the time for skepticism is over. people are flowing back into our country. companies are coming back into our country. many of you i know are coming back with your plants and factories. thank you very much. america's prosperity is undeniable and unmatched america chiefed this turn around not making minor changes but adopting a whole new approach centered entirely on the well being of the american worker every decision we make on taxes, trade, embrace, education, immigration and more is focused on improving the lives of every day americans. we are determined to create the highest standard of living anyone can imagine right now, that's what we are doing for our workers, the highest in the world we are continuing to ensure the working and middle class reap

the largest gains. a nation's highest duty is to its own citizens honoring this truth is the only way to build faith and confidence in the market system. only when governments put their own citizen's first will people be fully invested in their national futures in the united states, we are building an economy that works for everyone restoring the bonds of love and loyalty that unite citizens and powers nations today, i hold up the american model as an example to the world of a working system of free enterprise that will produce the most benefits for the most people in the 21st century and beyond a pro worker, pro citizen, pro family agenda demonstrates how a nation can thrive when its communities, companies, government and its people work together for the good of the whole nation

as part of this new vision, we passed the largest package of tax cuts and reforms in american history. we doubled the child tax credit and lifting 650,000 single mothers and their one million children out of poverty and quickly. we passed the first ever tax credit for employers that provide paid pa attorneynpaterne for employees that make over $70 tho ,000 annually. we made child care more affordable and reduced or eliminated child care wait list across the nation. assuring working parents their children have access to

high-quality care education. we lowered our business tax from the highest in the industrial world down to one that is competitive. we created 9,000 opportunity zones in distressed communities were capital gains are taxed at zero tremendous wealth is pouring into areas that for 100 years saw nothing. the 35 billion americans have already seen home values rise by $22 billion. we have made investments in historically black colleges and university i saved hbc. we saved them. they were going out and we saved them we are removing road blocks and success to workers, families and

communities. we've launched the industry of job-killing regulations. we are removing eight old regulations which will save an average of american households about $3,100 per year. it was going to be for every one, we do two we were able to lift that to eight. we have a way to go. today, i urge other nations to follow our example and liberate your citizens from the crushing weight of bureaucracy. with that, you have to run your own countries the way you want we are also restoring the constitutional law in america which is essential to our economy, our liberty and our future that's why we've appointed over 190 federal judges, a record, to

interpret the law as written 190 federal judges and two supreme court judges as a result of our efforts, investment is pouring into our country. in the first half of 2019, the united states attracted nearly one quarter of all american, direct investment in the world think of that, 25% of all foreign investment all over the world came the united states that increased rapidly looking for a place they are free to address, build, thrive and succeed. there is no better place on earth than the united states as a central part and commitment to building an exclusive society, we established the council for the american worker. we want every citizen no matter the age or background to have the cutting edge skills to compete or succeed

this includes critical industries like artificial intelligence, quantum computing and 5g under ivanka's leadership who is with us today, our pledge to america's workers have become a full-blown commitment providing new job and training opportunities to already close to 15 million american students and workers. america is making sweeping changes to place workers and their families at the center of their national agenda. perhaps the most transformative is on trade where we have enabled for decades. our leaders did nothing about what happened to us on trade before i was elected, china's predatory practices were undermining trade for everyone

no one did anything except allow it to keep getting worse and worse and worse. under my leadership, america confronted the problem head on under our new phase one agreement, phase two is starting negotiations shortly, china has agreed to substantially do things they would not have done. measures to protect intellectual property, stop forced technology transfers, remove trade barriers on agricultural goods wherewith he were treated so badly open its financial sector. that's done. maintain a stable currency all backed by very, very strong enforcement. a relationship with china right now has probably never been better we went through a very rough patch but it is never, ever been better my relationship with president

xi is extraordinary. he's for china i'm for the u.s. but other than that, we love each other additionally, china will spend another $200 billion over two years on american services, agriculture, energy, manufactured goods we'll be taking in in excess to $200 billion, could be closer to $300 billion when it finishes. these achievements would not be possible without the implementation of tariffs which we had to use and we are using them on others too that's why most of our tariffs on china will remain in place during the phase two negotiations for the most part, the tariffs are being left and being paid billions a year as a country we ended the nafta disaster and one of the worse trade deals ever made, not even close, and

replaced it with the incredible new trade deal, usmca. that's mexico and canada nearly 25 years after, united states lost one in four manufacturing jobs including one in four vehicle manufacturing jobs it was an incentive to leave the country. the nafta agreement skem tied the decade-long failures of the international trading system shifting wedge shifting wealth to the hands of few, drove down wages and shut down of plants the plants would make the product and sell it into our country. we'd buy other country's product. that doesn't happen anymore. this is the wreckage i was elected to clean up. i couldn't understand why we were losing all of these jobs to

other countries at such a rapid rate it got worse and worse i think it is probably the primary reason i ran there are other reasons. to replace with a new system that puts workers before the special interest they will do just fine but the workers' comp first. the brand-new usmca is the broadest agreement ever for manufacturing, agriculture, labor all strongly endorsed the deal as you know, it just passed in congress overwhelmingly. it shows how to solve the 21st century challenge we all face protecting intellectual property, expanding digital trade, assuring lost jobs and reassuring increased wages and living standards

the united states has entered an agreement with japan approximately $40 billion and our deal with south korea. we are also negotiating other transactions with other countries. we look forward to negotiating a tremendous new deal with the united kingdom have a wonderful new prime minister he wants very much to make a deal to protect our security and economy. we are also boldly embracing american independence. the united states is now by far thenumber one producer of oil and gas in the world by far it is not even close many european countries struggle with crippling energy costs, the american revolution is saving familiar lis $2,500 every year in lowering electric bills and things people said never could

happen very importantly, prices at the pump we've been so successful that the united states no longer needs to import energy from hostile nations. with an a buchbundance of natur gas, we don't have to bundle the world energy suppliers achieve true energy security with u.s. companies and researchers leading the way, we are on the threshold of virtually unlimited reserves of energy including from traditional fuels, lmg, clean cole, next generation nuclear power, gas technologies. i'm proud to report the united states is among the cleanest air and drinking water on earth. we are going to keep it that way. we just came out with a report

that at this moment, it is the cleanest its been in the last 40 years. we are committed to preserving the majesty of god's creation and the natural beauty of our world. i'm pleased to announce the united states will join one trillion trees initiative being launched here at the world economic forum [ applause ] one trillion trees in doing so, we will continue to show strong leadership to reforr restore growing and better management of this is not a time for pessimism. it is a time for optimism. fear and doubt are not a good process. this is a time for optimism and action to embrace the opportunities of

tomorrow, we must reject the doom and predictions of a pok lips they are the propers of yesterday's unfortunate fortune tellers. they want to see us do badly we won't let that happen they predicted an overpopulation crisis in the 60s, massive starvation in the 70s and an end of oil in the 70s. absolute power to dominate, transform and control every aspect of our lives. we'll never let radical socialists destroy or eradicate our liberty. america will always be the proud, strong and unyielding basson of freedom. in america, we understand what the pessimists refuse to see that a growing and vibrant economy focused on the future

lifts the human spirit, focused on overcoming any challenge. the great breakthroughs of the 20th century from pencilon to high-yield wheat have increased the living standards around the world. we'll continue to work on things you'll hear about in the future you wouldn't believe it is possible that we have found the answers. you'll be hearing about it we have found answers to things people said would not be possible, certainly not in a very short period of time. the wonders of the last century will pale in comparison to what today's young innovators will achieve because they are doing things no one thought even

feesable to begin. we continue to embrace technology, not to shun it when people are free to innovate, millions will livelonger, happier, healthier lives. for three years now, america has shown the path to a prosperous future is putting workers growth, choosing growth and bringing dreams to live. for anyone who doubts what is possible in the future, we not only look to the towering achievements of the past only a few hundred miles from here are some of the great cities of europe, teaming centers of commerce and culture. each of them is full of reminders of what human drive and imination can achieve. centuries ago at the time of the renaissance, skilled craftsmen and laborers built structures

that still touch the human heart. to this day, some of the greatest structures in the world had been built hundreds of years ago. in italy, the citizens once started construction on what would be a 140-year project in florence incredible, incredible place while the technology did not yet exist to complete the design, ci ci ci city fathers forged ahead. the great dome was finally built. in france, projects that hold a grip on our hearts and souls that even 800 years after its construction, when the cathedral of notre dame was engulfed in

