this house, drinking a lot of champagne, guys. back over to you. >> that is a live shot to end all live shots, robert frank. our thanks to you. i'm glad we squeezed that into the end of the hour. good morning. welcome to "squawk alley." with me, jon fortt, kayla tausche here at post 9. dow's down 12 points on a busy day. as you may know by now, at this hour, a number of trump cabinet hearings are under way on capitol hill. congress secretary designate wilbur ross testifying before the senate commerce committee, tom price before the health education, labor and pensions committee. price will also appear before senate finance, which will vote on his nomination. that is scheduled for next week. u.n. ambassador designate governor nikki haley on the hill today as well. we're watching all of that. you heard tom price asking questions about his investments and various health care stocks. wilbur ross answering questions regarding trade, tariffs, some of his own housekeepers that he's had on staff and has now had to fire. so a lot going on tonight. >> yeah, and we also have scott

pruitt, who is the designate for the environmental protection agency, the oklahoma attorney general, who will also be -- who is also on the hill for his confirmation hearing today. very, very busy week as we lead up to the inauguration on friday. >> yep. not just this, the president's going to speak, his final news conference at 2:00. janet yellen in san francisco at 3:00. so it's a packed afternoon as well as a packed morning. let's get to john harwood in washington and see what you're seeing. hey, john. >> reporter: carl, first of all, we've got 48 hours left before this inauguration, and donald trump is still trying to develop some political momentum heading into that day, pushing back this morning against reporting by nbc news, among others, that suggested that some of the job announcements that have come recently have been already planned by the companies involved -- general motors, hyundai, walmart, and not because of trump. he tweeted out this morning, "no, it was because of me" and complained of media bias.

one of the reasons he's sensitive is if you look at the results of our new nbc news/"wall street journal" poll, he is struggling to get his footing with the american people, first of all in approval of his transition. just 44% of that compared to 71% for president obama at the same time. and when you look at when americans are asked, who do you want setting policy for the country, only 28% say donald trump. another 19% say republicans in congress. that suggests there are going to be some republican tug-of-war. another 41% say democrats in congress. so even though democrats don't have majorities, they don't have a lot of power, they've got some wind of public opinion behind them. and then finally, we are preparing for president obama to have his final news conference say good-bye to the american people in a metaphorical way before he literally does it on friday. and if you look at this nbc/"wall street journal" poll, you see rising appreciation for president obama as he leaves. not only is his approval rating at 56%, which is the highest

it's been since 2009, when americans are asked how do you rate president obama, where does he stand compared with other presidents, you see that 55% of the american people say he is either better than most of them or one of the very best. it's a remarkable finding for a president who's been so controversial throughout these past eight years, guys. >> john harwood in washington. john, thanks. going to hop over to eamon javers, who is keeping us honest on the confirmation hearings today. hey, eamon. >> reporter: hey, carl. it's been relatively smooth sailing here for wilbur ross in his hearings for commerce secretary this morning. he said so far on infrastructure that the nation is fortunate that it's dealing with infrastructure in this low interest rate environment, and he said that bonds and government spending and private-sector incentives all are going to be key to dealing with infrastructure as the trump term takes place. here's what he had to say on the subject. >> the infrastructure needs of this country are so monumental

that we need any available source of capital in order to meet it on a timely basis. >> reporter: and carl, he also defended himself on the issue of offshoring, saying in one case, one of the companies he controlled did move some employees to mexico, but that was only because the customer of that company demanded that those employees be located right next to its facility, which was being relocated to mexico as well. and he also had to admit that during the past month, he has fired a household employee of his who was unable to provide proof of that person's legal ability to work in the united states. he said that person provided some documentation early on but then within the past month, in preparation for this hearing, he asked the employee and all of his household employees for further proof and documentation. this person unable to provide that. wilbur ross said he terminated that person just within the past month or so. but overall, very smooth sailing here for wilbur ross. he's being treated with relatively kid gloves up here on

capitol hill, carl. >> i'll take it from there. eamon javers and john harwood, thanks to both of you for monitoring the situation in washington. to our other top story this morning -- big banks in focus as earnings continue and the conversation in davos gets under way. jpmorgan chase chairman and ceo jamie dimon joining "squawk on the street" last hour live from the world economic forum. number one on his list of priorities? tax reform. >> we need tax reform. we've been talking about this for a long time. we've been driving capital and earnings overseas for eight years. american companies are at a disadvantage. tax reform, repatriation would bring capital back here and plants back here. it is possible that some people are starting to spend in anticipation of that. so i've heard some ceos here say i'm going to invest already in anticipation. >> in advance of. >> in advance of. i think if you look at the regulatory side, there are things which are legislative, so dodd/frank is legislative, and there are regulations, which can

be reduced. looking at compliance costs, bsa, aml, kyc, liquidity requirements which are making it harder for banks to lend. so there are things that when you look at them, regulators will look at and make a bunch of changes that will be good for the economy. and important part is it's going to be good for the economy, not just banks, the whole economy, which means all working americans. >> of course, he did acknowledge that if money got repatriated from abroad, it could lead to more mergers and acquisitions activity as well. interesting commentary on the global economy. he said in the u.s., momentum is strong, housing is strong, that millennials are opening 57% of the new bank accounts at chase, and also that kids are getting out of the basement and forming new households. he also discussed his conversations with the president-elect about potentially taking on the treasury post. >> did you have conversations with trump about being treasury secretary? >> i am not going to tell you, but i was not offered the job and i didn't want the job --

