♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures wh futures. what a ride yesterday. the markets shooting up to a 283-point gain for the dow, then giving it all back >> rattled >> ten points down >> down 295. >> that's something to watch up 300 points we were watching with anticipation, down by that much is also something to watch. >> has to be like a fever breaking for people who are still not in >> now it's time to get in >> every day it's -- 26,000.

it was like five sessions between 25,000 and -- >> the zeseventh trading sessio. from january 4th to yesterday is when we saw the 1,000 point move in the dow >> oil breaking, which is a weird reason >> energy stocks came down as a result >> just the idea >> let's hold off for a second nevertheless, with all of that, the s&p 500 still remains on pace for its biggest monthly gains since march of 2016. the nasdaq is still on its biggest monthly gain since july of 2016. look at what happened overnight in asia, you will see the nikkei was down by a third of a percentage point back to this morning sorry, flip-flop back to this morning, you are look at double digit gains or triple digit gains once again for the dow. this comes after last night the nikkei down by a third of a percentage point hang seng and shanghai stocks both ended higher bay quarter

percentage point in europe, where you see the early trading this morning, you will see at this hour there's a bit of weakness. dax is down by 0.2%. ftse down about the same cac is down slightly less. when you start checking out treasury yields, yesterday the yield sat just at around 2.5%. this morning ten-year still yielding 2.552%. >> let's tell you about the bitcoin selloff, which is continuing investors spooked by reports yesterday that south korea and now china could ban trading. bitcoin down as much as 25 points in yesterday's session. we will talk to a cryptocurrency bull in a couple moments we're just above 10,000. we were at 12,000 just yesterday. less than three, four weeks ago we were at 19,000. so, it's been a roller coaster ride shares of juno therapeutics

are soaring. celgene is in talks to buy juno, that news comes a week after celgene said it would buy impact bio medicines for $7 billion juno working on a gene therapy to treat cancer. promising data from early trials for a blood cancer in november. nestle agreed to sell its u.s. candy business to ferraro for 2$2.8 billion nest nestle's offerings include butterfinger, babe ruth people >> yes and yes >> hershey's, mars and lindt are in the u.s ferrero is the maker of nutella. you can put that on anything the greatest thing >> too rich for me >> really? >> yeah. >> the deal would make it the third largest chocolate company

in the world we should show thecommodity price of cocoa >> trying to come up with a candy bar idon't like. >> you like nuts of every kind >> yeah. >> coconut >> yeah. >> caramel >> mm-hmm. >> peanut butter >> mm. >> that's the best one i don't think you'll -- i think we're barking up the wrong neck of the woods here. >> toffee? >> yes >> then -- you can't crush up the coconut stuff, like mounds or something but heath bar on ice cream, crunch that up butter fingers, crunch those up. >> butterfingers crunched up >> clark bars. love those i love zagnucht. >> what about the marshmallow ones -- >> they're not great >> see >> i'll eat them >> kale -- >> chocolate covered kale.

>> kale encrusted something. >> i'll find a candy bar you don't like >> i don't think you will. try. stocks to watch today, ford expects lower operating profit this year. the automaker says currency headwhead hea headwind headwinds and high commodity costs are offsetting gains. boeing is forming a joint venture with adient to design and build airplane seats as demand has outplaced supply in recent years adient is primarily a maker of seats for the auto industry. the joint venture will base its headquarters and plant near frankfurt, germany i imagine they mean these auto seats -- or these airplane seats need to go down. >> or back further >> they need to turn into beds >> that would be nice. >> that's all the rage now in any long-haul -- have you ever

done a coach for eight hours, sorkin >> yes i have what do you do it's hard, right >> it's tough. there's actually for those road warriors out there, there's the best thing you can get a new sleep pillow you know those neck things >> yeah. >> if you're in coach, you have to do this >> yeah. >> or lay on somebody's shoulder next to you. >> i have fallen asleep on somebody >> i wish i had the name of it, it's like a scarf that you wrap around your neck, almost like a neck brace it has a nice thing, and you can just tilt your head like this. it's thegreatest thing >> what is it called >> i don't have it i tried it i will get you the name. >> how did you try it? you used someone else's? >> borrowed it from the guy next to him >> isn't there drool >> what did you say? >> turtle traveler >> no.

that's not the right one i'll get you the name. if you're stuck on a plane for eight hours or four hours, you need to sleep in coach straight up, this is the best way to do it >> i hope i don't need that thing. this whole davos thing. >> okay. >> we'll see >> mr. goodbar >> yeah. >> csx, very disturbing. >> you're right. it's the turtle pillow trtl pillow. not really a pillow. here's what it looks like. we'll show it on the air later maybe we'll find the inventor and have them on >> it has to be in the disrupter series >> it's a cool thing csx fourth quarter profit beat forecasts but the company reported a bigger than expected drop in revenue. the railroad operator lost some

business caused by the turnaround plan of former ceo hunter harrison. harrison passed away in december he was eight months into his restructuring campaign kind of strange that the story relates back to him. the company is sort of hanging it on him, i guess, now that he's dead. that's what they said. just reading the prompter. >> all right right now let's get to eamon javers, he has today's big stories out of washington. good morning >> good morning. the big story yesterday was a legal fight surrounding steve bannon he was supposed to testify before the house intel yens committee during the day yesterday. camera crews caught him walking out last night he said almost nothing to reporters who were gathered there yesterday as to what he might have said. he may have said almost nothing to the house intelligence committee. a legal dispute erupted between

the white house and the house intelligence committee yesterday about whether bannon could invoke executive privilege on behalf of the president of the united states. democrats and republicans said that when bannon arrived yesterday morning at the committee he declined to answer any questions whatsoever about his white house service saying those may be subject to executive privilege. republicans and democrats responded to that with a subpoena to force him to testify. it's not clear how much he did testify yesterday amid all of the legal wrangling. the top democrat on the committee, adam schiff, said he was frustrated with the move >> this was effectively a gag order by the white house preventing this witness from answering almost any question concerning his time in the transition or the administration and many questions even after he left the administration. >> sarah huckabee sanders was asked yesterday whether or not the white house stepped in to block bannon from testifying

here's how she rans edanswered t question >> that's something i wo refer would refer to attorneys on that matter, specifically steve bannon's attorney. we have been cooperative throughout the process we will continue to be process we're also going to maintain some of the executive privileges here at the white house. >> sarah huckabee sanders yesterday using the phrase executive privileges it appears the white house is trying not to officially invoke executive privilege here the bannon line of argument is that some of this stuff may impinge upon executive privilege if the president decides to invoke it later. so there's a debate about whether bannon can invoke executive privilege at all during the presidential transition, before the president was sworn in as president of the united states. we'll see where that goes today.

>> that was the big story? the guy answered questions for an hour. >> that was fascinating. >> he was bush's doctor, president obama's doctor >> yeah. >> he supposedly is not a guy that they just stuck in there. >> it was really interesting yesterday. he came out, dr. jackson, the white house physician, he took questions. and he said the president asked him to go out there and take every question the press corps threw at hem and sarah huckabee sanders was not to interrupted while he answered questions he talked for just about a full hour he said the president is 75 inches tall, 239 pounds. the president could stand to lose a little weight, but otherwise is in great health and has excellent genes. >> cognitive, 30 out of 30 on the cognitive test democrats are not satisfied with the cognitive test they're pushing for a psychiatric test apparently he still disagrees with a lot of liberal

principles >> is that a mark of insanity? >> we need a -- >> they've been saying that for months he has all these disagreements on things we know are true there's got doing something wrong with him >> speaking of true, i got a kick on twitter yesterday in my mentions after i put out some of these details. people were skeptical that the president does weigh 239 pounds. they think he weighs more than that they plight be shaving a few numbers there. >> the camera adds weight. >> believe me, i know it >> in a perfect world, the camera would add hair, not weight >> right the people who were skeptical of the president's weight were calling themselves girthers on twitter yesterday. >> called themselves what? >> girthers. that's a new conspiracy theory >> eamon -- >> you look like you're in fighting shape >> i feel great. >> andrew has to get this --

>> i also have great genes >> andrew wants to show you his turtle >> i just bought one >> i did >> in the last couple minutes, i don't have one of these. i tried it for ten seconds on an airplane >> that's awesome. >> this is the turtle pillow >> how did you grow so fashionable? >> those road warriors out there who have used those little pillow wi things around your neck, but you usually get a crump in your neck, this almost holds your neck up like a neck brace. inside there is a lightweight plastic support system of sorts. so your head stays up. >> i could use that the next time the white house doctor talks for an hour about the president's health >> that's a good idea. take a selfie when you do. any way, becky will test it out for us >> i could have used it last week >> she was on amazon and hit the -- >> it's not just a scarf

>> it has a thing in it. >> it's furry. >> firm. it looks like just a scarf >> it has a piece like this. you can put it on either side of you. >> you can watch me on the flight to davos. >> if you go like this, do you fall >> if you lean the other way >> then you fall what if you lean forward you crack your head. >> we have to talk to these guys >> let's get back to the markets, joining us is noah blackstein and david lebowicz, and noah typically looks down on the united states wistfully from canada probably thinks i wish i would live down there. >> probably not. >> i'll move in with joe >> are you mad about nafta are i mad that --

>> you did that? >> i didn't do that. >> you are mad at us, we may not be patsies forever with this whole nafta thing with you and mexico >> you have to do what's in the best interest of your country. it's your trade deals. if you don't think you're getting a fair -- >> we have a trade surplus with canada >> we'll negotiate something you can't be the largest trading partners and just stop trade i'm sure we'll find something that works for both sides. it will be a long process. i'm not sure it will be addressed in the next 60 days or 90 days. >> let's talk about the markets. martin feldstein in the journal, everything looks great but the fed still has to unwind. never been done before he feels like it won't go smoothly as everyone thinks. what do you think? >> my biggest concern is they're unwinding as they raise interest rates. there's a lack of inflation in the u.s. i think both the regulatory halt

in the u.s., this administrative state putting regulations on companies has slowed down. the tax cuts are huge. this move in the market year-to-date in the u.s. has been the beginning of pricing in the tax cuts if you look at the sell side estimates, nobody has put it on. they're waiting for first quarter guidance no one has done models so i think there's further to go on the e, as opposed to the expanding pe the e begins to move >> david, you saw this you guys journalists >> yes >> okay. so you might know the answer to that when people write things, does your editor come up with the headline sometimes >> yes almost always. >> but the headline is stocks are headed for a fall. >> right >> so he may not have written that they read everything he says and try to clickbait you into the piece? >> two things, so you know,

you're reading the editorial page which happens to be different than the -- >> is that why it says opinion >> that's why it says opinion. >> he didn't write that headline >> the second thing you should know, on that page the editors are selecting the headlines, but increasingly in some news pages, reporters are suggesting headlines, and doing headlines >> as opposed to "new york times" where the opinion people write the headlines on the front page is that the opposite of -- >> no, joseph. no >> are you with that >> no. >> i think the question here is what do they mean by afar? are they talking about more volatility than we saw in 2017 that's a reasonability expectation. >> it says headed for a fall >> i think when we look at the fundamentals, we see economic growth continuing to look solid. sell side estimates are just starting to get revised higher to incorporate tax reform. when it comes to the fed, the bigger question is whether they're normalizing or

tightening the fed is saying we're normalizing. >> that's semantics. if you're coming off zero, even if it's from much lower levels, even at the inflection point, that's the beginning of tightening >> but the rhetoric is important. when you look at a real fed funds rate in negative territory, it's tough to take that and construe an environment where the fed is trying to slow things down. the fed is trying to reload their quiver so they have arrows to fire. >> so it's more about that then just getting back to what seems to be a four point unemployment rate 4% unemployment rate we have zero basically >> this is a global problem. unemployment rates continue to come down. unemployment in europe has accelerated its fall, inflation is nowhere to be found the question is when does

inflation materialize? we think that will happen later in the year. >> you think that rolls things over, the fed's rule >> yeah. there's no viable tradeoff to owning equities. once you are paid in real terms, so equities that pay with 3 in real term, volatility of 15 plus >> liesman would disagree with this premise easing monetary policy has led to overvalued equities and a precarious financial situation the fed should have started raising several years ago. do you think they're right about that >> as you look globally, not just in the u.s., you look at global markets coming back to where they were a decade ago some markets are coming back to where they were in the 1990s when you look globally at the world, you can't say there's an irrational exuberance.

