arabia it's monday, october 23rd, 2017. "squawk box" begins right now. ♪ ♪ live from new york, the city that never sleeps. this is "squawk box. good monday morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew is in saudi arabia this morning. he got unprecedented access to saudi's aramco we'll have an exclusive interview with the ceo in a moment then at 7:00 a.m. eastern principles alwaleed, the prince of the king done holding company will be joining us for an entire hour. take a look at this, the u.s. equity futures indicated higher once again. in all the records we've talked about this year, now we have yet

another one. the s&p 500 had its first per week in nearly 20 years. a per week is when you close with a record high every day all five days. that's the first time it's done that since march of 1998 been a big year for the dow, too. it had a per week last year. it's not the first time it's done that this year. both the s&p 500 and dow are coming off of executive consecutive weekly gains hat tip because i didn't figure out these numbers, he did. s&p futures up by another 3.5. nasdaq up by almost 14 overnight in asia, here's another place where we've seen record after record. nikkei once again closing at another record high. up another 1.1%. gain of almost 240 points to 21,696 this is the highest level they've seen in 20 years hang seng down .6 percent and shanghai up by .1 of a percent

early trading in europe, most of the markets are trading higher dax up by .6 cac is up a little bit higher. ftse up a little bit and italy up a little bit. crude oil prices and you will see that at least this morning things are -- well, they're relatively flat. up by 1% brent be is down by 17 cents >> look at the ten year? that's like murphy's law the one i wanted to see. >> did not come up >> no. that's always the way it is. almost 240 >> picking up yields again. >> we haven't seen it. 2.395. when we get above 240 it's usually short lived. you can see that one of these days. one of these days i'm going to cut you into little pieces. >> what? >> freud. >> hannibal lecter.

>> one of these days that's going to get above 250, 260. one of these days. >> unless you listen to somebody like mark grant who thinks we could be facing lower yields yet again. >> we're going to get this week the first read on third quarter gdp. >> maybe that will do it. >> it's going to be affected by hurricanes, right? >> right also you know what else we're going to get jobless claims on thursday last week it was the lowest in 33 years. >> yes. >> i thought it was even longer than that. >> kyle making his move. steady cam really a good shot there, kyle really that's heavy, isn't it how do we get a shot of you aiming that thing when you're the one getting the shot that's impossible. >> he can take it from that camera. >> like measuring yourself. >> see, camera one >> it's like heisenberg. >> need mirrors. >> breaking bad. bang up job. >> you're on, man. you're on. >> we're cooking early.

>> busy week as i was just talking about, here's some of the things i'm going to mention we already talked about. durable goods and new home sales on wednesday then the jobless claims number that i was talking about, that comes on thursday. then on friday we get the first report on third quarter gdp. then you get the second report on the first and the third report on the second it gets complicated. first report third quarter we've had two back to back threes chbl threes. >> who's on first? >> in the first quarter we didn't have a good three solid three in the second. the hurricanes maybe put a crump in the works for the second straight quarter ahead of that, atlanta fed let's see earnings could be the busiest week yet. 170 of the s&p 500 will report this week. there's the list of some of them name a few, 3m

caterpill caterpillar, gm, mcdonald's, coca-cola, boeing. amp ma zon >> dow components. >> who's who of american business perhaps the greatest of all companies there, comcast. >> on thursday. >> is going to report on thursday as well in the eye of the beholder obviously. maybe some people might argue it's not the greatest but -- >> given all the numbers we've heard, wall street will be watching people will be looking very closely at comcast. >> comcast was one of the first to say anything about some of the hurricanes hurting the video. >> the bigger question has been cord cutting. >> we'll see nfl stuff, too, in comcast. some analysts -- which one did they cut, cbs? >> based on -- >> cbs has a bigger number of days looking at some of those.

based on advertising, whether that comes back. >> did you see a couple of stadiums >> i did i don't know if those are stadiums that are perennially problematic. >> chicago >> yeah. >> i mean, you -- there's -- >> the bears. >> the bears there were more seats. it looked like there were more seats empty than seats with people in there. >> yeah, i questioned the same thing when they actually took those shots. over the weekend the spanish prime minister announcing plans to dissolve the catalan parliament and impose direct rule on the region willem marx joins us from barcelona. willem, this is something we kept thinking might tamp down. not the case. >> reporter: definitely. we were hoping the best case scenario hoping for a fresh

government that's pushed them on to president as well as 13 members of his own cabinet they're going to be taking over the local police force, local tv and trying to find a way to take over all of the local government executive branches essentially from madrid. massive changes coming here. we saw protests over the course of the weekend more than 400,000 people out on the streets in barcelona protesting these proposals what will happen next is that these will be discussed by the senate and then ratified by the spanish senate later this week down in madrid at which point they will be enacted. what's not clear right now is how the catalan leadership will react. whether they encourage civil servants to walk out of their jobs nobody is clear. >> willem, one of the things we've been looking at is this whole idea that the wealthier

areas, both in spain be and now in italy where we've seen it, too, the wealthier northern areas are tired of picking up some of the bills for some of the southern areas i was looking at some information over the weekend talking about how the catalan region is 20% of spain's gdp and on its own it would rival some of the country that you're not surprised to see how much of that is playing a role in what you're seeing in catalan and northern regions of italy? >> yeah, historically this is a big argument about fiscal independence and that really hit hard here in spain the catalans asked the question, why are we sending so much money to the center and getting so much less back in terms of spending they ask for a lot more fiscal autonomy and that was rebuffed by rajoy he was the lead man trying to

crush their effort that's led us back. that was part of a region that historically wanted to secede from italy it was done under the auspices of the italian constitution. what's happened here, of course, is something the spanish government deems unconstitutional that's why they're taking the actions we've seen over the last few weeks and imagine what it continues to see in the next few weeks. >> willem, thank you very much we'll check back in very soon. willem marx. in other global news, japan's nikkei rising for the 15th straight session. yen hitting three-month lows against the dollar cnbc's akiko fujita joins us from tokyo i was reading the piece to understand what parts of the constitution would be potentially changed just so i understand it a little bit better maybe you can help me, akiko

>> reporter: yeah. this is something that prime minister abe has pushed for for some time. we're talking about a clause in the constitution called article 9 which essentially says japan can't maintain armed forces in order to prevent japan from wagging war. the reality is japan has had a self-defense force in place. the prime minister has essentially said we should call it as we see it and japan should have an additional clause in place to say that japan should have at least the right to possess a military one of many issues debated in this election. now looking at the results of the election this certainly puts the prime minister in the driver's seat to seek a third term as japanese leader which would make him the longest serving japanese leader in history, but when you look at the numbers despite the party securing the 2/3 of aib himself.

the voter turnout was the lowest in post war history. when you look at the public polled, most than half say they didn't support abe himself this is more of result of a divided opposition now the prime minister did frame this election as a referendum on his economic policies as well as his handling of north korea and today he vowed to press on with pressure on pyongyang working very closely with washington take a listen. >> translator: now with support from people extended to us, we will conduct strong diplomacy as tension over north korea is increasing on the fifth of next month president trump is scheduled to visit japan. he called me by phone and when he visits japan we will spend time and aim to confirm our close alliance >> reporter: and in that phone call the prime minister

reportedly agreeing to play golf with president trump here in japan as well. the prime minister also talking about pushing forward with his economic policies, specifically a 2 trillion yen stimulus package would be used to talk about education as well. he faces a massive debt here in japan. he hasn't addressed the budget with the debt more than 250% of gdp. back to you. >> we understand that number that is a big number akika, thank you now to political news here at home, president trump is calling on the house to adopt the senate's budget this week and then push forward with tax reform trump made the comments on a house gop conference call just yesterday. >> of course, when it gets to tax reform, it's the details that really get sticky we're starting to hear more and more of those details. house republicans are reportedly considering a sharp cut in 401k

contribution limits. this would reduce the amount of money americans can sav in tax deferred retirement accounts it's considering as low as $2,400 for 401k accounts right now it's 18,000 for under age 50 and 24,000 for over age 50 >> they are looking for pay fors, right? you have find places for pay fors as we go along. >> it's not like we feel that everybody in the country is ready for retirement. >> right at a time when pensions are disappearing. >> right. >> most workers don't have those. you're told to save on your own. by the way, we're going to strip away the tax incentives for doing that that's going to be tricky. >> we don't know about some people saying the thirty-nine five stays out over a million

now. >> right right. so -- 39.5% for the top. >> take away state deductions. >> those people will be paying more. >> keep it 5939.5. >> that's a big tax increase. >> some of the people seeing the overall number, top half of a percent? >> the top 20% pay 80% i don't know where a million is. >> pay 70 -- but i don't know -- >> where that falls? i don't know either. >> there are a lot of people where taxes will go up. >> right >> that's going to be -- >> that goes against the -- if you talk to heritage, aei, anyone, that goes against the idea of across the board tax cuts and broadening the base. >> if you listen to the president he'll have a tough time like state and local tax cuts. >> not as many

people that itemize. the only people that -- >> they're item miedsing. >> that could be somebody who's making $250,000 in new jersey. with the higher cost of living there, $250,000 does not put you on easy street. >> you should pay more for the ability to live in new jersey particularly if you live by newark airport. the department of homeland security and the fbi are issuing a cyber threat nuclear firms, aviation industry i mean, this is some pretty scary stuff. >> yeah. a little bit alarming, becky the warning went out late friday by e-mail from the fbi and department of homeland security. it is being called a rather public warning by those groups the attacks are by a sophisticated set of actors, not clear exactly who's behind this, and they began in may. here's what we know about which

specific sectors are being targeted as you say, it's a very long list here starting with nuclear, energy, aviation, water and critical manufacturing all being targeted by this mysterious hacking group that the government says has been active for several months and has penetrated some of those networks what do we know about who is behind this? not much definitively but the sign berp security firm crowdstrike says this could be an entity called be sebeserk be. agrees sieve activity but no destruction is still ongoing it looks like what you have here is an elaborate probe operation going into the sensitive industries in which the hackers are determined to figure out how the industry networks work and maintain a permanent presence in them to what end is unclear

is this sort of a just in case kind of preparation for total war that intelligence agencies go tluf all the time or is this a prekersor, more subtle attack in the future. not clear where this is going. the u.s. government wants people in those industries to know this is happening and to take steps to stop it. >> eamon, the question becomes if you look at it from a potential question of war down the road, the question is do we have similar situations set up in their key industries like this can you count on detante or mutual mutually assured destruction >> you can technology doesn't have the same as nuclear with cyber, it's not very clear. i've covered thisfor a number of years they talk about in cyber security, a cyber 9/11 what would nap we saw a cyber

attack that came through russia. it targeted our election none of the people in the cyber security industry were prepared for that social engineering attack everyone was concerned about what happened if they got to a dam. what they got to was ourselves, our emotions and our fellow americans. that's what was being ma niche pew lated. cyber can be very, very subtle it doesn't have the mutually assured destruction piece that we are used to. >> this report in particular talking about aviation, water, energy, nuclear, that is pretty terrifying that's like end of days type of things if you play out some of those scenarios. >> it absolutely is. presumably the u.s. has similar capabilities offensively they don't talk about it the problem is the united states

is one of the first societies to put all of this infrastructure online going back 20 years now we are in a weird way although we're more sophisticated, more vulnerable to cyber security attacks. we have more of our system set up that makes us disproportionately weak and it's a field day for foreign intelligence services. >> eamon, thank you. >> you bet. let's get back to the stock market broader markets. darryl kronk is at wells fargo investment institute he's president there we had discussions last week about where we were in the stages, psychological stages of a long bull market, whether we're at the stage where you're finally a believer or whether you're at the stage where there's actually some euphoria and some froth are we merely at the believing stage? which leaves a couple of years, joe, or are we at the euphoria