>> you didn't want it or you weren't offered? >> i didn't want it. i wasn't offered it. >> but you had discussions. >> but the first thing from me is also to offer to help. i called up -- i mean, i was called by steve swartzman and asked me to be part of that advisory. i said absolutely. i'm chairman of the business roundtable because i think it will be helpful to a growth agenda. >> but there were lots of different reports, which i'm sure you read that suggested -- >> a lot were wrong. >> that suggested you wanted the job and you went back and forth -- >> whoever said that was either making it up or lying. >> so, dimon playing coy about whether, in fact, he did have discussions over the treasury secretary job. a very interesting conversation. i encourage everyone to look at it online. but he has said, carl, of davos before, it's for billionaires to millionaires how the middle class feels, but perhaps trying to get a pulse on the global economy. >> making headlines, other media outlets regarding the future of the eu. let's get back to the senate health committee. bernie sanders talking to tom

price. >> did he lie to the american people? >> i haven't had extensive discussions with him about the comments he made, but i have no reason to believe that he's changed his position. >> all right. so you are telling us that to the best of your knowledge, mr. trump will not cut social security, medicare and medicaid? >> as i say, i have no reason to believe that that position has changed. >> congressman price, quoting trump again, or at least paraphrasing him, last week he said, roughly speaking, pharma is getting away with murder. do you recall that tweet? >> i do. >> okay. there are many of us on this side of the aisle who are working on legislation that would do at least two things. number one, end the absurdity of the american people being ripped off by the pharmaceutical industry, who two years ago made top five companies made $50 billion in profits while one out of five americans can't afford

to fill their prescriptions their doctors write. will you and will the president-elect join us in legislation we are working on, which number one, will allow medicare to negotiate prices with the drug companies and lower prices, and number two, allow the american people to bring in less expensive medicine from canada and other countries? is that something you will work with us on? >> the issue of drug pricing and drug costs is one of great concern to all americans. i think it's important to appreciate that in a couple areas we've had significant success, whether it's in the generic area where costs are significantly less than they have been, and in part -- >> you are aware, sir -- i don't mean to be interruptive. we don't have a lot of time. we are paying the highest prices in the world for prescription drugs. do you disagree with that? >> i think that's the case. i'd have to look at the statistics. i think there are a lot of reasons for that, and if we get to the root cause of what that is, then i think we can actually solve it in a bipartisan way. >> one of the root causes is

that every other major country on earth negotiates drug prices with the pharmaceutical industry. in our country, the drug companies can raise their prices. today they could double their prices. there is no law to prevent them from doing that. will you work with us so that medicare negotiates prices with the pharmaceutical industry? >> you have my commitment to work with you and others to make certain that the drug pricing is reasonable and that individuals across this land have access to the medications that they need. >> wasn't quite the answer to the question that i asked. congressman price, the united states of america is the only major country on earth that does not guarantee health care to all people as a right. canada does it. every major country in europe does it. do you believe that health care is a right of all americans, whether they're rich or they're poor? should people because they are

americans be able to go to the doctor when they need to, be able to go into a hospital because they're americans? >> yes. we're a compassionate society -- >> no, we're not a compassionate society in terms of our relationship, the poor and working people, our record is worse than virtually any other country on earth. we have the highest rate of childhood poverty of every major country on earth and half of our senior older workers have nothing set aside for retirement. so i don't think compared to other countries we are particularly compassionate. but my question is, in canada, in other countries, all people have the right to get health care. do you believe we should move in that direction? >> if you want to talk about other countries' health care systems, there are consequences to the decisions they've made, just as there are consequences to the decisions that we've made. i believe, and i look forward to working with you to make certain that every single american has access to the highest quality care and coverage that is possible. >> has access to does not mean that they are guaranteed health care. i have access to buying a $10 million home. i don't have the money to do

that. >> and that's why we believe it's appropriate to put in place a system that gives every person the financial feasibility to be able to purchase the coverage that they want for themselves and for their family, again, not what the government forces them to buy. >> yeah, but if they don't have any -- well, that's a longer story. thank you very much. >> thank you. >> thank you, senator sanders. senator hatch. >> thank you, mr. chairman. welcome to the committee. >> that is bernie sanders trying to box tom price in on medicare entitlement reform, reading some promises from donald trump in which he said there would be no medicaid cuts. price responding he has no reason to believe that position has changed. don't forget, coming up in less than 30 minutes, goldman's lloyd blankfein will join us on "squawk alley" live from davos. you do not want to miss that. new poll numbers are out over donald trump's tweeting habits. we'll discuss the results with inside.com founder jason calacan calacanis. and then netflix's new deal