the s&p 500, as the u.s. was first in and first out through the financial crisis, now it's more of an earnings driven market globally it's hard to look at global bourses which are getting back to where they were a decade ago and pointing fingers >> i read this, know, if you've been saying this all along that they should have gone up and then it looks like thingswell, e was such a hole in demand that they needed this simplus people that think the fed orchestrated this, and guys all along were saying they need to raise rates. are they wrong >> while tightening to the tune of whatever it is, 40 billion a month for the federal reserve, the dank of bank of japan and t have not stopped you don't operate in a vacuum. there's plenty of global liquidity to make up for what the fed is doing >> all right

this is a dashing figure, trudeau. >> i was confused. >> you have that going for you up there trudeau is not a 240-pound -- >> thank you >> that's amazing, he cuts a dashing figure and you think i'm talking about andrew >> it's their image. >> it is >> thank you. when we come back, the bitcoin selloff continues. more red arrows this morning the cryptocurrency down 25% last week this morning down 7% we have the details after this it can detect a threat using ai, and respond 60 times faster. it lets you know where your data lives,

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welcome back let's talk bitcoin the price this morning, we're hovering around $10,000. now it's coming back a bit $10,500. $10,400 depending on which exchange you play. bitcoin falling more than 25% below the 10,000 mark on tuesday after word that south korea could be considering a tougher

stance on the cryptocurrency for more insights on all this, dan novis is the co-founder and ceo of current, a blockchain platform which earns consumers a way to earn cryptocurrency we'll talk about what that means. help us understand what you think is going on with the price fluctuations and where things stand now between south korea and china also there's been news out of china maybe they'll regulate this thing. >> yeah. thanks for having me so, essentially what's happening here is obviously the cryptocurrency markets are volatile news fluctuates with prices up or down. what's happened over the past two months you had a huge influx of new investors in the cryptocurrency space so we saw these prices go up bitcoin hit nearly $20,000 and for these last two, three months a lot of these newcomers have never seen red.

now this news over the past week, you know, it has been been relatively stable. this news comes out and prices dip. so a lot of people today are panic selling, because they have seen red not seen it before, not the most experienced investors. that's why i think you're seeing such huge negatives. >> i don't know if this exists is there a way to buy bitcoin on margin is any of this forced selling? >> i wouldn't say it's forced selling. it's like there's so much hype in the media around bitcoin and people making these massive fortun fortunes and i think people are scared, trying to realize gains or losses and that's what's in the pattern. what do you think the intrinsic

value now of a bitcoin is? i was talking to miners again last week. it seems like you can still mine a bitcoin for about $12 and 00,b $1300, maybe $1400 if it costs 1$1400 to mine one and you can buy one for $10,000, that's a spread. >> i know some folks deep in the mining industry, three, four months ago it was a profitable business then there was a huge spike and mining shops popping up. it's hard to get machines you need to mine bitcoin in a small amount of time there's a lot of infrastructure setup costs and so much demand for the s2 miners, that it's hard to get them it's a profitable business, but i think to answer your question on intren siinsic value, that'st

humans put value on anything who puts the value on gold we put value on these items. the market demands that. in every single country, what i find interesting about bitcoin, you have a universal currency that everybody agrees what the price is and it fluctuates day-to-day, but at the end of the day it's one currency not backed by centralized government >> before we go, what do you think the value of bitcoin will be, let's say, in 12 months from now, where are you on this and then explain what your business does. >> it's hard for me to say where it is 12 months from now i will say i'm long cryptocurrencies i think if people are going to day trade cryptocurrencies and don't know what they're doing, they'll get slaughtered.

i believe in the science behind it that's why i'm long cryptocurrencies in terms of current, to give you an idea of market sentiment, when bitcoin went down, we announced our token sale and got flooded by thousands of people wanting to participate in the token sale that shows where the market is all coins have actually gone up, maybe not over the last two days, but they've been thriving. there's a lot of amazing new technologies coming out building on top of this technology. >> i think it shows where the market is in that it is something that speculators everywhere are suddenly interested in. i can't go to a restaurant without waiters asking me about it we hear from friends and family, every one of them asks me about bitcoin. i don't know what that tells me other than this has caught the national attention and people who are not traditionally investors, not generally looking at stocks are interested in

this >> yeah. i agree with you here's how i try to explain this to my friends or parents i think that it's very comparable to what was happening with internet 20 years ago people only talk about bitcoin there's a variety of other stuff in the technology, that's most interesting. it will develop over the next five, ten years. i wouldn't put my entire life savings on it, but 1%, 2%. because i think there's a lot of upside and it will ultimately change our lives i think the media putting the emphases on it is bringing it to light. when people see useful applications for it, that's when it will hit mainstream >> you compared it to the internet bubble 20 years ago that was a situation where a lot of those companies didn't survive. the internet did, but a lot of those companies did. people will say blockchain will survive but not necessarily the currencies do you believe that?

>> i believe that not every single application or currency will survive we'll see which do there will be market corrections. at the end of the day that's why i'm long over it if you had spread your portfolio out with the top 20 tech companies pre dotcom boom, would have made a big return >> the question is are we still in the pre.c dotcom boom at this point with cryptocurrency or is it too late? every person we've had on the set who said they would put 1% of their net worth in it is somebody who bought in a long time ago that's the only people i heard that from. >> to be honest with you, i bought cryptocurrencies last week i buy these dips in any case -- >> but you made most of your money on it early on, right? >> yes and no. i think that, you know, the

philosophy that i try to instill, not necessarily what happened five years ago. to me the technology in itself is self explanatory. i think we're in the midst of this and just starting this we're still in the infrastructure stage a lot of the blockchains being built can't handle scaleability. ethereum blockchain has massive scaleability issues. so we're just starting on this now. and what the applications coming out to the sconsumers will be th most interesting thing to see. it's a great time to get into the market and expose yourself to that. >> thank you for waking up early or maybe staying up late >> the late. the late part. it's confusing you don't know which to do appreciate it. >> thanks for having me. coming up, former obama adviser jason furman wiljol in us we'll talk taxes, trade and the trump economy. that's next. energy is changing fast and we're changing with it.

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back time for the squawk planner. if you're planning out your month, here's some things you need to know december industrial production is out at 9:15 eastern followed by the national association of home builders monthly survey at 10:00 a.m. chicago fed president charlie evans and dallas fed president rob kaplan will be part of a roundtable discussion this afternoon. and then in terms of corporate earnings, results from bank of

america, goldman sachs in the next hour, and then after the close we'll hear from alcoa. u.s. equity futures at this hour are up again i don't think it counts. >> why >> because we were up 200 yesterday, closed down now we're up 200 again >> so never pay attention in the morning because you don't know what will hatppen at the close. >> we could be up every morning at 200, but it it doesn't stay up -- >> it was the biggest change in a few years. >> the market goes up 100 points every day. if it goes up 100 a morning and closes unchanged, the next day doesn't close. >> i think we're seeing a bit of a potential return to some volatility which is interesting. >> it's too easy if everybody buys calls >> if it always goes up. >> same thing happening with bitcoin. this is probably -- even if you're a bull, you would say this is probably normal,

wouldn't you when it goes to 19,000 from 500 t pulls back >> yes >> then it bounces off 10,000. where is it today? 12,000 13,000 >> 10,500. >> you said we were closer to 19,000 >> closer to 20,000. the real question is 10,000 -- yesterday, or even two days ago, people were saying this resistance level was 13,000. so now is it 10,000? is it 8,000? >> if your life depended on giving a range, like you asked that poor guy -- >> it's his business >> mine would be zero to a million. >> that's a good range maybe not zero it will always be worth something. >> it will be worth something. i think 5,000 to 30,000. big range.

not ba >> not bad you're taking a stand. >> what does mr. furman say? do you own bitcoin >> he has 100% of his money in bitcoin. >> i have about zero percent in bitcoin, and i will go with joe's zero to a million. >> jason furman here, senior fellow with the peterson institute for international economics and he's here to talk about the economy and the international store card for mr. tru score card for mr. trump >> what would you give him >> if you are looking at the united states, job market excellent, wage growth disappointing. grading on a curve you look at what's happening in the rest of the world, u.s. growth is upgraded less than growth in europe, growth in japan. stock markets in those countries measured in dollars outperformed

the stock market in the united states so we're participating in a global rally it's a great global rally. i won't look for the seeds of it here in the united states. >> you are right if you look over the last year, you see that, but from election day the gains are more significant. the gains did start from -- >> if you do it from election day, s&p is up 30%, the advanced economies outside of north america is up 33 they still beat us by three points since election day. that difference grows a bit more this is a global rally it's a great thing it's an exciting thing >> how i would break it down you said if you look at the stock market, great. if you look at the economy, great. if you look at wage gains, that's your biggest concern. what do you think is happening there? >> last 12 months, wages are up 0.4. >> which is surprising given everything we've seen and people thinking it will come.