flames last year -- such a sad sight to watch unbelievable sight especially for thoese of us tha considered it one of the great, great manuments representing so many different things. the whole world grieved. through her sanctuary now stands scorched and charred a sight that is hard to believe. we know that notre dame will be restored, will be restored magnificently. the great bells will once again ring out for all to hear giving glory to god and filling millions with wonder and you awe. the cathedrals in europe teach us to pursue big things, daring

adventures and unbridled ambitions. not only today but what we will endure long after we are gone. they testify to the power of ordinary people to realize extraordinary achievements when united by a grand purpose. together, we must go forward with confidence. we must not be timid, meek, fearful. instead, we must seize the day and embrace the moment we have so many great leaders in this room. not only business leaders, leaders of nagsz some are doing a fas tas tintas. we'll make greatness our common mission for the future together, we will make our nations stronger, our countries

safer, culture richer, freer and the world more beautiful than ever before. we will forever be loyal to workers, citizens and families the men and women who are the backbone of our economies, the heart of our communities and the soul of our countries. let us bring light to their lives one by one and empower them to light up the world thank you very much. god bless you. god bless your countries and god bless america. thank you. thank you very much. [ applause ] >> that's president trump here at the world economic forum. he had been speaking going through talking about the he n economic resurs ens in the united states. how he cut taxes and trade deals. it shoulds like klaus schwab

will be asking a handful of questions on this. i don't know if we can hear. >> we need to bring the sound back >> to create better inexclusiveness for the american people i want to thank you particularly for injecting optimism into our discussions. we have many problems in the world but as you said, we need dreams we have all the capabilities, technology, leadership to realize those dreams so thank you again, mr. president, for having joined us here at the opening of the 50th anniversary of the world economy for forum. [ applause ]

>> again, klaus schwab and president trump who finished speaking talking about the global economy joining us here more, cisco chairman and ceo chuck robins. focusing largely on the resurgence in the u.s. what do you sigh of that >> first of all, you can't argue with the economic performance of the u.s. over the last couple of years. obviously, it is reflected in the markets. we are super optimistic talking about the trade deals being done we've also seen other indicators that outside the u.s., it was a little more sluggish it is a bit mixed as we talked about. >> do you see it getting back to the status quo or reducing uncertainty and moving the ball down the field

based on our feelings with china? >> i think both of those deals were an additive >> what does it mean for your business given to the technology issues and ip issues >> this particular deal won't have a great deal of baring on our business i think it sets a stage and continues to move forward so there is a comprehensive deal moving forward. >> how do you handicap that. >> i think protecting intellectual property is important. not only in china but in the united states. our challenges have been in the united states, not in china. the week before last, china actually sentenced some counterfeiters who were part of the biggest counterfeit situation we had seen in china they've been working closely with us. >> china itself makes up a smart

part of your revenue >> our business over there has been declining the last four to six quarters in the midst of all of the geopolitical dynamics not a big surprise >> you talked about the hes d tense si do you think those customers would be impacted by the signing of the trade deal if it looks like tensions would be dying down >> this first phase is really good for a lot of american companies. the financial institutions are really good. from a broader perspective, reducing the uncertainty around the trade deals would have a positive impact. i do believe that. >> just because it is the two largest economies in the world

one of the initiatives you are doing now is to take chips you make and allow others to use them that is a really interesting change >> when i became ceo, we said we would sell to customers no matter how they wanted to consume it we've had customers to ask for hardware without the software and customers who would like to buy our silicon to build their own products it was very well received. >> does it highlight the legacy business is not what it was at cisco and you need to transform it to be a player in the cloud >> there is not one answer to what they are doing.

some are running their software on our hardware and their hardware on our software our software business is growing. back in fy 19, we had a good year we've been transitioning. when you look on a whoet board of customers some of them are in both categories look at aws how do you look at that >> i don't consider amazon a competitor >> they are doing hardware now don't you say to yourself two or three years out, they'll start to sell to others?

>> they may. i think the point you are making is correct we were talking to another customer today saying the same thing. the world is complicated that's just the world we live in today. >> in terms of the security issue that still exists between united states and huawei that was not resolved in these trade talks. the administration is signaling that will be dealt with separately and not wrapped into trade talks. i wonder if that causes a problem for you or blow back as countries around the world are asked to take sides. are you choosing the u.s. or china to go with countries that are in china's sphere don't want to be asked to choose between the two >> i think countries would prefer to have an open set of

options to navigate that they have to determine the level of trust across the board. it comes down to trust i thinks that what all the countries have to think through right now. they are going through all the different initiatives to ascertain their belief and we'll see where it goes from there >> has that created any problems >> we haven't seen any real move i get asked a lot. people around the world are still trying to figure out what people mean what should i be doing or my country be doing >> it is a little too soon to say confidence is on the rise and we've sorted these things out. >> well it happened last week.

>> are you feeling better about theses or more worried >> i actually feel good about it right now. there are a few dynamics and like brexit that seem to be coming to a resolution i think for us, our customers believe that this technology is at the heart of their strategy going forward we look at the pipeline, the deal work, it is not like falling off a cliff, we saw the slight pause once some of the uncertainty gets clarified which we are starting to see >> an 11-year expansion. it is unheard of i hate the words, it is different this time but no one had any idea of computing power, ai, the gig economy and the

technology they've talked about the sing all-starity and that each year becoming greater can this go on another 5-10 years? >> it could. given the strategic play, relative to everything else in the future how long would they afford a pause. dangerous to say that. we've ended business cycles. we don't know what they are going to look like the last 11 years will be different. >> we heard the president talk about optimism davos could use optimism this year greta is here. >> on climate.

and the imf reduced their growth saw that come in just happened yesterday on our way in here. still sooner or later, we are all dead we could be optimistic in the meantime >> i'm optimistic. most are >> if i had money in the making, i'd be optimistic too. >> chuck, thank you. >> now that we've solved income and inequality >> thank you to the head of cisco. >> coming up, more on his take on the fed and interest rates on the linend larry kudlow. he'll join us in the next hour to talk about the challenge facing the u.s. economy. live from voredas turning in a moment at fidelity, you'll work with an advisor

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some things are too important to do yourself. ♪ get customized security with 24/7 monitoring from xfinity home. awarded the best professionally installed system by cnet. simple. easy. awesome. call, click or visit a store today. president trump speaking to the world economic forum minutes ago. here is what he said about the

economy and the fed. >> these great numbers are many things it is despite the fact that the fed has raised rates too fast and lowered them too slowly. >> ceo hereof citi i like the sound of citigroup, it sounds big to me. last year was good for everybody in terms of stock prices i think there is still some type ofoverhang about the future that affects valuations for banks. is it yield curve related? >> when you think back to a year ago the market was given

signals. markets giving a prediction of a fairly high likelihood of recession. china trade, usmc, trade, brexit dispute of all of that, the industry had a very solid year >> i remember one year we have our own history now where everybody is really happy and six weeks later, it was the year trump was here, two years ago, 2018. people were smiling in ways they hadn't been in years >> there is a back drop. things are better now. could we throw away the yield

curve that has forecast three oust the last 10 recessions. >> i remember being here in early 2016 when the world was coming to an end the broken $30 a barrel, six months later, we are at new highs. is it counter to the view to do the opposite >> this year, the backbone of this recovery has been the consumer when you look at what matters to the consumer, it is jobs employment that is strong and housing two most important things to the consumer now, maybe we get some clouds there on trade and other things i've mentioned when you look at the growth coming out while we are here

3.3% global growth but up from 2.49 for the year. if you get some of these clouds to clear, i think there is 12i8 runway left here >> i've seen some worries expressed that central bankers around the world don't think inflation is ever coming back and it is hot. if it runs too hot, eventually you pay the piper. it could be. if you look at challenges. we win it globally the thing out there that has been toughest gets it back inflation is the challenge >> we always talk baseball

innings, where we are we then? >> i say my friends in australia are 27, 28 years into their recovery economic cycles have no recovery it is dangerous, there are aspects of this as you mentioned, the policy at work over a deck ate. >> you move money around the globe for big businesses maybe the trade deal brings down the concern. we've all gone through our planning process a year ago, we planned for two scenarios.

