerce secretary d designee, wilbur ross.

he will say he's not anti-trade but the billionaire investor will argue that the united states should not allow for malicious practices or unfair subsidies from foreign trading partners. he has promised to sell a stake in his private equity firm, divest other assets and resign from corporate boards. he will keep interests in mortgage lending and shipping. yesterday lead story in the "wall street journal," president-elect breaking with long-term convention and saying a weak dollar may be good. >> sending the dollar down. >> a lot of the take on that is saying out loud what administrations have thought for a long time. >> but when you're president you always need to have a weak dollar. >> he's broke with a lot of convention. my favorite thing about yesterday, president of china warning that no one country should be out for themselves. they should be global and not pursue their own interests as much as maybe the united states might try to do now.

leading by example, as china always does in being a global citizen. never looking -- >> the other side of that, people looked at that speech as -- not just what we're doing, but what we should be doing. >> stepping into the vacuum with the united states. >> fair is foul, foul is fair. the world is topsy-turvy. >> i was quoting abraham lincoln. >> exactly. >> for the people, by the people. >> it's a repressive regime there. >> let's tell you about a new nbc news "wall street journal" poll out this morning. according to that poll, 44% of those surveyed approve of how president-elect trump is handling the transition. 6 52% disapprove.

>> and 98% still expect hillary to win the election. >> thank you, joseph. some stocks to watch this morning. shares of csx, the rail, dipping in the premarket after the company posted missed quarterly results. profited declined in the fourth quarter as the railroad firm said they felt the effects of lower commodity prices. and the strong u.s. dollar, which maybe won't be as strong in the future. united airlines out with disappointing numbers, lower fares, and an increase in labor costs led to a 5 -- 52% decline. and the botox maker, allergan will pay a $15 million penalty and admit to wrongdoing after being accused of failing to disclose their 2014 merger talks with activist investors. >> wait. did you say something about botox? what was that story? >> caught your attention? >> botox, allergan. trying to buy activists.

>> i just heard -- >> caught your attention. >> yeah. >> needles in the forehead. >> your face is looking smooth. >> with botulism. >> with food poisoning. cosgrove knows about that. not that you used it. >> as a doctor. >> you might have, represent you like 75 or something? >> older. >> we talked about that before. you're our idol. among the issues at the top of trump's agenda, we have health care reform. the president-elect's pick for health and human services, secretary tom price -- designee tom price will face the senate today amid questions about some of his stock transactions. joining us now, dr. tobey cosgrove, president and ceo of the cleveland clinic. you will not be serving as director of va. it was reported that you were first picked. do you know? >> i don't know if i was first

picked, but i was offered the position. >> when it came down to your decision, it had to do with the cleveland clinic. >> you know, i have made a substantial commitment to the cleveland clinic. we started a lot of new opportunities. one of those is a medical school that combines the latest in technology and bringing together doctors, nurses, dentists, p.a.s, all in one facility to teach team play. and with a lot of technology that will be incorporated in that, including holograms, which we will teach anatomy now without cadavers. and also opening a facility in london. that's a major investment for us. i think i have to see some of those things through. >> do you know the gentleman that -- that the president-elect picked? >> i don't. >> let's get to obamacare, repeal and replace. my first question to you, as we hear a lot of the other side

loves this issue now because trump will own their albatross, let's say that we did absolutely nothing. let it go for 2017. how many exchanges would be left in most states? what would the premium increases be across the board? if we did absolutely nothing? >> i think if we don't do anything, we'll see fewer exchanges. how many fewer, i can't say. >> would it collapse eventually? >> the exchanges? >> obamacare. >> i don't think so. >> under it's own weight? >> i don't think so. going from volume, paying for value, it has done some good things, but clearly with any 3,000 page bill, it's not going to be perfect the first time around. >> i've seen the way to get around the individual mandate is to do it with large groups. so that everyone is able to get in for a certain price. is that viable or is the -- the

mandate didn't work any way because a lot of people didn't buy into it. >> it was surprising that more people didn't buy into this. that's the problem with the exchanges. mandate seems to be a bad word. most insurance -- look at car insurance, you can't drive a car without insurance. you stop and think about it, why would you not have to have some sort of healthcare insurance? that requires mandates. >> how do you do that? the penalties weren't enough - this time around. how do you force people to do that? you can tell people if they're driving a car without a license, you will throw them in prison. >> and you choose to drive a car. >> clearly there are other ways to do this, but the important thing is reforming healthcare. there has to be a couple things that we like to see. i think they like to see the number of regulations decrease. we have 3,000 pages of

regulations right now, which is just tremendous burden for us. and a lot of things we have to report. we also have a limitation on how we can consolidate. every other industry in the united states has consolidated over time. there's not enough push to keep people well. and to begin to decrease the burden of disease across the united states. >> do you have any idea of what this will look like in practice? >> i don't think any of us do right now. i think that -- >> he's said that come monday he plans to announce something. >> i've seen detailed stuff from the house on how they are planning to do it. rand paul has a detailed plan. >> rand paul has a detailed plan. very few of us in the healthcare industry know what that bill is about. >> now it's by april, is that the time frame? do you know tom price? >> i do not know tom price. >> any feelings about --

>> i don't know enough about him nor -- >> are yis he too anti-obamacar? >> to anti- >> i would hate to see this whole bill completely wash away without various -- a major replacement. you have 20 million people being covered. a lot of those were covered and are now covered by this. i haven't seen what the actual net number is. i see a lot of numbers thrown around. i'm not sure how -- >> the majority of those came from medicaid, because it got expanded. >> exactly. i think we picked up 750,000 in ohio. >> do we know what net addition was in terms of insured people? >> everybody has a different number. >> supposedly 20 million. >> what would happen if obamacare was repealed and there

wasn't a replacement? >> it would throw our industry into chaos. we would lose a lot to of reimbursement. hospitals across the country are running in the red right now. >> even with the reimbursements. >> each year it's come down. and i've been talking with several of the major hospitals here, each one of them has seen a decrease in their net this last year. we're down to about 2%. >> those payments from the government from obama care were supposed to increase as years went on. you guys took a hit in the beginning with the promise of payments going on down the road? . no, we had decrease in what doctors are paid substantially each year. we see what we're being paid from the hospital portion of it coming down. private insurance is paying us less and less. we've taken $700 million out of an $8 billion organization, our costs, we figure we have another 700 million to take out. >> that's why you point to

consolidation as the only way to negotiate with insurance companies? >> i don't think -- a lot of people talk about the fact if you consolidate, you can negotiate better. 60% of our payments now are medicaid, medicare or no pay. so there's no negotiating with that. those payments are going down. similarly the payments from the private insurers are going down. i don't think you'll see a major jump in the ability to negotiate if we do. you think about book stores, accounting firms, all of whom have consolidated to get rid of competition. >> pharmaceutical prices what is the true narrative? they're the best deal in town because they treat chronic conditions without hospitalization? they're wonder drugs? or the other side that we hear, they spend all this money on

marketing, extending protection on pat tents and we don't negotiate prices with the government being a big buyer. which is true? . we saw our pharmaceutical bill go up 19% last year. which is a huge jump for us, particularly as we are getting less and less to look after patients. part of that is the bad actors, the valeants, epipens. we've seen pharmaceutical drugs go up 10% a year. if medicare and let's say the government starts negotiating for lower prices. is that what should happen when you have a large buyer in a free market? is that the government exerting some type of pressure? how are we supposed to think about that? . you know, i don't think there's anything the matter with

competition. >> is it competition if the government is dictating that we want to lower prices if you're going to get our business? >> exactly. i think we should negotiate with the pharmaceutical company. >> it's still free market. >> you stop and think about what has gone on right now with the va, the va has the lowest drug prices, substantially lower than the rest of the industry. >> how much lower are we talking? 20%? >> i can't tell you the percentage. i don't honestly know. but they have a guarantee of the lowest of the prices. if you know that clearly the pharmaceutical industry is a tremendous industry for the united states, great exports, grade innovation, great research, but on the other hand we are supporting the rest of the world in terms of drug innovation. the rest of the world pays substantially less for drugs than we did. . you said it was genetics why you look so good at your age. but your parents are not alive,

are they? >> no, they're not. >> the mekpresident-elect said want one guy, i wanted cosgrove to run this, in a speech to the entire country. it would have been nice for them to see that. >> it would have been nice. you would have liked that. how proud would a mother be. >> that's what i mean. >> i'm surprised they're not alive looking at you. you have good genes. that's what you told us. it's not your lifestyle, right? >> you know, i exercise, don't smoke, take care of myself a bit. get the weight under control. >> you have that research at the cleveland clinic. if you go in for a test, it comes back in an hour for you. and there's a programming noted here. we'll talk much more about healthcare with the ceos of the mayo clinic and kaiser pe

permiente. we are just getting started. larry summers recently told us the markets were on a sugar high and it's only a matter of time before disappointment sets in we'll talk to him about that and more next after the break. first, look at this date in history. so if you have a flat tire, dead battery, need a tow or lock your keys in the car, geico's emergency roadside assistance is there 24/7. oh dear, i got a flat tire. hmmm. uh... yeah, can you find a take where it's a bit more dramatic on that last line, yeah? yeah i got it right here. someone help me!!! i have a flat tire!!! well it's good... good for me. what do you think? geico. fifteen minutes could save you fifteen percent or more on car insurance.

tadirectv now. stream all your entertainment! anywhere! anytime! can we lose the 'all'. there's no cbs and we don't have a ton of sports. anywhere, any... let's lose the 'anywhere, anytime' too. you can't download on-the-go, there's no dvr, yada yada yada. stream some stuff! somewhere! sometimes! you totally nailed that buddy. simple. don't let directv now limit your entertainment. only xfinity gives you more to stream to any screen.