>> we've seen a slowdown in wage growth, that's because with labor markets tightening, that nominal wage growth is not picking up in the way it is maybe that means we need to drive the unemployment rate even lower. it's fallen 0.6% in the past year maybe it could fall another 0.6% that might be an experiment worth trying >> sam zell was here yesterday he thinks it's because we have not seen productivity gains, and ultimately without productivity gains you won't see wage growth. what do you think? >> that's a big part of it if you see wage growth, a lot has come from employment, not enough there productivity we need a big pick up in productivity to have sustained economic growth in the future. that could happen. there's a lot of exciting innovation we need to figure out how to harness it. >> what's wrong with productivity what has been wrong? there's so many different people who say -- different answers from it's not being measured

correctly to we just changed fundamentally and we can't do it anymore. >> i don't think the measurement issue changed a lot over times i wouldn't pay attention to that half the problem is businesses are not investing enough investment has picked up >> the latest numbers we've seen, that's the bigger one. >> half of that has been in one category, which is oil and gas oil prices up 40%. that's up. so the rest of the investment is not up in the same type of way the other half is more pure innovation, total factor productivity growth. that's because a lot of our innovation has been concentrate ed to a narrow part of the economy and you had some reduction in the fluidity and dynamism of the new economy. >> birth of babies >> birth of new babies >> it's wonderful seeing you here >> you're a young guy. let's get going, dude. >> i have a 2-year-old i'm in my 40s.

>> coming up, bank of america will report. we'll bring you osthe numbers and the reaction from wall street goldman sachs later. tomorrow, it's a day filled with promise and new beginnings, challenges and opportunities. at ameriprise financial, we can't predict what tomorrow will bring. but our comprehensive approach to financial planning can help make sure you're prepared for what's expected and even what's not. and that kind of financial confidence can help you sleep better at night. with the right financial advisor, life can be brilliant. it's abor it isn't. ence in 30,000 precision parts. it's inspected by mercedes-benz factory-trained technicians. or it isn't. it's backed by an unlimited mileage warranty, or it isn't. for those who never settle, it's either mercedes-benz certified pre-owned,

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welcome back to "squawk box. it's about to get harder for small video makers to make money on youtube the site is kicking thousands out of its ad revenue sharing program. it will make it harder for new ones to get into the program it's part of the response to a year of criticism regarding questionable and offensive content, and advertisers concerned about being attached to programs with certain content. youtube says 99 pors % of thoseg booted were making less than $100 per year. they also will have human review to assure compliance the program is aimed at advertisers who want guarantees that their videos will run next to clips recode says the changes won't

prevent people from uploading offensive content. want to get over to wilf who has sotd ea some earnings news on bank of america. >> we don't yet. we're waiting for it to come waiting for those numbers to hit the wires. 6:45 today, goldman sachs at 7:30 we're awaiting to -- we have to the got the numbers yet. they're out. there we go. we can go with it. so we have revenue, 21.4 this is adjusted revenue, just behind estimates eps of 0.47, forecast 0.44 just ahead of the eps number the write down for the quarter, 2.billi 2.9 billion. they forecast 3 billion. trading is a stand-out for them.

it's down 9% year-on-year. much better than we've seen so far. citi down 16%, jpmorgan down 17%. trading will be key for goldman sachs. will they be worse than the rest of the pack or better than the rest of the pack like bank of america has been just now. cost-cutting has been key for brian moynihan at bank of america. the efficiency ratio at 62%. a bit hoyer than they would have wanted albeit, expenses for the quarter, 313.3 billion, stays within the annual target of 52.3 billion. the loan growth numbers has been strong, given that others have been low single digit and bank of america has been cautious in this area. loans in consumer up 9%. loans in wealth management up about 7% in corporate up about 4% so their loan growth number

looks impressive relative to recent past. overall a decent set of numbers for them guys >> all right wilf, thank you for that we look forward to spending more time with you sorting through these numbers and hearing from you on goldman sachs in a bit. >> you saw the stock up by 1%, then just below that so the street running through those numbers. when we come back, much more on the bank of america report still to come and we'll bring you the numbers from goldman sachs as soon as they hit the tape as we head to break, a quick check of what's happening in the european markets things have turned across the board for all these major markets. the cac down by less than 0.1% stick around "squawk box" will be right back.

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welcome back, everybody. it's been exactly a year since sky bridge capital which then advised $12 billion in assets agreed to be acquired by ron trans atlantic and hna capital the deal still hasn't closed leslie picker has more on what's happening in that limbo situation. >> that's right, becky today marks the one year anniversary since skybridge capital announced its sale to

china's hna group. the target deadline was over the summer they said it would close over the summer then that was pushed to by the end of the year, by the end of 2017 but as you mentioned, it still remains in regulatory purgatory as some sources call it. the deal has been closely watched, not just because of the size of the fund but the size of its figure head, anthony scare ra mu chi. the former white house communications director. since it was signed controversy has swirled whether it was over scare mu chi's ties to the white house or other hna deals that have been blocked given its china backing or under performance of hedge funded funds in general i'm told scaramuci is no longer with the fund. about 141 inbound deals are still pending according to deal logic. about 1/4 of those come from

china, and of those deals that are still pending, only five were signed before skybridges. if the deal is blocked, it could cause investors to believe the fund and skybridge and encourage that are still working there >> no, people close to the firm have said that they have essentially thrown an all time caution to the wind. everything they have estimated with regard to the closure of this deal has not come to pass so they're just saying, you know, we just don't know when this thing is going to be through. >> leslie, thank you coming up, big banks are reporting. we'll dig through the report that we got from bank of america and bring you numbers from goldman sachs as soon as they cross the wire plus, the senate banking committee set to vote on fed chair nominee jay wepoll

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earnings alert bank of america shares trading higher after quarterly results up next, it's goldman sachs. crypto crushed bitcoin briefly dips below 10,000 we have the details straight ahead. plus, move over. we're going to head to the farm for a story about milk the second hour of "squawk box" begins right now ♪ ♪ live from the beating heart of business, new york city this is "squawk box. good morning welcome to "squawk box" right here on cnbc

a whistling "squawk box" this morning. we are live at the nasdaq center, among the stories front and center at this hour, check out the prices of bitcoin. it continues to come under some pressure this morning. inbe vestors in the virtual currency concerned about trading. the price of bitcoin has fallen nearly from half it was almost at 20,000. we're now living about 10,000. it was actually up slightly higher earlier this morning, about $10,500. again, always depends which exchange you're looking at, but if you're in the crypto currency world, it has been a heck of a little ride these past couple of weeks. we're also watching shares of luxury retailer tiffany this morning. holiday season sales were up 8% overall. 5% in comparable sales fiscal 2018 earnings will likely be flat to slightly down from 2017 levels. also a mixed quarter for bank of america. the bank reporting quarterly

profits of 70 cents per share. revenue, however, was slightly below forecast in the meantime, we also want to head over to the breaking news desk where wilfred frost has some more details on the bank of america. wilf. >> that adjusted eps number is a slight beat. like all of the banks, quite a bit lumpy. still, that adjusted eps is a slight beat. the main standout of that performance is the trading performances i mentioned moments ago, down just 9% year on year citi and jpmorgan were down mid to high teens. 16 and 17% respectively. we break down the trading, it was a 13% decline in fixed income equities was flat. how goldman sachs stacks up on that measure will be absolutely fascinating at 7:30. trading for goldman sachs is under 40%, just under 40%. it's about 15% now within sort of related trading

but come out in loans, they have this same similar single client write down for bank of america it's 292 million we talk about this for citi. we talk about it for jpmorgan. for bank of america this comes as a chargeoff in the loan book for jpmorgan it's thought to be the same south african retailer that has affected all of the banks this quarter. steinhoffle is not confirmed in the earnings releases. we should talk about loan growth it is stronger than it has been for bank of america. brings them back in line with the likes of jpmorgan. they've been less cautious on loan growth. this quarter they're hitting the same numbers that will be interesting in terms of the tax bill, we've got a 2.9 billion one off writedown for this quarter it was forecast at three that was good. we haven't got what their tax rate is for 2018, whether it comes out at 19% like jpmorgan or 25% like citi slightly to be learned

guys. >> yes, wilf, thank you. we'll keep an eye on that. wait for goldman sachs few other stocks on the move this morning shares of juno therapeutics. sell gene celgene is in talks to buy that company. they've got 7.5 billion. that news comes a week after celgene said it would buy impact biomedicines for $7 million. swiss food group nestle has agreed to sell its u.s. candy business to italy's ferriero it includes butt eerbutterfingey ruth. >> peanut chips? >> i like those. i don't like that much everybody else in my family does, peppermint pattys. >> finally we found something. >> i don't say no. >> never mind. >> trails hershey, mars and

lindt in the candy business. nestle's been shifting away from junk, sugary foods and focusing on nutrition, health and wellness family owned ferrero is the maker of nutella this deal would make it the third largest company in the world. ford expects lower operating profits in 2018. cost cuts in demand for high margin pickup trucks they don't plan to take any charges related to tax reform. >> let's get back to the broader markets. joining us right now for that is julian emmanuel. he is chief equity derivatives strategist and christian amani is at oppenheimer funds. welcome to both of you julian, let's talk about the stock market that gain of 285 points that then reversed and went a little more by the end of the day made people maybe start to think,

okay, the market does go down as well >> and that's not a bad thing, actually, because one way price action like we've had to start the year off has gotten sort of that boo yauel yans, a little b froth in the market. this market has climbed on the wall of worry. every time the wall of worry came crumbling, as it did these last two weeks, you had more difficult gains. >> yesterday we had two guests, sam zell and sarik omar who both used irrational exuberance is that what this is or is it reflective of the increasing earnings gains? >> it's increasing earnings gains, but it's a little bit more than that if you're going to have a ten-year yield stuck at around 2.5%, we think it crepes higher. and you're going to have economic growth that's sort of anchored now around 2.5 to 3% versus 1.5 to 2.5%

that's a recipe for supporting 20 times multiple, which is, if you look at where earnings are, we think 150 this year, that's where we sort of see the market heading. >> christian, let's talk about the fixed income market because that has been part of the reason stocks have continued to climb you can't get anything for investing in fixed income relatively speaking. what's going on? does that change >> well, so i think rates are at 2.5% rates are 2.5% because inflation is relatively low. as long as that is the case, rates probably don't climb ten years much the front end of the curve, two-year note, for example, is being driven by what the fed does the fed is on the hook to -- their intention is to tighten two or three times, i think they'll probably tighten three some expect it to be four. i think that's a bit of a stretch. but i think the point that he was making is extraordinarily good this is not irrational exuberance it's driven by global growth,

profitability being high you have a tailwind of taxes coming down. all of those things are supportive of the market we anticipated that, and that's what our case was in october, november, that things are coming together and we'll have a jump up in equity markets in the first half of 2018 >> if the economy looks so great, if everything is firing on all cylinders, how come we have a ten year at 2.5%? >> that's because the growth is there but inflation is not there. so in the old days it used to be when you have growth you have correspondsing inflation coming up, but as jason was talking about, wage inflation is not there, labor markets are tight people are not getting the sort of raises they were getting before. >> is that just around the corner when do you think we'll see wage inflation? >> it's been around the corner for the last three years we've been waiting for wage inflation to materialize at some point, and it hasn't what's the reason? i don't think anybody knows. as jerry said himself, we've asked that question, what's the