i don't necessarily see companies today having a mindset of something looming out there we talk about a conservatism around how long this cycle has gone on. >> if they ask you the question are you opt his tick about the economy, the policies of the current administration have we got that right is there a risk to the 2020 policy >> one of the things that has happened is we have become very aligned on monetary policy in general, we've seen a follow through in terms of entitlement reforms and creating sustainability to get where we are in the policy of low rates or negative

rates, governmental balance sheets being called into question and a lack of creation, it creates vulnerabilities >> income and equality we've talked about again and again that down the road, it is going to be a society. will some of is that growth ee lay some of that worry do we have to work on the gap? >> we have to work on the gap. part of the challenge of quantitative easing is that gap widens those who own assets have access to borrowing and i don't see lose monetary policy going away anytime soon >> hard to be in davos and not

worry. when we come back, a lot more we've got verizon betting big on next generation wireless technology 5g, it is. here to discuss the company's 5g strategy you can always watch us live you are headed to the office or elsewhere on the cnbc app. we are right back from davos, switzerland. ♪

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welcome back to a special edition of "squawk box." an expected move out of telecom is the rollout of 5g joining us now, the ceo of verizon. it is great to see you today. >> great to see you guys >> let's talk about 5g you are spending a lot of money. what is your cap x expected to be >> expected between $70 billion u.s. dollar. we have done a lot of efficiency because we are building the network in a new way we do a lot of fiber and a lot of 4g, a lot of 5g we do it all at once >> you've announced some new

cities, you'll be rolling out 5g in the united states for this year where does the plan stand and how long will it take you? is. >> when it comes to 5g, we have launched 31 cities 17 nfl stadiums and a couple of a re arenas of basketball you can see we will continue on this pace. we think it is important we are early on of course taking a little bit of that ground. it is important for the customer to be the best network >> there is an expectation that come this fall, apple will come out with its new iphone. everyone thinks it will be the new 5g edition when we think the customer

adoption will happen is it this year when people actually make the move because the network and the hardware is good enough? >> i think first of all it is an important event p whenever they come out because given the market share in the u.s. will be important this is dprad you'lly. people don't change phones immediately. it will take some time and remember, we have 120 million mobil phone customers. the expectation from external soursz is that 2024, over half of the u.s. population will have bought the 5g phone. that is the expectation. >> what is it internally

>> you if do it well, you could probably do it better. we'll see. >> starting to gradually be seen on our revenue line because we have pretty big revenue. you need to be there and get some certain amount of customers before you see the impact. we have been out with 5g over one year >> let me ask you about streaming services disney plus and the deal you with them to get sursubscribers a year >> a lot of enthusiasm we've been a network and we can work with anybody. we think we come with the best friend, best consumers we have the best network we with partner with disney plus and they get the win/win and we get the win/win.

we did that with apple music we know how many customers will take the free service. that is all baked into win/win they talk about >> what do you think that's doing to your abilityto compet with them to the extent that the whole theme and concept of that transaction was to both avoid and get new customers because they'll be able to offer the other streaming services >> they decided we believe we have the best network, we can

grow from there. so that's the way. i have no insight. we would have different strategies. >> but in term of your ability to pick off their customers or their ability to pick off your customers i have to imagine you tried to assess that. >> of course you always assess a competitive landscape. we feel good about our positioning. i give optionality for my customers. i have that they're going to streaming service.

then you need to give them option optionality. >> what comes first? a g-5 phone, or a 737 max. >> 5-g phone. >> there's several already out >> that was really a boeing question so the question was a given. they're already out. >> but you won't hook me up now. >> we have to do some home game business will you do a distribution deal with peacock. >> no. we have not announced anything but we're open to discuss with anyone. >> where do i do 5-g. >> we're in switzerland and limited deployment in switzerland so far it will be there i promise you. >> thank you very much when we come back, legendary

investor will join us. larry kudlow will be the special guest. lots more to come from squawk box in davos stick around we'll be right back.

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they learn that embracing those challenges is what sets them apart. i am justin rose, and we are morgan stanley. we're super optimistic about the trade deals that have opinion done. >> i think there's still some left here. >> this hour, influential investo investors talk about the record rally and where they're hoping to find the biggest returns. this is a special edition of squawk box in davos.

welcome back to squawk box right here on cnbc this morning. this is our super bowl for the world of politics and business u.s. equity futures at this hour let's take a look at where things stand right now after where we were. it was a record before but we look like we'll have a lower open this morning. dow looking like it would open down about 77 points nasdaq off 47 points and the s&p 500 off about 14 points. let's get you caught up on the three big stories we're following this morning, first up among the factors weighing on the markets you have a new virus in china that's taken four lives and sickened 200 people.

boeing is seeking $10 billion to help deal with the grounding of the 737. it is talking to others for the amount and the international monetary fund cut it's global growth forecast for this year and the primary drag, sharper than expected slow downs in emerging markets. >> this morning, we are joined by ray dalio he has been critical of the nationals financial system the wealth gap he has talked about, printing of money and monetary policy and now is expecting higher inflation i hope we got that right no, you're nodding your head the wrong direction. >> yeah. let me clear what i am saying. we're in a spot in monetary policy where you can no longer simulate the same way that you did before and you used to push a button and it would go up. as we get down closer to zero

interest rates it's like other periods of time so it's not that particular stimulation we're going to have larger deficits which we're going to print money for. but in the 1930s they printed a lot of money but it produces an inflation in financial assets. so we, the way it works is they print money and they buy a bond and they give it to the seller of the bond and they buy other financial assets when you get negative yielding bonds and we are approaching a limit that will be a paradig shift i think. >> i want to get to that and more president trump just speaking here in davos in the last hour he touted his economic, the

economic success of the country and the globe just a short time ago. this is a blue collar boom since my election the network of the bottom half of wage earners increased by plus 47%. three times faster than the increase for the top 1%. real median household income is at the highest level ever recorded the american dream is back, bigger, better, and stronger than ever before nobody has benefitted more than america's middle class. >> you talked about income inequality and you talked about the potential of a civil war over income inequality. >> what's your reaction to what the president said >> he gave a good speech and he talked particularly about productive and he talked about how the human energy that the

united states that we need that inventiveness and creativity and created a beneficial outcome and that is reprecept tsentative th history. and the motivation to move forward. that is true he is not talking about the deficit behind the question and the money question so we're going to enter a period of time which we have deal with the amount of money that we're going to have to borrow. who is going to lend it to us and what that will be for monetary policy. it was a calm, thoughtful -- >> do you think he was touting, attempt to sell something but

this goes back to the press issues that we talked about. >> all you did was read it we didn't write it. >> i think that the problem that we have is that we're having a war. i mean, meaning, everybody is on one side or the other. they're antitrump or proud and either going to be anti or pro and if we're not looking at things objectively -- >> let's look objectively. i want to get back to central bankers and the fed here they seem to be of the notion that they can let things run hot right at the time that maybe they shouldn't be letting things run hot for too long powell was saying we're going to go above two we always make this mistake. >> i think the risks are a symmetric on the down side you know they'll work. >> okay. there's enough debt you raise

interest rates a bit. >> so you're not that worried near term about inflation. >> no, no, no. i think there's four big issues in the world but if you still -- know these four big issues and the interior relationship that's everything. >> the first is this wealth values gap and polarity that could force us to go from one extreme to another the second is the difficulty of monetary policy to be stimulated when it's needed the third is we have the rise of china as a competitive power and you have people at each others throats i'm worried about that. >> fiscal policy to go along

with it. >> and fiscal policy is going to be in the hands of politicians so will that money be well spent because you have to make productive so the idea of just give money away. they took all the wealth. >> you think there's a downturn coming in the next five years. >> it's going to happen. >> that's a long time. >> but this is one of the -- that's such an american mentality. if you go to china and you start to think what is the -- should we talk about it should we think about it i'd say there's a 20% chance every year but you also don't have a rollover because the key

was the federal reserve in december backed away from a two-type monetary policy and we're enjoying it ever since but the big thing is then you have a wash in financial assets everybody can borrow at cheap interest rates and you want to get out of cash. there's still a lot of money in cash everybody is missing out then we have an election and so we have to start thinking ahead of the next six or 12 months i think. that's what keeps you ahead of the game. >> so here's the question. david tepper texted in on friday and suggested right now that you have to be in the market full on so the question is whether everybody jumps on the train, everybody gets in and then the problem arises.