there's no denying there's been a spike in confidence from many businesses since donald trump's election, nfib, even consumers. but the view beyond the short-term is unknown. our next guest is arguing in a new financial times column that we're likely in the midst of a sugar high. he says we could be in for disappointment, disapproval and disillusion down the road. we're joined by larry summers, the former treasury secretary of the united states. you wrote a piece on davos recently too, right, larry? we're all davos men one and all. >> i think there's a lot to of

anxiety here. a lot of anxiety about what's happening politically in many parts of the industrial world, brexit vote, elections, and what the election of president-elect trump of the united states means. there's no doubt that animal spirits are running high. some of that is a welcomed correction to probably was some feeling that had become overly punitive in some sectors. but i think there's also a deep concern about populous policy. particularly populous nationalist policy that lurches into protection. that's a real risk hanging over the global economy. if it's not put to rest, there's the risk that as is so often the case in the past, that the p

populist policies we're pursuing will have short-run benefits, ultimately more uncertainty, reductions in confidence, a bit of a downward spiral. >> there's always a chance that as a dealmaker who has built a business and negotiated, that instead of it ending up in protectionism, it just ends up in -- he wants the united states to succeed. he wants to export goods. he wants to be a president that, you know, that helps the economy. s this a chancthere's a chance lot of this is posturing to extract deals. sometimes it seems we get taken advantage of. i have no doubt at all about his sincerity for wanting a better economy for all of the american people. no question at all. it's just a question of which strategies are most likely to be

effective. it needs to be recognized that the consequences of rhetoric so far has been a 15% appreciation in the mexican peso, that makes every business decision 15% more favorable to mexico, relative to ohio. and that's a big step against the economic interests, against the workers who are an important part of the president-elect's constituency. this is not all hypothetical. we're seeing some of the direct consequences of it. >> he said he's in favor of a weaker dollar. >> he's in favor -- >> you would have never said that. >> i would have never said that. i would have never said it. i think it courts increased uncertainty over time. but i think what needs to be very, very careful about

pursuing policies and rhetoric that are indirect contradiction. fiscal expansion coupled with monetary tightening, coupled with increased protectionism, coupled with a border adjustment tax is a policy prescription for a stronger dollar. so it pursue across the board policies that will push the dollar up and then to use rhetoric about a weaker dollar, i think is to leaf tef leave th confused. if there's clarity that the boarder tax is off the table, that will happen. >> but if you take the border tax off the table, you won't get the 15%, 20% rate. >> i think the world would be okay if there's no 15%, 20% rate. >> but the flip side is he may have to do the 15%, 20% rate and

not be neutral if he doesn't do the border adjustment tax. >> if that happens you will see substantial increase in deficits, to no great benefit many terms of spurt investment and that will have consequences for the economy that are not likely to be so -- to be so favorable. i have a feeling this corporate tax reform debate will be more complex and contentious than many suppose. and the process may take a while. >> did you see president xi quoting abraham lincoln yesterday in davos? >> i did hear -- i did hear about it. all things are possible. certainly not something that one would have expected a decade or two ago. certainly i hope that the united states will not abandon its role as a principled supporter of an open cooperative global economic

system. i think china's professing adherence to those norms as a welcomed development. there are steps they have to take to go beyond professing adherence to actually adhering. >> he said no one country should be out for itself. that's my favorite part. no one country should be so single minded to pursuing its own self-interests. hearing that from china is -- >> a direct dig at trump. >> do what i say, not what i do. get real. >> i think there was an important concept some years ago when zelleck spoke about china as a stakeholder in the global economic system. china, when it was a poor country, it was fine for it to be focused on itself. with the passage of time and with gaining economic strength, they do need to do more to

uphold the system. we need to encourage them in that and recognize that it's not our system, it's everybody's system. and we'll have to be prepared to engage in a spirit of compromise. >> hopefully no lectures on human rights from china. you wrote for years about our problems with secular stagnation, low growth, a savings glut, everything else. lately you're wondering if the supply side pro growth policies exacerbate income inequality. we did not have supplied side growth policies for the past eight years, which left the fed as sort of our only supporter with quantitative easing and zero interesticypolicies, in the end exacerbating income

inequality. part of the reasons for the animal spirits, maybe it's a sugar high, the idea that we'll go back to what you would probably call voodoo, trickle down or pro growth policies, how do we know give than we had no success in the past eight years in terms of goosing economic growth -- >> excuse me, joe. the unemployment rate went from 10 -- went from 10% to 4.5%. >> i understand that. >> we have not seen that kind of 5% move during a presidential term. >> we had the fed at zero. >> the longest period of employment growth. >> but you wrote about how bad everything was. >> it would have been much better if we had expansiona expansionary fiscal policy. the president didn't propose the amount of expansion air fiscal

policy that i would have liked, but he did so, particularly in the public investment area. that's kind of a complicated political history back and forth. do i think indiscriminate regulation would drive growth? i doubt it. i think particularly if we go too far in financial deregulation, we court the possibility of another financial crisis. >> markets could be wrong, but you'll come back. what is a sugar high? you actually gain weight? what happens? >> it's a crash. right. you don't have anymore sugar and you feel horrible. >> or you feel better, you work out. we'll see a year from now what this is. >> we certainly will see. i heard you, you said it's possible this could be real. >> yeah. i don't think anybody makes absolute certain economic

forecasts. you do occasionally. >> i do. >> i do. i missed the correction phase of your various predictions of over the years -- i watch your show avidly. >> when i'm wrong, i'll let you know. i can change in hypindsight. >> really? you might wanted to catalog -- >> we don't have a lot of institutional memory. >> you may not have institutional memory, but i have personal memory, you and a variety of your friends on the show have been -- were for many years worried about that crazy fed. >> i'm still worried.

♪ welcome back to "squawk box" live from davos. some of forest whitaker's best known roles have been characters surrounded by violence and brutality, including his portrayrole in "the last king of scotland." but he's been supporting peace. he's being honored in davos this year and joins us now to talk about this. thank you for being here today. >> thanks for having me. >> i didn't know about this initiative. how did you move from acting into the activism part of this? >> i had been working with dangs and domestic violence in the united states. but i had not done it on a concentrated way until i got to

uganda. in uganda, i met some of the first child soldiers i had ever met that moved me into the work that we've been doing. we started our own ngo that works in conlict resolution and development. what does that mean specifically? how does the ngo do its work? >> we train youths in conflict resolution with ictcos, commuter technologies, life schools, and development or end pra ntrepren skills. they go back into their cities and develop projects. we have that. so we're also in the protection and civilian camps where we have about 3,000 people that we work with, youths there. wie moving into another refugee

camp, working with about 10,000 youth there. >> when you met the child soldiers in uganda, what happened? how did that touch you? >> i remember one in particular. i met him, after all the things that happened, he had some psychological things that were harming him, that he wouldn't be able to sit in a room by himself. we started working. and it threw me the sweetness of this person's heart, but the tournament because of the things they've seen and had to do. now he's been working with us, he opened up an electrical store, he is training about 30 youths in electronics. there's hope these things can move forward. we were working extensively in south sudan right now and we're in mexico as well as the united states. >> when you come to a place like davos, i don't think people

appreciate how many ngos are here, how many philanthropists are here. tell me what goes on behind the scenes in terms of what you're doing and the work you're trying to accomplish. >> it's kind of diverse. today i had -- there was a discussion panel on humanitarian -- the future of humanitarian aid. so we were discussing that. then i also had some meetings with people i was working with at the u.n., talking about how we could work together. and i've run by a few friends here. it's exciting. seems like everyone is trying to move the envelope forward trying to improve the quality of life. i only say that because of the cynicism that we talk about with davos and davos man, there are some organizations like yours that are doing interesting things and it does move forward. i'm curious in terms of money raising, how much money did you need to raise? what did you look for and what

are you trying to do while you're here and elsewhere? >> initially they brought me here for the crystal awards benefit. we are looking at our organization and trying to scale up. right now probably looking to scale properly and slowly probably $10 million, which is the work we'll be doing in other countries. >> how do you identify the people that you want to work with from here? initially it was people you had met. how do you find new people in new countries? >> how do you find new people and new countries? >> yeah. we look at places in need of -- either in conflict or impacted by conflict, try to discern if there are people opt ground to work with us, locals that can work with us, and the local government and how we can come in with support.

we make a decision from that. what we'll be moving into next is moving into myanmar, one of the places we just scouted. looking at colombia, and starting to talk about jordan. slowly looking at it. i guess initially we were looking at -- this is the youth peacemaker network, we were creating spots around the world where we can have this network be able over the world, all areas of conflict, for people to support each other and work with each other as youths trying to fight for peace and development. >> can we talk fillingmake imma? >> yeah. >> are you a film guy or a tv guy? >> i have a number of projects made for tv. we have a film called "roxanne roxanne" that opens at sundance

in a few days. i haven't made a decision. i go where my hard leads me. >> you were just in rogue one. >> yes. >> you will be the voice in this other project. >> i have been in rebels. >> is that hard to do, the voicing thing? >> it's actually fun. you're sitting there, you're free. you're speaking. >> hanging out. >> yeah. >> were you a "star wars" fan before rogue one? >> yeah. i was a "star wars" fan since i was younger. i guess i watched all of them. i like the force, we have the capacity to do anything, if you believe. >> that's really great. >> do you like acting or directing more? >> directing i can't do. i love it a little bit more, but i can only do it periodically because it takes time. >> what about directing yourself? >> i have never directed myself or done a cameo in any film i've directed. >> all right. thank you very much for joining

us. we appreciate your time and talking to us about the initiative. >> thanks for having me. >> coming up, when we return, blackstone's chairman, steve schwarzman will join us and weigh in on president-elect trump's agenda for the first 100 days. he's running that business council and knows a lot about what's going on in the administration. at the top of the hour, ray dalio will join us. and later, tom freiedman will st down and talk policy and trump. a universe of data - in your case literally - and turn it into medical discoveries, diagnostic breakthroughs... ...proof that black holes collapse into one singularity. i don't know what that is. but yes. innovation runs on supercomputers... ...and supercomputers run on intel. you are super smart. and super busy. ♪ ooh! ufo! false alarm, eyelash!

the first stock index ♪ (musicwas createdughout) over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks. (bell chimes) ♪ nice work brother dominic. now we just need 500 more... translated into 35 languages, personalized oh and shared across the 7 continents. (other languages spoken) look abbot, i got it. it's a miracle. ♪

welcome back to "squawk box" live in davos, switzerland. time for the executive edge. facebook ceo mark zuckerberg taking the witness stand yesterday to defend oculus. he denied allegations by a rival firm that the technology used for oculus was stolen. there were heated exchanges during the trial, especially when the lawyer told zuckerberg that improving a technology doesn't make it yours. maybe there will be a sequel to "the social network."

those scenes in the depositions. >> i would have sent jesse eisenberg yesterday. who i thought was a better mark zuckerberg than mark zuckerberg. >> have you told mark zuckerberg that? he's a millennial, right? >> he's a millennial. 31. speculation he may want to run for president. >> i saw that. >> he has to get to 35 first. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t.

when you travel, you want your needs to be understood no matter where you go. you want an experience that feels highly personalized. with watson on the ibm cloud, travel companies like wayblazer can apply cognitive analytics to social data to understand what a destination is really like. and who exactly, it will appeal to. today watson is helping businesses create experiences that revolve around you. because that's what the ibm cloud is built for.

welcome back to "squawk box." we are live in davos, switzerland this morning. we're less than two days away until the inauguration of donald trump as 45th president of the united states. our next guest was appointed by the president-elect to chair his strategic and policy form. joining us to talk about that, the next 100 days, chinese relations -- we have a lot of questions for him, steve schwarzman joins us.

we want to understand what is going on in trump land. china, president xi was just here. i want to start there, and go c a abraham lincoln and talking about free trade and open borders and being much more global rather than nationalistic player. trump is on the other side of that, at least some of the rhetoric has been. where do you land in terms of your conversations with him that you've had and the people around him, how you think he's thinking about this. >> i think president xi gave a really brilliant speech yesterday. sort of covered the waterfront and was a great exposition on a way the world should be going. i think what's going on in sort of trumpland, as you call it, is a lot of stuff.