reason for inflation being low he says, i don't know. i think what that means is the fed is too preemptive and tries to knock this economy down because they are worried about inflation, i think they'll be doing a disservice to the economy and the markets. >> what would you tell people who might be interested in investing in fixed income? where should they go >> investing in fixed income is really still about fixed income being a ballast in your portfolio. markets are higher and therefore if there is a substantial correction, you want part of the portfolio to hold value. i think that's in high grade bonds as opposed to high yield where spreads are inordinately tight. if you're looking for income, we believe emerging market local debt where because the dollar is unlikely to appreciate probably offers you the best yield. >> julian, what about you? what do you tell investors to do at this point? >> you want to tilt more cyclically the fact that we had two quarters of over 3% growth is

basically in our and the green light that the economy and the stock market is moving forward in the cycle, we weren't sure that was actually going to happen because of what interest rates have done for a number of years but now we're here so that means energy, that means financials, and i think importantly financials everyone is talking about lower trading revenue. yesterday might have been sort of a wake-up call that, yes, we have more volatility and that's going to be good for trading revenues. >> that was my next question do you think there's a return to volatility >> absolutely. >> it's hard to argue that it's going to be less volatile than it was last year >> you know, having been one of the least volatile years on record but, again, it's totally consistent to see a pickup in volatility because the range of economic outcomes is wider, the range of interest rate outcomes is also wider and when you think about earnings, there's a lot we don't know about the effect of tax. the range of earnings outcome is -- >> again, that was the next place i was going. if we start to hear from a lot

of companies that are upgrading based on the tax plan, what that will mean for them, then you're not going to have the same range of economic activity you will have people assuming, okay, the growth is a little stronger than anticipated. >> we could see a 4% quarter in 2018, and that's how you open up the up side in a more volatile way in the equity markets. >> i will take the other side of the trade, at least for the first half of the year there's enough momentum in the economy, there's enough clarity with respect to the global growth brand, tax rates for us and more importantly, actually most importantly,rates and, therefore, i think volatility to be subdued might not be exactly at this level but it remains subdued if volatility is going to increase, it's in the second half when it starts slowing down, u.s. starts rolling over from their really high levels and more uncertainty comes in first half i think it remains low. >> christian, julian, thank you for your time today. coming up, timing is

everything, and when it comes to volatility around bitcoin, it's either been a winning lottery ticket or a widow maker. trade up next. we're going to compare investing in cryptocurrency to betting on blue chip stocks ayr different. st tuned you're watching "squawk box" on cnbc we took legendary and made it liberating.

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welcome back to squawk box the futures higher up almost 200 points papa john's cfo is leaving in march. he's going to take the same job at restaurant chain operator jack in the box. papa john's cfo stepped down last month i don't know if it was because of his comments on nfl leadership, but it did follow his comments on nfl leadership we are talking bitcoin this morning, and just about every morning lately, it seems traders and investors are hyper aware of how returns are affected by simply getting in or out at the right time. dom chu picked out a few right times with how investing this that cryptocurrency has fared. >> there's not a lot of information about cryptocurrency, it's been around

for eight or nine years. we want to know how investor returns have been juiced we looked short, medium, longer term there is a chart we know that, yes, it was sub100 at one point it got all the way to near $20,000 at one point, now we're back down to where we are, about $10,500. if you got in, say, three years ago, all right back then in mid january of 2015 bitcoin was around 250 bucks a token, three years so even with the market moves that we've seen to the down side over the last couple of weeks, you still have a $10,000 investment at that time worth $460,000ish as of yesterday. it's a little bit less today because of the price moves over the last year you're still doing pretty good. still worth about $125,000 but if you look at it just over a month from the highs to now, that $10,000 has lost around 40% of its value so that 10,000 is now worth $6,000 that gives you a short term,

medium term, longer term >> this is not the growth, this is the return. you lost 4 grand, right? >> $10,000 invested initially is worth the dollar amounts we put up there. >> okay. >> we want to then contrast it to the stock market, not because we think that they're comparable in terms of investment or risk or anything else, but because other people choose the stock market as a way to invest in anything over three years if you bought the s&p 500 spdr etf undividend adjusted, price appreciation, that 10,000 is worth 13,700. >> compared to 450,000. >> it is but, still, we are in a mode in the stock market where a 30% return is a good thing, right? >> right >> that's what we know over the last year you're still up $12,200 that's what it's grown to. if you invested just at the high of bitcoin over the last month, your s&p 500 return would still be positive as opposed to the minus 40% in bitcoin right now, $10,400.

the reason we want to show those is we want to put the context behind the moves that we've seen it also calls into question whether or not if you held bitcoin for a long, long time, whether or not you're still in it because if you watched at the highs, that $10,000 at one point was worth around 3/4 of a million dollars at the highs and is now down to $160,000. how much pain would you have suffered as a bitcoin holder and investor before you would hit the sell button, that's a big question. >> can i raise my hand >> yes. >> i have a question. >> yes. >> i wouldn't call it explosive. >> what would you call it? >> i know what it would be about. it would be about -- >> that suggests that you think you're the teacher interesting. >> oh, i do. >> so separate -- >> i just have a very poor pupil. >> oh. okay separate issue do you think that people are buying the stuff on margin or are taking out loans or doing -- i'm trying to understand whether

there's forced selling going on. >> anecdotally we have heard stories about it the headlines about i have mortgaged my house to buy bitcoin. >> right. >> that family in the netherlands that sold everything they owned to live in a trailer and bought bitcoin. >> right. >> there's a handful, but when i look at this sort of massive selling that's clearly gone on, i'm trying to understand what's driving that beyond just the psychology of it is there actual economic pressure on some of these owners >> that's a good question. i don't know here's what i would say. i'm not sure how many lenders out there, whether you're a traditional brokerage -- >> i don't think anyone wants to lend against this specifically >> correct are they taking helocs. >> or doing other weird things we're not thinking through. >> there may be some people. you don't feel as if this is a prevalent thing. bitcoin hasn't grown enough in size where people are tapping the home equity which is trillions of dollars in terms of the total value of real estate

to do it that may not mean that it won't happen but right now, yes, there's probably forced selling but maybe not enough of forced selling. >> you can always be our teacher. >> i don't want to be a teacher, i want to be a student. >> you want to be a golfer. >> i would be if i was good enough. joining us, another teacher on the set to bitcoin and cryptocurrency nolan bowerly, director of research at coin desk. so the thing that we're trying to understand is what the heck this thing is actually worth how do you even figure it out? >> well, it's still price discovery. it's based on what a person is willing to pay for bitcoin and sell it for. the figures you mentioned about the number of -- the price volatility and the price fluctuations that have happened over the past few years, since 2016 there have been six 25% decreases in bitcoin so six times it's hit these large scale selloffs

>> right. >> and what we can see from that is oftentimes that money goes into other cryptocurrencies. >> okay. >> so you've got a lot of people, because it is so liquid, you can get in and out and change your position so quickly, it's really helpful to look at the bitcoin dominance index. how much bitcoin is worth versus the entire set of cryptocurrencies a lot of people went out of bitcoin and into -- >> aethereum. >> ripple had an incredible run. i like privacy coins personally. >> you like privacy coins? >> what are those? >> anything with a crypto graphic innovation don't forget, that's what we're betting on here. we're betting on cryptography going into individual's hands. that will be an important investment. >> let's make a list you like zcash that's a great coin. >> what else

>> manaro. both have competing ways to achieve privacy. >> you just made the argument that bitcoin is very liquid. there are people that i talk to who say exactly not that liquid. first of all, there's huge commissions coming out of it if you're trying to sell. if you want to sell a lot of it, actually, at any point in time, not that liquid. >> true. when people say bitcoin is not that liquid, the fiat on ramps and off ramps, it's -- >> it's not liquid >> but it is for other cryptocurrencies and that's what i'm suggesting people are going from bitcoin to other positions in other cryptocurrencies and back again. >> you're saying that's -- well -- >> i would not say this. first of all, the hfr, hedge fund research folks, i've talked about the number of hedge funds we've seen trafficked in bitcoin, what their performance has been, the question that i had back then and still have today is how much of that is on

paper, on the ledger so far and how much is realized if you take a look, even on some of the more i guess volume driven platforms for trading these things, the market impact associated with selling a bitcoin, not that difficult, right? you start to sell 500 at a time or 1,000 at a time, which is what at the institutional level you might need to do to either fund redemptions for your fund, right, or put money to work 23 yo if you're going to put money to work, all of a sudden you start to see the liquidity profiles not as robust as you think they are. that kind of money being put to work does have the ability to drive prices up or down significantly off of these exchanges. >> it could put pressure. >> yes i remember back in -- back in my wall street days i at one point traded a small cap fund on an institution level. i was asked to share a million shares of a stock that trades 250,000 shares a day so if i was to be half of the daily volume, which is massive

for a stock, it would still take me god knows how many days, weeks to get out of that position. >> right >> and i would drive that stock down a lot if you're talking about large scale cryptocurrency investments, we're not talking the size of the equity markets yet, but if there are funds out there that want to either sell en masse or buy en masse because investor demand is driving it, i'd be curious what the market impact would be to buy or sell at that kind of level. >> we've seen it in other crypto currencies aethereum, some of these large icos moved aethereum, we saw it come down. that was close to that institutional level that you're talking about. some of these guys managed to raise 200, $300 million worth of ether for their ico. within a week or two changed their opinions and wanted to diversify and put out public statements about their treasury management so they didn't just tie their entire company to the

price of ether so we've seen those movements before we've seen a lot of sophisticated trading particularly on the crypto hedge funds and they really do have a touch and feel for the market. it's a little like waves that's why i mentioned that whole bitcoin dominance index. it's down to about 35%, it started in the 90s, up again to the 60s and 70s in the run. >> okay. we've got to run >> nolan, thank you. fascinating. when we come back, turning up the heat on silicon valley. why some say tech giants like facebook and amazon should be broken up and regulated like at&t and standard oil. we're going to stay tuned, hear more aboutthis in just a moment you are watching "squawk box" on cnbc time now for today's aflac trivia question. who invented the first mechanized milking machine the answer when cnbc's "squawk box" continues and a gentle wave-like motion...

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the concept was patented in 1917 coming up, the deep freeze in -- or the deep south in a deep freeze or the deep south -- deep freeze in the deep south. pois morning we have a live rert in louisiana. we'll do it straight ahead in just a moment when "squawk" returns.