behind seinfeld and "comedians in cars" getting coffee ahead of earnings tonight. we're back in a moment. hehe

welcome back. just two days to go until donald trump's inauguration. the president-elect taking to twitter yet again this morning, but more and more americans are falling out of favor with the president-elect's favorite form of digital communication. according to a new nbc/"wall street journal" poll, 69% of americans are calling twrump's

twitter habit a bad thing, saying off-the-cuff tweets can often have unintended, major implications without review. and they're not just partisan. among republicans, 47% say his use of twitter is a bad thing. joining us now, inside.com founder and ceo jason calacanis. jason, good morning. >> good morning. thanks for having me. >> well, my first question is, does it matter? because i don't think the president-elect is taking to twitter at this point to win popularity contests. he's targeting his pressure at certain companies, on certain issues, exciting his base. does it matter? >> well, you know, the great thing for trump is that when he tweets, there's no vetting process, there's no fact-checking. he can talk directly to the tens of millions of americans who want to burn down the existing system in washington to drain the swamp and start over. and those people love him and they love his attacking, bullying tweets. and you know, those tweets are

effective in the short term perhaps in a negotiation, but in the long term, i think every civil adult and probably most kids understand that bullying people and berating people into doing what you want is not as effective as collaborating and inspiring people to solve these big problems. the interesting thing is, he's going to gain tens of millions of followers on his personal account while president. he refuses to use the potus account. he'll use #realdonaldtrump. i think the value will be $1 to $2 per subscribers in twitter's ad network for those followers. so he will gain a $30 million or $40 million asset. i don't think anybody's talking about that right now. that to me seems inappropriate. and you know, it's not a very collaborative approach, which is how our government has typically worked. >> but jason -- >> so, if you're burning down

the system, maybe it's great. >> it's not new to bypass bureaucracy to try to take your message directly to the people. fdr did it in his fireside chats on radio, reagan with directv addresses. how is this different? >> yeah, i think it's different because of the tone and the inaccuracies. you know, if you're going to use the medium to bully people and attack people and then not talk about specifics and plans, you're basically just involved in personal attacks. we need to be working on ideas. and i think that was part of why people thought trump would be an interesting, and some people obviously think he's going to be a great president, because they voted for him. we need to talk about the ideas, not attack people personally with "sad" and "losers" and all of this other nonsense he's involved in. nobody wants that from a leader. it's pathetic and it's not the way we want to see anybody treat other people. we want to talk about ideas.

and that's what's really missing in this. you know, attacking the intelligence service before even meeting with them, which we talked on my last appearance about, is unforgivable in my mind. if you really thought that our intelligence community had issues, the people who put their lives at risk, you would meet with them three, four, five times in private and try to understand their perspective and then possibly go public to put pressure on them. but to put pressure on people and attack people before even meeting with them, it screams of immaturity and just a horrible leadership ability, which is why the polls are showing people want trump to turn off and delete his account. >> to the extent that many people believe these polls, we'll see how it pans out. moving on, as netflix prepares -- >> fake news! >> -- for fourth-quarter results after the close, the giant also announcing a deal with jerry seinfeld to bring his "comedians in cars getting coffee" series away from sony's crackle and on

to their platform, along with several other comedy projects from seinfeld. jason, consolidation of power here by netflix? i mean, the only big reason i had to turn to crackle was seinfeld in a car. >> yeah, i mean, 98% of the people listening to our voices do not know what crackle is. podcasting and web series have now become sort of the development league for these big networks and over-the-top services. netflix is going to spend $6 billion on content. if they're making $2 billion a quarter, it doesn't take a genius to know that the 75 cents on every dollar they're pumping back into content, a level of investment that's never been seen before, and it's turning the entertainment industry on its head. if you look at hbo, which has done some pretty, pretty expensive projects, whether it's "game of thrones" or "vinyl," "rest in peace," they're spending $500 million and say maybe in 2018 they'll spend $1 billion. so this is a level of spending

that's unprecedented. >> jason, why didn't apple do this? we were just talking about this yesterday, they're talking about if "southpark" comes to him, he wouldn't turn them away. apparently, jerry seinfeld was on the market. should they have snatched that up? >> yeah, clearly, apple has been, you know, sort of feeling their way around this space and thinking about it, reaching out to people. they're doing a reality tv show about apps and investing in apps. and so, i think we'll see apple, you know, start to ramp up. they tend to move slow, as we all know. they don't want to be the first person up the hill. they wait for things to be established. but you can imagine, dove-tailing with the trump conversation, when all this money gets repatriated, apple could just go crazy and buy netflix or start competing head to head with them. the idea of apple spending a couple of billion dollars a year if they repatriate $100 billion is nothing. and boy, would that make this apple subscription service that