standing up a government from a standing start with a group that was widely perceived as not having a chance to win, so that they weren't as well prepared for transition. i think you'd have to give them pretty high grades for standing up their government now. there's a lot of people coming together, there's a lot of stuff happening. imagine, you know, they're like house moving. the offices will all be opened on monday. there's a lot that's going on. at the same time, other governments and constituencies are calling on them to be functional before they're even functioning. so i'd say it's a lot of juggling as things come together. >> have you talked to him about some of the comments he's made around tariffs and border taxes

and things of that sort? you are, to some degree, a globalist. i think you believe in globalization. as you said, we're defensive of what the chinese president said yesterday, which really is the antithesis to some degree of what trump is saying, no? >> it's a little different than that, i think. you know, sort of the new administration is interested in fundamentally creating a better life for americans. and that's how they won the election, with half of america that has not really shared in a lot of the improvements that have happened over the last 10 to 15 years. so they're looking at different ways to do that. and that'll drive them, you know, to looking at almost everything. it's sort of like in business you'd call this zero-based budgeting. what should we be doing? not what were we doing.

in that sense, it's very exciting period, and it's going to touch a lot of unfamiliar places and ultimately, my own sense, and i can't tell you what i talk to people about or else i wouldn't be worthwhile to confide in, but -- >> you could whisper. just to becky. >> everything is secretive. it's all secret on cnbc. i find that people are quite responsive when you communicate with information that's useful. so i think we're in a period of adjustment and learning and that's normal. so i'm not pessimistic. i think if you don't like change, this will be an uncomfortable period. but growing at 1.8%, that was an

uncomfortable period. the benefits for the american people, you know, have not been substantial at that growth rate overall. so we're going to be trying some new things, we as a country. some will work. some won't work as well. but the leaning forward, if you will, to experiment, to debottleneck, to change taxes, there are going to be a lot of things, most of which on a theoretical basis, most people would say are good things. >> that explains a lot, steve, that people are resistant to change. in a null shell, you just said it. 1.8% is what we were used to. the number of ceos and business leaders and republicans that were saying let's continue these policies, that's why i'm backing hillary clinton, because we know what the policies will be, and we know the stability. so many of those same people now

are saying, wow, this other stuff might be pretty good. they didn't say it before the election. they didn't understand maybe deregulation might help. maybe corporate tax reform might help. they were willing just for the sake of not changing to stick with 1.8%. now suddenly they see the effect of this already. now they're on board. it's bizarre. >> well, most people, joe, like the world they live in. >> i guess. >> it is the human condition. there are some of us who have chosen occupations in the securities business, investment business, where it's all about change and anticipating change. from my days when i was doing deals, it's the uncertainty of that, that some people are comfortable with. >> what are you anticipating right now? if you're in the business of anticipating change and you're a betting man, where would you bet we'd be after the first hundred days of this administration?

>> well, you're going to have a lot of action by definition. i think you'll have major rollbacks of whether it's executive orders or regulations, putting people in place who are going to do those type of things. >> but when you have your monday meeting at blackstone, what are you telling them they should be thinking about in terms of places to invest, things to do, things to sell, things to buy? >> i think we're saying, just for a start, that we're going to have higher growth rates in the united states. we're liable to have a stronger dollar. you know, we have to watch to see what happens with some of the tax proposals. because they're highly complex. they're interrelated. at some point, you know, initially difficult to understand for most people. so we have to be mindful of

that. >> okay. steve schwarzman, thank you. >> more "squawk" in a moment.

heads of state, business leaders, and celebrities gathering to discuss the issues facing the global economy. in this hour, manager of the world's largest hedge fund,ing ridgewater capital founder, ray dalio joins us, first on cnbc. plus, nyse group president thomas farley, the ceo of levi's

and the ceo of paypal. we hit the topics most important to your portfolio as we get ready for a transition of power in washington. rising interest rates, jobs, corporate tax reform, and much more. the second hour of "squawk box" live from the world economic forum begins right now. good morning. welcome back to "squawk box" here on cnbc. we're live from davos, where it's really sunny but that doesn't mean that it's warm. it's really sunny and really cold, but it's crisp. i'm sort of developing a taste for it. although, minus 3 at 8:00 in the morning will get your attention. >> but you know what, i was out this morning and i didn't realize it was negative. you get used to it. >> it's kind of dry. >> it's a dry cold. >> it's not like the cold in new york. if it were windy, dreary, and

snowing, we might be crying, andrew. >> we have little heaters under here. people don't know. >> but my leg is on fire and the rest of me is freezing. i'm joe kernen along with becky quick and andrew ross sorkin. and mack the snowboarder, the knuckle dragger. futures at this hour, we'll take a quick look. futures have been -- well, now they've turned negative. down about two points on the dow anyway. s&p still positive, barely. nasdaq up 3 1/2. the ten year has been trending around 2.3 or so. it's 2.36 this morning. we'll take a quick look at the oil markets as well. we should probably look at the dollar, given that was the big story yesterday with some of tru trump's comments. 51.71 on wti. there's the european markets. only one is positive. i would have put in the dollar if it's the lead story in "the

wall street journal". dollar a little weaker yesterday. >> he said he didn't want a strong dollar. >> i know he said that. it got awfully strong. >> just adding the context. >> then larry summers said he would never say that he wanted anything other than that strong dollar. >> you're not supposed to say it. >> even though that's what they want. >> worried a about strong dollar. everybody talks out of both sides of their mouth. >> i thought you were going to say something else. let's get a look at what's making headlines at this hour. we're just about a half hour away from the latest earnings reported from goldman sachs. the firm is expected to earn $4.82 a share on revenue of $7.724 billion. at about 8:00 a.m. eastern time, we'll be getting quarterly numbers from citigroup. analysts think citi will report a profit of $1 a share.

and president obama will hold the final news conference of his presidency today. that will be taking place at 2:15 eastern time. >> i think he'd like to hold some even after the inauguration. a final, final, final news conference. i don't think you really can. this is probably definitely the last one. is this the last one, andrew? >> this is it. >> okay. turning now to the agenda on capitol hill, we are just two days away from president-elect trump's inauguration. confirmation hearings continue today for a lot of the nominees in washington for his cabinet picks. among the names to watch, scott pruitt is trump's choice to run the epa. governor nikki haley is up for ambassador to the united nations. commerce secretary designee wilbur ross. according to prepared text -- do you remember what that's from? >> yes, mr. ed, the horse.

>> yes, it is. ross will tell senators he's not anti-trade, but the billionaire investor will argue that the united states shouldn't allow for malicious practices or unfair subsidies for trading partners. that's something we've heard. ross has promised to sell his stake in his main private equity firm and divest other assets, also resign from the corporate boards he's on. he will keep his interests in mortgage lending and shipping and hopefully will keep his frequent appearances on "squawk box." the rise of populism across developed nations is now more important than central banks these days for global markets. this according to ray dalio, ceo and co-founder of. in a first on cnbc interview is ray dalio. we always love seeing him out here in the alps. >> i always love being here. >> you just wrote a piece about

populism. you always talk about the economic machine that you've developed, at least in terms of the framework for how you think about the world. we're all trying to make sense of trump world and what it's going to mean to the markets and what it's going to mean to the economy. how are you positioning yourself, and how are you thick all of this? >> i don't think there's probably much insight that i can give beyond the interviews you've just had about trump. meaning, i think -- i won't go on at length. i think there's a phenomenon that exists that is called populism that we really don't know very well, that it existed in the 30s. that phenomenon partially is due to a wealth gap, but it's also partially due to the sense of inefficiency and make the place work on time for the common man. the values that are national values rather than global values, there are those elements

that exist right now as an influence that is more important than central banking. this is the first year that i would say politics is more important. so i think it's important to look at what existed in the '30s. i think the '30s parallel, maybe we could take a few minutes and go through that. >> okay. tell us about the '30s parallel then, if that's how you're thinking about it. >> well, okay. if you take the wealth gap, comparable in the '30s. so 1929, '32 was analogous to 2008 and '09. then when we hit zero interest rates in both cases, what we had was monetary policy, the printing of money and the recovery that took place. the recovery in the '30s and the recovery we had was a bimodal recovery. as a result, as you got to 1936,

'37 and through the '30s, there became the sense of we need to gain control of this by the common man. as a result, we had populism. populism became more -- there's populism of the left and populism of the right. populism of the left was then communist and socialism. then populism of the right was fascism. fascism was that nationalism. what we're experiencing now -- the word populism a year ago was not popular. as we're now -- you're going to hear more of populism. if you look at europe as a whole and you're going to say what is the greatest threat to the european union, it's not the debt crisis. it's not central bank policy. it is the movement of populism. >> do you think we're headed dh down that same road though? >> i'm saying that the phenomenon exists. it as a driver will become more and more of a driver.

the impatience, these elements -- >> but the economic implications of that are what? just remind you, we had a conversation with tim geithner at the delivering alpha conference probably now maybe 12 months ago. no, six months ago, in the fall. i said to you and to tim, what do you think the growth rate could be in the country? this was after donald trump said he thought he could get to 4%, 5%. i think both of you said somewhere in the twos seems realistic. now all the sudden we're having a whole new conversation about threes and fours and who knows what. >> i think that's one of the advantages that we're having. we can rekindle animal spirits. in other words, if you look at where you're going to get it from, you're not going to get it from monetary policy, right. it's not going to be stimulative. you can get a certain amount of it from fiscal policy. in other words, change taxes, but you got to spend it and still got to balance the budget. so you're not going to get much from there. what is interesting is from

deregulation, from creating the excitement and the can do, to create a home where the united states is a place where making money for wealth to create businesses and creating productivity. it starts to create an environment in which capital from the rest of the world starts to make a move over here. so you look at it, and you think globally, even the comparison, do i want to put my plants in china or do i want to put it within the united states. the calculation is very different. if you want to be in the u.s. market and you want a market in which you're going to have -- it's okay to make money, it's okay to make things happen, and it's a market in which there's also respect for property rights, rule of law. it makes the united states a very unique place. if you change the capital repatriations and you bring money back and you do some of these other things, these are stimulative things.