♪ ♪ ♪ live shot of times square. it is raining outside right now. it may be snowing in just a little bit good morning, welcome to "squawk" on cnbc live at the nasdaq market on times square the fed's widely watched beige book will be out today it will be releasing the region-by-region segment at 2:00 p.m. eastern time. they'll be looking at clues on economic health, by implication the chance of rate hikes national home builders association will be out with its monthly index. that's at 10:00 eastern time expect to come in with a reading of 72 for january. that's two points lower than a month ago. one report out on wednesdays,

not going to be out today. energy department releasing its weekly look at oil and gas that's going to happen tomorrow. joe is so disappointed delayed a day because of monday's holiday joe, news you can use. >> first thing i thought of when i woke up this orning. >> we have some pretty serious energy traders out there. >> we do >> that rely on this the deep south is in a deep freeze this morning. the weather channel's mike seidel joins us live from shreveport, louisiana. give us an idea. did it go all the way across to the atlantic coast, too, mike? how cold is it down there? how cold is it down there? >> reporter: it's so cold, joe, this is the coldest temperature they've seen here in 22 years. it's 13 right now. wind chills in some spots are down below zero. we have our first 1-inch snowfall in shreveport

we have that still on the ground believe it or not. you know how they loaded the salt trucks, bag by bag. schools are closed because primarily the cold temperatures and some ice still on the back roads. houston, take a look at the pictures there they had 1/10 of an inch of snow third time they've had measurable snow this winter. that hasn't happened in 33 winters. 20 degrees here. new orleans is down to 20 right now in the big easy. that's a record low. atlanta wakes up to another inch of snow following the snowstorm back in december all of these places will have highs 20 to 25 degrees below average. in the northeast, what's left of the storm bringing some snow right now to hartford, upstate new york into the boston/worcester area. snowfall into the 2 to 4 inch category it will change to snow in new york city, more of a sloppy mess there. then it turns cold back here in the deep south, temperatures by the weekend will be much, much warmer back into the more typical 50s

and 60s. becky, i've never covered snow in 26 years this far south so this is unusual one more quick thing, believe it or not, pensacola beach this morning it's snowing temperatures now in the 20s. that's how ridiculously cold this air mass is. >> pensacola >> wow. >> that used to be in florida. >> still is. >> becky says it's so cold that robert -- >> please tell r-- police tell robbers to freeze and they do. so cold that we have to chisel the dog off the fire hydrant perhaps my favorite, so cold the lawyers have their hands in their own pockets. >> heard that one before. >> hear that, mike that one is politically incorrect. i don't know whether lawyers have their hands in their own pockets. augusta's 38 degrees >> love that. >> that is amazing >> mike, what does this mean for the citrus crops in florida? we had talked to people there over a week ago saying that this was do or die situation and that

they were really facing some hardships after all of the issues that have happened weather wise down there the last year >> reporter: well, they're going to go through it again tonight and tomorrow morning because temperatures in those areas are going to drop below freezing so it's another tough morning for the grapefruit, the orange crops and we'll see how things fare as we get into march, as we get into strawberry season in central florida. i can tell you living in atlanta, we are tired of this. i mean, you don't move to atlanta for temperatures in the teens and snow and snow and more snow. >> exactly. >> everybody down here is looking forward to a break in this pattern getting into the weekend to get back into the 50s and 60s. but the pensacola stats blew mea way this morning it's snowing and 20 degrees in pensacola. it is still in florida, joe, last time i checked. >> that's so weird repeat after me, mike, it's just weather, it's just weather, it's just weather when it's cold, it's just

weather. if it's warm, we know what that would be, but it's not anyway thank you. we're trying to escape the cold. we're going to davos on sunday yeah, we're -- >> not bad. >> 25 degrees. it's warmer than pensacola. >> 30, 35. >> warmer than florida >> did you look at the forecast? >> i did. >> last couple of years we were in the -- wasn't it single digits >> it all depends on whether the wind comes through, whether the clouds are out or the sun pokes out from behind -- mike, thank you. >> 24 degrees right now in davos, 29, 24, 24, 37. >> 37! >> and all the indoor studios are still sold out, is that -- is that still the issue for us >> yeah. >> yeah, they're sold out. there's not that many indoor places over there. >> yeah. we like being outside. >> i think we do it for the theatrics. >> nice back drop. >> other people make the decision to have us do it for

the theatrics. >> right >> i know. >> this is our job and it could be worse. you could be outside every day of the week. >> you're right. like mike seidel. >> that's right. >> louisiana. snapshot on the housing market this morning. the latest data on weekly mortgage applications released earlier this hour. diana olick joins us from washington diana, good morning. >> good morning, becky i did shovel a little snow to get here to do this report for you in d.c mortgage applications up 4% last week which doesn't make a whole lot of sense because interest rates rose unless, of course, you factor in fear borrowers may have jumped in especially to refinance worried that the long run of record low rates is over. breaking down the gains, applications to refinance a home loan led the charge also up 4% for the week refinances are usually highly sensitive to small moves in interest rates which is why the gains aren't following normal patterns interest rates rose to their highest level since march of

2017 the average contract interest rate for 30 year fixed mortgages with conforming loan balances increased to 4.33% from 4.23%. that's a big jump, 10 basis points we haven't seen a move like that in a while that's for 80% ltvs. mortgage applications to buy a home which are less sensitive week to week rose 3% and are 7% higher than three years ago. they may be trying to get a jump on the spring market given how competitive the market is. one thing on bitcoin, i heard your last segment. i did a piece on a jump in home equity lines i asked a mortgage broker what they were spending it on, renovations, college, he said they're actually taking money out to invest in the stock market very hot he brought up bitcoin. he said he had a couple of clients who did want to buy cryptocurrencies i didn't bring it up, he did just sayin'. >> yeah. we are hearing everybody wants to talk about it, diane. i'm still at a loss because

it's -- i didn't know it was a speculative investment i thought it was -- if it's going to be a currency, i don't know how it's a currency when you have no idea, you know, if you give it to someone to pay for something and a minute later it's either worth twice as much or half as much. >> which is why it's sort of crazy that they're buying and selling houses with it now go to cnbc.com we've got lots of bit cohn real estate stories going on. >> mavericks. >> not spending a lot of time on, if you do live in south korea, north korea, any other countries, you might bet that you think that this is going to be more stable than your own currency you don't think that think of people out there that's -- >> well, that's the idea yeah, that's the idea. >> we don'tthink about it that way because we live here >> exactly >> goldman sachs earnings to focus on. >> we do >> so looks like i am going to go with adjusted $5.68 i like where they are. do it, do it, we don't know what

it is, but do it. >> yeah, do it. >> got the headlines. >> do it we don't know what the number is 4.$4.91 was the estimate and i think $5.68 would be well above that then there's some really interesting numbers in here. first do the revenue, 7.83 billion which is above estimates of 7.6, but the de facto numbers, i guess the gap numbers are what's kind of interesting it was a loss of $5.51 a share, but when -- >> does that have anything to do -- >> that's the question. >> -- with tax reform? >> tax reform. >> tax reform they say excluding the legislation, it was $9.01 for all of -- >> that was for the entire year. >> for the entire year excluding that which makes me wonder if -- i'm working with headlines here, not an actual release. >> exactly it's $19.76 but we don't ever useful year. >> right >> we use -- obviously we use

fourth quarter because we already knew what the first three quart tirs were. non-compensation expenses, 2.79 billion. operating expenses, 4.73 investment management revenues just disappeared >> goldman sachs has no longer put that to release. that's apparently on the wires we've got to find it i have an 8k filing link i will track down to find out what the actual numbers are >> andrew, we'll find out about compensation because that's sort of the key metric. used to be not as much anymore. >> interesting. >> people are less interested in it stocks, anyway, after all is said and done, $257 stock. >> let me get back to you. fourth quarter excluding the tax legislation, the diluted earnings were $5.68. >> that's what i said. i said adjusted $5.68. >> tax i'm looking without tax. >> right. >> so that's --

>> what did they say, carry forward? >> i didn't know goldman sachs -- >> i didn't either but it's the tax that is the impact on that we'll dig a little deeper into that. >> that's a pretty good number comparing apples to apples. in washington the senate is gearing up to confirm jay powell, the president's fed nominee. joining us is senator mike rounds he sits on the banking committee. i don't know, i'd rather interview steve bannon, i think, senator. this isn't going to be that interesting today, is it >> i think you're right. i think this is going to be no surprises. i think mr. powell has proven himself to be a very stable impact or at least a very stable part of the fed. his leadership is going to be a continuation of what we've seen in the past. i think there's going to be some steady growth in the interest rate with regard to monetary policy, but he's kind of one of these no surprises kind of guy right now we think that's pretty important. >> he was nominated by trump so

i figure you're going to get at least 49 nos or 48 nos from the democrats -- no, probably not. but you know what i'm saying i'm sure there will be some people that don't like him just because he's a trump nominee. >> when it's all said and done, the confirmation is not in doubt. what do you think the final numbers are going to be? >> do you think any republicans will vote no >> no, actually, we've already had him up before our committee in december and there was only one no vote in december on the entire committee so i would expect kind of a repeat of the december vote. i would expect that there may be one, maybe two no votes since this is just a continuation. this is an extension of the term, and at this point i think he's, you know, a well-known commodity and i think people feel very comfortable with him they like the stability on the board, and right now with regard to monetary policy we think that's important we want to make sure that the changes that are occurring with

regard to people reviewing the taxes and the revisions in the tax law are what are moving the economy forward to begin with. they need that stable monetary policy as well we still have to do some things with regulatory reform, particularly with regard to financial institutions we have to look at the labor force and we have to achieve higher gdp numbers in the future monetary policy is critical. that means a very stable monetary policy at this point in the game. >> i guess you follow closely with what the forecasts are for the fed this year. you have three or four and the economy can handle three or four rate increases this is one thing that might and might not be a lot of disagreement across the aisle. i guess some democrats would like even less than three to four, they always like to keep things headed higher but what do you think, three or four >> i look at the continuation of what you saw with chairman

yellen, which is 3/4 of a percent. i think you're going to see -- once again, monetary policy is up to them based on how they see things heating up. stability and using the same approach right now i think is healthy for us it wouldn't surprise any of us at all to see those types of numbers. once again, we're not predictors or we wouldn't be in the united states senate, we would be doing something else >> yeah. >> but we think that's a reasonable expectation, and we think mr. powell is probably one of these guys that we can count on to be very stable in his approach and, you know -- but i think you'll see a continuation of the policies. >> senator, what are you hearing about a possible, i don't know, can you use the children's health to somehow get daca done or keep the government open? are there carrots and sticks going on that we don't know about? what's the end result going to be in your view for the government >> last night at about 10:30 we received word that the proposal coming out of the house was a

short-term continuing resolution until february 16th but included in it was an extension of chip through the healthy children's program up through the year 2023 and so that's kind of the sugar in this for a lot of folks out there that might otherwise not want to vote for another short-term continuing resolution i've been one of those guys that have not been really in favor of the short terms. i think that kind of looks like we kick the can down the road and does not show stability at the federal level. so i think this is one way in which leadership is trying to say, look, here's something for those of you that want to see real results and long-term goals put in place we'll see whether or not that brings enough votes around to get this thing passed. >> what do you think >> i think it's up in the air. i think part of this discussion is going to be what about daca for those individuals who have said they're not going to vote for anything until daca has been resolved, is this enough of a change for them to step forward? me personally, i'm still concerned about the senate right

now. real quick, we have ships sitting at dock not being import but set up and set up a half-life. we have 60% of our f-18 jet fighters that you use on carriers are not operational today. so this doesn't address that issue. that's got to be resolved as well and we'll wait and see when we'll have a discussion about at noon today in our discussions with the leadership and then we'll decide what to do. >> okay. great. senator, thank you appreciate your time this morning. thanks. coming up when we return, we've all been taught that milk does the body good, but this morning we have an udderly fascinating story for you. it is all about a drink designed for millions of americans who think they're lactose intolerant cue the muuuuusic, lots of subtle hints here. "squawk" continues in a moment