i've talked about before, an apple version of amazon prime, where you get icloud, you get protection for your devices, and you get music, and you don't have to make any decisions and get video, too? people would pay 15 bucks a month for that, and we could see 70, 80, 90, 100 million subscribers on top of the $25 billion-a-year app business that apple has. so don't count apple back, and the fact that trump is going to bring all this money back is going to change everything in technology and media. >> so, in earnings after the bell -- >> it's going to be groundbreaking. >> -- international subscriber numbers? are you watching domestic still? what do you think investors should have their eye on here? >> yeah, i mean, the interesting thing about netflix is simply the number of subscribers, the churn, and it will be spiky. sometimes you'll see them, you know, beat a target by $1 million or miss it by $500,000. if you look at the trend line, it's slow and steady doubling of revenue every couple years and it's not going away. when these subscription services get momentum, it takes a long time for them to unwind.

remember dial-up with aol and hitting over 30 million subscribers. that took a decade, even more to unwind itself when dial-up went away. so, netflix, as they grow, it takes a long time for these subscriptions to go away. so even if they completely screwed it up, this is going to be one of the great companies of our time. this is going to be a google or facebook-level company, i believe. i believe it will be worth hundreds of billions and i think they'll have 200 or 300 million subscribing to this in ten years because the investment level is so beenld so courageous, and the content is coming out so good. they have nailed something, which is, people want episodic, 40, 50-minute content, not movies. all of the great actors of our time are moving to do creative projects -- >> of course! >> -- that are risk-taking, and not for everybody. this puts them at a tremendous advantage over the networks. >> one last thing, jason. it occurs to us that you berate trump for his aggressive practices on social media, but you salivate when it comes to

the repatriation he has in mind for corporate america. >> yum, yum! yum, yum! listen, trump is going to do two or three amazing things. i think there's a 10% chance he's going to be a great president. we have a really interesting joke that's going around silicon valley. trump is either going to last zero terms or seven. nobody knows what is going to happen. it's complete chaos. we can all sit here and talk about what trump's going to do, but we are in black swan territory, and it's going to be a crazy ride. buckle up, everybody. >> nobody knows what is going to happen. don't we long for the times when everybody knew exactly what was going to happen? thank you, jason calacanis. >> well, we had a pretty fair idea. things were a little more predictable, right? this is insane! >> jason, thanks. as we go to break, take a look at shares of target today. the retailer the latest with softer-than-expected holiday comps, cutting their 2017 outlook. we're counting down to the close of the uk and europe. busy day across the bond. ecb tomorrow. goldman's lloyd blankfein is

coming up live from davos. dow's down 14. k r mic. j jt 5

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want to take you back to washington, where senator rand paul is questioning congressman tom price, trump's pick for hhs. let's listen in. >> your motives i think is insulting. to question whether you're honest is insulting. you know, the whole question of, you know -- and i guess this would be my first question to you -- did you go into public service to enrich yourself or for public service? >> i have a passion for public service and passion for people, and that's what guided our decision that some might think was a foolish decision for both of us. >> did you take a pay cut to go into public service? >> i didn't consider the remuneration for public service. >> right, but i'm guessing it would have been a pay cut. the motives as to what we should do -- see, i think we're not

separated that much on our motives. i think we all want the most amount of insurance for people, the least amount of cost. we want people to get access to health care. what are your motives? you know, what are your goals? what should we do with the health care system? do you want more people to be insured? do you want more people to have health care? or do you think we just disagree on how we do it and not necessarily the motives? >> no, as i tried to lay out earlier, and i know time is short for everybody, but the principles that i think are absolutely imperative for a health care system is one that's affordable for everybody, one that provides access to health care and coverage for everybody, one that's of the highest quality, that is responsive to patients. the system isn't any good if it's not responding to patients. one that incentivizes innovation, because it's the innovation that drives the high-quality health care, and then one that ensures choices are made and preserved by patients. so patients ought to be the one choosing who's treating them, where, when and the like. >> you and us by extension, republicans by extension, have

been accused of having no replacement ideas, no ideas for how to fix the system. approximately how many bills do you have that would be -- could be regarded as replacement bills or ways to improve the health insurance system in our health care? >> i had one large-term bill since march or early 2009, and then beyond that, tens of pieces of legislation to address the health care issue. >> it's also been insinuated that america's this horrible, rotten place, you know, that we don't have compassion, and i guess by extension, the physicians don't. but as you worked as an emergency room physician or as a physician, didn't you always agree as part of your engagement with the hospital to treat all comers regardless of ability to pay? >> that's one of the things that we prided ourselves on, that anybody in need of care was provided that care, and that was true not only in our residency but in our private orthopedic practice as well. >> it's interesting, those who