>> i think we're moving to it. we're not in the our for yeah or the believer stage is that true >> the return structures are seeing euphoria. industrial metals are up 25% you're not seeing the flow of capital come in from the retail investor that the euphoric last stages. >> that's what you see people aren't believing it, that seems like an earlier stage. that's where you're climbing a wall of worry. money going into assets but no one understands it or believes it that would seem you're saying we're not at the euphoria stage. >> we're not quite at the euphoria stage i will tell you, i was looking at that this weekend quietly equity positioning is rolling up there as well so it's starting to get higher and higher

the issue here between now and year end, i think, joe, is you have two things happening. one, there's a dirth of sellers. number two -- >> because -- because of the tax -- potential for tax reform? >> tax reform is going to be difficult to happen in 2017. most of the estimates are we can get something done in q1 of '18 and q2 now or never for tax reform. quietly, companies are putting more money into under funded pensions if you can deduct a contribution in your pension plan at 35% instead of 20 or 23, that's a big return all of that money is grinding its way into markets >> you said the market can go as far as earnings take it. and, you know, that does make sense. earnings will go up if tax reform does. last week i thought we saw a

clear message between what congress was doing and the market there seemed to be a linkage between tax reform and better markets. is that still happening? >> if we do get some sort of tax reform or something on the other side, which would be some kind of stimulus, that's going to be -- >> infrastructure in. >> infrastructure. it can be a massive accelerant earnings don't need taxes for infrastructure spending in order to move higher from here it's not just earnings in the united states, it's earnings all around the world this is a late cycle environment. that's when you typically start to see this coordinated growth you also will start to typically see inflationary pressure and things like that all of that is very, very good for equities in this eighth inning in the bull market, the last two innings could be, you know -- they could absolutely be elongated in baseball terms,

innings are not time dependent they could be shorter and longer this could go on for quite a long time. the main spoint investors are still krachg their heads over how the markets go higher. our answer is, just look at profits. we're in the sixth or seventh quarter of this profits repla reflati reflation. this week we'll see continued acceleration this is an environment to be bullish. >> so the inflation that you talked about is like wage inflation which if it doesn't get out of hand, that can actually be positive because it doesn't flee through the economy? >> even though we're -- >> the economy is 60% consumption driven which means it's going to turn into consumers buying more things. >> all right thank you. >> is 2that part of it yet? >> we haven't adopted that. >> you are double your money

under management i'll telling you. >> because you sound so much better. >> pay it back to you. >> he just takes it and, you know, which i think he thought he thought of it which he definitely did not. >> no. >> we have an exclusive look inside the nerve center of saudi aramco they're going to likely become the largest country in the world. we took cameras where they're not allowed before andrew has an exclusive interview right here next on ""squawk box." alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life.

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andrew ross sorkin is in saudi arabia this week he caught up with the ceo of saudi aramco in the operations control room they kicked off their conversation with how aramco, the crown jewel of the saudi economy, plays a role in the country's plan to try to transform the country's economy by the year 2030. >> where do you see aramco within the context of that transformation >> i think aramco is at the heart of the 2030 transformation because talking about accomplishing certain percentage of saudi aramco in the market and we're looking forward to

participating in that and supporting 2030 and being included in that and hopefully participating through saudi aramco efforts in different sectors in defining in terms of upstream, in terms of petro chemicals, down the value chain, creating industries. a lot of contribution will be coming through saudi aramco. in addition, i think the listing will alleviate our international visibility decision making strategies and also our governments and all of these will be held. >> how do you think the culture of the company is going to change once it's public? >> well, aramco -- i can say aramco has always been run like publicly traded companies. if you look at our governments, we have independent board

members. everything that is being done in the company similar to any international oil company in terms of the way we do business. only exception is that our shares are owned by the u.n. entity which is the government but in reality, we always thought for ourselves, we have a lot of similarity to publicly traded companies. >> one of the remarkable things about this company is how long term oriented it has been historically and how focused it has been on the long term in terms of the types of inve investments. in a world dominated by the stock market, do you worry there's going to be pressures put upon you that are different than they are today? >> you know, at saudi aramco you are absolutely right everything is based on the long term the long term our strategy is based on the long term you need a lot of benefits for the company. our results today in terms of

costs, in terms of safety performance, in terms of environment, in terms of local content, technology and talent development is based on our long-term strategy we are where we are today is based on the strategy. i think my prediction that it will be easy to explain to the investors later on that these strategies and our track record in developing and delivering results and performance and achievements and success through the history of saudi aramco will make the investors better understand how is this long term strategy helped the company to achieve all of these things and they will understand. >> do you ever worry about a conflict between public shareholders and the kingdom >> i think what i'm looking for results, be looking for a better performance. i don't see any issues between

our shareholder and the public that we'll be participating when listed because ultimately we need to develop better -- to deliver better results and that's what the public wants currently our shareholders are looking for. so i think it is aligned in terms of what is -- we are expected to benefit. >> the two also talked about the company's ipo which nassir says is on track. plus, andrew will join us live at 7:00 a.m. eastern with a special interview, one hour with prince alwaleed. chairman and founder and we'll hear about his investments in citigroup, lyft and much more. here's a look at last week's s&p 500's winners and losers ♪ ♪

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welcome back to "squawk box. good morning, u.s. equity futures at this hour in the green again after five straight records last week in the dow for another 23 indicated we're somewhere between 23,000 and 24,000 now after getting above 23,000 on the dow for the first time ever and more gains indicated this morning.

republicans cleared a hurdle on the road to tax reform, but time is running out on the race to try to get a bill passed before the end of the year joining us is oklahoma senator james langford thanks for being here today. >> glad to be with you. >> we know it was a big hurdle to get the budget passed now the house has to pick that up and go ahead and run with it. where do you think we stand on the likelihood of getting something passed >> we included a lot of the requests in our budget of the house and senate if the house passes it this week, that allows the next week for the ways and means committee to pick it up. by constitutional requirement the senate cannot take up a tax bill until the house has passed it as soon as the house passes it, it goes to the senate. the finance committee, that's happening. once the house gets it there goes the committee, then it comes to us and then we move

on it. >> there have been a lot of republicans who sound like they are presenting a united front when it comes to getting tax reform passed. the devil is always in the details. some of the details have people saying wait a second, is this going to work. >> a lot of the details coming out are people's guesses on the details. the smoke filled room is still smoke filled people are still going through the process of it. that's the nature of it now. within the next ten days people will be able to see the initial burst from the house and all the details in it. it's not done. it's a work in progress. >> one of the things that came out is there will be a limit on 401k 2400 versus the $18,000 that people under 50 can do wall street can complain about

that and moan, most americans don't have pensions. they've been asked and most of us are not in great shape. does that concern you? >> that is a trial balloon let's go through the process >> would you poke a hole in that trial balloon? >> that is the type of idea that i go back so om basic principles we want americans to say that's an important part of it. we don't want to count on social security social security was always designed to be a supplement in case your other retirement ran out. we want people to have their own retirement funds that's exceptionally important there will be an argument about that as a principle that's got to be there for business expensing and simplification for the individual side. >> democrats don't like anything about this i'm looking at a piece by jason farmington my first question is does it matter whether democrats don't

like it? they're never going to like it. >> at the end of this, this is going to be a experience >> you guys thought about obamacare. the criticism from the left and then whether it works on the media or wherever it works caused a lot of republicans, i won't mention names, after eight years, 50 repeals, they didn't have the fortitude because of pressure from the left there's going to be pressure from the left. so you do want to answer it or should we -- >> to, i can go ahead and answer. >> jason furman says there is no benefit really for the middle class. he says because the lowest bracket goes from 10 to 12 and a larger standard deduction and child tax credit would be offset by the elimination of personal exemptions. >> when you double the standard deduction, then you're not going to be able to take the mortgage deduction if you're at the

lowest end the reality for the taxpayer, it's the same. fewer people have to itemize. >> where's the tax cut >> the tax cut goes into lowering the rates he's looking at it as well which is still in conversation on that that's not a done deal that goes from 10 to 12. >> the zero rate gets bigger >> that's correct. >> is he dissembling there. >> i think he's making some assumptions that he hasn't seen the details on yet and no one has. >> that's the problem. nobody has seen the details. it's hard to argue the back and forth until we have a set of details. >> that is correct we're talking less than 10 days. >> he takes issue that cutting the corporate tax rate would benefit paychecks for people -- for workers and i love this. in the last ten years there haven't been any good research papers that say more money in the private sector would

actually help. i need an academic to write a paper on this for me to think about it and he also says it's going to increase the deficit, that you're not taking into account that that will reduce capital formation and long-term growth you're going to hurt economic growth by increasing the deficit. >> i do not agree with that. the last decade we've been at 1.9% growth. there hasn't been a decade like that in america. every single decade that we've had in the last century at least one year we've hit 3% growth our economy is stuck we're in the old turntable system at this point and it's stuck in a groove and it needs a bump. >> is it my fault because the baby boomers won't -- too many of them or -- >> no. >> not having enough kids? >> none of that. >> i'm not productive. i leave at 9:00 every day? >> i think the two big issues are going to be regulatory reform if you incentive advise economic

activity and the movement of money to get the develop logs city back out, that will have a deficit built into it. if you can't grow the ee con more more than .4% growth, thin it's a break even. everything increases revenue >> you have 49 other people that agree with you >> ask me that in a month. >> they're going to tell you trickle down doesn't work. you drove the car into the ditch in 2007. what's kind of irritating is that if you leave the high bracket and take away -- leave the 39.5 and then you take away state and local, you're raising taxes on wealthy whose idea -- people don't pay -- rich folks -- you used to say that. >> i do. >> people have to pay more is that -- he's gone.