>> so is the market move we've seen to this point just the beginning? if you're laying out a story like that, that sounds like a much longer term move. >> i think the market has discounted the obvious, meaning if you take the corporate tax rate and change it by that amount and you take those various things, the market is adjusted now to that level. okay. now we're at a point where we have to wait and actually see. i think the real question is what is a trump administration? is it going to be wise and thoughtful and well calculating? so when you have something like the border tax, is the border tax on? is the border tax off? is that going to be worked out intelligently? how will the 1.3 trillion that was supposed to be raised in the border tax and then pay for other taxes, where will that come through? so we're at the stage that we've made the initial reaction to that, but now how these people work together and actually

operate, and then there's geopolitical issues. there are questions in terms of geopolitical. the issue of will the china situation -- what is actually going on there? how will that work? how will that play out? and will that carry through in terms of other policy? what will that mean for iran? what will that mean for other places? there are right now i think more question marks on the implementation of it. we have a lot of question marks on how it is actually going to go, right. >> we could be underestimating the effects of all these things synergistically. one plus one could equal three because we haven't tried this pro business zeitgeist. we haven't had it for a while. others say it's already a sugar high and there's going to be bumps along the way so that it doesn't proceed smoothly. so we've already been rewarded, we've paid it forward. i have a feeling that we don't -- that we're

underestimating how powerful it could be. >> i think if it's done well w the calculations done well, it can be extremely powerful because if it didn't take place, then the malaise and the impatience would produce even worse results. we needed a revolution. in a sense, we need a reinvigoration and that kind of revolution. so there's an optimistic possibility that this can be, but the question is, donald trump is aggressive, is he aggressive and wise and thoughtful and calculating, or is he aggressive and reckless? i think we're going to find out. >> which one are you betting on right now? >> i would say so far i've been optimistic about the selections of the people he's made, so i don't -- but you know there's also a time to know not to take a big bet. you don't have to always have a big bet. the way i've done best is know

what i don't know. it's not because what i know. so when i look at what the next few months are going to be, i think that we'll learn a lot over the next six months. >> okay. >> one of the things that you've written about recently was your experience with "the wall street journal" and a story they wrote on you. you took issue with a lot of what the reporters laid out and wrote a very precise memo detailing a lot of the points you took issue with. what kind of response have you gotten to that? >> i've had a good response, but i don't want to be about bridgewater. >> no, we were just talking before. it's interesting in this era of so-called fake news the experience you've had with traditional media outlets. >> i think you know and all of us here know that it's all too common that the desired story is what drives at not the truth, and we all know that. so when we're dealing with that

particular issue, that's a threat to our society because if we have democracy, we have to know what's true. if you've been involved, of course you must be involved in a situation and then you read about it, you know that it doesn't resemble what you're reading about, right. and if you agree and you know that, then you know that that's a threat to our system because if you don't know what's true, it's terrible when it's intentional. >> and your point is that it's important to have a very strong journalistic community, but one that you know you can trust at the same time. >> i would say if you all were looking and others were looking and saying is that quality journalism if somebody is looking and saying is that quality journalism, and i don't think it should be the government. that would be the worst. but almost if there was a self-regulatory organization or somebody making judgments or even the awareness of the problem. the awareness of the problem

itself raises -- probably will produce a higher sense of responsibility. >> it's a big echo chamber right now. they talk back and forth to each other. they nod so much to each other that the world is the what i they'd like it to be rather than the way it is. that's what i see reported a lot. i'm in the going to mention any names. i know i just looked at you, but i didn't do that on purpose. i think they're well intentioned, but it's an echo chamber. >> there's also many that you know are not well intentioned. >> there are some that are even not well intentioned. >> in other words, the story is more important than the truth, right. commonly. >> yes. >> ray, thank you for talking to us about all of this. we look forward to seeing you again soon. >> it's always a pleasure. >> thank you. a quick stock to watch, just moving in the last couple minutes. take a look. news just out from target. the retailer saying the holiday season comparable store sales were down by 1.3%. that's softer than the street

had anticipated. so target is now cutting its full-year 2016 earnings and sales estimates. that stock, as you can see, is down by 4.8%. >> probably amazon too. when we come back this morning, nyse group president tom farley joins us from davos. we're going to be talking ipos and the future of the big board. later, we'll also be talking denim dollars. the krerceo of levi strauss tal to us about the new designs. plus, paypal ceo dan schulman on life. stay tuned.

bp gives its offshore teams 24/7 support from onshore experts, so we have extra sets of eyes on our wells every day. because safety is never being satisfied. and always working to be better.

with newfound corporate confidence about donald trump's presidential administration, many are expecting a pickup in the ipo market this year. joining us for more, tom farley, nyse group president. good morning. >> good morning. >> i can't really call you mr. president anymore. president of the nyse. >> you can call me tom. >> call you tom, call you ray. we just had ray on. so you're feeling the animal spirits even in the big board. >> yeah, it's a bit of a setup to ask me to talk about the economy after ray dalio. might be the wisest head on these matters. >> i don't know. if anybody's there with their pulse on what's happening,

you're no slouch. >> who knew that if you talked about lowering corporate income taxes and smarter regulation that maybe we'd see a pick up in the markets and animal spirits. maybe you knew, joe. >> i saw a lot of people that should have known better sayi i i just want to stick with what we've been doing because i'm scared to do something different. then it didn't work out for them, obviously. republicans across the board, republicans for hillary. your buddy hank paulson said i think hillary can reach across the aisle to get things done. what about electing a republican on the same aisle and see what happens. it made no sense to me. and now suddenly they see what's happened and it's like, wow, why didn't i think of this befo beforehand. >> it's working. the narrative has been the dow is going sideways, but it's up 2,000 points since the election.

>> what do you hear from all the companies you talk to? >> people are excited. the number within issue that ceos have talked to me about for the last three years is corporate income taxes, especially u.s. ceos. it's not rocket science. there's a lot of just angst because some companies benefit from deductions. i won't call them loopholes. other companies are paying, you know, 33%, 34%, 32% corporate income taxes and they're feted with it. people are really excited about it. i was at dinner last night with a very big ceo who said to me, said to the group that in his industry, he's already seeing regulations not be implemented that were otherwise going to be implemented. and that's a relief. so we're already seeing positive pickup. >> they were supposed to kick in. they will never see the light of day. >> so i think these will be good things. obviously we need regulation. we need safe and sound markets that are trusted. we need safe and sound corporations that are trusted.

but we've gone too far. it feels good right now. >> do you know jay clayton, the appointee to be the head of the s.e.c., who i imagine will oversee some of what you do. >> i do not. i'm not just saying this, but everyone i've spoken to, the number one thing they come back with is first and foremost a very good person and somebody who will be a good s.e.c. chair. i think they picked him for a reason. this is somebody, he was not a former prosecutor. i don't mean that as a jab at chair white. i respect chair white. i think she was a very good chair. but this is somebody who's going to really have a pro-business bend. obviously will have an important role as a regulator and enforcer. >> tom, very quickly, ipos. not a great year last year. what are you seeing in the pipelines? >> i think it should be a really good year. by the way, welcome back. congratulations. >> thank you. >> i think it will be a very good year. thingsing change. i'm not making a prediction, just looking at the facts. last year was lousy. the whole first quarter we did

zero ipos. we obviously raised zero money. next week and the following week we'll have six or seven ipos. we have a billion-dollar ipo, a couple 500 million plus. it's coming back. >> thank you, tom. >> great to see you, sir. >> great to talk to you guys. when we come back, the ceo of levi's on the business of denim, the consumer, and the retail sector. we'll talk about it on "squawk" when we return. time now for today's aflac trivia question. which company was listed first on the new york stock exchange? the answer when cnbc "squawk box" continues. yeah looks like y 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 without that money from... aflac! you might miss your rent. aww i just moved out. bummer man. hey i used to have my own place. yeah? no, no i live with my mom, but it's cool.

health can change but the life you love doesn't have to, keep your lifestyle healthy with... aflac! but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet?

i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss when you have the right financial advisor, life can be brilliant. ameriprise one of the largest business process companies in the world. whether it's in health care, customer care, technology, transportation or government. we touch millions of lives every day.

conduent. advancing the everyday. now the answer to today's aflac trivia question. which company was listed first on the new york stock exchange? the answer, the bank of new york.

♪ we're drowning in information. 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.

god morning. welcome back to "squawk box" right here on cnbc. we're live from the world economic forum in davos, switzerland, this morning. among the stories front and center that we're looking at, target reporting softer than expected holiday sales. as a result, it is cutting its full-year outlook. it's also now expecting adjusted earnings of $5 to $5.10 per share. that compares to analyst estimates of $5.20. target pointing to disappointing traffic and sales trends in its

stores. also, mortgage applications rose 0.8% last week. that coming according to the mortgage banker's association. new purchase applications falling 5.2%. that was offset by a 6.8% increase in financing activity. and netflix has signed a deal with comedian jerry seinfeld. that news coming ahead of the company's quarterly earnings report, which comes today after the closing bell. they've been on a streak, picking up a lot of rights to different comedians. i think chris rock they just paid a fortune to. just like hbo used to do all the big stand-up specials. now there's a whole new competition in that market. >> good news for the comedians. extra money going around. good to be in content these days. among the unofficial themes at the world economic forum this week, making business decisions as president-elect trump prepares to take office.

the auto industry has already come under fire just this week. as a result, gm announcing this week it's investing $1 billion in the united states, including new jobs. we caught up with ceo mary barra right here in davos. >> the united states is a very, very important market to us. so as we look at how do we drive the business and make it more efficient, a lot of these jobs are a big part of that. you know, we've consolidated our engineering centers from seven to three and centering a lot of those jobs here. as we look at logistics costs, it makes sense to do some of the work close to an assembly plant. so it really has been looking at how do we drive efficiencies, but also work with all of our stake holholders to do the righ thing. >> barr are da did not say the announcement this week was a direct response to the tweet from donald trump, kind of going after gm. but very clearly, she did say that the world is changing, the way we communicate is changing, and that twitter is something they're paying close attention

to. blue jeans is one of america's fashion staples, something that never goes out of style. we have levi strauss & co. to thank for that. levi's is one of the oldest american companies still operating. in fact, it dates back to the 1800s. while the company has had its share of struggles through the year, the company's current ceo came in five years ago and has changed the face of a very well-known denim brand. joining us now is the levi strauss & co. ceo chip bird. you have done some amazing work over the last five years. levi was a fantastic brand that really came under pressure and started losing money. what happened to bring the brand down, and what have you done to turn things around? i thi >> i think in short, the brand lost its way in the late '90s. we lost a lot of consumers. we lost our mojo. i'm a brand guy. >> proctor & gamble. >> 28 years. i saw this as kind of an

enormous opportunity, an enormous challenge. now the brand is back. we're growing solidly around the world. building the brand through kind of re-establishing the brand back to its roots. >> how do you do that? what are some very concrete steps you would take? >> this sbrand brand is at its when we're at the center of culture. back in the day, we were there when the berlin wall fell down. we were there through the riots in the '60s and '70s. so we are at our very best when we are right at the center of culture. so we've put the brand back at the center of culture. we did levi's stadium, culture sports. culture, music. we do a lot with music as well. music happens in big stadiums like levi stadium. we launched a new advertising campaign to put the brand right back at its roots called live in levi's. one of the things i learned very early on is everybody has a levi's story. first date, first kiss, going to

college. everybody has a levi's story. we've capitalized on that in our advertising. so re-establishing ourself with youth, making brand cool again. the brand is hot, especially here in europe and in asia. i do my informal market share tests by just looking at people's butts as i walk through the airport. >> you're one of the few people who can get away with it. >> right. i've got the perfect excuse to do that. >> almost everybody's leisure wear pants -- i'm not really sure why denim is what i would always -- you know, if i have to wear khakis, i feel like i'm dressed up. now i got to make a choice. i have some of those really expensive ridiculous things. >> your stretchy ones. >> yeah, i have those. those are okay. but then i've also got some jeans i don't like. they're dad jeans. remember obama jeans? he had that one pair. they're baggy.