say we have no compassion extoll the virtues of socialism. and you look at a country like venezuela, the great resources, and in utter disaster, where people can't eat, evolving into violence. and you know, i think it is important that we do have a debate, ultimately, in our country between socialism and communism and america and capitalism. one of the things that's extraordinary about our country is that just two years ago, in 2014, we gave away -- >> senator paul asking the georgia congressman tom price about his motives for getting into public service and what he hopes for the health care system in the u.s. we'll keep monitoring this and the other hearings. but in the meantime, markets just closing in the uk and across europe. seema mody's monitoring that. >> hi, kayla. modest moves in european markets just one day ahead of the european central bank's first policy meeting of the year. let's take a quick look at currencies, because of course, that was the big story yesterday. the british pound now giving back some of its gains after posting its biggest one-day surge since 1990, sparked by uk

prime minister theresa may's speech, where she did say britain will look for a clean break from the european union. keep in mind, yesterday the pound surpassing 1.24 before pulling back, as you can see here on this chart. sticking with the uk, uk-based education publisher pearson tumbling after issuing profit warnings for the next two years. a company hurt by a textbook sales slump in the u.s., perhaps a sign of the times. pearson also putting its 47% stake in publisher penguin random house up for sale. take a look at the price action, down 29%. lastly, populism and the backlash amongst globalization among the issues discussed at the world economic forum in davos, and billionaire hedge fund tighton reiddalo talking about the situation in europe. >> if you look at europe as a whole and you were going to say, what is the greatest threat to the european union, it is not the debt crisis, it is not

central bank policy. it is the movement of populism. >> -- tested in march with elections coming up. as for tomorrow's ecb meeting, no action is expected after the central bank extended qe by nine months. at the last meeting. the key metric to watch this year will be inflation, which has been on the rise. also, we'll take a look at whether the ecb president, mario draghi, makes any comments about the incoming president, president-elect trump, and of course, keeping a very close eye on the euro, which by the way, is down 3% against the u.s. dollar since the election, carl. >> all right, seema. thank you very much for that. let's take you back to capitol hill -- nope, we're not going to do that. we're watching for tom price. we'll see if any headlines develop out of that. meantime, goldman sachs coming off an impressive quarter, thanks in part to the trump rally. and when we come back on "squawk alley," we will talk to ceo lloyd blankfein live from davos. a lot more coming up.

hello, everybody. i'm sue herera. here is your "cnbc news update" at this hour. senator lamar alexander, chairman of the health, education, labor and pension committee, says congress should not repeal obamacare unless it has a replacement ready. he released a statement ahead of his panel's hearing, which you've been seeing here on cnbc on the nomination of representative tom price to head health and human services. three earthquakes hit central italy in the space of an

hour today, shaking the same region that suffered a series of deadly quakes last year. no immediate reported casualties, but the tremors were felt as far away as rome. ringling bros. says that its final show, which is going to be held at the nassau coliseum on long island in may, is sold out. "newsday" reporting that seats normally going for $23.75 to about $191 are now being priced on the secondary market at between $245 and $2,000. and former sara lee ceo brenda barnes died yesterday after suffering a stroke on sunday. she caused a media sensation in 1997 when she gave up her job as head of north american beverage operations for pepsico, saying that she wanted to spend more time with her three young children. she was 63 years old. that is the news update at this hour. let's get back downtown to "squawk alley." carl, back to you. >> sue, thank you very much for that. let's get over to the cme group and check in with rick santelli

for "the santelli exchange." hey, rick. >> good morning, carl. you know, there's a commercial about rings, that every good thing starts with a "k," "k" is for kiss. well, there happens to be a kiss that's important when you're a technician trading markets as well. sometimes it's a kiss good-buy, nasdaq b-u-y, and sometimes it's a kiss for a good sell. and what it really is, quite simply, is when you have a technically significant level -- remember, the interesting thing about technical analysis is the prioritization effect, as i call it, meaning you could have a variety of techniques for trying to ascertain where there's support and resistance. you could use trend lines, you could use channels, you could use formations, head & shoulders, wedges. then there's the mathematical side of retracements, fibonacci retracements, gand angles. the feature is when you have

many methodologies that give you the same level, you prioritize that. it becomes more tech clanically significant. and embedded in that is a retest. and i'll show you what i mean. let's take the dollar index, for example. if we start out at a more macro chart, a daily chart, what we'll find is that 100, in my opinion, was a very key level. and once you went through 100, we have yet to go back underneath it. and we went through pretty powerfully through this level. now, if you go to an intraday chart from december 5th through december 8th, what you will find is intraday there was actually a couple of trades under 100. that kiss many times can turn into head and shoulders and other formations, but usually the first time, for sure, you want to buy it when it comes and retests or kisses. on the second time, you want to be a little bit more cautious, but it doesn't mean the formation doesn't work. now, we can also look at the same thing in reverse. for a good sell versus a good

buy for 10-year notes. taking the macro chart, you've heard me talk about 227 so many times along with 260 and 303 and the 240s, because we had so many important congestion levels there. all those were very significant if you were trading the market from about september through today. now, when it comes to 10s, we never came back and retested that 2.27, similar to the 100 and the dollar index. we've come very close, but we haven't done it. and boy, do we go through it like a hot knife through butter. but if you go back to the intraday charts from the 29th and 30th, you'll find one day that kind of went right on the cusp of both days, so outside our time zone. in both of those instances, we traded down to 2.28. that was probably the kiss. will it always give you a good buy or a good sell? no, but i'd say put it in your arsenal. it gives you another technical methodology to help you prioritize the most important levels. carl, back to you. >> all right, rick. thank you very much for that.