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welcome back, everybody. don't have a cow when you hear this it is possible that millions of people who think they are lactose intolerant are only sensitive to milk that comes from certain types of cows we have an alternate joining us is blake walldrip

he's the a2 milk company ceo this is news to me first of all, how many people are lactose intolerant it's a growing number of people. >> yeah, the numbers that we see in the u.s. are approaching 75 million people will self diagnose as lactose intoll ler ranlt. the key is a much smaller number of people are lactose intolerant many more are intolerant to the a1 protein versus the a2 protein. >> which comes from what type of cows >> any type of cow 30% of cows produce a1 proteins. 1/3 produce a1 and a2. >> how did you figure this out >> it was started in 2000. it was initially looking at different disease states over in the south pacific. for the first eight years of its existence it was really a set of patents and scientific

discoveries and then ten years ago became a branded entity in australia. >> how does someone know if they are lactose intolerant or similar tots a1 protein? >> well, there is a test that you can take for lactose intolerance. most people never take it. most people never prescribe the test you walk in and say it bothers me >> they say stop drinking it. >> does this taste the same? >> it is the same, it is milk. >> you have 1%, you have whole do you have a view on the health they say skim milk, sometimes skim milk looks blue, you know what i'm saying? >> yeah. i think the biggest trend in the u.s. in particular is a movement back towards full fat. dairy fats are good fats you saw it with the greek yogurt trend. you're seeing it in yogurt as well whole milk, 2%, that's driving

the category >> more importantly, where is this available >> we're just rolling it out we started in california in 2015 we rolled to the southeast in publix 60 million consumers 20 plus percent of overall milk consumption so shop rite, in whole foods, sprouts. >> a lot of the people who i know who think they are lactose intolerant don't miss milk as much as they miss things like ice cream, cream cheese. do you have other things >> yeah. right now we don't have. we're focusing on the milk proposition. i'll tell you why. fundamentally, if you can establish the goodness and understanding the a2 protein through milk, which is fundamentally one of the most complete nutritions -- >> do you contend that a1 actually has harmful effects or not? it hasn't been proven that it does >> there is controversy. there's a building body of evidence that points to the fact that we're talking about milk

intolerance here and -- >> it's a case of protein. do you know -- it's one amino acid do you know which amino acid it is. >> yes i couldn't tell you which one it is it throws off a peptide called bcm7 that creates gutt inflammation. >> one amino acid. >> yeah. it's one link in the chain that makes the difference. >> thanks so much for coming in. >> thank you very much >> thank you when we come back, we have this morning scks 'stoto watch stay tuned you are watching "squawk box" right here on cnbc rack a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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coming up, we're going get an analyst take on bank of america and goldman sachs. take a quick look at futures we are up 161 points going to a higher open on street. stay tuned, you're watching "squawk box" right here on cnbc. hey, need fast heartburn relief? try cool mint zantac. it releases a cooling sensation in your mouth and throat. zantac works in as little as 30 minutes. nexium can take 24 hours. try cool mint zantac. no pill relieves heartburn faster.

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earnings alert bank of america and goldman sachs rolling out results. the stock moves any reaction from the street straight ahead. the shutdown showdown. >> shut it down. >> shut it down. >> the clock is racing for lawmakers to get a deal done plus, the bitcoin plunge a month ago the digital coin topped 19,000. now the value nearly cut in half we'll talk to a crypto currency investor as the final hour of "squawk box" begins right now. ♪ ♪ live from the most powerful city in the world, new york. this is "squawk box." good morning, welcome back to "squawk box" on cnbc live from the nasdaq market site in times square

i'm joe kernen along with becky quick and andrew ross sorkin futures are up 200 on the dow. quick look up 174 now indicated on the dow. s&p indicated up 15. nasdaq indicated up 36 the ten-year yields were higher. got down to 253 yesterday. i saw 256 earlier in the session. today we have right at 256 >> let's get you caught up on a few earnings reports this morning. goldman sachs beating on the top and bottom line. didn't take a big charge it talked about how this is going to be a tailwind, this new u.s. tax law those were comments from lloyd blankfine. blankfine citing the strong performance of 2017 in the face of what he called a challenging market that stock is down by .8%. the bank is reporting 47 cents

at bank of america that stock is trading flat at this morning let's get over to wilfred frost. he has more from cnbc headquarters what can you tell us >> reporter: diving into some of the goldman sachs numbers. we'll start with trading their significant under performance relative to peers does continue. year on year was down 40%. that continues to citi and jpmorgan bank of america down 9%. when you look into the fixed income currency commodity in particular, it really stands out. again, that was down a massive 50% year on year now to offset that, investment banking was a blowout performance. up a huge 44% year on year up 19% just quarter on quarter so sort of one jewel in their crown, investment banking very much bailing out the traditional jewel of the goldman sachs crown in terms of trading, fixed income trading in particular, the firm reported

a one off tax write down it was still large relative to the size of the bank at 4.4 billion but they guided to 5 billion. so that charge actually a little bit better than some had feared. all of the new areas, investing in lending are growing well over the course of 2017 5 billion in deposits they've taken through markets. 2 billion of loans originated. it's making progress it's still tiny. clearly it is growing and it's not that small in goldman sachs size so it's an interesting area. just to come back to bank of america. spoke to brian mown ynihan, they said the tax rate was 20%. that's decent for them it's a bit better than expected why they're outperforming. although they already paid a $1,000 bonus to roughly half of their staff relating to the tax bill, from now on out brian moynihan did say most of the

benefits in the tax bill will be going back to shareholders in terms of dividendsand buy back as opposed to any further bonuses and things like that maybe a small amount of investment guys >> wilf, thank you very much we're going to talk more about that joining us on the "squawk" news line is gerrard cassidy. goldman trading down bank of america looks like it's trading flat on what is otherwise an up day for the market what did you think of the numbers? >> on the goldman sachs numbers, becky, it was a tale of two cities if you look at the investment banking numbers as wilfred pointed out, incredibly strong in the quarter they succeeded at doing a very good job in the leverage underwriting area on the dcm business in the ecm business equity underwriting was strong. advisory was in line with expectations, however, that fit

trading number was down, shocking 50% they focused on providing liquidity and market making, particularly hedge funds i think that's why with no volatility that's what hurt them in the fit trading bank of america, on the other hand, bull markets were strong their core banking businesses have continued to improve. >> lloyd blankfine made some comment talking about how they're well positioned to help their clients and to make significant progress in the growth wind that we outlined does he have to count on market volatility to hit that >> becky, i think they do. they have some real strong goals that they put out in september and to meet those goals i think they're going to have to increase the penetration into customers in trading in particular that are not your traditional hedge fund customers. that's their real core customer. they want to increase that penetration to the asset managers, banks, insurance companies, but i think having increased volatility would help them reach that goal and would

obviously benefit their trading activity. >> so what do you think about their prospects for improving in that arena what would you say just in terms of whether you buy the stock or not here >> it's interesting. in that area is there a structural problem because their fixed trading numbers are so much weaker than their competitors. everybody was down as you pointed out, but this one seems to be far worse than their competitors. is there a structural problem? it's not easy dislodging some of the other players when it comes to getting into the asset managers and banks and insurance companies, but on the other hand as i mentioned, the banking business is phenomenal. >> very strong. >> so it's a mixed message here. i would say that on weakness they're still a dominant player and investors should be looking at it. >> what about bank of america? >> bank of america is a real play on the recovery of the economy as wilfred said. 20% tax rate for bank of america is going to obviously boost their earnings everybody is going toadjust

their earnings they also are growing their core consumer business and commercial banking businesses and on top of that merrill lynch, which is of course part of bank of america, is doing a very fine job globally bank of america at these valuations is very attractive. >> how do you break up these banks or are all of the financials of banks attractive with some of the tax advantages that they're getting is there a way to differentiate or would you buy all of them >> that's an interesting question because it's a commodity business, as you know, money is fungible. it's very hard to differentiate yourself it comes down to who can differentiate. u.s. bancorp said today they are the best in the group but that doesn't necessarily mean that you can differentiate yourselves too much so buying the group because of the macro factors that you just identified is clearly the primary reason to be owning banks. >> all right any concerns you have for when it comes to the banks and ownership?

>> number one concern we have this year for the banks is that the u.s. economy over heats forcing the federal reserve to raise rates too fast that is the biggest concern we have >> although then they'd be the beneficiary of higher interest rates, right >> initially they would but eventually rising rates will hurt the banks' profitability. the first two or three rate increases this year would be fine, but if we end up by the end of this year having five or six instead of two or three, that would be a challenge for the banks. >> sure. thank you very much for your time. >> you're welcome. coming up, the future of ge. is a breakup on the horizon. the lead story and we'll have that next. plus, head down to the cme and talk market strategy with the n ad cayou believe that stay tuned you're watching "squawk box" on cnbc

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on this rainy wednesday. news for you not bad news though. tiffany saying the holiday season sales were up 8% overall, up 5% on a comparable store basis. fiscal 2018 earnings will likely be flat though, slightly down from 2017 levels seeing that stock down about 1% in the pre-market. not enough people planning to go home with those little blue boxes. and, remember, in 2016 or '17 there was a big issue with the tiffany's store on fifth avenue. >> next to trump tower. >> that was their issue. anyway a rare downgrade for apple this morning the stock downgraded to neutral from buy longbow research seeing shipments coming in below consensus. they say good but not great iphone cycle all right. check out the shares of general

electric in the red again this morning as reports about a breakup loom morgan brennan joins us now, at least it's above 18. thank god for small favors, morgan >> yeah. so general electric mulling a breakup. this has been sort of the big question over the past 24 hours. ceo and chairman john flannery said he's considering the possibility of separately traded units, aviation, health care and power. update is expected this spring, but can ge actually make the breakup math work? maniable liy ablnalysts skeptic. there's $31 billion in unfunded pension liabilities. debt liabilities in ge capital, including as of yesterday, bigger than expected $15 billion that must be set aside for insurance reserves over the next seven years. that's a big chunk of cash for a company that's suffering a cash flow crunch right now. so ge has some big liabilities

that have to go somewhere. where? that's the question. now factor in the lack of a ge capital dividend that shaves about 3 to $4 off some of the parts analysis according to rbg it could be as little as $16 a share with the exception of bank of america which is high in terms of the sum of the parts numbers. many estimate we're looking at 17 to $18 per share. cowan has said it's as little as 11 to $15 per share. ge stocks currently trading at 18.06 in the pre-market. meaning a broken up ge could potentially be worthless than today's whole. back over to you. >> all right, morgan let's get a quick check on the markets right now. the futures, last we looked, were up about 175 points or so not quite 200 like we saw yesterday morning. jim urio of t.j. institutional