>> all of these things need to come down. every bracket needs to come down especially on the individual side you have to offset it with different pieces. >> i was going to say, the way we keep getting back to this and some people paying more, you need to have pay fors for this the senate is the chamber demanding that more than the house, correct >> we are. i can't speak for the house and what they're trying to ask for we're expecting a $1.5 trillion offset that's what you have to have in economic activity increase if you have that economic increase which i believe you will, then you offset that completely. >> there are people like senator corker who say they are very worried. they want to see the rates come down and don't want to bust the budget. >> senator corker is not wrong in that. >> senator corker is not wrong if you have that every single year for the next ten years, that's not reasonable.

>> if you don't have the border adjustment tax, if you don't have the state and local tax deductions taken away, that's some pretty heavy lifting. >> that would be a very heavy lift the border adjustment -- >> state and local is still in the mix. >> that's what i mean. you have these big issues very unpopular are a certain group of people >> really state and local tax affects california, new york. >> and new jersey and connecticut. >> what do you have to do for those republicans in the blue states with that how do you make it -- how do you give them some type of concession or do you >> well, i think you will have to balance that out. i think it's going to be kevin brady's responsibility so by the time it hits the committee it's back behind the scenes back to the smoke filled room let's get it worked out. >> there's been smoke in the back of the building >> is anyone vaping or anything? >> that i've seen.

>> vaping? >> vaping with a patch >> let's talk very quickly about iran the president has said we will not recertify the iran deal which leaves it on the shoulders of you all what happens now >> right the responsibility comes back to the house and senate, especially the senate how do we negotiate the deal we're not going to get a p 5 plus one we're not going to add to the cpoa this has to be a set of sanctions that comes down on iran based on the missile activity. >> you're in favor >> absolutely. so what it's doing is saying we're abiding by the nuclear side of it but we're continuing to test ballisticmissiles, continuing to destabilize yemen, prop up assad in syria, they're propping up hezbollah. >> that was part of the original plan that was there. >> that was -- >> i think that was the main point that many of us made. >> so controversial.

that's why it was so controversial in the beginning however, iran has already gotten what they wanted which was to get other countries around the world to drop those sanctions. if we took those sanctions on, the rest of the world doesn't follow along with us, there are some people who say you're giving iran the best of both worlds they will be able to say, fine, we can go ahead with our nuclear strategy because you all have dropped the deal by the way, we already have trade open with the other countries. >> what iran really needed to finish the nuclear program was time and money what the agreement gave them was time and money their expansion to syria is very serious. a lot of people's focus is on isis and syria rightfully so you need to focus on assad if assad stays in power, iran is the one that is propping them up iran runs syria, they run lebanon, all the way across iraq and iran that's a pretty wide swath and that changes the middle east dramatically. >> senator, quickly, secretary

mnuchin pointed out how difficult it is to cut taxes without having some of the people that pay taxes -- >> right. >> -- have lower taxes when it's all said and done, do you think -- let's say the cutoff is $1 million here, that's what they're saying those people when it's all said and done, they'll have the same tax rate they'll pay more or they'll get some type of tax cut when it's all said and done? >> that's what -- >> what would trump go for >> a vast majority of americans have a tax cut. >> some people take -- >> some will have more i'm not saying what bracket that will be. i have a friend of mine that said during the ragan tax cut for two years as soon as the tax cut happened in '86 his taxes actually went up he was furious about it. three years later he was making more money. >> maybe it's okay for people that's what's used for the corporate tax cut and then it lifts all boats and everyone's -- maybe that's okay. then rich people need to believe in your dynamic scoring, too. >> everybody has to see that this actually increases economic

activity and turns around the economy. >> they have to put their money where their mouth is. >> one way to find out. >> senator, thank you. >> thank you. coming up -- coming up, another newsmaker. >> he's sitting right here. >> right here. this isn't the only one. we just had one. but another one. saudi prince alwaleed will join us to talk about his biggest investments. geopolitical hot spots and more. he's our guest host for an hour.

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right now it's time for the executive edge bitcoin is hitting record highs. it tops $6,000 for the first time over the weekend, and there's another split in bitcoin that's coming. this is known as a fork. it will be creating a new crypto-currency called bit coin gold what holders of bitcoin will get some bitcoin gold when says it is issued it is also getting a boost from rumors that china could reverse its ban on bitcoin exchanges wow. at your peril there, folks when we come back, we are just a few minutes away from our exclusive interview with saudi prince alwaleed. he will join us for an hour at

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. >> when we come back, we a special guest for the next hour. prince alawaleed will joining us from andrew. we'll be talking about his big

investments, including citigroup, twitter, news corp., and lyft it's an interview you can't afford to miss, and it starts after this quick commercial break. the governor has declared a winter weather emergency... extreme risk of burst pipes and water damage... soon, insurance companies won't pay for damages. that is, not if they can help prevent damages

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zbliefrmt an exclusive interview with saudi prince alawaleed is just minutes away. he speaks out about high profile investments in companies like citigroup, twitter, and lyft plus, we'll get the billionaire's take on the global economy. oil prices and tensions in the middle east. a special hour of "squawk box" live from saudi arabia begins right now.

♪ we'll never be royal >> live from the most powerful city in the world, new york. this is "squawk box." >> good morning, everybody welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernan andrew is live in saudi arabia he has a big interview coming up this hour with prince alawaleed. that's coming up in just a few minutes. in the meantime, let's get a check on the markets this morning. it created a perfect week for each of them it's the first time it's happened in over 20 years for the s&p. you can see this morning that the gains look like they are continuing at this point the dow futures are indicated up by 28 points. s&p futures indicated up by just over three, and the nasdaq indicated up by just over 13 in europe we've seen green arrows there as well

stocks up by a quarter of a percentage point spain down by one-third of the percentage point, and the ten-year note yields have been picking up a bit you will see the ten-year is yielding 2.386%. >> here's what's happening at this hour. a record win streak for japan and the nikkei it was up 1.1% overnight, and gained for the 15th day in a row. >> wow >> and this is after prime minister abe's weekend election victory, and it closed at another 21-year high automaker tesla has reached an agreement to set up its own factory in shanghai. that's according to the "wall street journal", which says that the two sides are still working out the timing of the announcement tesla would be the first foreign automaker to set up factory in china without a local partner.

that is significant. cisco mz is close to a deal to buy telecom socht wear maker broad soft the price is said to be in the $2 billion range, and that deal could be announced as early as today. a couple of other stocks to watch today, including poplatch, which is near an all-time stock deal to buy a smaller rival dealt ic deltic timber it's at a market cap of $3.3 billion. mitsubishi heavy have agreed to cut the production of wing production of the 787, the dreamliner the companies will also work together on advanced technology for future commercial aircraft >> the third quarter profit fell 15% on a slight decline in sales, but the electronics maker is backing its full year guidance phillips ceo says despite global uncertainties, the capital is on track for sales growth of 4% to 6% no skr artis.

in other corporate news, apple's chief operating officer will reportedly meet with fox con's chairman later this month. the nikkei reports that they are expected to discuss ways to try and deal with the manufacturing bottleneck for the new iphone 10 analysts have said that apple's suppliers are struggling with the camera and 3-d facial recognition technology on that device in the meantime, toshiba is rejecting a net loss of $1 billion this year. that's because of taxes related to the sale of its memory chip unit toshiba's forecast doesn't include the expected gains from the $17 billion sale as it has yet to be approved by regulators united airlines is in talks with jp morgan to try to renegotiate the terms of their co-branded card partnership the "wall street journal" reports that analysts say that move could impact the bank's

revenue. jp morgan has been issuing united credit cards for 30 years. >> i think i have one of those jeez what are they going to do? >> i don't know. >> my one pass miles that are now really not good for anything >> anyway, andrew ross sorkin is in saudi arabia. he sat down exclusively with the ceo of oil giant saudi aramco. >> there's been lots of speculation about whether you'll list in new york or london or whether there's better investors in new york but more regulations or whether london -- how do you just think about it? what's the framework with which you're thinking about this process? >> there is a lot of speculation, you are absolutely right. you only see yesterday and today only a small piece of saudi aramco saudi aramco in terms of size,

in terms of refining capacity, five million barrels, and talking about huge capacity between -- in terms of size and facilities we have international operation. many countries from the u.s. to china to japan, so aramco in terms of size and capacity we did a lot of analysis of all of these markets we have always said that we will be listing in 2018, and to be more specific, in the second half of 2018 however, i think journalists and writers, they are expecting more and more information, and we are governed by certain rules with regard to talking about it what we have seen from the beginning that we will be listing in 2018, the ibo is on

track, and the listing venue, we will be discussed and shared >> can i ask, are you talking to them about this? >> saudi aramco, as i say to the chinese and others, saudi aramco, as they say, we are -- we did prepare our books and streamlined all the necessary work that is not necessary for listing. we evaluated and analyzed different venues, stock market in different countries with so many of them all of that analysis is being reviewed in detail to make a decision at a certain stage, and we're not going to be pushed by a journalist saying this needs to be talked about >> if a stake was sold to

another sovereign like china, would that change the outcome of the plan to pursue an ipo? there's been speculation that if one piece was sold, perhaps that could delay or even put it off for many years >> you are speculating now >> yes >> as i say, things are on track, and as expected in terms of -- as we planned. >> let's get over to andrew in saudi arabia he joins us right now with another very special guest andrew >> hey, becky. we are live this morning we are in riyadh, and we are very happy to have with us prince alawaleed thank you for having us. we are overlooking riyadh this morning with you, and you're going to be with us for the hour thank you. >> pleasure to be with you >> so much to talk about glichb in large part that saudi is