>> i think that's most likely. >> but when do you jump off the train? >> but also the question is what do you jump into when you jump off the train and the issue is you can't jump into cash cash is trash. what do you do you get out? >> what do you do? >> so you have to have a well diversified portfolio and first of all you have to be global and you have to have balance and i think -- you know, i don't want to grab whatever the headline is going to be. you have to have a certain amount of gold in your portfolio. there's three monetary systems that happen. the first is in the old days it had intrinsic value carrie around gold coins then they -- then we come up with the idea of banks or even

central banks and what they do is they create certificates that are claims on those. so we did that and we broke that in 1971. then you have a fiat monetary system which means that you can print whatever amount of money you want and you can put that -- and that's what governments do so we're in that part of the cycle. so i think over the next few years it's going to be the biggest thing. >> if you want to buy gold, do you buy bitcoin. >> there's two purposes of money, a medium of exchange and a store hold of wealth and bitcoin is not effective in those cases now. >> store of wealth potentially. >> first, it's too volatile because of the volatility, you

can't go next to it. some day when libra or something with more stable value has more potential but also who is going to do the buying central bankers and others what has been tried and true are they going to hold digital bitcoin? they're going to hold gold that's a reserve currency and it's been a reserve currency for a thousand years i want to emphasize that a bit of gold is a diversifier i know that i'm going to come out of here like that. >> i'm not saying cash is trash is your headline. >> but cash is trash. >> you would have thought that after all the years you could have been making this case that entire time. maybe there was so much of a lack of demand in the private

sector following the financial crisis that it was able to absorb all of that but coming to us now with that, it almost at the risk of sounding like the boy that cried wolf too many times, i'm not saying that you did but it's been well documented for the time of the year. >> i would say when we are dealing with negative interest rates. >> which we have for years and years already. >> we know how long it's been. you take each country and you take where we were in december and then you create an easing. we are now coming into a direction. what does the next five years look like?

it's going to be something like that and plus more deficits. more deficits means sell more bonds. >> why should i believe that we're going to negative interest rates in the united states >> well, i think that -- i'm not saying now. >> ever. >> i'm saying that okay, if you have the next downturn then you can't do that. we don't have much stimulant we have people at each others throats over the wealth gap so what will the next downturn be and also why would you want to hold those why do you want to hold those? just tell me why that makes sense. >> who is going to buy these bonds. i'm curious whether you think the chinese will be one of them or whether the larger debate around the u.s. versus china is

going to play itself out in that context. and they can say i'm not going to pay that debt how appealing if i'm a chinese or another we're at the three major reserve currencies so answer my question. if you can't lower interest rates much and if you do quantitative easing, you're going to buy more financial assets and so you can get more

financial assets but how is that going to deal with the other issues isn't that an issue? >> we just decided we're going to go 28 years in this recovery like australia so there's not going to be a downturn and the income inequality, if you look at the quality of life overall it's much better than it's ever been in history. you're starting to see organic growth in the low end from all the growth in the low unemployment i think we know the things i'm saying about the lack of stimulation and so on. there's new technologies coming out. inventiveness. innovation innovation comes from good thinking the capacity to supplement using artificial intelligence. >> we talked about it. >> so i think that we can make the pie bigger the issue is how you divide the pie and also how monetization is

a threat there's good things here you probably want the stock in the technology disrupting companies and some gold. it's in relation to the monetization question. >> the president taking a victory lap for the trade one china trade deal has that generally deescalated things do you think it's going to get worse overtime or does it play into whether the bonds are attractive or not or whether there's a larger fight at play or battle at play. >> there are four major conflicts that we're having with china and trade is one of them and this is a small part -- it's lavonte deal and it's done but there's a trade, there's a technology war going on.

because you're having the emerging power going global and challenging an existing world power. there's going to be a lot to argue about so after the election those things don't go away that's just how raises and declines of powers happen so i think that those issues -- this is a small thing in relationship to the whole big thing when we return we're going to talk more about what's happening here in davos. we'll be speaking with the ceo of general atlantic and then we'll be talking politics and economic policy with national economic council director larry kudlow you can always watch and listen to us live on the go on the cnbc

app. we'll be back in just a moment you're watching squawk box special edition in davos right here on cnbc that's what happens in golf nothiand in life.ily. i'm very fortunate i can lean on people, and that for me is what teamwork is all about. you can't do everything yourself. you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley.

they have invested $34 million in more than 360 companies including uber airbnb and bytedance that you may know more as tiktok. >> we're going to be on a panel together in just about an hour and a half from now and we're going to talk about the

valuations and maybe we'll do a quick preview and then i want to get into a couple of other items with you but when you think about that there's a huge question about whether the private valuations make sense anymore and whether all of these funds are going to ultimately have to bring the valuations down to match the rest of the market. >> it's a tale of two cities in some ways. i mean, last year we had a case where it was the public markets disciplining an overvalued private market and we saw that consistently in many cases the last private rounds were above the ipo price. so the growth rates are there to support reasonable valuations but we just got ahead of ourselves last year in the private market. >> are you buying anything

it's getting expensive out there. >> it's expensive. and underwriting that growth as carefully as possible. the growth was 32%. >> in terms of revenue. >> yeah. revenue was 32% so 2-thirds profit so the growth rates were solid and you have to, i think, the only way that you can is company quality and company growth. >> given all the focus on regulating and regulations around the big tech companies which used to be the exits for so many of the companies, how has that changed the dynamic with which you think about buying something and who you may or may not be able to sell it to. >> it's going to be a period of time that we'll see a shift in the ipo market and we saw the ipo market open up last year 8 companies went public. three chinese. one brazilian and one middle eastern and we're seeing another pretty good ipo market but we'll be a lot more reliant on the

public markets at least for the foreseeable future. >> how concerned are you about your investment in byte dance. there's huge questions about where they are going 800 million daily active users it's from the first day been built outside of the chinese firewall i'm pretty optimistic that they built this in a way that's different from some of the other social media companies >> he's going to be joining us later this morning and obviously they're working at ways to

compete with that too. what do they do with the money do they pay out a lot of the investors or do they use it to reinvest and find other ways to expand their brand in the market >> they'll continue to reinvest it and grow internationally in particular >> is your expectation that it is an ipo? >> i wouldn't be surprised if they choose a direct listing path and they don't need to raise a lot of capital to your point but they're still hashing that out. >> is it better to you >> not really? it's still going to be building a case for the investors a lot of these were too small for them to come back to them

there's places like fransisco where they blame them for the fact that rents are so high that because people can rent their places out and have anybody coming in it means that they can't afford to have a place to live. >> they tried to be a good citizen and make the case where they're helping middle income families make money for themselves so i think they have done a good job but they have to recognize that they're going to have to invest significant management time from those relationships.

>> one of your colleges is still on the board >> yes. >> what is your take on their future prospects and given what has happened to the valuation of the company? >> i'm very bullish on uber. and turning the business model to move toward profitability nice growth. it has really good prospects and even today's announcement about selling the food delivery business to a local competitor in india it's still growing globally >> if investors are forcing these companies to move faster toward profitability rather than growth what does it mean to

long-term growth prospects of these companies and the long-term ability to have this sky high valuation. >> survival >> it matters. >> some of them pushed him to growth and they want as much as possible it's going to be important going forward. what is going to be the lesson

great success or a great val failure? >> a couple of things. valuation matters. how you use your capital matters. we're going to look back and say he invested in terrific companies at the wrong price and didn't impose the kind of discipline that is helpful to a company as it evolves in it's development. >> thank you for being here. we'll see you in just a little bit on the stage still to come on this four hour edition of squawk box, national economic council director larry kudlow will join us. this is squawk box in davos on cnbc a golf course is designed to be difficult. to challenge your thinking and test your execution. but great minds are driven to seek out the complex.