services joins us from chicago he's a cnbc contributor. we tried to explain yesterday, jim, it's like a do over today yesterday everything was going swimmingly then, what, oil broke and went down and that started some of the selloff in the averages because of all the oil stocks? and then what happened >> you know, i think that's part of it. i think also when it extends itself to hit that 26,000 level in the dow, sometimes markets run out of steam the thing that i thought was comic call that people were trying to tie the implosion in cryptocurrency with this big risk offing. i think if cryptocurrencies continue to implode, that's probably good for stocks yesterday and today the realization comes we are on the cusp of an earnings season every earnings season is going to feature a forward guidance call that completely raves about the new tax environment that they're in we saw it a little bit in the banks. they're a little bit of a different animal i don't think it's time to sell

the stock yet. if we take on yesterday's low, maybe i'll change my mind a little bit right now i don't think it's time to panic at all. >> what was yesterday's low? >> i think it's about 27.70 let's call it in the futures we're 27 point be poi$27.92 abo. after yesterday's price action, admittedly that's terrible as long as you don't make a new low, which we didn't do. it's a blend of the technical and fundamental thing. >> but rarely in our experience, jim, either one of us, have we seen like a stilt. i mean, it's like a hockey stick. it's straight up over the last -- and it's accelerated it was last year but even since the beginning of this year, straight up. >> but the story is a huge story, and that's why i can sleep okay at night. and i think people investing should rebalance and take profits, there's no question, but the story's big. i think for a lot of years there was administrations that wanted

to regulate companies. i'm not even saying that companies didn't need regulation, they probably did, but the tide has turned greatly and right now companies are lifting their heads up saying, wow, it really seems like the new laws that are coming down really want to help us out this is a huge change and i think it warrants a huge rally in the stocks. i don't think it's over today. >> i like how you said that. there's a lot of regulation but you're not saying it's a bad thing, you're just sort of saying what it is. you're trying to please all people at all times. say what you mean. was it good or not >> here's what i mean. >> is it good or not take a stand. >> yes, it's absolutely business friendly. >> all right >> people think i'm dogging the last administration. from a macro economics standpoint it was better >> if the shoe fits. >> it does. >> don't worry about it, jim, don't backtrack. you're trying to satisfy everybody. >> i don't want to make people mad. they come after you on twitter

and they're mean. >> you know what, that's the greatest thing because then -- doesn't it feel good to block them don't you do that? i've got nobody left >> i've only blocked a couple of people. >> what? >> i like to fashion myself as someone who wants to hear other people's arguments sometimes their arguments are dumb. >> she doesn't even have twitter. you might as well block people and get your own little echo chamber. that's what i have my own little echo chamber. so you think we see what this year on the s&p? would you be surprised to see 3200 >> i look more at the s&ps. >> that's what i said, the s&p would you be surprised to see 3200 >> i guess i -- yes, i would be surprised to see 3200. i don't think it has that much left in it. >> okay. >> i think maybe another couple hundred points. >> that's only 8% left then you think. you're looking for a high single digits year? >> exactly exactly what i'm saying, too market position sometimes

outweighs the good fundamental story. if everyone gets too bulled up then all of a sudden small things could change sentiment. you could see a 5% decline despite the fact that the sentimental story is intact. that will happen this year in my opinion. >> okay. there is the notion that the offsetting thing, you know, you have all the great stuff, the tax plan and corporate earnings going right to the bottom line but you have the fed hike rate hikes to deal with i guess nobody really knows what it's going to be like since we haven't done it in years. >> i don't think they're going to be that aggressive. 10% of the publicly traded companies in the u.s. are classified as zombie companies where their earnings can't pay their debt service if the fed hikes too much, that's twice as much as in 2007 by the way the fed knows this f. they hike too aggressively and adam smith starts wiping out the companies and forcing them into bankruptcy, that's aed about thing. the fed knows they have to be gentle and moving slowly

that's what i'm hanging my hat on. >> how many of those jackets do you have >> i just have two of them do you want -- i'll send you one. >> no. >> i sent larry kudlow one. >> do you have it cleaned? >> i only actually put it on when i'm coming on the air >> how -- >> about once a month. >> it gets a little bit, you know, in volatile times, you must get a little bit nervous. >> yes yes. it gets a little gamey, there's no question about it. >> really? really >> it probably is right now. i will have it cleends todaned y see, i'm making you happy now. >> i can't believe you just god into that. >> i did i did. that's why people keep moving like this. when you sit -- anyway >> all right, jim. >> exactly. >> all right we'll see you later. thanks. to you, andrew. >> coming up, when we return, we just talked about a potential ge breakup. what about a potential breakup of facebook and/or google or maybe even amazon?

it would be a mptecolely different reason but it's a story that's generating a big debate this morning. we've got the details about that next i think that she's a very nice girl... you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital. like you do sometimes, grandpa? and puffed... 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.

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all right. welcome back to "squawk box", everybody. we've been watching the futures

this morning you know it was a bit of a wild ride yesterday looking at triple digit gains yesterday played out in the markets once it opened but then turned around and gave all of that back and then some. this morning the dow futures are indicated up by triple digits. up by 166 points right now s&p futures up by 50 nasdaq up by 37 and we are approaching that opening bell just over an hour away. >> the big question of the morning, should tech giants be broken up and regulated like at&t and standard oil once was that's a piece on the front page of the wall street journal he looks at the dominance of google, facebook and amazon. what the size of those companies could mean for consumers they have market shares similar to monopolies of earlier eras. google and facebook absorb 63% of all online ad spending last year google and apple provide 99% of

mobile phone operating systems there's really only two as we know apple and microsoft supply 90% of desktop operating systems and so he makes the argument effectively that if you look at the way at&t used to behave, for example, early in the 20th century it says at&t began buying up local competitors and refusing to connect independent exchanges to its long distance lines in a similar vein to some of the apps and other kind of software companies that can't connect into some of the google, amazon, or other services in terms of trying to protect the moat what do you think? >> the question is is it good for consumers or bad for consumers? >> this is the fundamental question the one distinction that he makes in this is that, for example, google gives away all of this stuff for free so all of this stuff is cheap, cheap, cheap, cheap, cheap the question from a competitive standpoint from a company like

yelp, he makes the argument that in a normal world yelp, there would be 1,000 yelps all over the world but nobody either wants to buy a yelp or create a new yelp because you're effectively competing now with a google you have to basically go through google there's no way around that. >> the other question becomes right now it may be good for cop sum mers but as you -- >> if they've chosen to change their stripes what would happen? >> philosophical question about whether there is anything missing, such as a legal monopoly or whether by definition when you are a mon nop p -- monopoly if you need to be broken up. sometimes when the company crosses the line to doing evil, which google would never do, you can make the case that breaking up at&t was a good thing maybe at&t because of its behavior back then they deserved to be broken up. the question is if you're -- like apple my wife, she said, who doesn't

have an iphone because someone had another kind of phone they're so good and so amazing that you want one. what, does that mean you need to break up apple because they're so good? >> no, but then it goes back to microsoft. because others couldn't get onto the system for other offerings. >> that is different they crossed the line. >> with apple -- >> the behavior is anti-competitive. >> is being really good at something anti-competitive >> yes. >> i don't know. >> peter choate said -- >> legal. >> in europe they do it not based on consumers but competitors. coming up, republican senator rrmojey ran will join us he may know. we're going to ask him about looming government shutdowns and also terrorism we'll be right back. who's the new guy? they call him the whisperer. the whisperer? why do they call him the whisperer?

he talks to planes. he talks to planes. watch this. hey watson, what's avionics telling you? maintenance records and performance data suggest replacing capacitor c4. not bad. what's with the coffee maker? sorry. we are not on speaking terms.

♪ ♪ ♪ 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 andrew ross sorkin and joe keern

nin. dom chu is here. shares of juno therapeutics are surging in the pre-market trading. wall street journal says juno is in talks to be acquired by drug maker celgene and a deal could be announced in weeks. dollar general and dollar tree are out performing both dollar store chains have long-term growth prospects and shares of british publishing company pearson are lower this morning. it says that sales of u.s. higher education course materials are down 3% from a year ago pearson had said back in october that pressures in that segment were easing. turns out to not be the case and the stock is down by almost 6% ibm getting a double upgrade this morning at barclays which boosted its rating of ibm from over weight to underweight an upbeat main frame cycle will give the company time for the strategic initiatives to take

hold to the hot news that we've got from dom. >> texaco about to roll out the new products just in time for the super bowl >> we have the first look. the reason why pepsico is such a big deal the pepsi halftime show is an integral part of every super bowl show. this time around we're getting a first look at the products that they're going to be featuring in their commercials. >> and a first taste. >> these are just on the shelves very recently. you can find them most of your local retailers. new mountain due product, called mountain dew ice it has the similar caffeine profile with regard to mountain dew products they call this doritos blaze because they say it's like licking a volcano. >> it is rather spicy. >> i tried some of these ahead of our segment if you want to try these --

>> they smell hot. >> joe also has a high tolerance. >> we do. >> i do not. i took a tiny bite and spit it out. it's hot. >> it is pretty hot. >> not bad. >> try it. >> andrew -- >> that's not the one i tried. >> you just got back -- >> not mexico. nothing. >> it's not like -- i liked it, too, it's pretty good. >> getting hotter. >> it has delayed heat >> it's not like buffalo wild wings. get the blaze there. >> the blaze is a challenge. >> thai food, ask forex t extra >> i eat mild salsa. >> we all know super bowl ads are part of the super bowl pepsi is releasing a teaser of the ad they will be running during the super bowl. it will be a 60 second ad. it will feature both the doritos blaze and the mountain dew ice brand. what you're seeing now is the teaser trailer, or the teaser, if you will, featuring, yes, on

the left, peter dinglage for "game of thrones" and morgan freeman one of the most iconic voices, voice of god they're going to be in the commercial today. >> three billboards. >> i didn't see it >> i can't believe you haven't seen it. >> according to pepsi this will be the first time they have two 30 second ads back to back in one minute first time they're featured in one super bowl commercial running for 60 seconds, not 30 here's the big number that we're talking about. i asked the folks at apex marketing group to put a brand value for pepsico's halftime show the kind of exposure is $32 million worth of brand exposure. >> wow. >> for the pepsico brand because you'll have promos during the first half of the game for the pepsi halftime show. you'll get mentions during the halftime show altogether and the pepsi logo on the corner of your screen during the show itself. all of that in their

estimates -- >> i'm surprised it's 32 million actually when you consider how much time they're actually getting. >> i guess if you talk about the 60 -- remember, a 30 second ad is $5 million. if you run a couple of million dollars of -- >> ads for 30 seconds or you can be on the screen almost the entire time. >> if you want a kicker for this whole thing. the win being coach gets that gatorade dunked on him it doesn't always happen but when it does, apex marketing group says that if hypothetically a gatorade dunk were to happen, it could result in about almost $2.2 million worth of gatorade brand exposure just for showing that big old container being dunked possibly on a head coach. if you guys are out there and you make it to the super bowl and you win, whatever team you are, give gatorade some prompts and do a coach dunk and see if that gives them some more brand exposure. >> a lot of soft drink companies are putting a little sugar back