undergoing a remarkable transformation, this 2030 vision we are here in larnl part because throughout the week there will be a major conference with business leaders coming from all over. let's just talk about this vision, the transformation of saudi. do you support it? you haven't spoken publicly about it yet >> yeah. pleasure to be with you on cnbc. yes, in full support of what's going on because a few years ago before king solomon took over i went public with many of my requests and requirements to safeguard saudi arabia as you know, the economy is devein of any country, and the country of saudi arabia in 13-14 and in the beginning of 15 was not doing very good because we were so much dependent on oil. 92% of our budget was depending on oil as publicly that this is dangerous, so you have to have diversification. you have to have a sovereign wealth fund, and you have to have less depend on oil. when king solomon took over and

the prince who was appointed recently as the conference took the initiative of initiating the 2030 vision. clearly all those requirements were fulfilled full support of it frankly speaking, saudi arabia is in the midst of a major overhaul and change on all fronts, economic, financial, social, entertainment it, and even political really we always heard about the so-called arab spring in certain arab countries, so this is our version, our saudi version of arab spring, our peaceful arab spring what's happening is not an evolution. frankly speaking, this evolution is happening now, but a peaceful one in saudi arabia. i'm in full support of it, yes >> one major component is diversifying away from oil i did an interview yesterday with the ceo of aramco the expected ipo of aramco and

being able to use those proceeds to invest elsewhere. take us inside this ipo. what do you know this is the government, is the company speaking with the chinese? is this is this ipo going to happen as planned? >> well, you know, when at the conference announced that the -- that -- the results are resistance people did not understand the arationale and reasoning behind it i think right now with the indication that took place of the public and the investment arena and even internationally people began absorbing it. really i fought for this -- i call it the nuclear weapon -- this is safety for saudi arabia. saudi arabia right now is living on oil and investing some of the money coming from oil and by going down from reserves

that's very important. this is 5% of the public because this will get the government sometimes depending on the evil waugs sometime between $7,500. it's important to jump-start the process again. as the conference said that to be part of it invested locally to get even more growth and jobs in the market. this is very good idea no one talks about this idea that if you go 5%, there's nothing obviously from another 5% next year, and 5% the third year and fourth year and so forth. depending on the situation, now, i know this os treasure, and we have to keep it, but that treasure also needs to support the country because all the initiatives that have been taken by the government, you know, the taxes, the direct taxes, indirect taxes, and the fees, and the organization that have been taken like the projects in riyadh and the sovereign wealth income this will take years to come we need in three, four, five years we expect all those -- all things to be in the budget of

saudi arabia meanwhile, we need to be sure to have a safety valve of having an amount between $1 billion. >> that means that aramco has to be worth $2 trillion >> this evaluation is being talked about right now $2 trillion. now, clearly if you go public with 5%, that's going to be $800 billion. if it's less than that, no matter what it is, it's going to be the highest and biggest ipo the biggest one was albauba at $25 billion. that was ipo i'm full support of that, and in full support of the ipo of aramco it's another safety valve that the money could be used as needed >> do you think or do you know that the ceo said that the chinese are not or at least that he is not talking to the chinese. is it possible that the chinese could be talking to the government >> well, you know, i'm not a member of the government, but i read these reports, and i would not be surprised if china would be looking at this opportunity

because china depends on oil, and we depend on oil for a long time to come saudi arabia is an anchor exporter of oil to china if this thing happened, it would be very much welcome i've heard discussion in the western media that if china comes and buys x percent of saudi aramco, this may hinder and delay the pronled ipo of aramco this is not the case oil companies in the world -- aramco is a company, by the way. they can have an anchor investor before ipo actually, if chinese company -- if another investor comes and invests in ipo, that should confirm and expedite the process of having them go public because this will never stand the price that aram -- the owners of aramco of the saudi government is seeking >> when you think about, though, the price of oil right now and the need for this ipo and the valuation required, how much

influence do you think saudi arabia has over the price of oil and how much do you think they are doing to prop up the price of oil between $50 and $60 a barrel >> well, i think that not only saudi arabia all opec members have an interest in having price stabilize, and clearly, it's a big cooperation right now between opec members, saudi arabia, and russia, and a few other countries outside the vicinity and arena of opec having price stabilized around 50 to 60, which is like hovering around right now, or this wti or brent, it is a good thing for the consumer also. remember, also, shared oil production also depends also on where the price falls. clearly, the lower it goes, the less opportunity for shares to continue the investment is for both sides. those in america are happy with the $50 to $60 range, it's feasible also. >> do you worry that this transformation is going to be --

create conflict here in saudi in the reason i ask is taxes invariably are going to go up. it is leelk that oil, which is subsidized here, of course, the cost of that is going to go up, and that much of the money that may get raised from saudi aramco ipo is being used or at least initially being used for investments in this new blackstone fund, which may get invested in in parts of america. soft bank, which will be invested elsewhere all of which may create great returns, but what is it going to do for people here in terms of jobs and employment? >> well, prince hamid, the conference, named nbs and the western media, has publicly announced that we'll be balanced, and the pif now that they have right now is very much roi, return of investment and r -- it's moving that direction

right now. whether the investments internationally or locally, it's important to diversify if you look at the soft bank analysts, it's really preferred shares, you know, with 8% guaranteed interest. the $45 billion is 28 to 17 more towards turn for saudi arabia. >> 600 billion real. we are very much exposed to the saudi market just before we arrived in saudi arabia, a lot of announced in the energy industry, infrastructure, in the creation, in the tourism projects. a lot of -- there is a lot of balance between international and national investments >> speak to the cultural

transformation you tweeted out over a year ago you said stop the debate, time for women to drive just several weeks ago that has now happened how is that going to change this country? >> well, look, i always joke in my tweets and my -- to my friends and say that saudi arabia is moving from the 12th century to the 21st century, and frankly speaking, it is -- it doesn't make sense at all for saudi arabia being the only country in the world, you know, that had women not driving that's -- it doesn't make any sense. it's irrationale what i said in my tweet is that there was social, economical, financial ramifications for woman driving because women driving, guess what, this will happen and will help the economy. why? because have less pressure on the economy, by having potentially based on the mckenzie study one million drivers could leave saudi arabia, which means what it means the economy will have less pressure by this one million. less pressure on hospitals

less pressure on schools less pressure on roads less pressure on airports, et cetera that's very important for the economy. financially it's good for the families a lot of taxes are going to be imposed. back taxes and, et cetera. it's going to impact the families although this is a citizens fund that will help those poor people still, if you have those families have their expected driver leave and have the woman drive, you're going to save somewhere between 1,500. that's sometimes 45% of their f income all the taxes that will be imposed will be recouped by that gesture. this thing of woman driving, it's economical, financial, and social thank god that registry right now and politically this was taken, and guess what, the community and the culture of saudi arabia accepted it with no

whatsoever disturbance at all. at all it was -- it's done well, and perfectly engineered, and perfectly publicized to the public guess what, even the men and those conservative men accepted the idea >> our own president, president trump, is a prolific twitterer as well. i want to get your thoughts about our president and the politics taking place in the u.s. and, frankly, around the world. president trump came here. it was his initial stop as president. you and him had a little bit back and forth before that given some of his comments about islam. >> well, you know, when he was a candidate, there was a skirmish or a small clash between him and islam. i think this matter has completely disappeared, and actually, i congratulated him

when he was elected. this issue of islam now is behind us right now. actually trump's first visit to my country i'm very proud of he met with 55 heads of nation, heads of state of arab muslim countries. really mr. trump's visit to saudi arabia really helped strengthen the relationship further between saudis and the united states and saudi arabia and the islamic board. >> we're seeing right now with the less dependence of the western oil, saudi arabia is increasing this proves conclusively all those people said that saudi arabia is in relation, and that state is exclusively or yebted and that's obviously not true. saudi arabia is the van garde of the islamic and when trump made his first visit to saudi arabia, he visited saudi arabia, 150

million people, and the muslim world of 1.35 billion muslims. saudi arabia is the leader of the arab world and islamic world and the relationship between saudi arabia and the united states and trump and the -- they are almost in if weekly communication basis. >> what do you make of his presidency thus far? >> well, look, trump is unique president. president trump has his own way of governing i know some people don't absorb this issue you have to be accepting that. after all, president trump was elected by people in the united states we have to expect and accept that trump speaking about policies, they are pretty good, and you know, not to quote president trump personally, he is right. 5.3 trillion dollars of wealth is being created clearly this was created because health care will be finalized,

and the tax reform more importantly will be finalized also there's a lot of good policies by trump now, clearly, it's not being helped a lot by, you know, the skirmish that's happening in his administration, because he is a unique president, and it's very difficult for some people working around him right now that come from very structured, organized background to work with a president who is really, you know, very much unique and what they say, i give the examples when you said that puerto rico is bankrupt. will never pay his debt. you're right he will never pay his debt just like greece nobody pays debt we all know this when he says, for example, that you should stand for national anthem, is he wrong? he is right. you have to respect your national anthem and stand up for your national anthem you know, he speaks of his mind very openly and freely, and this is -- for example, he says

america first. he is saying something wrong you expectto say america is number two just like i expect mr. macron of france would say france should be number one or the chancellor in germany, merkel, to say we should be number one also or mr. putin in china to say we're number one or mr. xi jingping. you don't expect them to say we're number two the public is not used to this openness and this -- if i can use the term, the bluntness of trump. frankly speaking, i he is a unie president, and i hope he is successful in his presidency >> you are a major investor if in a number of large companies in the united states many multi-nationals, of course. you played the stock market. you think about the stock market a lot. you talked about how the stock market has risen since his presidency i know you follow tax reform in the united states and the health care situation what do you think is going to

happen >> well, as you know, the health care did not move ahead because of one vote, but i think as mr. trump said in his latest interview, i think just yesterday with your competitor, fox news, fox business news, that it will happen, but more importantly right now is the tax reforms, and you have seen that the first step was initiated by the senate if the tax reform takes place, i think it's going to be important for the stock market to keep from going up, and we have to keep an eye on the bunl deficit and the debt of the united states i don't see a lot of people talking about that as an investor and defender of the united states, as my country being -- we like united states to be in the use tomorrowian idea situation clearly, tax reform are good for the -- actually, my company, kingdom holding, did benefit a lot from mr. trump's policies, but at the end we need to keep an eye on bunl deficit and on

the debt >> what's your take on the tax plan >> well, the tax plan, you know, will go from 35 to 20. that's the bottom line that mr. trump is talking about right now. it's good for the u.s. economy you have to find a way -- >> what's it going to do for the debt piece that you are talking about? >> well, it's very important i hear that some -- that the house of representatives right now is talking about having a revenue neutral situation. >> we'll come back and talk about your world as an investor. i wanted to ask you about twitter because i mentioned earlier you spend a lot of time on twitter are you still bullish on this company? >> well, you know, our investment on twitter is part and parcel of a plan whereby kingdom holding is moving from the old investments that you had

into the new investments like china, like twitter, lyft, and -- it's another driving in the middle east. obviously twitter will not be easy because they're facing difficulties right now it's on the break even point. any good news from jack dorsey and his team at twitter, i think it's very much reflected on twitter. >> how do you think about twitter relative to facebook, google, amazon, the others evan spiegel from snap was recently here. >> well, obviously, clearly, google and facebook made it. they were able to jumple to where they are right now, and i this i that twitter and snapchat may be in similar situations whereby it was not very fast and swift, but i believe that the future of twitter and snapchat is almost -- i think it's still going through a learning curve

whereby they are able to monotize more their model. >> loots more to come with this. this is an exclusive conversation with prince alawaleed. we have more in two minutes time stay tuned u wahi "ua b" ox here on cnbc nah. not gonna happen.