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morning. >> we had a number of conversations about where we are in the economy we also saw what the president had to say about the economy but i wanted to get your assessment of where we are. >> well, we're just again in the craziest monetary fiscal mix in history. it's so explosive. it defies imagination and i don't think that anything has changed. it reminds me a lot of early '99. we had 2.3% cpi and we had the same metrics today we had impeachment we didn't have three rate cuts because we had an expersonal

crisis so crazy times. >> so you wanted to be on the train and then you need to get off of it pretty quick if it's '99. >> not really. the train has a long, long way to go if you think about it. >> i would say we have a curveball. it's a big deal. if you look at what happened in 2003, estimates range .5 to 2% in gdp for china half a percent for southeast asia stock markets sold off double digits >> we know a lot about this. >> there's no cure we don't know what the incubation period is and you're

getting ready to go to the biggest travel period in china we kind of know how lethal it is >> are you seeing through this or not >> i'm a trader and not investor i would be really ervous that's a huge deal. >> everything that you said before you mentioned this latest virus sounded like just what

tepper told joe on friday which is get on the horse and ride it because everything has been set up to mean that stocks are going up with the exception of a possible curveball. >> you had a bunch of 6% corrections. this might be more meaningful. you're already in three or four countries so it's a big deal clearly we have monetary and fiscal conditions. already some type of a blow off that will ultimately be ended by the fed hiking a lot sooner than they even begin to contemplate so yes i think david is right. >> let me show you what he said in the last hour

i want to get your reaction. >> you can't jump into the cash. cash is trash. cash is that they're going to -- because they're going to print money. what do you do you get out. so cash is not -- >> so what do you do >> what you have to do is have a well diversified portfolio and first of all you have to be global and you have to have balance. >> making the argument effectively that when in fact you do get off the train the train is not a cash train. that the cash effectively becomes devalued we have never seen a fiscal monetary mix like this so it's some massive blow off at the top and at the top, whenever that

might be, remember between now and the top in '99, the nasdaq was up 130% ight there will be. the stock market will go until at somepoint the fed gets the game and the same monetary policy. >> i want to pivot you're here. it's your first time here in davos by the way. >> i'm so privileged to be here with all the talking heads i'm overwhelmed. >> you can feel it, can't you? >> one of the issues that you noel is this idea of sustainability it's a big theme this week and we were talking a little bit about what may be the hypocracy of it all. becky was at a dinner last night and it didn't come up as a topic until late in the game only because they mentioned it

didn't come up until that point. >> you have a lot of ceos here that seem to be very happy with president trump and his economy. so what gives in all of this. >> i'm going to hijack that question a little bit. you can boil it down in 1970 we had profit margins 6% today they're between 11 and 12. last year we had $2 trillion of corporate profits. if we were back in the sharing arrangements of 1970, a trillion dollars instead of going to shareholders would have gone to employees, customers, communities, and the planet. so this social divisiveness that we have, what we're seeing play out in the political arena, why we have two socialists that had a great chance of being the

democratic nominee is because the sharing that we have currently. is not working for the majority of the country they say what is corporate behavior there's 29 components. number one is fair wage. number two is ethical leadership do you know what the 29th component is at 1.2% shareholder return so you have this massive dic dicotomy between what the people want and what they're delivering and what we want to do overtime. we have a 6% versus 11

gdp growth is twice what it is today. >> isn't that because there was no competition outside of the united states at the time? so they could share it more with the employees and they could have effectively high rents if you will >> i don't think it's binary there's shades of gray in everything that's a very good point and i think the most important point is we know what is happening right now. it's causing millennials not to believe this system. i'd rather see us share them bottoms up where they put employees first and put the planet and community and customers on par with shareholders if you have a black sheet of paper and we were starting and trying to maximize happiness and output and we had those five stake holders, shareholders, employees, customers, communities, the planet would

shareholders be the most important thing to manage companies around i don't think so. >> we have to go how much of this is about business trying to get ahead of regulation that would be the cynical take >> i think ceos love the idea of the business round table definition because they want to put their employees on the most important. >> all it is is the profitability of the companies and it's employees and communities and everything else. and then you can't help anything it's like a chicken egg thing. >> but again it's shades of gray. >> when we go too far and we have to come back. >> thank you. >> thank you so much for being here welcome to davos. >> thank you. >> when we return the national economic counsel director will be joining us. we'll talk about his reaction to

the president's comments from earlier this morning also squawk box is starting live again tomorrow morning you can catch bob dudley and mamany, ny more. squawk box will return in just a moment at leaf blowers.

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u.s. stock markets have

soared by more than 50% since my election adding more than $19 trillion to household wealth and boosting 401ks, pensions and college savings accounts for millions of hard working families joining us now we have so much history. >> 25 years. >> do you remember when we brought you back look at you now. >> well i have always said this is a blessing. it's been wonderful working for president trump. it's been about two years for me a lot of the projects that we work on came out in the speech today. >> what was your old saying that you told me 25 years ago >> free market capitalism is the best path to prosperity. that's held up pretty well people still use that.

>> is this the type of prosperity >> the president talked a lot about free and vibrant market economy where people are rewarded and they have able to grasp opportunities and i think that, you know, you could say sure i have to say that because i work for him but the reality is the facts are there and i think for me, one of the most interesting parts of this boom right now with tax cuts and deregulation and energy independence and rolling back unfair trade practices, it's the middle class we call it a blue collar boom. it's the middle and lower wage earnings that are growest the fastest. they're growing much faster than their managers the last time i saw that i was with reagan in the 1980s and that's really gratifying because as potus said today we want an inclusive economy and we're getting an inclusive economy and in relative terms even with respect to the stock market, i know that the middle and lower

classes don't have as large holdings of stocks but their rate of increase in household network has been running, i don't know, 12 to 15 -- >> the good news is made it into the pages of the new york times. and andrew's column today. when the president came here two years ago there were some raised eyebrows who is this guy? what is he doing a mega media star back then. but he's back here and andrew, because andrew said he's being embraced embraced and called the new davos man because the construct of what it used to be -- >> this is the new york times, larry. >> of multilateral negotiations and he turned the whole thing on its head and there was an expectation two or three years ago here that it wasn't going to work and everybody dare i say has been proven wrong. >> thank you for that.

>> number one is optimism. the president is a optimist. you know i'm an optimist always have been an optimist number two is what a prominent role the president is playing in international affairs, not just foreign policy but trade policy. folks say he is an isolationist and so forth and so on but the reality is we have cut huge trade deals, one in china, one in north america, one in south korea, one in japan. we're still working on the eu. i will be in the bilateral with the new president of the eu and president trump. so he has been very prominent in international affairs and he is an optimist and i think the country is in a better place to be honest with you i think that people are happier. the president mentioned there. >> is the growth that we're seeing for the middle class and

even below middle class, why is it called that by the left why do a lot of people in the media say the income inequality is still the overriding concern and it's going to end badly in this country is this enough organically or the beginning of something real? >> i think so. as long as the policies are in place, that's very important story and i think a lot of the stocks, you can bet are going to be about that subject. >> but look. inequality is diminishing right now. people don't want to look at the facts. folks on the other side are painting a dreary picture of an economy in deep recession. it's simply not true factually and one of the lines in here that i also wanted and got in toward the back end, i know that the millennials are supposed to

be all socialists and so forth but actually be careful here, we looked at the numbers, age 25 to 34 which is millennials, their labor participation rate is soaring and their wage increases are better than 5% per year and i think, you know, we all think back to when we were in that age bracket starting careers and so forth and when you're working and paying taxes and you have household needs, the job is important and being rewarded for the job is very important and i think that the president is going to do much better among the younger folk than people think. >> as millennials are aging they're getting into all the same sort of things. >> that's the way i see it >> what reagan used to call take home pay, you look at median household income after inflation and after taxes that is soaring. it's $5,000 per household in three years. and prior to administrations republicans and democrat we are

basically flat todown. it's a huge change the whole trajectory has changed. >> what do you think of the whole theme here that investors and company leadership should not just be focused on shareholders but should be focused on so many other constituents there's also a huge focus on sustainability but his policies in large part have been some what antithetical to them with a carbon negative of their company. >> i'm okay with that. i don't see anything wrong with that by the way, i look closely with the microsoft folks on 5-g, they're so helpful the president of microsoft it's interesting to me, stakeholder theme is not a brand new theme and i think any responsible company has to think about the so-called stakeholders you're talking about labor management relations and community relations, that's a good thing

i don't think that should get in the way of good profits and earnings because that's what drives the system and judging from the stock market, the outlook there is still kind of good i don't want to exaggerate it. we are opposed to a government run socialist economy. the president will be clear about that this morning. we are opposed to that beyond that, stake holders are a good thing it's just acting responsibly but you can't forget the profit. >> it's a blessing and a curse i have known you for so long you used to be pretty hawkish on deficits and debt. >> i was really a deficit man. >> but you were like -- you were about normal for where most people were naund of us are there anymore. >> what happens if there's a second term? does the president no longer exceed to what the democrats