levi's, if you can put the time in to break them in, that's what you need. so you haven't gone up on price points. they're not $250. you don't make the dad jeans. there's still constriction in the crotch. they're tough. but it's worth it to put in the time. >> so we actually do play across a variety of price points. we go from $30 all the way up to several hundred dollars. >> several hundred for levi's? >> levi's vintage. i'm wearing maiden crafted today. >> let me see those. >> italian denim. >> so you chose those today to come on "squawk box." >> i was wearing 501s yesterday, which is our authentic, the originals. >> they're stiff but they're worth it. >> how much time do you have to put into it? there's a commitment. >> with the stiff levi's, yes. >> but once they're broken in, they are formed to your body. that's why they're so comfortable, right.

it is worth the investment to have them form to your body. >> who makes those dad jeans? are those wranglers? who makes those things? >> all the bad guys out there. >> they're terrible. they're thin denim and eri everything. >> how much is the jeans business, on the pants of it? you're wearing a levi's shirt, blazer. how much is that now? >> the pants are still the majority of our business, about 70% of our business around the world. we're also underrepresented in women's. most denim brands, bigger on women than men. our men's business is three times bigger than women's. meeting the woman's need for more stretch, better stretch. our women's business is on fire. we've relaunched it about 18 months ago. it's grown double digits every single month since we relaunched it. >> where do you manufacture most of your stuff? >> all over the world. we're a big global -- >> how much are you paying attention to some of the

comments that donald trump has made? >> a lot. one thing about the apparel industry, 97% of the apparel sold in the united states comes from overseas. this is an industry that has historically chased low-cost labor because it's still very labor intensive. we make jeans the same way we did 143 years ago, by hand. so this industry has historically chased lower cost labor. there's disruption coming though. one of the themes of this event is the fourth industrial revolution. so there's disruption coming that will probably change that. >> meaning computers? >> you'll make the stuff by hand? >> 3d printing potentially, robotics. all those things could come into play over time. >> is it true you never wash your jeans? >> i never put my jeans in the washing machine. that's what i said. >> so you hand wash them? >> i spot clean them. i mean, you can really ruin denim by throwi ining them into wash machine. >> have you heard of people putting them in the fridge or freezer?

>> it's an old wives' tale. i made that comment really to rattle the consumer. the average consumer throws their jeans into the washing machine every time they wear it. >> what should we do? >> you can wear it many, many times. >> if you're careful. >> no machine. you think the machine is a bad idea. >> machine is a really bad idea for denim. >> good to know. >> got to just take your time. >> and never in a drier. >> never in a drier. >> thank you very much for joining us. come join us in new york sometime too. >> i will, definitely. >> this was a lot of fun. thank you. coming up, paypal recently inking a deal with discover and strengthening its relations with card networks. we'll also ask ceo dan schulman about that and the future of digital payment right after this break. at the top of the hour, glenn hutchins, north island chairman,

to talk the global economy, president-elect trump, and more. "squawk box" will return live from the world economic forum in davos, switzerland. your insurance company

won't replace the full value of your totaled new car. the guy says you picked the wrong insurance plan.

no, i picked the wrong insurance company. with liberty mutual new car replacement™, you won't have to worry about replacing your car because you'll get the full value back including depreciation. and if you have more than one liberty mutual policy, you qualify for a multi-policy discount, saving you money on your car and home coverage. call for a free quote today. liberty stands with you™. liberty mutual insurance. the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence.

welcome back to "squawk box," everybody. earnings just out from goldman sachs. came in with earnings of $5.05 a share. street estimate's had been $4.82. revenue also beating forecasts. goldman says the first half of 2016 was challenging, but that the operating improved during the remainder of the year. a couple of programming notes for you, by the way. later this morning, we're going to be interviewing jpmorgan chairman and ceo jamie dimon. we'll be talking to him from here in davos. a little after that, goldman sachs chairman and ceo lloyd blankfein also live from davos. that's coming up this morning on "squawk on the street" and "squawk alley." also, friday we are live from washington, d.c. for the inauguration of the 45th president of the united states. lawmakers and business leaders

gathering in d.c. for this historic day. "squawk box" will be there to bring it all to you with special guests through the morning. that's starting at 6:00 a.m. eastern time on friday. >> that goldman chart is unbelievable. it's almost like a thermometer or a barometer of animal spirits. you know what i mean? >> in the meantime, the financial services industry continuing its shift to what's called mobile first as consumers become more comfortable paying online. for more on this trend, the health of the future of mobile payments, let's bring in the ceo of paypal. we always love seeing him out here. last time you did not wear a coat, if i remember. >> i learned my lesson. >> our last guest asked us to ask you what kind of pants you're wearing. >> 511. >> so he's a levi's man. >> all the way. >> worth asking about. let's talk about mobile payments. one of the things that's going on here in davos you guys have been talking a lot about, how mobile payments are changing the world, the idea of being able to bank the unbanked. i want to get into the actual business itself.

you're here in davos this year speaking a lot about that issue. >> i am. there are 2 billion people in the world that live outside the financial system. the things that we take for granted, paying a bill, cashing a check, sending money to a loved one, are incredibly time consuming for them. they wait in line sometimes for hours to make that transaction. and very expensive for them. the promise of fin tech is that you can make those transactions much quicker and much less expensive. for instance, international remittances, $600 billion business today. it costs on average 8% for somebody to send that. we can send that same payment for 3.7%. that's a savings, if you extrapolate it, of $28 billion that could be returned to people who really need that money. lifting almost 30 million people out of poverty. >> why can you do it so much cheaper? >> we don't have the middleman that's changing that transaction

from digital to cash. then when you have cash, it's really inefficient. there's a lot of leakage in the system based on that. so if you can do it all digital, you can do it much less expensively. and you don't have to wait three days to get that money. you can get it instantaneously. >> talking about the middleman, you used to be the enemy of the visas of the world and the mastercards of the world. you've recently partnered with them. how did that happen? why are they doing t and why is it going to work for you? >> i think what we came to the reali realization of is that the war is against cash and against waste. governments waste over $130 billion, $140 billion in leakage of cash. if we could become allies and partners in the advancement of digital payments, that would be a win for all of us. >> i'm sorry, what is leakage of cash? >> it means if you put out a check to a consumer, a benefit payment, it can get lost in the mail. there can be corruption in between so that end user that

the government steals it or the middlemen in between to cash that check, they charge fees for it. there's tremendous leakage in the system. well over $100 billion. we've all come together and figured no one company or government can do this alone. there has to be collaboration at the heart of it. if we can collaborate in a productive way, which we've all decided to do, we can probably take the best assets of traditional financial institutions, the best assets of emerging technologies and create better value propositions. >> what do you make about all the emerging crypto currencies. ta take bitcoin out of it for a minute. >> i think you need to separate out, for instance, bitcoin from the underlying protocols that allow for the transfer of

bitcoin. a lot of the crypto currencies right now aren't really currenci currencies. they're commodities. they're traded because they're not really -- they bounce around so much. it's difficult to use it as a currency. say you're a retailer accepting a bitcoin and it goes up 10%, you've lost all of your margin. so the first thing you have to do is convert it into a fiat currency, which costs you money to go and do. so you can't really use it as a currency yet. but the underlying protocol, the block chain protocol, shows some promise to take out costs in the system and some unique ways of thinking about different things like identity and protecting identity in different ways. anybody can avail themselves of applications written on top of the block chain protocol. so it doesn't really disintermediate folks, but it allows for more efficient transactions potentially.

still early. >> one thing you do every time i talk to you is scare me. because you're somebody who's so actively involved in cybersecurity threats. how many times a day does somebody try and hack in? >> the typical american business has about 4 million attacks a year. 4 million attacks. financial services have over a billion attacks. thor e er ior e ferocity of thos going up. not only has the number gone up by tenfold, but the amount of force inside of those attacks has gone up by 20 fold. it's a constant battle to make sure that we can protect the consumers' identity and their management and movement of money. and that really comes down to data. the more data you have, the more sophisticated your algorithms can be.

because you can't just keep people out. it's not really about building, you know, higher turrets and deeper moats. people will get in because people's credentials have been compromised. it's then identifying behavior that's abnormal and being able to look at algorithms and prevent money from leaving the system. it's that combination of the two things that's important, and the key to that is having scale and data. >> it feels these days that people, users are willing to put out more of their own information publicly, which probably makes your job that much harder. you have this fast-growing app called venmo. i use it all the time to transfer money. i just type in somebody's phone number, and i can send you money. it's the easiest thing in the world. i don't know how you make money on it. we got to talk about that, actually. however, when you do that, you can also write a little note. so publicly, it's like a social network. everybody can see what you're spending your money on, which i find shocking. i do it privately, by the way.

i don't turn that on. >> you don't want to say what you're spending your money on? >> venmo? who do you pay that way? >> all sorts of random people. sometimes people -- >> maybe we shouldn't talk about this. >> you know what, actually, no. >> keep talking, andrew. >> jim cramer, the trainer at the gym. just pay them directly. >> you wouldn't want to give a credit card to the establishment and have them bill that? >> it's harder to do it that way. now you can do it instantaneously. >> it's the most amazing thing. how do you make money, by the way? investors want to know. >> it's cooler than paypal, right? >> venmo is part of paypal, but it's targeted at the millennial segment. it's interesting. 95% of venmo users, and it's like the leading app of the gen tech generation, put a comment on it. they share it with their friends.

i think one of the interesting things is there's a generational difference in public/private. >> look at me. >> the older you are, joe, the more private you are. >> this is why i know i'm old. >> there's a fluidity between that public and private. and we really see thathat in ve. it's an interesting thing. >> i'm going to send you -- i'm not going to send you much money. >> send me a dollar. >> thank you. great to see you, sir. when we come back, stocks to watch ahead of the open and at the top of the hour we have north island chairman glenn hutchins. he's our guest as we head to a break. take a look at ray dalio of bridgewater associates. this was earlier today on "squawk box." >> what is interesting is from deregulation, from creating the excitement and the can do, do i want to put my plants in china,

or do i want to put it within the united states? ea ininte aen . evngeshm.veinisievi ea t aniog. ininte aen .

anything with a screen is a tv. stream 130 live channels, plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. let's take a look at a couple of stocks to watch this morning. goldman sachs is reporting quarterly profit of $5.08 a share, beating estimates of $4.82. revenue also coming in above forecast. goldman ceo lloyd blankfein and jpmorgan chase chief executive jamie dimon will both be on cnbc

later this morning. and u.s. listed shares of british publisher pearson are tumbling this morning. the company caught its profit forecast for the next two years, also slashed its 2017 dividend. and software maker adobe systemings announced a new $2.5 billion stock buyback program that will replace the $2 billion program, which is nearly complete. when we return, another big hour of "squawk box" live from the world economic forum right here in davos, switzerland. north island chairman glenn hutchins will be joining us from the mountains of davos. that interview is right after the break. then, the ceo of the largest broadband provider outside of the united states will be joining us. plus, three-time pulitzer prize winning author tom friedman will be joining us as well. he'll stop by. a busy hour ahead. "squawk box" will be right back. e

e cirywein seimateg e ri timrbto c infrtu d ngkepartrtr thgithe nvt

world economic forum, our all-star lineup continuing this hour. up next, glenn hutchins. goldman sachs and citigroup roll out quarterly results. the numbers and market reaction straight ahead. plus, the new world order. pulitzer prize writer tom friedman joins us. the final hour of "squawk box" starts right now. good morning and welcome back to "squawk box" here on cnbc, live from the world economic forum in davos, switzerland. inauguration week. here we are. i'm joe kernen. we're glad to be here. along with becky quick. that looks like a hobbit sword. >> i broke it. i had a nice long one.