in because of the aftertaste of -- >> right. >> if you could give me like a 25 or 30 calorie one that didn't have the -- >> whew. >> not diet, right >> this mountain dew product is 160 calories i don't know what it is. 160. regular pepsiat this 20 ounce size, 250 calories this has 160 >> i had a mountain dew the other day that had like 40 i liked that a lot. >> remember some of these -- >> you want more of those? >> kind of addictive >> i took two small bites and my eyes are watering. >> we have a senator who -- >> ah. >> why did i say yes >> get fired >> these are really good >> we'll leave them all. senate conference committee will discuss the impact of terror propaganda to prevent terrorists from using social media for recruiting

sorry, senator you do need to -- never occurred to me to lick a volcano, but we do have these new doritos that you might want to try. >> i learned a lot they have more bang for their buck this morning with your program. >> exactly senator, the -- here we are again. so how do you -- how do you keep everything free and uncensored and keep away the terrorist recruiters on the internet >> well, that's the topic of the hearing today in the congress committee. i think it's a very fascinating one. it's an area that until recent bely i didn't know existed, but our platforms, instagram, youtube, google and others have the ability to discourage terrorist activity, and particularly what we're talking about here is the recruitment of terrorism. we know from our history and our experience the number of people who are disillusioned, dissatisfied, looking for a cause and social media is the place they go looking for a solution, and when they see that

information, the website they are directed to can either be a positive influence or a negative influence. we're going to learn about what the private sector is doing in this regard and what i've seen to date, i've had a couple of companies in and demonstrated the technology, the plan, and it's very encouraging to me. then there is always the balance. it is certainly the federal government that can intrude upon free speech, but i think there's a desire on the part of these platforms to make sure that they find the right balance what this means is we can spend -- hopefully what this means is that the efforts that recruiting new u.s. citizens and people around the globe to terrorism is diminished and we can focus less of our attention on the military aspect of fighting terrorism with the hope that we keep american soldiers, sailors, airmen, marines alive and well. >> people are so smart now,

senator, with algorithms i just wish there was a way where -- you know, where you wouldn't intrude on someone's privacy where you'd let it all -- you know, it's the wild, wild west anyway let it happen. anything that sets off a red flag, you know, they -- you know, they give themselves away with whatever it is that they're doing. isn't there some way to screen what's happening in that way and -- or is that too intrusive to find out, you know, where it's from, where they live, everything else? >> no. i don't think that's too intrusive. again, that will be a subject of the conversation, the hearing today, but those -- those algorithms give us the opportunity to know a lot about a particular person or a particular cause and who's being drawn to it. information we can work to fight terrorism militarily, and we do, and we've lost lots of lives doing it we can't walk away from that, but we have the opportunity to reduce that circumstance and

replace it with intelligence i've said from the very beginning the key to fighting terrorism is having more information, having information sooner and responding to that information and that's what this hearing will be about and gives us some hope that we can address these challenging life threatening circumstances here in the united states, around the globe in a different way >> all this sort of leads into a discussion on daca and immigration because both sides use immigration as sort of a political football to highlight worries about terrorism. people that want to end chain migration and lotteries, they say that, i don't know, most of the incidents that have happened have been perpetrated by individuals that got here that way. others say not so. what's the -- what's the right middle ground there? how do we solve -- where do you think we're going to go? will the government stay open? >> well, i have become more pes si miss accident about that over

time the breaking news is the house republicans have a plan to induce republicans in the house to vote for a continuing resolution my view is that we ought to have a continuing resolution, not shut down government, but we ought to do it for a very short period of time, a day or two, and stay here and resolve these differences because not only are we talking about daca and immigration, the attempt to resolve thoseissues, which are very important, but also disaster assistance. the list is long chip the program for health care. the collins nelson bill. we ought not delay these things until march. i'm a member of the appropriations committee as well, and i don't want us to be back here in february with another continuing resolution. we need to get out of the pr business and get to doing 12 appropriations bills this is where we can prioritize spending, we can reduce spending and perhaps more importantly we can rein in agencies, departments, bureaucrats with directions about how the money

can be spent this is the way that congress every once in a while, we get credit and it's part of our greater successes in reining in regulations. we've done that by a cra, a congressional process by which you can reject administration regulations. we can only do that in a very narrow path. we can do that every year, every day is in appropriations by taking away money that comes from bad behavior or bad ideas we need to get out of the cr and get into the appropriations process again. >> senator, we appreciate your time today do you own any bitcoin >> i'm on my way to the banking committee to talk about confirming a couple new folks at the fed. >> but you don't own any bitcoin yet? >> i do not. >> we're asking about -- i want that -- full disclosure now, any guests we have on. doesn't matter how you are. >> good to be with you. coming up next, the bitcoin bloodbath. digital currency taking another

dip lower today. we're going to talk about what that means for an investor in crypto companies next. plus, more doritos during the commercial break back in a minute your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

digital currency taking another welcome back to "squawk box" this morning take a look at bitcoin we've had a huge selloff this morning that continues we're actually touching under 10,000 yesterday we're hanging out a little over 10,000 it always depends which exchange

you're looking at. investors spooked by the report that south korea and china could be banning trading in bitcoin. bitcoin was down as much as 25% yesterday. joining us to talk about all of this and more, joyce kim co-found jerp at spark chain capital. she co-founded stellar a blockchain platform. we were talking off camera, i was trying to understand the valuation. you were saying you don't really care about the valuation. >> doesn't matter long term. >> i think there are a lot of people out there watching who by the way may have bought into this thing even over the past couple of months who care a lot now that they've seen their investment perhaps actually go in half. >> i think it comes down to what are people's motivation for getting into the space if they're there as investors, or developers or where their stakes are invested, right for me personally i've been interested in what the technologies can do in terms of greater change in the world. you'll see that things that i've

worked on have a lot to do with health care, data, financial clugs. there is a large rush of people. it's trading exchanges and the giant sucking sound of all the money going into that. >> you don't have to care about the price because you were in so early that i assume you are doing just fine, more than fine. >> i'm rich at heart which is less important than the size of my bank account, but i've always thought that the protocol use cases will always far surpass whatever the financial values are for it because what is important, how can we actually unlock financial friction in our infrastructure so people who are presently financial -- >> let me ask you a question if that's the case, how does bitcoin, which is as volatile as it is or aethereum, how can the

do this? >> i am a minority opinion in the state where i don't think the token will become the money of the future for every single person for every transaction i think it's super important to be able to transact in local currencies because that's how our lives are denominated. that being said, the rails upon which our currency run, that is out of date and that can be upgraded you can see they're focused more on allowing native local currencies to run like a digital currency, faster, more efficient, cheaper those benefits will trickle down. >> jamie dimon and others have talked about the idea of putting a dollar -- making the dollar a crypto currency. >> right. >> how would that even work? he. >> i think you have the dollar behave in the economy the way it does behave. the back end like our swift and our paypal like systems will be faster and cheaper. >> does that mean that you need an aethereum -- all of the other crypto currencies disappear? >> they have individual use cases. >> give me a use case for bitcoin then. >> for bitcoin >> yes

>> i'll give you a use case for -- for bitcoin i would say most people do use it as a savings system, investment tool. that i'm not as bullish on in terms of a good reason to get involved in the space. >> okay. >> but i think you'll see things like other use cases, one i'm super excited about is supply chain, especially in emerging economies. i've seen companies make essentially a coin star for coffee beans. >> okay. >> and that allows those local economies to have better supply chain, higher yield and higher income for small shareholder farmers and it touches into the micro farm account, cooperative savings accounts that whole system moves faster and raises the income of the communities that are growing coffee beans. >> but you're not really talking about any of the big currencies that people are talking about now. >> i'm not. >> so, okay, final question. we were talking about 18 months out from now what's the range you think these things can be valued at? i know you said to you it doesn't matter, but i have to some degree it has to.

>> i don't -- actually, to be honest, a lot of the trading volume right now is detached from logic so what it will be in the future is completely and utterly unpredictable. >> okay. we will leave it there thank you. priaapecte jim cramer joins us live on the new york stock exchange, we'll get his take on today's top stories. and keeping it in the right conditions is the best way to get that fish to your plate safely. (dane chauvel) sometimes the product arrives, and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. (tom villa) we took our world class network, and we developed devices to track environmental conditions. this device allows people to understand what's happening with the location, but also if it's too hot, if it's too cold, if it's been dropped... it's completely unique. (dennis woloshuck) if you have a sensor that can keep track of your product,

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cramer is joining us now, i don't ask you about ge anymore, you are given up, right? >> i think there could be zombiezombisom some buyers. we got to wait what they say in a quarter, maybe john got something up his sleeves the analysts are increasingly working and certainly the stock can go lower or maybe he can refute them by talking about how soon the liability can be covered. i don't know the answer. >> we keep on talking about the under funded liability is that something that ge pensioners need to worry about at some point? >> you can do a big equity offer. it is not what people wanted,

certainly not but if they had to, they can do one. they can do a gigantic offer at 15 much better to be able to sell parts to multiple buyers and have them cover some of the pension liabilities. it is difficult to break the company up breaking it up, the company has to be sold in pieces with very big evaluations and i know the people want to buy some of this stuff. it is not a lost cost. it is bad hand john got bad hand. he's trying he's best. >> when you are trying to turn a state company into a nimble start up, you cannot be a wuss i love that quote in that ml quote in that piece. you cannot be a wuss >> people did not like the fact that they use the word disappointing. there is a series of wake up calls here

when you see that, that's a suboptimal situation >> goldman's tax law, amazing, right? i didn't know they had many nlls >> they can make money in a bad environment. bank of america is clearly the winner today it is a pretty good story. >> excellent >> i guess, brian is going over there. >> you may see him >> as you are, too, joe. >> how many years? >> i come back feeling so global anyway, jim in four and a half minutes. when we come back, new details between the viral fight of the

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welcome back to "squawk" we

are in the chairs. after arguing over uber fares, somebody blames everything on their life on somebody else. it got into a long debate and a meeting that was set up as an apology. other executives discussed the possibilities of buying the driver's car the second meeting was not ar e argumentati argumentative. the ceo says the company is planning an electric super car that'll compete with tesla it is a big change for the ceo who ones called the idea of electric ferrari is an obscene concept. what tesla has done can be done by others in the industry. >> what do you got there you are trying to throw it around

>> it is the kind of thing that you can throw. it is very unsettling as you see it coming but then it just bounces off. you are okay >> you are not mad >> which camera? >> we have four seconds. go to kyle >> i am going to this one here make sure you join us tomorrow "squawk on the street" begins right now. good wednesday morning, welcome to "squawk on the street," i am carl quintanilla and jim cramer bankers dominates today with goldman. europe is in in the red, our road map begins with wall street's wild dry after yesterday's nearly