want he had to do it to the defense bill these are things he didn't want to agree to but how do you stop run away entitlement spending when he won't do anything with medicare or security will that be on the plate? >> politics is the art of the policy so you have split houses right now. there's a pretty good chance that they will, it's like 18 or 20 seats, something like that. we will have more spending reforms. but i also want to emphasize the growth i mean, look at revenues are rising we have already paid for the corporate tax cut. i think economic growth is the ultimate solution to budget deficits, okay we're running now against deficits as a shared gdp of

something around 5%. now to me that's a manageable number given all the reforms that we have put in place. spending is 21% of gdp i'd like to see it lower the president would like to see it lower as a business man he tackles waste, fraud and abuse look at the regulatory changes that we made it's about $3,100 per family just on the regulatory savings alone and yes, i think everyone is going to have to have a stronger look at spending if that is possible i think that you're going to need the united congress to do it but i don't want to get too far ahead of that here. >> he thinks in the next five years you will see a downturn, playing the odds, looking at how long of a growth spurt we have seen he said he's worried about what happens next first of all, the fed is not going to have the power to lower and stimulate the economy like he has in the past and then he thinks the nation is more

divided. that congress is more divided. you're less likely to have two sides working together to do things to offset a downturn. what would you say to that >> well, you know, ray is a friend he's a very smart guy and i have heard his view but first of all, i don't want to get too far ahead of the story in fooive years, i don't know. we may all be doing something else we'll see. the long cycle and what you got here in the trump years is essentially a mini up cycle. we had it going at almost four and we're now down to 2.5 to 3 i'm looking for faster growth. i think that we're going to get three this year. the trade deals will help the fed change policy. that was very, very important. some of our friends in europe are not growing.

i want to make this point. by itself it doesn't really work does it? i use europe here as an example. ecb has negative interest rates and their balance sheets are exploding. negative interest rates struck me as ineffectual. where are the incentives to work the extra hour and make the extra investment and take the extra risk and in addition, the president made a point today departed from the text to make this point, you have to clear away the regulatory bureaucratic cost debris which clutters up and causes sclerosis in the arteries and i don't think our friends in europe have done near as much as they could to do that. i don't think it's wise to rely

solely on monetary policy. the g-7 is going to be in the u.s. it's an nec run. we're going to explicitly have sessions on growth and the role of all the different -- >> your people are rushing out but maybe the euros can learn from davos man the new davos man and adopt some of the pro growth policies that are working. >> this will be a pivotal deal because they all heard it today very clearly you ought to read the speech by the way. it's a lot of fun. >> thank you very much. >> thank you. >> andrew is leaving us right now too. >> i have to go do a panel maybe i'm davos man. >> something more important than this. >> we'll check in on the panel in a little bit. back tomorrow morning, 5:00 a.m. for all of you so you know that we're here another hour of heavy hitters

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president trump taking a shot at the federal reserve. this time, this morning right here in davos. >> these great numbers are many things and it's despite the fact that the fed raised rates too fast and lowered them too slowly. >> the president also spoke about the negative interest rates that some countries around the world are seeing also boeing is in talks to borrow $10 billion or more that's according to people

familiar with the matter that spoke with cnbc and they say boeing already secured at least $6 billion and is in talks with other lenders as well and at tesla, tesla rebuffed a petition to u.s. regulators calling for a recall of $500,000 for an alleged acceleration issue tesla called the petition false and said it was put forth by a short seller shares up by 1.25% there's you anemic insight a ceo. it's great to see you. >> great. >> we can start with what rge s everyone is talking about. have you tried it? >> i have not. >> it's big. it's huge growth the kind of growth. >> it's one of those things and this fast summer it took off.

>> why >> it's health and wellness and a sense of less carbs, less calories. >> what was the number 250% growth. is that possible >> that's totally possible with beer now, beer plus seltzer went back to growth. >> so it is something that's profitable it's here to stay. we are very excited. we have three propositions and we have bud light seltzer which will launch officially now at super bowl and we have ours as well. >> this is real. i can't drink beer anymore it's not just me because if i drink five beers, it just doesn't work. >> i don't want to say -- >> it just doesn't work. the second six they go down so smooth though. beer makes me full it makes me feel full and this

stuff, it's not just a alcohol delivery system but that's part of it. i like -- and seltzer there's a pure clean way, it's 6%. >> it has bubbles. >> andrew loves the wine spritzer no he doesn't really >> so this is something that makes a big difference. >> it's great. great opportunity. >> what about everything else. >> it's growing and it's on trend. it's about national brands and it's also something that can travel so beginning to explore other countries because consumer-wise in the u.s., it's the same trend as in the world. >> given as diversified as you are in beer and all around globally is it that big of a deal to start an interview about hard seltzer it's not there yet in terms of total revenue but it is a big thing for the future.

>> no, it's a big thing. it's on trend. it's profitable and it's growing and that's something that the category has lead for some year which is is innovation and now the category is innovating very fast and that's why you're seeing other beverages. >> when we asked you overall about the consumer, if beer has a problem you're not getting a clear view because. it's great so many can say that. >> it's a very blessed category to be in also because of terms of health and wellness we can offer something all the way from 5% all the way to zero. >> you're talking health and wellness and beer in the same breath that sounds very odd i thought millennials were cutting away from some of the

stuff it offers lower alcohol. it offers a way for consumers to workout and not have to compromise and it's growing. it's the fastest growing brand in the u.s. and now it's pure gold it's the first organic beer in the u.s. >> i hear more and more people talking about dry january. do you see that in your sales and do you have something for the people that don't want to drink alcohol. >> of course so during january also for consumers. >> does that show up in your numbers? >> no. >> or is that a total twitter phenomenon. >> no but it's profitable and some consumers are willing to go for it we're here to offer them something so they can stay with us

>> all right do you think that coke or some of the other beverage makers, do they have the same problem do you think in terms of innovation and satisfying health and wellness i know that this is not beer, it's not inbev. >> we're also -- >> tastes are changing so quickly with millennials. >> but they have all been very close to consumers and going where consumers are. consumers can go from sugar soft drinks to no sugar soft drinks to water to juices to coconut water to so many things. there's a breath of things out there and i think all companies are trying to go where consumers are going because if you do that you grow. >> that's one of the additional broeth areas what are you seeing? >> some of that in canada. we only do it in canada. very early stage not mixed with alcohol no thc, just cbd

only in canada where it's legal. so we have a joint venture there and we're testing. >> what do you think so far? >> it's too early to tell. >> you have the whole supply chain thing exactly where you want it? what do you spend most of your time thinking about? the logistics of the business? >> sure. >> all innovation and satisfying consumers. >> consumers and customers we need to look at consumers, customers, retailers is the way to get to consumers and our people is the magic behind all of this. if they feel a sense of ownership, they will win and that's the magic >> oh, yeah. >> michelob ultra. >> that's yes. >> it's going to be a really

good super bowl. very competitive it's great looking forward to it. >> i had both of those teams as i have mentioned to you already. >> even though they are big favorites. it's hard to cover 7.5 points. it's hard. but i think all of this is helping me too all the draft kings. i watch all the games. >> i'm not kidding. >> no. >> i see a lot. >> big. >> big. >> there's always been that. if there was one thing that people still watch live. >> sports. >> that's what you're betting on. >> you have to have a beer apparently. >> thank you we'll see you again. >> when we come back, the head of the world's largest hotel company will give us his view of the global economy the consumer and the potential impact from the flu-like virus in china stay tuned you're watching squawk box cc.e live from davos and this isnb things you can do with schwab:

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joining us right now is the ceo of marriott international and we're pleased to have him here it's great to see you. >> thank you good to be here. >> let's ask you clearly about it iflts early on in this. >> it's still way too early to talk about i think the chinese authorities have to understand that they know what's going on and we'll have to watch. >> i want to talk about your tenure you took over in 2012 and since that time you have completely made over marriott you have doubled the footprint size 1.3 million rooms. stock performed phenomenally up 230% and that really beats your competitors and beats the s&p 500. i want to taub about how you ha - talk about how you have gotten so much bigger. >> one of the conversations

happening here is about the increasing movement of american companies or global companies toward platforms and how do we take a collection of hotels with a loyalty program and offer more choice, greater royalty connectivity and drive more stickiness with our customers. that's what it has been about. there's a peace of that about i.t. investing and there's a piece of that that brings in that many more brands and that many more locations. how much do you expect to see it growing? >> we don't want to be as big as the other players in the space and it was interesting to listen to them because they were building a model in which the hosts ranked the guests and the

guests ranked the host and they weren't blamed for bad experiences. i'm not sure that they could have pulled that off anymore we would have never been able to pull that off. how do we get into that space in a place that is brandable where we can have the reputation of the company stand behind it. so we make sure that we have great bedding and stand by services and if something doesn't go right then somebody can step in and help and we think in that space it will grow significantly. it's still tiny numbers compared to the platforms and it will grow quickly and give our loyalty members another option >> what are you plans from here? are you looking to add more rooms or additional brargnches? what comes next.