rick santelli. let's get to davos, the "squawk box" team with goldman's lloyd blankfein. hey, guys! >> hey, carl. great to see you. we are with lloyd blankfein, the ceo of goldman sachs, who this morning announced earnings which beat the street handily, quadrupling profits. congratulations on that. but a huge piece of it was the fixed income piece. we want to talk about the trump administration and the economy and where the world of wall street's going, but on earnings alone, how sustainable is the fixed income piece? where do you think this is all headed? >> you know, we've always been committed to the fixed income business. some people were pulling back from it. i think the fixed income business is going to be in a cyclical trough when interest rates are close to zero and there's no yield curve. we didn't think that was a particularly sustainable situation. so as the world gets a little growth here and as rates get raised and as people anticipate further raising of interest rates, those markets of course become a lot more interesting. and -- >> you separated the two.

we want to talk about trump, too, but i think -- isn't some trump effect already in these results in fixed income that you saw? >> yeah, i think one of the reasons why the election had such a dramatic effect is because it was drawing people in the direction that it was already heading. i think the markets were improving. you know, the fed's focus on the likelihood of them raising rates, the growth was already in it. we were already getting at or near full employment. >> but? >> i think that was already baked in. and of course, the fact that, you know, president-elect trump's platform is, you know, is so stimulative is just going in the direction of the tailwind -- >> but you can -- delta said they saw, they could draw a line between what happened and some improvement in the results. would you say the same thing -- >> no, no, definitely filled people with greater confidence. listen, it's a reality, because

the expectation is, you know, a lot of his commitments were lower taxes, more spending on infrastructure, maybe more spending on the military as well, peeling away some of the regulation, which is also kind of a stimulus to the market, and those are going to be real -- >> so, not just -- [ everyone talking at once ] you've already seen it? >> yes, and by the way, it's also not just the difference between this new set of expectations and the status quo, it's also the difference between the new set of expectations and what was built in had the pundits been correct -- >> the question we've been asking everybody on set since we've been here in davos, and we just talked to jamie dimon about this -- how much of this is baked into the stock market already? meaning, are we priced to perfection all of these things, whether it's tax regulations, et cetera, or is there really a lot more room to move, if, in fact, these things get done? >> no, i think, look, there's a lot that can go wrong, but i think we're at the beginning of a change in the cycle.

so i don't think -- i think there could be a lot more room. even if it goes -- but if it falters or something goes wrong or a risk pops up we haven't anticipated, it won't, but my base case is it will keep on going. >> internally, do you say to yourself it's possible that economic growth in the united states will be 3%-plus or more? >> yes, it's possible. i think our writing on the topic is, you know, 2.5% to 3%. but it could get -- >> do you think it gets to 3.5%, 4%? >> i don't know. i think -- in the range of things that i plan for, it is a distinct possibility that things work out okay. >> you know, lloyd, you are a risk manager. that's what you do. how do you assess the potential risks around the situation? >> oh, my god. look, i spend 98% of my time thinking about the 2% of the things that can go wrong. so, i can go on for a long time on that. you know, there's a lot of things you worry about. i worry about, you know, i worry

about europe, worry about -- pick a place, i can tell you what can go wrong in that place. and of course, we plan for that. but i think there is a risk here, some small risk that things actually work out and we all muddle through. and if you ask me, i think that's actually the likely outcome. but you know, there's a -- >> there's not a small risk, that's a big risk. >> it's a big risk to think we will muddle through. but basically -- and again, i would say that it's exacerbated by the politics at the moment, but i don't think that that's the initial cause. it was going in this way. you know, the basic bones of the u.s. economy is good. you know, look, the balance sheets of companies and balance sheets of individuals had been fixed. again, i'm talking about full employment, wage growth. it was getting into wage inflation was coming back in. energy situation is very, you know, benign in the country. i'd say it was, you know, fundamentally, things were kind of getting better anyway. and so, this is pushing in the direction of the momentum. >> what are the implications of

so many people from goldman sachs, including gary kohn, now dina powell, steve mnunchin, former -- obviously, steve bannon, all former goldman sachs people. how do you think about them being in government now in terms of your business? >> look, i'm very happy if good people go into the government. i think everybody mentioned it's pretty good. i think it's kind of -- you know, obviously, there's an issue there's too much concentration from a single place, whether it's a company, whether it's a region, whether it's an industry, but i think what's happening is they're picking people individually, and guess what, there's a lot of people that -- you know, also, who do people know? and you think of, there are a lot of people in our firm who have had a very high profile for a long time, so some of them going into government and they're public service minded. and we've had a tradition -- this is not a new thing for us.

i'm a little defensive about this, because in the last cycle, we were made to feel a bit defensive because people from goldman sachs habitalually wentt the end of their career, but not at the end of their business life would go into philanthropy or go into public service, and that was always a good thing, and it became sort of per jurortive that people would commit themselves and go into public service, but that's been a long tradition. my last five predecessors went into the president, people like bob rubin and steve friedman and hank paulson and john whi whitehead -- >> would you go into the government? you're saying your last five predecessors have. >> you know, the one six back died at his desk, so maybe that's my way out. >> so, this move towards nationalism, populism, brexit, trump, does it become le pen? does it -- have we hit the nader, or are we still climbing, and does that mean the end of the eurozone?