>> andrew ross sorkin is here. like the futures, we've moved into positive temperature territory. i think we're at 4 degrees now. >> a nice balmy 4 degrees. >> but it's crystal clear. >> it's beautiful. >> i can see how people that live here would say you get used to it and it's pretty nice. it's invigorating. but cold early in the morning. the dollar, we'll take a quick look after what was a tumultuous session yesterday after comments from the president-elect. we're going all over the place. someone's finger got stuck on the board button or something. the markets look like -- i think the dow is up, what did it say, 25? did you notice? >> i was busy playing. >> tell us about citigroup. >> an earnings alert. citi reported profits of $1.14 per share. that came in two cents above

estimates. revenue coming in slightly below the forecast that had been expected. that's after hearing we heard the goldman sachs earnings earlier. we'll be talking to lloyd blankfein later. >> let's tell you about some of those goldman sachs numbers. posting better than expected earnings and revenue. the firm says that after a challenging first half, the operatie ining environment impr during the remainder of 2016. of course, we're going to be hearing more about what they're seeing in realtime when we speak with lloyd blankfein later this morning. that stock is up by about half a percent. target says that holiday season and comparable store sales were down by 1.3%. that is softer than target had anticipated. it is now cutting its full-year 2016 earnings and sales estimates. that stock has been hit relat e relatively hard today. right mow it's down by about 4%. and on the economic front, we have a busy agenda today as well. coming up at 8:30 eastern time, december cpi. then later in the day, we'll be getting industrial production, the monthly sentiment survey from the national association of home builders, and the fed's

beige book. plus, this afternoon fed chair janet yellen is scheduled to deliver remarks at 3:00 p.m. eastern time. joining us now to talk about all things market and beyond is glenn hutchins. great to have you here. >> nice to be here. thank you for having me. >> so many places we could start, but why don't we start with the president-elect. donald trump is going to be taking office in just two days. you're somebody who was a very strong supporter of hillary clinton throughout. what do you think, as we're now heading into the trump administration, where are your thoughts about where things stand from a business perspective? >> well, let's look at it from the market's perspective, quickly. it's one of the issues you wanted to talk about as well. the issue -- there's a lot of talk at davos about animal spirits. joe has been a big proponent of that, we all know. my concern right now is the markets are pricing in everything this incoming administration wants to do as if

it's already been done. tax reform, regulatory lessening, the infrastructure spending. and there is a lot of differences of opinion within his administration about how to do some of these things. there's a lot of complexity associated with getting it done. there's a lot of time lag in actually getting things done in washington. he starts off with the very low approval rating and high expectations, which is a very unusual combination. those animal spirits can turn quickly if they're not satisfied quickly. so my concern is the markets might be overextended right now based on that kind of sentiment. >> we spoke with ray dalio about an hour ago. he said that where the markets have come to this point, he thinks it's because of these expectations being built in. he said himself that he knows what he doesn't know, doesn't know whether there will be additional gains. you make it sound a little more dire. you think -- >> i don't think it's dire. joe and i have talked about this in the past. i think these things go in cycles.

it's now time for the theory of lower regulation, lower taxes. they release these animal spirits spirits to see if they can work. >> ray was pretty enthusiastic about that. >> i hope it does. there's a lot inside that philosophy. i'm just concerned the markets are overreacting to what can be accomplished in what time frame. >> if this works out, you'll do were v very well, as you said. we've talked at length about this. your caveat is as some of the people that are benefitting from these things are doing well, it probably is a good idea to remember people that are unaffected by, you know, when business does well and when assets do well. you don't want to take your eye off people that won't do as well while all these positive animal spirits -- and we agree on that. >> the africans have a saying that when the elephants fight, only the grass gets hurt.

one example of that facing us right now is what to do about the affordable care act. >> and medicare. >> one of the accomplishments of the obama administration has been covering 20 million-plus people who weren't covered by health care. our health care system is very complicated. there might be a better solution to it. if we can find a better solution, i'm very, very supportive of that, but if that involves taking health care away from all those people who are not advantaged by all the benefits that we're getting from the markets right now, that would be very troubling. >> donald trump says he's in favor of repeal and replace and that there is going to be coverage for all americans. >> so if you have coverage for all americans and you cover pre-existing conditions and you allow kids to be on their parents' health care until they're 26 years old, i'm not sure how you take a lot of cost out of that system. >> right. so what should we be doing? obviously it's not a perfect system. toby cosgrove is here this morning too. he said when you have a 3,000-page bill, it's not going to be perfect. you have to change things. >> sure.

if you take your time to get it right, if you cooperate -- remember, most of these important reform legislations have had tens, if not hundreds of modifications and improvements. obamacare was never once addressed by congress. >> but in washington you don't have the two sides working together. you're not going to have a thoughtful sitting down of doing something like that. >> but that's just one example. another one is what happens with taxes. in other words, if you cut taxes for the wealthy and don't spread that across the economy in some constructive way, then you've tilted the economic system for people who have already benefitted enormously by this massive run-up in the markets since 2009. so i think the philosophy of trying to stimulate the economy with a more republican, conservative point of view, cyclicly it's maybe time to go back to some of that. >> what does glenn hutchins the

investor do right now? >> these times have historically been good times to make money. it's very favorable for the markets. lower regulatory barriers mean companies can oftentimes do very well. >> does that mean you're betting all these things are going to happen? >> there are two things i'm thinking about. one is a whole bunch of stuff going on here in the technology space that i'm very interested in, particularly the whole apropos your prior speaker, the bitcoin protocol. the other thing you have to worry about is historically these excesses lead to market and economic problems. so you have to learn to protect yourself against that. the last two periods of this sort of -- the applications of this philosophy has led to serious problems in both the economy and stock markets. >> you're looking back to the 1980s. >> yeah, talking about the 1989,

'90, and 2008. you have to keep track of the imbalances building up so you have to get out or be hedged in the right way. you layer on top of that right now the problem that this has so far been one of the longest economic recoveries in history. four more years of it, 48 more months would make it the longest in modern economic history. at some point, i think a better person would be wise to think about a cycle, business cycle here too. >> but the other thing is, and people say it again and again, that recoveries don't die of old age. i don't know if night follows day in terms of just where all the sudden the clock runs out. if you haven't through some type of flawed policies or through printing too much money, whatever has caused recessions in the past, i don't know if the business cycle is eneinevitable.

>> right now you have asset markets that are reasonably extended. all sorts of things that are interest rate sensitive. you've got pretty extended prices in a time period in which we're likely to see rising interest rates. if you cut taxes and do lots of spending and have a large funding need, that's going to put more pressure on interest rates. so the interest rate effect could be very profound. that's one. the second is there's a lot of international issues. our relations with china, our relations with russia, potential events in the middle east that can interact with economic events to create these sort of questions. the one thing you have right now, people on both right and left agree, is a lot of unpredictability. that obviously always -- usually creates some sort of conservatism in markets. unpredictability combined with

this huge rally. that just causes an investor to kind of be cautious, not to be negative, but to be careful. very quickly -- oh, they're rolling the music on us now. you have been somebody who's laid out great explanation for bitcoin and convinced a lot of people as a result. >> well, davos has now discovered the block chain. since the davos consensus is almost always wrong concerns me. but i think that what people are missing is the -- what i call the bitcoin protocol, which like the simple mayo protocol and the voiceover internet protocol is a way in which we can move value around the world at the speed of light with no cost. and the block chain is just a way for accounting. i think people are missing that. >> great. >> thank you. great to see you, sir. >> nice to be here. >> thank you, glenn. coming up, we're going to talk media with liberty global

ceo mike fries. then the ceo of chobani is here. we're going to talk yogurt and the consumer. then later, pulitzer prize winning writer tom friedman. there's a golfer. >> i've heard about it. >> it's like a bee that flies. shouldn't really be able to do it. you look at him and you can't. anyway. heus 5..at,onaled oanac o ok, a m♪

anything with a screen is a tv. heus 5..at,onaled oanac o ok, stream 130 live channels, plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen.

download the xfinity tv app today. welcome back to "squawk box" this morning. we're talking media. lots to talk about here this morning with mike fries, the president and ceo of liberty global. lots to talk to you about. we were just talking during the commercial break about brexit and its implications. we've talked to a lot of other ceos about trump. i don't think that's necessarily going to have a huge implication on your business, but brexit will. >> it should. we have a big business in the uk. thousands and thousands of employees. we're all anxiously awaiting the process and how it will unfold. the comments yesterday i thought were received well. my concern is that consumers start to bear the brunt of this a little bit. if people stop investing, if

industry slows down, then there's a trickledown effect on consumers. we haven't seen it yet. >> that's your concern as an operator, it will creation recessionary environments? >> we're investing 3 billion pounds, as we speak, extending networks, building out fiber based networks throughout the uk. we're not going to stop. but if other companies who are investing billions of pounds say maybe i'll invest 2 billion instead of 3 billion, there's a trickledown. hopefully she can help create clarity and confidence among the business community. >> john malone recently made a comment that had people speculating about a possible takeover on t-mobile. >> right. well -- >> can you give us a little bit of color? >> don't ask me to comment on what john says. >> well, he's the guy. this is the news. >> that's the u.s. business. i think he's just speculating about something we believe in, which is fixed mobile convergence. if you look at our business throughout europe, we will be -- i think ultimately there will be two fixed mobile players in every country. we want to be one of them. which means we have a broadband fiber based network and a mobile network. we have mobile in nine countries.