that's it. i'm calling kohler about their walk-in bath. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] mmm. the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this?

the kohler walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind. ...for a free kohler nightlight toilet seat with consultation or visit kohlerwalkinbath.com for more info.

we are live in riyadh, saudi arabia, this morning with prince alawaleed, and we are so pleased to have him here we've been talking we got through so much stuff just in the last half hour one of the things before we get into some of your investments i wanted to ask you about -- we were talking about oil and the price of oil and where that's going. how do you think about electric cars how do you think about tesla and the future of petrol chemicals across the board >> well, tesla -- the fact is also that all other companies are going into tesla path of electric cars and autonomous cars clearly, the conception of oil,

more than 70% of it is linked to the consumption of cars. clearly the direction is moving that way >> you fully accepted that's what's going to happen >> it's a fact actually, not only that, but you remember that just last year a plane took off from abu dhabi and flew all the way around the world above egypt and through saudi arabia, and that plane was flying with no fuel at all now, that's an indication of how much the world is moving to being less dependent on oil. saudi arabia has moved to -- it's depending on oil and smart. >> he would like to celebrate

the last day we export the last barrel of oil. saudi arabia is doing the same thing. we like to celebrate when we export the last drop of oil. >> i believe those big car manufacturers waited to experiment with tesla and waited until the world depends more on that, and we'll go for production inevitably -- >> when you think of the valuation of tesla, being the investor that you are? >> i look at this like other companies, and i would rather not comment on that because maybe some people believe the value is right, but it's not for me to enter that price, obviously. it's too exuberant for me right

now, obviously >> you have invested in the car ride sharing business in lyft. it's been a great investment for you. it's up about 200% since you bought it. explain why you bought lyft and not uber i think that you were looking at both at the time >> craw. you know.

>> what are some of the regulatory challenges that uber is facing now, for example, in london and elsewhere do you think that could affect all of these guys? >> well, you know, i mean, now we have a new ceo there just appointed, and i think she's given the time to really to get the company back on track. >> he is going to be here this week >> i think so auto, yes. i'm not sure who is going to come, but -- i may see him if he comes. uber will make it for sure i think all that's happening right now in england and some of the countries, i think it would be -- they will cross that bridge for sure. >> i want to ask you about some of the other investments, one of which is the four seasons. we are -- your office and your

home, your apartment is above the four seasons where we are right this minute. there's an article in the "wall street journal" recently that suggested that your relationship with bill gates and cascade, your partner in this project, is, well, more than a little complicated was the suggestion of that article. is that right? >> oh, for sure. my relationship with bill gates goes beyond four seasons our fiphilanthropy, our alliance in the energy project that he has, in the vaccination. we have so many projects charity. actually, the philanthropy that i head is in almost daily communication with the bill and melinda gates foundation actually, what happened is there was a ceo over there -- >> ceo of the four seasons >> old ceo of four seasons, who just had discussion about when she should leave just a matter of months.

>> you have an investment with 21st century fox is that an investment in rupert murdoch or the murdock family? what is that about >> we put out news corp. we were not invested in news corp. right now. clearly, my investment and alliance with fox is really based on -- my relationship with him and mr. james murdock. yes, we have a very great alliance and friendship together it's a blend of investment

>> the fox channel clear clearly, he did disagree with them eventually, and he was forced to leave. really mr. murdock, whether rupert or james murdock, at the right time they might be excited to have him depart, and he left. they had him signed off after he gra heed on this settlement of the matter of riyadh

>> clearly, bow heem at companies like google, amazon, facebook, apple, microsoft, these are giants the combined market cap is ab e above -- see what's happening on facebook and twitter these are bohemath companies each one is -- they are very much -- >> you believe they're monopolies >> clearly who is going to enter in and compete with google and who is going to get into on-line shopping against amazon? who is going to get -- who is going to go against these two

giants >> they had a good business model that proved to be successful in the market >> policy question if they're a monopoly, should they be broken up? >> i don't believe in that we've seen that in the 1990s and the early 2000s how they were trying to break up microsoft you know, this just failed completely i think it's a free market it should be free competition. if the company was able to reach this high valuations because of their good business model, i this think this should be an incentive for others to come and compete and try to gain markets on them rather than breaking the so-called monopolies >> you have been a long-time investments for citigroup, and there's a long history in that, but you have remained an investor in citigroup. >> how do you think about the banking world in the united states today have you ever thought i want to make an investment in goldman

sachs or jp morgan instead >> you have seen that after the election of prurp how the stock market related to those approximate banking industry it's only 50% decrease in less than one year. it's going to be the main ingredient of having the income go up, but also the less circulation is also helping the banks also less circulations, more controls by the banks learn the lessons of the last decade all these events are really helping the share price for the companies going up i'm happy with citibank because now even with the big jump right now, they're still below local value right now. there's still plenty of room for citigroup to go 100 and above.

>> one of the great parlor games may have a huge impact on all of these banks. do you have a choice have you been following the situation? >> mr. trump said he has two men, and existing lady also that's a candidate i think at the end of the -- there's a lot more votes over there. with inflation being so low for so long. right now the united states economy is doing pretty well >> we're going to continue this conversation i'm going to send it back to joe for now, and we're going to come on back in just a minute joe. >> this is classic he is so -- they must have really good newspapers over there that cover all of our stuff because he is so

up-to-date on everything you know what, andrew, i'll bet you knows out of that $5 trillion, i bet he knows what kingdom holding's take it on the last year. can you maybe ask that question? exactly how much portfolio is up since -- i would be interested to hear. >> can you hear joe? we're still live right now we haven't gone to commercial yet. do you know how much kingdom holdings is up in the last year since the election >> well, i mean southeast group went up 50%. many of our companies in the united states, so really quite a bit. stefrl billion dollars, yes. >> we will continue this conversation with your heiness >> thank you >> he just seems like he is in a really good mood if that makes sense. >> we've been having a great time this morning. >> all right great. a lot still ahead from andrew in saudi arabia check out the futures at this hour a couple billion

much more than my portfolio. like a lot more. anyway, dow jones up 24 and change s&upusunp 11 p jt der three. we'll be right back. and the wolf huffed and puffed... like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day. symbicort contains formoterol. medicines like formoterol increase the risk of death from asthma problems.

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we are still looking for details on what to expect in this tax reform plan, but we are getting answers this morning from president trump himself >> the kpgmen were considering getting rid of that capper, at least reducing what you could be setting aside in tax deferred spending for these plans, putting it from 18,000 down to 2,4 2,400. the president weighing in and saying that's not going to happen let's get back to riyadh andrew ross sorkin live with prince alawaleed andrew >> thank you, becky. we are do you say to yourself is

this going to continue do you think there's going to be a hiccup along the way as an investor, how are you thinking about it right now? >> he just said that if there's no tax reform, the market will tank >> will tank >> he said that. i'm just quoting >> is that what you believe? >> there's a bet on tax reform reduced tax from 35% to 20 on the corporate tax going down also inevitably companies go up, and the valuation could go up also i think there's a big bet on that, but clearly there's a lot of optimism in the united states we've seen how the north korean affair is not afting much more market >> you believe the tax reform is baked in right now

>> yes, it's baked in. for sure >> if we get tax reform, is there still more to go >> i never look at the market in general. i just look -- i'm very much company-spisk. we look at certain companies, the valuation, and the future expectations, the cash flow, and the value, et cetera certainly the market clearly plays a role because inevitably there's a buoyance we always go company-specific in our investments. seemed to be pressing saudi on trying to fix the situation with qatar. how do you think that's going to manifest itself? >> well, you know, i think he met with the king yesterday privately, and they met with the prime minister of iraq saudi arabia is playing a very

big role in having iraq be neutralized and not being in the arms of iran this shows how saudi arabia is important to the united states we're playing a very big role in extracting iraq with at least neutralizing in internal affairs. yesterday the king met personally with -- we established the first meeting that took place between saudi arabia and iraq related to the economic and business and business fronts. >> go back forward >> how concerned are you about iran >> well, iran is playing a very nasty role >> they are in syria and then iraq they are with hezbollah in lebanon. they are with even used to be with hamas in palestine, in

gaza, and, you know -- and morocco. let alone what's happening in yemen. they are playing a very active role by exporting their so-called revolutionary mentality. clearly, saudi arabia stood against them, and i think the war in yemen right now is to stand against iran and their dominance and control of arab countries. >> if you were president trump right now, if you were the united states, you would do what >> in relation to iran i think it's in the right direction right now.