>> i don't know. two points determine a line, but two data points don't necessarily make for a -- you know, you can't define a political era from that. i'm still digesting what all this stuff means. >> what about europe? will it be here? five years from now -- [ everyone talking at once ] will the euro still be the currency five years from now? >> i think so, but there are -- you know, look, this is still the gestation in the scheme of things. this is still -- they're still working on the foundational principles of what it means. this was supposed to be an evolution of -- you know, it was a political reproachment, and it was aimed at, you know, for political reasons, to accomplish that objective rs but over time it was supposed to evolve into an economic unit. that's complicated. that's very hard to do if it's not done, it's not accomplished. so we're finding the pain of

that, of people submit -- you know, of people submitting and brussels getting involved in very, very fine regulatory issues in specific countries, and that form of federalism has to be worked out. federalism wasn't worked out in the united states until four score and seven years after the country was formed. it took the civil war to sort it out in the u.s. i don't think it will take that here. but let's not underestimate how, you know, how the birthing of what we think of now as the american system, the federalist system, took place. >> i'm talking about the united states, i just wanted to go back and try to understand what you think's going to happen, especially given that you're in the middle of working for so many multinationals who may be thinking of mergers and acquisitions, especially if we get some of the tax proposals, especially the repatriation through. what do you think happens? >> well, i think that there's a lot of pent-up interest. look, companies had made themselves -- you used this last period of time to get -- look,

every time i want to think about other companies, i think what would you do? because that's the best indication, really. and we used this last period of time when the economy was relatively slow and growth was slow to really, you know, tighten ourselves up, make ourselves tight and more nimble efficient. i think a lot of companies have done that. they positioned themselves to now think strategically. people have planity of -- you know, plenty of cash, balance sheets are in good shape. people can give effect to their strategy by looking and making acquisitions here and decide really what businesses they want to be in and what business they don't want to be in. there will be some sellers of businesses and some acquirers of business. i think if additional cash comes in that will be a positive for the market. >> if you look beyond mergers and acquisitions, things you're talking about could also lead to more hiring, additional job growth. it could lead to investment -- not necessarily for your company alone, investment back? >> sure.

one of the things people talk about is they talk about that companies returning money is adverse to investing. but when companies are returning money they're giving it to investors who turn an and want to invest it themselves. money is going to be invested, it's just a question of whether the company is make that decision or they are returning the money to their shareholders. dividends and buy backs, and letting the shareholders. it's interest that people talk about returning the mop any to shareholders as it is if it's unpatriotic or uneconomic. i remember in another environment people were critical of companies that were spending money and investing in their own industries even though that might not have been the best place to invest and people are saying return money to shareholders and let the shareholders decide. >> income inequality. >> i hear it all the time. there's almost no opposition to it. but i think it's a perfectly legitimate thing to make an assessment can i use this money in our business or am i serving my shareholders better to give

it to them and let them -- maybe they want to invest in silicon valley. >> they're not all fat cats. >> i don't think the money is going to be recycled into investment. >> when you spend time with your team and your lawyers -- >> a lot of industries are highly regulated at the moment. and may find it hard to make those investments. >> that's what i was going to ask you about. dupg that's going to change under a defanged dodd frank if that's what it's going to be? >> if it's all right with you i'm not going to adapt your formulation. but i think the president-elect has already said -- and let me say to my own -- in my own voice. there has been -- for very good reason, regulation came on very heavily, especially in our industry. and it was no -- and the pendulum may have gone too far. i'm not sure the regulators would have drafted all the laws that drive their regulatory -- their burden is to fill in and

accomplish the objectives as stated in the initial legislation. i think it's time to look at this stuff, not all -- not all the regulation is serving the interest of safety and soundness and certainly on a cost benefit analysis it's not. that's not saying we want repeal of all regulation or repeal of dodd frank or everything like this. we want to take another sensible -- now that have we experience in operating. >> ken griffin recently said in chicago he didn't think goldman sachs should necessarily be a bank, still be considered a bank by the federal reserve, have access in the way that it does. >> well, i think the way the rules are now where strategically important financial institutions are going to be regulated in a bank like fashion, there's no -- the only practicality of debanking would be for us to lose the benefits of being a bank but not necessarily regulatory burdens of being a bank. so we would have to redo the regulatory scheme for us to think realistically of doing