the u.s. will ultimately go that direction. i think cable companies will have to find mobility in their future. that's a good thing. >> but do you believe that broadly every cable company is effectively going to have to have a mobile piece to it. >> every company that has scale. so a small regional operator in the u.s., no. but we have scale in our european markets. so for us, we need a mobile solution. we want seamless connectivity for our customers. that connectivity layer is where it's at. functionality and content for sure, but getting that connectivity layer right -- >> so when you look at this time warner/at&t merger, does that make sense? >> it does because i think at&t has national scale, national reach. they have a directv product now. they can stream video across their phones. the time warner piece adds premium contend. i think it's a smart strategy. ultimately, when you have the connectivity layer and the functionality, i think it's a matter of time before vertical integration starts becoming more and more. >> you live ed through the

regulatory hurdles that took place in europe. do you have any sense of how you think the u.s. will all tultima look at that transaction? >> i think it'll get done. >> you do? >> i do, and i think it should get done. i'm not an expert. i'm not as close to it as others. but i think it will get done. >> we spoke with larry fink just last week. he was talking about how we're always talking about how positive things are in the market, how the u.s. stock market has taken off, but that investors -- most investors have a global perspective. they have a global portfolio, and other places in the world aren't doing so well. can you tell us how europe is doing? >> i think they're pretty steady for the most part, surprisingly steady. i think, you know, we haven't seen anything -- our business is growing every quarter. we've had 45 straight quarters of growth. we're fortunate to be selling a product that grows in demand 50% a year in broadband. so we're fortunate. i think our business will continue to grow. we haven't seen much in the way of instability on the gdp front or the economies. i think people are more or less positive. there are tectonic issues,

whether it's politics in the political sphere this year will be interesting for a lot of people. >> would it be a problem if the eu were to fall apart? >> we would prefer it not. i think one of the biggest impacts would be, of course, the instability and the uncertainty around currencies and trade and regulatory. i don't think that's going to happen. i really don't. >> what are the implications of apple trying to get into the content business in your mind, and also even just facebook and the growth of snapchat and things like that? >> i think you have to define content. facebook is really defining video content differently than we defeign vine video content. it's great for our business. we win when people download more, upstream more. again, we're that highway that people are utilizing. it's good for us. we're partnering with netflix everywhere. we're putting netflix on all of our platforms. every year when we talk, i sort of tell you that's where it's going, and it has. it's been great for consumers. more video consumption is good for us across both broadband and video. >> you think netflix stays

independent? >> good question. i think they'd like to. whether they will or not, we'll see. >> okay. mike fries, thank you. >> my pleasure. >> thanks, mike. when we come back this morning, breakfast at 5100 feet. the ceo of chobani joining us next to talk about the battle for the grocery store shelves. later, don't miss our live conversations with jpmorgan ceo jamie dimon and goldman sachs chief executive lloyd blankfein. two interviews you won't want to miss starting at 10:30 eastern time.

coming up, president-elect donald trump has promised to repeal and replace obamacare. we're going to talk about the impact on the health care sector with the ceos of the mayo clinic and kizer permanente. stay tuned. didi 9f ounse sh her thelo s r? noeld. itll..thtrafress run s r? noeld. ou ol. t r) '

hintnc..'scoveri.hsuepy at o' r.

tesrdxu..n s.20 ene . moree the300$5came my name is danita seaton. i'm a gas service representative for pg&e here in oakland. when i work in oakland, i feel like i'm home, because i grew up here in oakland, my family still lives here. every time i go to the customer's house, i treat them like they're my family. if they smell gas, or they don't have hot water, i'm there to ensure that by the time that i leave, they feel safe and they can go back to their day to day life. to learn more about gas safety in your home, visit pge.com/safety together, we're building a better california.

♪ good morning. welcome back to "squawk box" here on cnbc. we're live in davos, switzerland. let's tell you what big stories are front and center for us this morning. the federal reserve is out with its beige book later today. the region-by-region assessment of the economy comes out at 2:00 p.m. eastern time and comes less than two weeks before the next meeting of fed policymakers. fed chair janet yellen will talk about monetary policy today in an appearance in san francisco. that begins at 3:00 p.m. eastern

time, 12:00 noon pacific. she'll take questions from the audience right after her speech. of course, we'll bring you that news as it comes. also, more homeowners moved to refinance their mortgages last week. the mortgage banker's association saying refinancing applications rose 6.8%, even as new purchase applications were declining by 5.2%. the average 30-year mortgage rate fell by five basis points during the week to 4.27%. some news just in involving j.pmorgan chase. the u.s. has filed a complaint against the bank, saying they charged certain minority groups higher mortgage rates. that's according to reuters, quot quoting a court document. again, that news just coming out. president-elect trump has been very vocal about his plan to tackle health care reform in the first hundred days in office, including the fight to repeal and replace obamacare. let's bring in the ceos of two

leading health care organizations, dr. john noseworthy of the mayo clinic, and bernard tyson, president of kaiseh permanente. have either of you adviced the new administration? >> we meet a week after christmas. >> how about you? >> we have not. >> we were pleased to speak with him and his agenda was focused primarily on the va and the next changes in the va, a little bit about the nih and its future, and then we talked about some of the lessons from the affordable care act. we didn't spend a lot of time on the affordable care act. our focus was really on complex care and how the affordable care act needs to be addressed. >> let's say that -- and bernard, you can start, or either one, but both give me the

recommendations. let's start, since john has already spoke, bernard, how should we do this? what's most important that we keep? what's most important we modify? what would you tell them? >> well, i'm pleased so far that the narrative is repeal and replace. i think it's important that we not lose ground on what we've gained so far with the affordable care act. we have over 20 million people who now have coverage that go in through the front door of the american health care system. i hope that we do not go backwards. we've dealt with pre-existing conditions. we no longer discriminate against women by charging them more than men, simply because they are women. there's a menu of preventive services that's included inside of the policy. and we started, as you know, down the path of looking at the aca for both insurance reform and delivery of care reform. it's my hopes that has we talk about the replacement, that we

learn what worked in the first paradigm, build on that, and then problems that we were having with the affordable care act that we start to address. >> have we dealt with pre-existing conditions, or is that part of the reason for the problems that we're having? we're not getting healthy people. we're not getting enough healthy people to spread out the risk right now. only people that have problems -- they wait until they get a problem to sign up. isn't that why we're imploding here, john? >> i think what he probably meant is they're covered. >> we want to do it, but we want to do it in a system that's viable and that will, you know -- that we cannot have to be -- is not bleeding. >> i couldn't agree more. i think one of the outputs of the discussion on health care is the american public is more aware of the importance of the decisions they make. they're actually now part of the dialogue, what they want, what they need. it's on every kitchen table in america. that wasn't the case six or seven years ago.

>> although, we still don't know. i have to say, so much of it i thought we were going to be getting more transparency, that i as the consumer might know how much things were costing. i might be able to shop around a bit. we don't see that. >> absolutely. there's a need for much more transparency. but that question is being asked now. i think we have a more informed public. the dialogue, hopefully, will be brisk and informative. >> but i also think how do we continue to expand on the narrative. right now the narrative is, just as you framed it, right, there aren't enough healthy people to cover those who are sick. well, after a while, if health care just continues to go up and up and up, it doesn't matter after a while about the risk pool in terms of spreading high cost across a risk pool of healthy people. >> but there are two problems. one is rising cost of health care. second is not having enough people. >> that's right. we have to work on both of those. >> do either of you know tom

price, have views on tom price? >> i have met tom price years ago. i've read about his view. i haven't spoken to him in the last year, so i can't speak to anything current. >> and i don't personally. >> talking about price, but in a different context, the price of drugs. donald trump has made a lot of comments recently about trying to negotiate prices. does that make sense to you? do you want that to happen? what does that do to the overall health care picture in terms of cost overall? >> well, drug pricing is 12% to 15% of health care costs, so it's very significant. we would say at mayo clinic that valuable drugs should be priced for their value, and drugs that add less value should be appropriately priced. there is predatory pricing, but there's some terrific drugs. there's a lot of innovation coming out of pharma. >> that's the question, do you think you're going to kill the golden goose. to the extent you believe the narrative that we have the greatest system in the world to create that innovation, you know, that we will kill that. >> we can't afford to kill it.

i think a lot of it is the regulatory system that is limiting innovation and slowing things down, both in terms of the necessary regs and those that impede innovation and health care. i must say our conversation with president-elect trump did focus a lot on regulation and essentially we said that if you're going to regulate the financial services industry and the energy sector, please have a look at health care. there are agencies writing regulations that contradict each other, and they're limiting our activities. >> what do you expect, gentlemen, starting next week? bernard, even if there is a repeal, the rug is not going to be pulled out from the 20 million. they're doing it a certain way. when would you expect a replacement? you think it could be done in three months, six months, a year? >> i think it's going to depend on what kinds of replacement, what kind of replacement we're debating and ultimately going to decide upon. i mean, we've been working at

this for six or seven years now. we still have a long ways to go. it's going to be very important that there's an orderly transition to whatever new plan that we're going to go to, if it is a dramatic change from the current plan. >> we've essentially advised review and repair, not repeal and replace, just because this is very complex, as bernard mentioned. there's a speed. you can do something quickly, but it's hard to imagine how this puzzle will be solved immediately when it's taken so long -- it is so complex. if it does, we'll adjust to it for the needs of our patients. we'll look after them somehow. >> i mean, all the changes we've seen since november 8th, still president obama. this is amazing how much we've talked about how much action there's been in all the markets in anticipation of this. it's really going to happen. next week. get ready. it's really going to happen. gentlemen, thank you. we better come to work for the first time. >> be ready to go. >> i think we should be here

every one of those days. >> back in new york. when we come back this morning, chobani ceo will be joining us to talk about the global consumer. then trump's foreign policy priorities for his first 100 days in office. tom friedman will join us. stay tuned. "squawk box" live from davos back in just a moment. ierleho

inmiecs. th on ac

d nd inmiecs. oft,harerica

welcome back to "squawk box." futures right now indicated up about 30 points on the dow. nasdaq indicated up 9.25 so far. >> okay. we have a lot to talk about this morning. we are talking about global politics, of course, but we're also talking about yogurt right now, one of my favorite yogurts. the chobani brand is a dominant force at the grocery store. recently, the company has come under fire for hiring refugees at two of its u.s. factoriefact. the founder is here with us. he's set up a refugee foundation. he has a new op-ed out today on linkedin. that's where i want to start. we talk about inequality here in davos. we talk about how to fix that inequality. one of the things you did and have got an lot of attention for is you gave out a lot of shares in your company to the workers.