i think that iran should be faced very aggressively. >> a couple other quick questions. we've talked about -- we haven't really had a conversation about currencies, and one of the conversations in the united states all the time these days is about not the currencies we know really, but new currencies like bitcoin, and there seems to be a raging debate about it. where do you land on it? jamie dimon says it is a fraud yet, goldman sachs may be pursuing working with the currency >>. >> i don't believe in this bit cone thing i think it's going to implode. i think it's enron in the making >> really? enron in making? >> i don't believe in it >> because >> it's not under control. it's not i'm in agreement with

jp morgan. >> where is that all going you have a whole new host of projects that you are working on with them. >> you know, we began with five hotels and now that with $20 million. >> it's the fourth biggest hotel company in the world it was with more than 4,000 hotels and 6,000

we said this will not merge with anyone because it's a unique project. we have hundreds of hotels plus, and we're growing very fast to redouble the hotel numbers in next two, three years. really, the p.e. ratio is in the 40s, and it's -- if we leak them to any other -- the issue will be pulled down from the 40s plus to the 20s >> before we leave you, let's talk about philanthropy. you have announced, a, you are part of the giving pledge, but you have announced $32 billion in philanthropy. what is that about tell us about how you got to that place >> in my case, i'm a muslim, and i'm very much a practicing muslim

philanthropy is one of the five pillars of muslim. on day one when i began my work in january 1980. philanthropy goes parallel to my work >> i announced all my wealth a few years ago, and i joined my two dear friends mr. buffett and mr. gates to join the giving pledge, and i signed that with bill gates just recently >> what's the top initiative for you in terms of philanthropy

>> thank you for a wonderful hour i can't believe how much we went through. we talked that we might try to go longer than an hour, but, boy, do you talk fast. thank you. appreciate this very, very much. i'm going to send it back to becky, and i know everyone back in new york. thank you, becky , thank you, your heiness, and thank you, becky >> thank you to you and to the prince joe and i were listening to all of that. where he thinks valuations should be for citi >> sometimes i do think we're surrounded by so much. we are looking through the trees and can't see the forest he says, what do you expect macron to say we're number two, we're number two >> or merkel >> here if they -- people will say to trump, what do you mean you are saying america first what are you saying?

>> a lot of stuff. $5 trillion. i think it has something to do with trump's policy. it's up $5 trillion. i don't know, things right in front of -- it seems very -- that was interesting that was great coming up on "squawk box" setohei ddcp nar idhieiamis her. whoo! ( ♪ ) woman: class, let's turn to page 136, recessive traits skip generations. ( ♪ ) molly: i reprogrammed the robots to do the inspection. it's running much faster now. see? it's amazing, molly. thank you. ( ♪ ) thank you. not rebalancing your portfolio. focused on what you love,

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stocks rising to record highs as we get ready for the busiest week of earnings season. >> quack is in session our guest host this hour, senator heidi heidcamp we'll get her take on tax reform, health care, and much more plus, a cnbc exclusive andrew reporting live from saudi arabia with the ceo of aramco and prince alawaleed the final hour of "squawk box" against right now. ♪ >> live from the most powerful city in the world, new york. this is "squawk box." >> good morning. >> there's going to be more of them >> real good

you bet. welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernan along with -- >> you really are bad at this, joe. really bad at this >> senator heidi heidcamp is here from fargo. the tv series. it's great to see you. never gets old, does it? >> well, it does for listeners especially for you >> here with becky quick andrew ross sorkin is live from saudi arabia we'll have the highlights from his interview with prince alawaleed throughout the hour, but our guest host this morning is senator heidi hidecamp. we'll hear from her in a bit we hear they're a rare -- they've got these decisions to make that are not as easy as chuck schumer in a blue state or something like that, and we just wonder how you sort of walk that narrow line. we're going to get to that >> okay. >> because it takes a lot of

thinking ahead, does it not? >> it takes believing that if you do the right thing, you are doing the right thing, and you just keep walking. >> yes >> and bringing your sensibility to the decisions you are making. >> right one of the things that i always like to remind people, i used to be the tax commissioner. >> i don't know where the next divergence might be. >> probably right now the biggest thing for me has been reg reform, and you had james on earlier, and we've done a lot of work together on regulatory reform >> he mentioned that >> he said to bring that up with you. >> he spoke positively about you in your -- >> i know. >> he does >> that's a good thing we can get a lot done actually our committee has been very,

very active on regulatory reform >> he said ginger and red heads are superior >> my mother is a red head >> first, let's get a check on the markets. right now the futures are indicated higher up. again, up 25 points now on the dow. the nasdaq indicated up 9.5. the s&p indicated up 2.25. >> among this morning's other top stories, our -- chick blankenship will be taking that role and sitting on the board. he is a 24-year veteran of general electric, spending most of that time in the aviation and jet engine businesses. . >> that keel would be the first of its kind for a foreign automaker. it is official cisco is buying telecom software

maker broad soft for $55 a share. this is cisco's second major acquisition this year. it bought apt dynamics back in march. you can see both of the stocks are higher broad soft up by almost 17%, and cisco up by half a percent >> andrew is far -- in a land far, far away. he is in saudi arabia this week. he sat down with the ceo of oil giant saudi aramco at the company's headquarters and got some clarity on ipo plans as well as involvement there of sovereign investors. >> the ibo is on track, and the listing venue, we will be discussed and shared saab ji aramco, not talking to the chinese or others. we did prepare streamlined all

necessary work we evaluated and analyzed the different venues >> we heard this morning from prince alawaleed he had some other thoughts about china in saudi aramco. >> do you think or do you know that the ceo said that the chinese are not or at least that he is not talking to the chinese? is it possible that the says chinese could be talking to the government >> well, you know, i'm not a member of the government, but i read these reports >> saudi arabia is an anchor

exporter of china. i heard a lot of discussion in the western media that if china comes and buys x percent of saudi aramco this may delay the projected ipo of aramco. oil companies in the world -- aramco, by the way, they can have an anchor investor for ipo. if chinese come -- another investor comes and invests in ipo, that should confirm and expedite the process of having them go public this will rubber stamp that the owners of aramco is seeking. >> senator heidi heitkamtp we're right in the middle of tax reform, conjecture on all sides. we just saw the president -- pretty funny

we had just had a conversation about in terms of retirement that's one thing we think is important for a lot of americans to prepare for, and it's been getting harder with the defined contribution versus defined benefit and pension plans, and the 401k seems like something that maybe we ought to do. we want to make retirement comfortable and productive for those that have earned it. >> this has been in and this has been out i think they're sending up trial balloons because they realize that there's a lot of spending that's going to go on with -- and dech sit spending that's going to go on with this tax package. they're trying to figure out how they can broaden the base. very early on we met with gary cohen and the banking committee members did, and just said, you know, retirement, and everybody kind of got their back up and

said no. >> sths going to devastate american families if we don't give them a way to save. >> i think it is absolutely the wrong direction. if we're looking at long-term stability for american families, we have got to deal with this retirement insecurity. >> what's the income tax in north dakota >> it's very low >> do you think we need to stick it to this blue states on all -- everybody else is towing the line they're spending all this money, and they get to write it off don't you think this is the time to stick it to them good >> joe, you know, the one thing that i remark when people talk about this is i say why don't you look at which states benefit from investment by the federal government and to what proportion if we start playing that game about we're going to stick it to

you because you have a high tax, then all of a sudden those high tax states are going to say, look, we send a lot of money to the federal government >> it's also because the cost of living is much higher in these states, and so if you are -- it's something like $100,000 that goes a long way in north dakota and it does not go here, you're not -- you're middle income if you are earning some of the bigger figures. >> you are itemizing your deductions, which meansure well off anyway if you are looking for middle class tax cut, that may not be the worst thing in the world >> i don't think it's fair to say only high earners itemize their tax deductions >> you know, i do a few.

>> do they want you to vote no with schumer >> i think my constituents, first off, want a sound fiscal plan they want fiscal responsibility, and that's one of the big challenges that we have. >> they want tax cuts? >> well, for the middle class they sure do >> i have been focused on the pass through portion we have to figure out what the economics of this is and we've got to figure out what the plan is you know, people say are you going to vote for tax reform i say tell me what it is i don't know >> when it comes down to it, and let's say the republicans don't think they're going to need anyone at this point, so let's say that they got it, and you know beforehand before they do the vote when it's all said and done may not be that far off.

>> if i believe that tax plan is going to grow productivity and the economy and give middle class tax breaks, i'm all in, and i think that the effective rate is lower than what people want to talk about, but obviously the nominal rate is very high. i think we need to adjust the nominal rate to be more competitive. >> one of the -- listening to you, trying to wade through what would be deal breakers for you, and it sounds like when you say you want fiscal responsibility, you sound like bob corker or somebody that says i wanted to do this, but without ballooning the deficit. >> you want pay fors or you want the rate to be not quite as low. >> i don't want to blow up the debt and deficit if we make an investment we're going to make $1.5 trillion investment, let's look at how we're investing those tax

dollars. if those tax dollars are going to benefit only the top 1%, i don't think we're going to see a lot of economic growth out of that if we really -- i had an amendment during the budget process. not one middle tax income payer should have their taxes go up, and i put the rate at -- or the earning at $250,000. that's pretty high a lot of people say, well, you are really advantaging the 1%. what i'm saying is that the super rich -- that's why you see paul ryan coming back to now yet another bracket that would, in fact, apply to older or to wealthier americans. when you lower the tax -- the upper tax rate from 39 to 35 and you take away the alternative minimum tax, of course, this is going to spin to the rich. it's going to spin to the rich if you said, look -- when the secretary, secretary mnuchin said there's no way you can give a tax break to the middle class

without advantaging the richl, that's not sure. i could do a tax credit to just those earners. >> do you think there's a tax increase going through to the wealthiest americans in order to pay for a tax break dpor the middle class >> i wouldn't be i think that if we're going to make an investment, we need to figure out how we're going to get the money into the hands of the american worker. you know, i have said this before here. in the united states of america if you go to work, let's say at the bobcat factory, you pay a higher rate than people who live off a trust fund that just is not -- >> so you don't think rates should go up on the highest -- >> what i'm saying is we need to make sure that when we look at this tax proposal, that the bulk of if not all of the tax investment on the individual side goes to the middle class -- >> right >> because it's hard if you do across the board cuts, and you've got people that is the top 10% pay 70% of the taxes

and you cut rates across the board, just in terms of dollars, that's going to be where most of the dollars are set. it's hard to cut taxes on people that don't pay taxes >> yeah. you know what's really hard is the other thing -- my constituents want a simpler tax code when people talk about, we're going to make this simple by compressing the rate schedule. the rates aren't where the complexity comes in. the complexity comes in in the deaf next of taxable income. for a lot of farmers, i've had farmers in my office say, look, i think it's complex i think it's difficult to deal with what i know is what i know don't mess with what i know. at this point i feel like i have a pretty good handle >> it's a steep learning curve >> if you start changing and jiggering with some of the little things in between >> and think if you make it retroactive at 17, what difficulty that's going to be. when you look at there's been a long argument, which now the

administration, you know, has told me they don't intend to do, which is to take depreciation basically go to 100% expensing and pay for it by eliminating the interest deduction that makes perfect sense when you are scoring it a lot of assets are deappreciated within the ten-year cycle of scoring, but the interest -- the elimination of the interest deduction is the gift that keeps on giving in terms of revenue >> right >> and so when you are a small business, you already have expensing through 179. you have to look at who gets the advantage when we're moving forward with this. >> when -- what did you do with the tax -- you were a tax person what did you do? >> i was the north dakota state tax commissioner from 1986 to 1992 >> oh, okay. >> yeah. >> did you used to audit people and strike fear? >> you never came to inneded nh dakota if you step foot there, you --