and in this adjacent space we have been in for a long time and how do we get into third party restaurants? how do we get into food delivery how do we work with partners out there that say there's more connectivity for a loyalty program and move to make it the most powerful thing. >> president trump was here today and he talked about this trade deal with china and what a great deal that has been for the united states and setting the stage from here. china is your second biggest market what kind of impact did you see

during these tensions with china? was it anything more than international tourism to the united states being down or did it have an impact on what you were able to do in china growth? >> china is a big market so we see cities like beijing performing very strong throughout last year there were other markets not as strong part of it is leisure travel and where they're going. it's been more than 7 quarters of protests. and they were up very strong last year. >> chinese are traveling more. they want to see the united

states. >> so none of these issues created a problem for you? >> they probably made the performance less strong than it would have been but it was hardly the wheels coming off i do think the trade deal being done will take a cloud out of the horizon and help build confidence in china and the u.s. business in china. >> are you going to keep all of your brands? what's your favorite brand >> what's my favorite four children. >> the easy thing is we're going to keep them all because we think by having greater choice within our network more and more will come to us. >> it doesn't have to be the hotel. it could be where he is. >> you guys are great travelers and i'm sure that you agree with this so much about the travel experience is who you're with and what the purpose of the travel is. i can go with my wife to paris

and have the greatest weekend in the world. >> what's the most impressive? >> i'd probably take the ritz carlson in hong kong you're looking across at hong kong island it's stunningly beautiful. >> that is good. that is good >> we just want to check in with you about your health. you had issues, you look great how are you feeling? >> yeah. i had surgery in november. they dug around in my mid-section for about seven hours so it was a sort of monumental event for me. i am back, though. i feel great i have worked throughout and cancer is a battle and one of the things you learn from this is how big the community is of folks that have experienced part

of this, who have survived i feel good. i'm very optimistic and i'm just grateful. >> localized from what they could tell they removed what was there, right >> they thought the surgery was successful. >> but again, you take it a quarter at a time. >> goes and has the tests. >> we're really grateful to have you here and grateful that your battle is going so well. we have been following along with you. >> nice to see you both. >> nice to see you too. >> here we are. >> i'm going to have to think about that no, i love him anyway, still ahead on squawk box, the carlyle group going to join us. he's always doing panels. >> the fed, 2020 election and sustainable investing. we'll get his view more the is on the way stay tuned you're watching squawk box you're watching squawk box at least mack is

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indicating down 79 points. down just under 14 points. and we were a little better. still to come, it's one of the hottest topics being talked about this year on the panels. the carlyle group's david rubenstein will tell us what he thinks a lot more too stick around we'll be right back. >> later on squawk box and davos, the record economic expansn d atig ce nextwh mhtom

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some things are too important to do yourself. ♪ get customized security with 24/7 monitoring from xfinity home. awarded the best professionally installed system by cnet. simple. easy. awesome. call, click or visit a store today. welcome back live from the world economic forum in davos switzerland we're hearing from the biggest business and economic leaders in the world. we spoke with the national economic director larry kudlow and here's what he had to say about the state of the u.s. economy. he likes it. >> in the trump years it's

essentially a mini up cycle. you have gone from 1.5 to 2% growth we had it going at almost four and then the fed tightened down now to 2.5 to 3. i'm looking for faster growth. we're going to get three this year the trade deals will help the fed change policy. that was very, very important. >> joining us now to talk more about global growth and investing and much more he is carlyle group co-founder and co-executive chairman and i want to really throw out the window, you're a journalist and an interviewer, i want you to interview me and becky here. >> what? >> okay. >> now the only problem is, you have real world experience in a lot of things. do you have to totally forget everything that you know in the real world to be an effective journalist because i have to >> no, you have to use your common sense, good judgment. >> no journalists i know of have

ever done anything like this you saw what larry kudlow said i was kidding. we're going to interview you. >> i'm happy to interview you. >> it could be a free exchange let's do it that way so he was very bullish we had at the same time a plethera of issues that they see with the future and whether it's debt or income inequality. and they may not agree that some of these policies work but some of these policies see to be working. the policies seem to be working. who would have predicted that we would be where we are today. the economy is doing well.

and right now i don't see any prospect of a recession in 2020. i also think unemployment is going to stay low. interest rates will stay low so economy is pretty good. >> every once in awhile, he will send something in. so he watches. this is a fact he said when people start talking about capitalism not working he said tell them this, for every billionaire created 250,000 people have been lifted out of poverty in the last 10 to 20 years. is that a fair trade >> china has more billionaires than the united states but also about a billion people have been lifted out of poverty since china has become part of the global economic scene. there's a lot of billionaires in china but chinas economy for everybody is much better. >> what's our biggest problem? sustainability climate change >> there's lots of problems. you always have problems number one, i think we do have a lot of debt we have to pay off

at some point. $23 trillion in debt. >> can we do that? >> at some point. >> can we manage it? >> right now it's manageable but at some point it has to be dealt with if interest rates can go up. we have income inequality and lack of social ability but we have people at the bottom that are not really rising up and one of the reasons is we have a large problem with literacy. 14% of the people in this country cannot read above a 4th grade level. >> 14%. >> 14% cannot read above a 4th grade level and right now 80% of the people are functioning illiterate so you have income inequality and social mobility problems, you have debt problems and you also have the fact that eventually in my lifetime and your lifetime we're going to have to deal with the entitlement issues large entight mmetlements that

obligated to pay people. >> we heard about profit margins in 1970, where they are now and that the amount of sharing for corporations between shareholders and employees is at the lowest level ever. it almost sounded as if corporate america got greedy and it doesn't take into account the way that we become a global player and all the labor moved offshore at $3 an hour and that hurt a lot of our middle class that's the -- aren't we trying to do the things that would reverse that and some of this america first mentality may be warranted given what's happened. >> there's virtually no economy in the world that wouldn't like the u.s. economy the economy is doing well for a lot of reasons that we discussed. secondly, the stock market does well and obviously who owns these stocks largely it's pension funds. >> they still argue that's not true only 50% of americans own -- even directly or indirectly any

stock. >> well, but indirectly i think almost everybody owns something because pensions are on so much of the stock. >> there's not a lot of pension funds. and there's a lot of 401k. the u.s. economy can always be better and fairer. i don't know exactly why. a strong china deal and the u.s. economy is in pretty good shape.

>> bank of america they're now paying a minimum wage of $20 an hour every employee that is there >> the financial system in our country has done pretty well who would have thought that it would be as strong as they are right now. bank of america is going well. >> is that what they are doing to address the inequality and in some cases it's what the feds have done with quantitative easing and built up the inequality does it need to be resolved by companies taking steps by that and would you invest in companies? >> i would be in iowa. >> nobody really knows how to solve that problem solving literacy problems would be helpful

and worry about more than just shareholder return are probably the companies they're going to get more people buying their stocks at the end and they're probably going to do better. >> we need to match skill sets with people coming up. it's not one size fits all private sector needs to help with that. we probably need to spend money on it. do we need more revenue? do we need to reallocate the revenue that we have right now how would you do it? >> the tax revenues are lower than they have been. probably whoever is president next time nobody will say that and i suspect they'll probably be adjustment attacks down the road