you made millionaires out of people who never expected to be millionaires. you really encouraged and tried to advocate other businesses in how to share the pie. what reaction have you gotten to that idea here? >> this is why we are here to davos, talk about that. what's in everybody's mind, not in america, but around the globe, is this gap is widening between rich and poor, this income inequality is widening. nobody has an answer for it. i think we have an answer, which is the ceos and businesses, tomorrow they can fix this by doing stuff like this. what i did is from my own personal experience. i come from a small town in the eastern part of turkey, growing up hating ceos, businesses, because it was like they come from another universe of something. we farmers didn't have much. when i started chobani. i started in upstate new york in a broken factory with five

factory workers. as business grew, these people work as hard as i did. we all did. the community did. something created -- i always wanted to give more than anybody else when it came to wages, 401(k)s, insurances, everything. it's just not enough. you make the calculation, and ordinary factory works, even with high wages, there's no way they can have a healthy family environment, that the kids eat better, go to schools, or have vacation. so what's your answer? i found out the best answer is the people who work in the company so hard to make this successful, not only they get their salaries and benefits, but they also secure their future. >> you were able to do that pre-ipo. the complicating question is how do shareholders -- if you're currently a public company today, how do you go about doing that without having shareholders say, you're giving away the

store? you're increasing your costs in a way that are uncompetitive. >> they're doing it for their executives. you know, they're doing it in the high level. it just doesn't go to everybody else. my question is why. why not? we all do participate in this whole thing. and shares might be one option. there could be other options. profit sharing or whatever you may call it. but i do believe the only model hasn't been tried is this one, which is employees, associates, or members, or whoever works at the company have a stake at the company. >> and you don't think it creates a competitive issue? >> no. i think it creates a competitive issue in a positive way. now you have 2,000 partners. >> but i'm assuming some of your senior people have to get paid less at your company because more of the money is going to

people farther down the chain. the question is, do those senior people say, you know what, it's a competitive market, i'm going to work wherever it is. >> well, how are they doing? no, you can still make it work. this pool, the 10% pool, and it can grow. i'm a founder and the vast majority owner, and i can do whatever i want to do. it's easy for this. but this to become a norm, we have to talk about it, this needs to become a norm. yes, we can hire executives and give them, you know, the benefits and all the long-term initiatives, incentives. at the same time, if you talk to them, they all love the idea that somebody works in the factory who contributes as much as they do and is going to secure their future. i really believe there's not

going to be any challenge in that. >> i notice you guys really kicked off the trend for greek yogurt. everybody is now trying to copy it. major brands who never had these things before have it now. how much has that changed the competitive landscape for you? >> i mean, early days we were very fast. we focused on making more and making more. i knew at one point these large companies were going to come after. my biggest advantage was i was in a factory and focused on making and focused on the product. these big companies sometimes can be very, very slow. when they come in, of course it changed the dynamics for us a little bit. we built a brand and created a very good product out there. if you look at the landscape in the last two, three years after they came into the marketplace, you know, we all look at the news. yoplait lost that part of it. yogurt is still extremely exciting. last year, we had a record year,

financially and growth-wise. we have so much to go. we launched products like flip and yogurt drink. i believe drinkable yogurts is going to be big in this country. what your going to see is some of the small players are going to get larger and larger. >> before we go, we did mention this refugee project but also the controversy. can you speak to that? >> sure. look, i'm from turkey. i know this feeling really well. i settled in upstate new york. i didn't realize that there were refugees coming from 19 different countries to utica. same thing with twin falls in idaho, when i built the plant. these people did not have a place to go. they didn't have a place to work. they legally came to this country, trying to build a life through this horrible journey. the factory, the community, and these people from all over the world create a family. they made yogurt and built life. and this has been happening for

the last five years. i think when we're facing this greatest humanitarian tragedy, 65,000 people without home and going through this horrible journey, when they settle in somewhere, the minute they get a job, that's the minute they stastop being a refugee. that's the minute they start contributing to society. we have amazing, amazing stories in our plants. iam so proud last year at davos we launched ten businesses. today we have 70 amazing companies working around refugees, especially on integration. >> okay. thank you. good luck. appreciate it. we're going to be eating some chobani yogurt, as we do every day. coming up, the world according to tom friedman. le imy enhe e.

coel

le iotminiw ed 5 e. o ,ookitoacro 7 conth lke time now for your kensho stat of the day. the smart buildings index was kensho's top performing index in 2016, surging 38%. 2016, surging 38%. its top components were and they're absolutely right. they say that it's hot... when really, it's scorching.

and while some may say the desert is desolate... we prefer secluded. what is the desert? it's absolutely what you need right now. absolutely scottsdale. let us now get down to the new york stock exchange, where jim cramer join us us now. we're over here, but back in the states, there are some pretty important numbers coming out from some of these companies that have done very well since the 8th, november 8th. >> yeah, i mean, look, it's hard to figure out what to do with goldman sachs and citi.

they're up huge. you want to sell it at 58, be my guest. goldman is a terrific value. tangible book value is up. the window for selling is going to open. all i can tell you is that the stocks go up when interest rates go up. interest rates are up today. so they're in control because it's algorithmic right now. this is a hard market to trade. if you don't have conviction, get out, because man, these stocks are all over the place. >> if i had one thing to ask lloyd for you, what do you want me to ask him? >> what do we do with stocks like target? bricks and mortar are so dead. target's worst enemy right now is online. online was superb. what do you do? what do you do when your online doesn't make you nearly as much money as your bricks and mortar? that's the situation facing retailers this particular quarter. it happened way too fast.

they're not ready. >> okay, jim. thank you. we'll see you. u.s. relations with russia, israel, and iran are likely to look very different app president-elect trump takes office just the end of this week. let's bring in tom week. let's bring in tom friedman, "new york times" columnist to talk about what he's been seeing and anticipating. tom, great to see you. >> great to be here. >> that's one thing everyone is talking about here in davos is how the world changes and the u.s. relationship with so many countries will be affected. the one thing everybody's agreed on is it's changed, nobody exactly knows how. >> yeah. i -- you know, let's take the russia relationship. personally i'm all for better relations with russia. there are a lot of things we can sure do together. where president-elect trump has talked about working with him is in syria to fight isis. that's the first paragraph. the second paragraph for me is russia's allies in syria are iran, hezbollah and collection

of mercenaries from asia. they're going to be our allies, number one. number two, putin's goal in syria has not been to defeat isis. his goal has been to actually reinforce the leadership of bashar assad. >> right. >> who's been a bit of a genocidal authoritarian there. so the question is how are we going to balance that? how is it all going to work out? because syria only ends well if it's on the premise of victor no advantage kwish. if russia's ready to be a partner for that, that could work out really well and use leverage with assad. if it's to use us to crush allies, that will end really badly. that's one question. another question is china, big question on everyone's mind here. so what's the best way, i think, to counter balance china and asia would be to sign tpp. basically consolidate an alliance of like-minded allies around free trade principles because this is important, i think, for security as it is for trade. but president-elect trump is

either going to renegotiate or so far has been abjure tpp. >> look, the whole idea trump has said he's in favor of free trade but doesn't think the trade we have right now is set fairly or evenly and that america has gotten the wrong end of the stick. i've heard that repeated by nkt democrats and republicans here this week. when they look at it and dig into it they don't think we're getting a fair deal either. >> he's said things that resonate with me. you know me japan, how many oldsmobiles have you seen on the streets of tokyo? there's a reason for that. using greater leverage i think to open up some of these markets i think could make a lot of sense. it's all about how you do it. i'm just watching. i wouldn't -- i'm not pricki i- predicting anything in that regard. >> did you sneak up to the tower? >> i was there, joe, when he came for the times. >> you haven't been up the

elevator? >> i haven't been up the elevator. >> i don't want to be surprised. there's friedman. >> hasn't happened. >> is it scheduled? >> i talk to everybody. >> is it scheduled? >> right, left or center, so we'll see what happens. >> tom, we were at a dinner last night and one of the conversations that came up is the world still flat? in that we now almost feel like in a world that felt like it was getting smaller because of globalization, maybe that flatness is having some bumps in it. >> so i would disagree. >> okay. >> i think one of the reasons this election happened because it's flatter than ever but flatter in the way i actually wrote about flat, which is not borderless. i never believed in that. i think globalization that's driving us forward today is not your grandfather's globalization. that was containers on ships. that is declining. it's digital globalization. everything is being digitized or globalized whether it's facebook or twitter or mooks or paypal.

paypal did $2 billion last year in small loans in basically the developing world to its customers. they've got big data. they know andrew sorken's a good risk. so it's all how you measure it. and i think the world's flatter than ever. which is one of the things that's stressing, i think, a lot of workers in the developed world. >> because? because the technology is displacing them? >> there's two things going on. one is technology is displacing a lot more jobs, and it's creating a world and this is what i meant by flat where more people in more places can compete, connect and collaborate than ever before. i think on balance that's a good thing, but obviously it poses, you know, challenges for us. i think we have a lot to think through now. >> yeah. >> but i think the biggest thing roiling people is one of the things i say in my new book is when i grew up in minnesota the '50s, '60s, '70s congressman in minnesota, growing up in minnesota then you needed a plan to fail.

as america stood astride the world with so much economic and industrial dominance that you needed a plan to fail. now you need a plan to succeed. and you have to update that plan every six months. i think it's true if you're an individual. i think it's true if you're a country. and i think that's one of the things really stressing a lot of people. >> you know, we just spoke with jim cramer and he was talking about target's numbers that were out today. their comp store sales were down weaker than expected for christmas. and you've written recently about how, look, the world's at a tipping point right now and cyberspace is taking over for everything. >> yeah. i think what happened this year we saw it in retail sales. >> yeah. >> we saw it also in politics that our lives move to cyberspa cyberspace. our lives have moved to a realm where we're all connected but nobody's in charge. and there's no 1-800-stop putin from hacking me. there's no judge, there's no court. i think we haven't really figured how to manage in my book

is god in cyberspace, for that reason, who is going to govern there. i think this could be a huge governing challenge going forward. >> tom, i want to thank you so much for joining us today. always a pleasure. >> great to host a show here. >> yeah, hope to have you back in the states with us soon. >> is there a golf course down there? do i see it? >> get a lot of distance. i think it's frozen. doesn't go into the snow. you need orange balls though. >> exactly. thank you guys. don't try blue balls. still to come, talk to j.p. morgan ceo jamie dimon and goldman sachs chief lloyd blankfein, two interviews starting at 10:30 eastern time. "squawk box" will be right back.

. wh's tm irs)at'swolkom tueflkod

welcome back to "squawk box." we are live in davos, switzerland. tomorrow you don't want to miss morgan stanley chairman and ceo james gorman. and we are all getting on a plane to head to donald trump's inauguration. so join us in washington, d.c. on friday. our guest lineup includes aei president arthur brooks. really big show.

really big show. we're not going anywhere by the way here because we're going to be on in just a moment with jamie dimon and lloyd blankfein later. >> yeah, we're stuck. we're not like done. but we're done with this show. but then we'll be back. >> almost. >> we want to be back. >> we do. i do. that does it. make sure you join us a little later. right now it's time for "squawk on the street." ♪ good wednesday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. dow looks to gain at the open after falling five out of six. lots to watch, goldman and citi's earnings, target warning, netflix tonight, trump on taxes, ftse and pound lower this morning, 10-year 2.37 as cpi biggest annual jump in six years. ro roadmap begins with can the rally rally?