>> you didn't work with lois lerner you weren't earmark people where. >> no, i didn't. i probably should have if i had known you were coming. you do some pheasant hunting, i'll figure out how to tax you >> can i make a point about the corporate income tax deduction individual what hasn't been talked about is almost every state has a starting point of federal taxable income if you broaden the base, there's going to be a windwall in terms of revenue to the states if they don't lower their rates. think about that >> is there snow yet >> no. >> there could have been there is in canada >> it is absolutely stunningly beautiful. >> i love those scenes from fall i love the scenes of the -- >> you are so horrible >> it's beautiful. don't you have an eye for that >> i do. every season in north dakota is stunningly beautiful we'll get you an ice pick, and you can bury your fortune. >> you think -- >> senator heitkam is staying with us for the hour

we think andrew ross sorkin is live from saudi arabia we have the highlights of his interview with prince alawaleed. former ambassador to saudi arabia, robert jordan, will join us with his reaction to the prince's comments. stay tuned ren bce up awaying "squawk box" he ocn ♪ ♪ my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach.

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welcome back to "squawk box. let's head over to riyadh, and back to andrew andrew, good morning again, or even evening >> hey, becky. >> great to see you. >> it is the afternoon here in riyadh we just visited with king alawaleed. an amazing hour of conversation about just so many different things that made headlines across the board one of which -- it's been picked up on twitter just in the past couple of minutes here where his comments on bitcoin. we want to show you them and then talk about it in just a moment here they are. >> i just don't believe in bitcoin. i think this is just going to implode one day.

i think this is enron in the making >> this is enron in the making >> because -- it doesn't make sense. this thing is not under control. it's not krurnd the supervision of any federal -- any united states federal reserve or any other central bank i don't believe in this at all i'm in agreement with the jp morgan -- >> he also made two other big pieces of news one was really about his take on the stock market after president trump became the president since the election what it's done and perhaps where it's going he does believe that tax reform is baked into the cake and like treasury secretary steve mnuchin said, he thinks that the market could drop he is just as much of a quarter if, in fact, tax reform did not take place thought if it did take place there was a little bit of room to run, and the other big news that's making a lot of news

here employ around the world. we interviewed the aramco ceo just yesterday he said it was on track. didn't get into a conversation, though, about whether investors, other investors, like the chinese might come in or not, suggested basically they weren't talking to them. it wouldn't proclued an ipo. it immediate create a valuation of sorts for the ipo going forward. we're going to continue to watch this we have a lot coming to you throughout the week. we're going to bring you a lot more from that aramco interview with the ceo later this week, and then we have a number of biggests, including steven schwartzman and others who will be here. larry fink will be here. we mentioned travis calanic is going to be here it's a who's who richard branson, who was in town

with us last week, he is making his way out here big questions about perhaps maybe the saudis who will be the first to do hyper-loop, and we have virgin hyper loop one we have more coming from riyadh. back to you, guys. >> just to clarify, correct me if i'm wrong, the prince thought that -- i thought what he was saying was that maybe as much as a quarter of the gains that we've seen were due to taxable >> yes, that's fair. >> if you were to give back, you wouldn't be giving back a quarter of the market. you would be giving back a quarter of the gains >> yes >> yeah, a quarter of the market, that would be a lot worse than a quarter of the gains. >> that would be a lot >> okay. >> quarter of a gains would be enough given the past two years. or year and a half >> yeah. i thought that was interesting, andrew, some of the other stuff about -- he is very frank. he is blunt. he is blunt. >> so frank. >> he is blunt >> he is blunt >> yeah, bankrupt. what do you think? greece, bankrupt yeah, they're not paying us

back obviously, it was a man's opinion. >> should we show that joe, do we have tape of that i think we have tape of the puerto rico comment, and if you watch it, it's sort of fascinating to listen to i'm told we don't have it. i thought we had it. nonetheless -- >> doesn't mean we can't get it, and we still have time just some of the other stuff was funny too. i thought -- i like your reaction to it just the america first and -- he was funny about that he is, like, he almost pretended to be someone from another country going, like, yeah, we're number two we don't really care about it. maybe it's not so crazy to the rest of the world when someone says something like that here we think, oh, my god, what are we saying. it's so nationalistic. >> i will say, by the way -- that's been the feeling here you know, we've been here all weekend now, and when you ask people and we talk to it is ceo of aramco too.

internally in the u.s., we have lots of conflicted views here in saudi, they are very, very, very supportive of the president. of course, the president has been very supportive of this country as well. >> right >> but they are -- they are not as concerned perhaps as many on the other side of the aisle in the u.s. are right now >> well, you have the whole interplay with iran and who, you know, asserts themselves in the middle east and that we're going with iran. there is a lot of moving parts, andrew, but we understand anyway thank you. >> thank you see you guys >> joining us right now is robert jordan. he is former u.s. ambassador to saudi arabia during the george w. bush administration he is also the author of desert diplomat inside saudi arabia following 9/11 ambassador jordan, thank you for being here today >> what do you think of prince alawaleed? you've met with him before

>> he is a piece of work i met with him in april in his office in riyadh i went there to give him a copy of my book desert diplomat, and he is on the cover of it, and we already have a copy on his desk. he is one step ahead of the rest of us in many ways he can multi-task. he would sit there with four or five computer monitors on talking with us, looking at his cell phone he had "squawk box" on, by the way, when i was there. he is a -- he is a multi-tasker. he is a brilliant thinker in many, many ways. as you can tell from his portfol portfolio, he is very heavily invested in the united states. >> right we got to hear a lot about his investments this morning also heard some about the plan for 2030 for saudi arabia and how everything that's happening with sad saudi aramco is at the center of that what are the plans for saudi arabia right now >> focussing first on the aramco ipo, there's a lot that has been

unsaid here that i think needs to be understood the disclosure issues are enormous they got to talk about what their reserve ip strumts are they got to be much more transpatient about their governance they have to be more transparent about their social funds >> that's number one number two, i think prince alawaleed put his finger on something early in the interview, which is the rapid transformation going on in saudi arabia this vision 2030 plan that the crowned prince is spearheading is really only a part of a kingdom-wide change in focus it's becoming a much more youth-focused culture. over half the country is under the age of 30, so this is a nation of kids right now coming

up they are desperate for jobs. they're desperate for building their non-oil economy. this is i think a transformational process >> well, i have a question this is senator heitkamp from north dakota obviously, we watch very closely what's happening with opec and what's happening with oil prices >> right >> given that we're now the second largest oil producer. what do you think generally is the attitude of the increased production we now opened up the markets to exports. how concerned are the saudis about the united states as a major competitive threat >> i think they are concerned that it has an impact on the price of oil, and they've got to figure out ways to manage their production, and at the same time keeping an eye on you are

production because it greatly concerns them. king solomon was just in russia meeting with putin i'm certain that they discussed production limitations both of them are closely watching u.s. production >> ambassador, that brings us to the idea of potential investors in saudi aramco, and whether they would always have the same needs as the kingdom, and that was a question that andrew put to the ceo of saudi aramco in the tape we heard earlier today. he didn't think there would be conflict between the two of them, but if i'm a shareholder, i may not want you to be pumping or holding off on pumping and be worried about the price of oil versus what the company should or shouldn't be doing? >> that's an important point the geopolitical policies of the kingdom may be different from the interests of individual shareholders in an aramco publically held company. we can recall the year of oil

embargo in in the 1970s when the arabs, especially the saudis, decided to punish the united states for supporting israel >> ambassador, thank you for your time today. >> thank you >> all right nick adams and jake barnes later. you know, robert jord aan is a famous -- i would like the protagonist. i always talk about that do you think that's really his name >> i think it's really his name. >> it is >> it is i'm going to be jake barnes, i think. the holy grail -- you got an expensive watch for us >> the most expensive watch. >> it better do some really fancy stuff. >> it does >> other than tell time? does it? >> it does

>> the holy grail for watch collectors is up for sale. it's paul newman's rolex you won't -- it's paul newman's rolex. do you have it here? >> we do >> oh, many i god. you won't believe how much it could fetch at auction robert frank joins us now with more >> yeah. this could actually become one of the most if not the most expensive watch ever sold at auction. it's paul newman's rolex cosmograph daytona, which he wore every day between 1969 and 1984 he used it to keep lap times when he was racing cars. it's coming up for sale this week watch collectors say it could fetch between $5 million and $10 million. maybe even more. it will hit the auction block thursday at the winning icon's auction held by phillips in association with box and russo joining us is orell, the co-founder of box and russo. thank you for joining us it's the middle watch that you have in that tray that is the paul newman watch. what makes this watch, of all the famous people who have all the great watches, what makes

that watch the watch to have >>. >> the paul newman rolex isn't just a rolex owned by a famous person an actor, politician it's a watch that has created an entire market. the rolex sports watch market from which all the sports markets derive from collecting, and this is a watch that i would consider the adam and eve of an entire movement. >> when you say adam and eve, sir, are you saying that the whole watch collection industry, the whole vintage watch world sort of started with that. >> not quite i mean, people collected clocks and pocket watches throughout the 20th century then, of course, the first wristwatch is collect in the late 1970s or 1980s and were -- a stainless steel sports watch was not considered precious enough it's just an entire new approach

to collecting, and that watch, seen on paul newman's wrist for 50 years has inspired a new generation of collectors >> why did he stop wearing it in 1984 >> it's awe beautiful story. in 1984 he offered this watch to james cox, the consignor now, who then was nel newman's, paul's daughter. he wasn't wearing a watch, james, and one day he said do you know what time it is he said no, paul, i don't wear a watch. he said you need to have one just wind it every morning there's a watch. >> paul newman gave his rolex to his daughter's boyfriend >> absolutely. they were a great couple eventually didn't end up marrying, but remained absolutely best friends to today. >> he is the guy who is selling it >> yes and he and nell together will share the proceeds >> oh, he is giving -- okay, for the kids

the foundation for the kids? >> for organic food for -- >> well, nell has a charity, which is separate from paul newman's own charity, but she has her own charity. tell us about -- you have some other watches there you're selling. what's the sort of collectible watch market like right now? does it basically follow the art market, or is it its own inning, and what's happening with values right now? >> the watch market for vintage collectors wrist watches is in great shape today. scholarship is at its best literature the community is growing there are many parallels art, jewelry, wine. it doesn't always go in parallel we see the moment the watch is catching up. contemporary art if you bought a vazquez 30 years ago, you would be much better off than having bought watches, but now we're really catching up where. >> the last time you were here, you brought that patek philippe,

which we showed on this show, and it became the most expensive watch ever sold at $11 million we're your good luck charm >> thank you >> the auction is, what, thursday >> at 6:00 p.m. at the phillips headquarters in park avenue. the viewing is open today, tuesday, wednesday ten until 6:00 on thursday until 2:00 don't miss it. >> thank you >> thank you >> thanks. >> coming up, trp-umonomics. jason furman at 8:40 eastern time we'll be right back.