>> it sounds like it should be opposite and people don't notice it quite as quickly. >> loopholes could you raise the top marginal rate it's hard to get enough money. you want to raise rates across the board. >> we took the money away from all the forbes people that's not going to solve your problem. the problem is the middle class and taxing the middle class is very difficult to do 65 to 70,000 it's hard to do. you're taxing about 2% of the population. >> it's enough of them. >> what do you think the democratic candidates i should say that have plans to spend much more on health insurance and health care and education. >> when you run for president, i

have been president for campaigns it's easier to say that and it's not going to make a big difference the economy is in good shape and i don't see anything unless we have a war and this is not his crowd by and large but it's recently well received he read from the speech that was prepared and he obviously had input in it and it was accurate from his point of view about what he has done other people would disagree but he gave a statement here that was better received than the statement he gave two years ago. >> all right we got a lot to be thankful for. a lot to be optimistic about when he writes a peace that he has been well received in davos he wrote that this morning. >> i was just in a reception

with him with lots of business people, global business people and they all wanted their picture taken with him nobody was shunning him but everybody seems to be happy with him. this is the elite of the elite so i'm not saying that the average person on the street is as happy. >> but those are the ones that are happy. there's 63 million of them you're the ones that he's trying to win over. not the normal people. >> there's not enough of me. he has to win over the average person. >> can i ask you one more question about china you have really good idea of what is happening. when we talked to you in august you said you thought the phase one trade deal would be signed in four months that's the time that we got it done is there going to be a phase two becau before the election? >> no, phase 2 is much more complicated than phase one and whoever is president of the united states could not probably get a phase two done in the next six months it's too complicated but i think a phase two can be done in the

next two years or so but it's a complicated thing because you have to change the way the economy is running. >> better that we have a phase one and tensions have died down. >> the best thing is that we have some impact and the vice premiere of china and global tensions are so much lower than they were before. >> we're not fighting with each other as much and in a year or two i don't know economic matters. >> when you interview people on your show, you ask tough questions. you feel like you need to. who would you pick >> you know, as you get older, what's your tactic guests don't answer questions that you ask, what do you do >> next question >> how about trump versus biden?

>> pick who is going to win or -- >> who would you vote for? >> well, i generally don't like to say who i'm going to vote for because i think it's important for people to maintain some privacy. i haven't seen all the facts yet but there's no doubt that joe biden would be a very strong candidate and mike bloomberg and remember i do some things on bloomberg tv i'm partial to mike. he would be a strong candidate so would biden i think there's -- unfortunately there's no private equity person running for president right now and that's a big problem. >> and that person would make sure that your carried interest doesn't go away. got it. >> thanks a lot. >> i understand. >> i'm kidding. >> thank you very much. >> can i come on your show sometime. >> absolutely. >> liar. >> tomorrow. >> i can tape it today. >> i'm going to get -- i'll send you my e-mail. >> i have a camera here. >> can't afford me. >> i can't afford you. i got it. >> when we come back, global chief investment officer scott

minerd will be our guest he'll join us to talk about where he is finding the biggest market opportunities and the biggest risks. by the way, here's a live look at the panel that andrew is moderating right now it's all about valuing unicorn companies. he's speaking with goldman sachs ceo david solomon and also stacy cunningham and general atlantic's bill ford let's listen in as we head to the break. >> the policy question that you have to ask is more about should the standards around information disclosure, discipline, governance, et cetera be different? what's the threshold because there's no question. imagine traveling hassle-free with your golf clubs.

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more than a half hour away from the opening bell on wall street in the united states the futures are pointing lower but that's going to be the exception lately here's our legendary investor that joined us earlier today and here's what he had to say. >> we're just again in the craziest monetary fiscal mix in history. it's so explosive. it's -- it defies imagination and i don't think anything has changed. it reminds me a lot of early '99. >> joining us right now is

legendary investor scott minard. he is global chief investment officer. thank you for being here. >> great to be here. >> let's talk about what paul tudor jones had to say we would be in a we were in earl 1999 where everything is kind of pointing to an increase in stock prices do you think that's the case here >> i think he's right. i toned look at this as the period after the asian crisis. the federal reserve lowered rates by 75 basis points to save the world and of course then going into 2000 they were accommodative and the famous internet crash >> the difference now is that rates are incredibly low, 1.5% versus 4.5% like they were back then >> which supports higher stock prices in and of itself. with the fed pivot, i think we've gotten a revival in economic activity. we've got the trade war on hold

now. there's a lot of reasons to be positive about the economy for the next 12 months who at the federal reserve originally said expansions don't die of old age the federal reserve kills them and so it's just a question about when will the federal reserve feel that it has to kill the expansion. >> those were policy mistakes the fed was making when you were warning last year about a myriad of things, stock sell-off or recession or any of those things, that was based on mistakes being made in hindsight now. >> in 2018 >> those were mistakes the fed was making then. did you know they were fed mistakes at the time or the fed was doing the right thing? >> joe i'm on the advisory committee to the new york federal reserve. i would take data in to every meeting and show them how m2 growth was slowing down.

i would show other data in the economy and say to them i think you're being more restrictive than you think you are the quantitative tightening, while the fed was raising rates, was like a double whammy, and so you know, of course whenever i brought that point up, all the academics around the table told me how stupid i was. >> in hindsight, it made president trump look like some type of monetary genius for being early and calling out powell and we know he's a real estate guy who likes low interest rates and he's president so he likes low interest rates, but did it turn out that he actually was more right than the fed and all the academics? >> i think he was. hindsight i think he was more concerned about slowing the economy and this administration but at the end of the day -- >> they're usually not quite as outspoken as he is >> i think the fed's going to be after everything they've just

been through and the criticism they've taken, they're going to be really hesitant to start raising rates again. >> that's scary, right, if they should, they should. >> that's right. that's why the stuff i've been talking about in risk assets, i mean, when you look at where corporate dutch trading, the relative premium to treasuries is the narrowest it's been since 1997 you know, risk assets are priced in the bond market at least are almost priced to perfection. bull markets go as long as they it g i don't see any reason why we can't push asset prices higher >> the concern with the bond market is the deterioration in terms of quality and how many defaults have been there >> look we've had a 50% increase over the last year in the number of defaults.

everybody will point to it and say well, we are ccc credits or that was all in energy yeah that's to be expected the weakest links will go first. one of the most disturbing things, becky, you look at some of the companies that are rated bbb and single "a" companies, using the rating agency's own criteria are already junk and how do they do that? they basically argue that, well, there's a plan to delever. they did this acquisition, they'll pay down debt and get the ratios back in line. at some point the music will stop, and all these companies, not everyone is going to get a chair in the musical chairs game, and we're going to find out then warren buffett famously said when the tide goes out we'll find out who has been skinny dipping >> there's a mental image for you. >> did you say as long as the

spigots remain open things keep working. do you look at that half empty or half full is it going unjustly higher or the fed is out of the way in a strong economy, let it run it's not going up on just the balance sheet expansion, is it >> no. that's why i'm more optimistic about stocks than i am about bonds, because when you look at earnings, i think we'll get some good earnings growth this year, i mean the economy, when you have unemployment rate this low, you bring in a lot of consumption, especially people that are low wage workers, they tend to consume 100% of their income so i think the fundamentals in the economy are actually pretty good, but again, eventually if they're price pressures the fed will feel an obligation to kill the expansion. >> scott, thank you. good to see you. let's get back across with note great guest at new york stock exchange, jim cramer had a lot of legendary investors

on today i couldn't help but think of sally field, you like me, you really like me that's kind of what the president came into, in davos this year. andrew wrote a piece this morning, he's the in you davos man. it was a pretty accommodative audience this time, which was a lot different than two years ago, jim >> look, i was surprised he could have taken after the europeans. i know he's not happy with the germans and how much they export here, but his tone was set by that great deal with the french. yeah, you're right people trying to figure him out. they were expecting a scold, they were expecting some sort of disquiet, and they didn't get it at the same time, of course, obviously this chinese virus is dictating a lot of the stocks that we have here regardless of the depth of it, but you guys' interviews are terrific. larry kudlow was right, i think we could have tip to 3%. we are getting already earnings that indicate we could get that

but i do think larry's right to be optimistic. >> i guess we have to rap. we blame income inequality on ourselves but china took a lot of our jobs, maybe that will help >> i'm sick of that. >> jim, right? >> that's the kind of, we're doing so well, we have to help others let's help ours. let's make it so all the people who are in trouble here do better >> all right, jim. >> thank you >> all right, jim, thank you we'll see you in a couple of minutes and we'll be right back. ♪ ♪ ♪ ♪ don't get mad. get e*trade, dawg.

. ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer back at post nine with me and david faber at the new york stock exchange china confirms the new respiratory virus, davos continues with the president, earnings katrina tonight with net flick and ibm. our road map begins with a rally pause. stocks are set to pull back from record levels at the open amid growing concerns about the spread of this new