what it would take to forego our status as a bank. >> i was going to ask you what you know about jay clayton who has been put up as the head of the scc, cromwell lawyer has done a lot of business for goldman sachs over the years? >> he has a terrific reputation in our firm. i've never met him. >> do you have any expectation of the way he thinks about the world? >> well, i can -- i'm very free in giving opinions since i've never met him or talked to him but i don't think it would be -- i don't think he would want me speaking for him. >> going back to these earnings. some of the numbers are like up 78% year over year. and i know things are getting better. things have been getting better for eight years and we've been waiting to go above 2% for eight years. i mean, it seems -- it seems like it's happening this time. >> i hope, look, i hope it -- i hope it stays that way. it's off a base that buyers are historical performance, a lower

base so it's easier to get higher percentages. i think it's going in the right way. we like it. we're not -- and the condition -- you know, condit n conditions improved. >> you know the stock is the best dow component since november 9th. >> yeah. >> that's you though. that's not trump. >> no, he's part of the macro environment. like i said, it's not only the difference between his platform is highly stimulative. i like that part of it. by far. and not just in the comparison is not just to the status quo ante, it's the comparison to what we would have had if the election had gone the other way, which is increased taxes and more regulation. so it's quite a big delta between the two things that's very favorable. >> in hindsight do you wish you had backed the other horszs or do you like regulation and higher tax snes. >> i don't like more regulation. >> you said that's what we would have gotten. >> but there's other factors at work here, too. look, i'm dying to like -- let

me put it this way. i am dying to look back at this and like the outcome of it and i'm certainly going to behave in a supportive a fashion as i possibly can to make sure that i like it. >> good. >> okay. >> can we talk about interest rates again? >> sure. >> where do you see interest rates headed? there are so many different opinions that we get. so many different opinions we got that inflation is going to step in faster. we should worry about a lot of different issues. when you look at it and look at the rest of this year, where do you see us ending? >> you know, i think that -- i think when sentiment shifts, if sentiment shifts people are going to forget what they thought five minutes before. >> right. >> and i think if we get ourselves -- you can go from a moment where i was so reluctant to raise rates to a point in time where all of a sudden people are sort of getting very anxious that we're really behind and then the sentiment and pressures will shift.

i think it's good to say -- it's good to have forward projections and expectations and be as open but you're only open with what you think right now. look to joe's point, there was a shift in sentiment. >> yes. >> and with that shift in sentiment you can -- you know, you can have -- again, when we're dealing with markets -- look, economics is not even -- is not really a hard science and market is one step further removed than economics from being a hard science. >> right. >> and markets is very, very much sentiment, confidence, and all those kind of emotions that can really change kind of quickly. and so the answer is, i'm in line with people's expectations, two or three more increases. blah, blah, blah. but you know something? i've also seen people go over a nice edge of something and fall into a different environment that people think we have to go more.

>> the risk would be to the upside, we would see additional -- >> there's risk to the upside because the consequences of getting it wrong on the downside was so severe that people who are charged with the policy appropriately held out for longer because, again, the consequences of deflation are so much more severe and there's no real playbook for dealing with it compared to inflation. and a lot of -- by the way, a lot of the kind of more liberal economists are urging even forbearance now because they would like to see inflation established. i understand their point. but i think at this point it's getting kind of growthy outside and i think it's okay to -- >> we did have -- like larry summers, one of the things he's warning about -- >> he's one of the people i'm thinking about. >> a sugar high. >> but he also thinks that we could be in danger of being too stimulative and rates go up too quick. i think with ve time, don't we? >> i don't want to waste all my time of derisk prolktbabilities.

at least at this point if it went that direction there are things we can do. now that we've raised rates we can lower rates. we close the budget deficit by raising taxes and we see sequestration but we did it. in terms of cutting spending and raising taxes and narrowing it. guess what, if we needed to stimulate the economy there's room to spend, increase the deficit. we can lower -- you know, now that we've gone this far it's less dangerous because we're in a better place thanner we were? >> lloyd blankfein, always appreciate your time. thank you for hanging out with us in the cold this evening. >> this is -- i would call this a low overhead operation. >> well, i know some people who think it's a high overhead operation. but thank you. >> yes. >> we're going to send it right back to carl back in new york right now. >> thank you, guys. >> thanks, guys, andrew, becky, joe, lloyd, thank you. fascinating to listen to lloyd talk not just about the environment regarding growth but

also the migration of goldman executives to public services and more. dow has added to the losses in the past few minutes. down 51. still got to get through the president and janet yellen this afternoon. >> also interesting to hear blankfein talk about his attitude toward a trump presidency. he wants to like it. >> headquarters and "the half." carl, thanks so much. welcome to the "halftime report." i'm scott wapner live from washington today where in just 48 hours donald j. trump will be inaugurated at the 45th president of the united states. one man who will play a key role in the trump administration's relationship with business is with us today, anthony scaramucci, adviser to the president. he's here with us now. >> i'm glad to be back. >> it is good to have you back. we'll get into that later. official title is assistant to the president, director office of the public liaison. what does t