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>> coming up in today's top stories, including what you may have missed from our newsmaking interview with principles alawaleed. first, as we head to break, take u look at u.s. equity futures. yoare watching "squawk box" on cnbc it can detect a threat using ai, and respond 60 times faster. it lets you know where your data lives, down to the very server. it keeps your insights from prying eyes, so they're used by no one else but you. it. is. the cloud. the ibm cloud. the cloud that's designed for your data. ai ready. secure to the core. the ibm cloud is the cloud for business. yours.

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up next former chair jason furman out with an op ed in the "wall street journal." it is titled no, the gop plan won't give you a $9,000 raise. he will join us after -- no, you'll get nothing and like it right after this we'll be right bac we come into this world needing others. then we are told it's braver to go it alone. ♪ that independence is the way to accomplish. ♪ but there is another way to live. ♪

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sfliechlt joining us now is jason furman he is out with an op ed titled no, the tax plan won't give you a $9,000 raise we spoke earlier to senator blankford, a republican about the op ed earlier. i think we have it cued up check it out >> jason furman says that there is no bin fit really for the middle class he says it's because the lowest bracket goes from 10 to 12, and a larger standard deduction in child tax credit would be offset by the elimination of personal

exemptions >> right what he is really talking about there is if you double the standard deduction on it, then you're not going to be able to take the mortgage interest deduction and take the charitable deduction if you are at the lowest he wanted. the reality is for the taxpayer, it's exactly the same for them they have a larger standard deduction. fewer people actually have to itemize. it dramatically simple fews tax. >> where is the tax cut? >> it goes into lowering the rates. he looks at 10 and 12, and that's still in conversation that's not a done deal >> mosh people in the zero bracket. >> he is -- >> i think he is making some assumptions that he hasn't seen the details on yet, and that no one has. he is just assuming the worst. >> that's the -- >> what do we need jason, is it details that are missing, or are you disassembling? more people would be in the zero isn't that the way it would work >> look, look, there's two parts to this tax plan there's the individual side and the corporate side

>> what i said about the individual side, we're going to be able to evaluate it we haven't seen the fully specified plan what it looks like is there will be small tax cuts for individuals, some small tax increases for individuals. it does look like there's roughly a wash some people will get a tax cut some people are going to get a tax increase, maybe a little more will get a tax cut, a little more will get a tax increase they'll have to wait to see the details. no one debates that. the real debate here is you're not going to get a tax cut from the individual part. will you benefit from the corporate part that's what i was addressing in my op ed >> the other thing that i was -- you weren't here, so i was kind of needling you a little i guess i have to do it in person with you here in the past you've said -- i have heard larry sommers say that there's not an economist left around that believes in some of the dynamic stuff and some of the trickle down or supply whatever it is that you're talking about, you are saying -- then we have, like, kevin hasset

and on goes i'm an economist, and i propose this i don't think it's true that no one believes it. >> read what i said. >> no. you said -- you want papers. you want -- you want pure reviewed economic papers >> we should have used dynamic scoring to assess tax cuts, and the thing is when you do use dynamic scoring, it turns out that if you have a really badly designed tax cut, it's increasing the debt that has temporary provisions expiring, that has mismatches of depreciation and financial deductions you are going to hurt economic growth, hurt wages you're not going to help >> i saw that. you said if the debt goes up, that at that point that a capital formation is hurt. you know, i understand crowding out. i understand all that. you seemed -- i asked senator heitkamp i said we gave you $10 therele to work with over eight years, and we got 1.8% growth you weren't worried about lack of capital investment when you were running up that bill, jason. now you are worried about $1 .5

trillion and what that might do to growth. give the republicans $5 trillion they don't even want $10 trillion >> president obama's first year of the deficit was 10% to gdp. he cut it by three quarters. that would be fine with me that's not what this plan is going to do. the plan is going to add to our debt, and that's a big problem it's going to help our economy it's going to indirectly raise wages by helping our economy you can only have that bhoel sequence of events you do this and that and that. wages go up if the plan works, and right now it's designed, unfortunately, it doesn't. >> i don't know how it finally -- how it finally all plays out, jason it's tough to say something. i'm not sure that you can say we haven't had any peer reviewed papers over the past do you really want to rely on

academics and paper? >> has there been -- the question is has there been anyone that's defended the proposition that wages will go up between $4,000 and $9,000 i haven't seen anyone defend that i saw two op eds in the "wall street journal" last week. an excellent newspaper, by the way. they were positive on the plan they had numbers that were below 4,000. i haven't seen anyone defend those two numbers. in fact, i think the interesting debate is whether the affect is positive or negative, but certainly no one is out there with numbers like that >> i don't know. you listened to people talk about just the affect on corporate earnings and on stock market and on the wealth effect that the fed has tried to engender over the past seven or eight years. we know that it does work if you do do see a wealth effect sooner or later the underlying economy seemds seems to benefit and catch up with maybe some of the movement in the stock market

just philosophically, jason, don't you think that money is better served -- we should always try to keep more in the private sector where it can be used to try to generate returns and try to increase capital and it just is treated better than when it's in the public sector isn't that philosophically something we could just assume >> you know, the only way to keep more money in the private sector is to cut government spending you're not cutting government spending -- by the way, president obama had proposals on entitlements, on medicare and on social security. president trump has proposals on neither of those, and it's taken both of those off the table. if you're not cutting government spending, you can't actually cut taxes. this bill isn't -- this bill is shifting the bill. >> is it possible to work on -- >> you do what you think, what you think should be done >> is it possible to work on growth first and try and get back to 3% or 4%, and then address entitlements >> sure, it's possible to get back to 3% or 4% if you could go back in time 30 and 40 years ago, and have

people have a lot more children than they actually had 30 or 40 years ago. the problem we have -- the biggest problem we have with growth is -- >> i'm with you on that. millennials aren't having any kids >> you either have a time machine or you can immigration,a tell. >> i think it's true. >> is it really? >> and doing what should be done on mmigration. >> we need more -- the millennials' fault. >> it's interesting because i look at this the way you would look at it if you were a worker in north dakota. i'm getting a $4,000 tax break, there's a way to taylor your corporate tax deduction so only those companies that grow their salary and wage deduction could actually get the tax cut so let's put the rubber on the road and say okay, you want guarantee it, not just make it as spirational people go, it doesn't look like it's for me. >> i think that's an important

point there. there's a direct part of the plan which offers basically nothing to the middle class and no one is arguing otherwise and there's this other goldberg, eight different things and hope it ends up in higher paychecks, no one out there has validated those numbers -- >> you mean the corporate stuff? >> i don't know. i don't think it's voodoo to think if you make corporations here more competent titive aroue world and don't leave the money over there, maybe you do borrow against it and some of it is still here, repatriation and a more level playing field with the rest -- i don't know if i need an academic to write me a paper that shows me xaexactly h that's going to help when it seems like -- it worked one other time. >> joe, no one is saying don't

do those things. no one is saying -- no, he's not, he's saying don't tell us -- all jason is saying, don't tell us it's going to result in a $4,000 increase in someone's paycheck, that's what he's saying he's not saying those things might not be important. >> it will be good but we don't know how good. you don't like the number. how about 3500 >> i'm not saying -- first of all -- >> would you take 3300 >> he's in the negotiating mood today. >> well designed business tax reform, that would modestly raise wages over time. my worry is if you do it this way, you're over the medium and long run going to hurt our economic growth. that's what you've seen in a number of countries around the world that did these types of tax changes and wages go down in the wake of them not some magic that will get us to 3% growth that's a lot harder work than people seem to be prepared to do >> it's -- a lot of people think it will. that's the weird thing about

this we talked to each other but half of the aisle thinks it will work they are sure of it, jason. >> then we should take the time and have hearings and analyze it and let the professional scorekeepers in congress do it they are people that know how to assess that. we can figure it out but not on the sort of pace they are on now. >> that's what we talk about whether -- we may never convince you. we've got a better chance with you than larry summers, i feel like we can work with you a little >> he means that as a compliment. >> i do. >> thanks, jason >> smart when we return, much more from senator --

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(vo) go national. go like a pro. our guest host today, senator heidi heitkamp there is a bill in the senate. does it pass >> i sure hope it does because it buys us some time to really solve the problems with health care it's much more complicated than what anyone has said and if we can pass this, it gets -- it stabilizes the individual markets, gives us time to actually talk about health care costs and what we need to do to reduce them. >> way more complicated than tax reform >> i think so. >> and tax reform is not easy. >> no but doable i think. >> you think it's done by the

end of the year? >> no, but i don't know, i'm not in charge. >> you're running again? >> i am, yeah. >> is it 18? >> yeah. fun, fun, fun in the sun >> it's great to be here. >> what's the most common expression up there in fargo >> we're going to continue this conversation here. we'll see you guys tomorrow. time for "squawk on the street." ♪ good monday morning, welcome to "squawk on the street." i'm carl quintanilla along with jim cramer nearly a third of the s&p reports this week and europe is up, the president goes to capitol hi t