analysts downgraded the stock to sell from neutral. upping the target price. they say some of the other stocks in the internet universe may have benefitted too much from the internet. not a good risk/reward >> thank you for that. tomorrow is a big day. "squawk on the street" begins right now. good tuesday morning welcome to "squawk on the street." futures are solid. as we brace for a busy inauguration week. yellen on the hill today along with other biden nominees for state, defense, homeland security earn frgs goldman b of a and netflix tonight. go big or go home. the former fed chair, yellen, calling for congress to bypass their concerns for debt concerns goldman shares are higher after it crushed earnings estimates. bank of america's stock the down

this after there was a miss on quarterly revenues we'll go through the both reports. the president-elect planning to cancel the keystone xl pipeline permit. what else should investors expect in the early days of the new administration which begins tomorrow at 12:01. >> we're going to get to all of that, guys jim, you did tweet this morning, i love a good rally based on nothing. is that what today is? >> i think so. look, we -- there are a lot of people who feel the late afternoon that maybe interest rates are done going higher. and then you've got janet yellen and you say i don't know how that's possible. at the same time, you don't get a blowout from bank of america you get it from the smaller sols goldman sachs. did anything happen over the three-day weekend? but maybe that's what matters. weren't they three days of calm?

>> i guess they were they were calm well, in the markets, maybe? >> no, in real life. >> for the country >> in real life. >> really? >> yeah. >> obviously tomorrow is a big day, but i'm saying we didn't see tweets this weekend that made -- >> and we didn't see violence. there was a lot of concern, particularly, i guess on sunday or even yesterday that there might be so yeah, i guess that's a fair statement, jim >> and carl, what i'm seeing is, again, the same thing over and over again it's the spac, spac, spaces. and we're all trying to figure out exactly what these companies are doing, how they're working i know david is interested in some spacs i'm looking at churchill capital corp. four >> dom was just talking about that, more or less not saying much of anything i hesitate to get involved because the speculative nature of the shareholder base -- you

deal with it all the time. people -- you're okay with people being mean to you >> yeah. i kind of like it. >> you're jimmy hill >> jimmy chill likes it. >> you block them all. a lot of conspiracy theorists out there. >> they're pathetic parodies of the human mind i'm not sure what to do with them let them move around carl, i'm more concerned about whether goldman sachs is a true blow out this is one of the largest beats i've seen. there's great reports about restaurants feeling like they're coming back. i guess i could focus on retailers that sell, david, play station and, i don't know, anything right? xbox >> yeah. that's what i noticed. you were battling it out >> and what the borrow is. >> carl, there is the speculative nature of the market that we talk about it can be reflected in the move of cciv. of course, this is a spac that has yet to announce a deal but moving up on speculation that it

will with another ev car companies. but we'll see. and then every day it's another spac i have omar, he has one. also gores, they got another one coming up those are just the ones that came up in a couple conversations. >> we're routinely doing half a dozen a day easily for the last couple weeks on average. jim, i wasn't going to get to this this early, but it reminds me out of the all out of ubs, they take pfizer, chewy and peloton to sell. we collectively see all three as em blematic of a market that sees growth over valuation of anything that can be justified

it's ubs >> when i heard they had something negative to say about chewy, i said everybody loves chewy. peloton, i thought their acquisition, i'm not sure how good it was. carl, i thought that resonated, because these kinds of stocks that had just gone up because we think that the pandemic is never going to end, if we're getting more vaccines, and the biden administration is able to deliver on its 100 million, then you can't really own those stocks they're just too high, david i do believe that while chewy is great and makes the process fun, i don't know so does amazon they don't make the process fun, but they have great prices >> great prices? >> yeah. >> amazon? >> yeah. >> sometimes >> where do you get your dog food >> i don't know where we get it. we have to get special we have a special dog. >> how much is a carton of mill snk. >> i know that we've already gone through this. it depends where you get it and

if it doesn't have the hormones or not it can be 4 .50 or $5. or it can be different if you want all the antibiotics or hormones in there. >> amazon is screaming buy because i think many people are sampling it and staying with it. many people asked me about netflix. there's a good piece today about facebook there's a piece about apple having a good quarter. is this the return of faang or are we supposed to continue to just buy endless industrials like emerson, david? because emerson, wow, david far is about to leave. maybe something big is going to happen i mean, in other words, self help industrials that's what i'm hearing about. >> that's funny. we haven't talked to emerson in a while. steve shaw was there >> oil and gas, david, doing well >> oil and gas has been doing well can we come back to financials we skipped over it pretty quickly. they did not perform particularly well on friday

after earnings >> really, david >> really. >> how about horrible? >> okay. you want to use horrible i'll say not -- >> led by wells fargo which i could make a very good case for wells fargo, but i'm not going to do it right now >> and then in the year of big banks, bank of america is going to open lower. the financials are lining up what's your take on the quarter. i'm looking at a note from piper sandler, lower than expected net interest margin, higher than expected expenses. they do note obviously the buyback was -- is nice at $3.1 billion, and they had a higher reserve are release >> interest income was good. a terrific situation in the expenses they tried to make it so, say, employees get $100 for child care there's been a tremendous move by brian -- i'm talking about brian moynihan to keep his employees safe spending a lot of

money. that hurt their expense ratio. i think they continue to have a problem with the yield curve you need more business, david. all these things are just things that happen. but you need more loans. one of the themes about -- carl, if you look at friday's conference calls, wells fargo, whether it's citi or jpmorgan, we are -- we now, there are many things that may not be going right in the country, but our balance sheets of individuals are the best they've been, and all the banks admit that we know there's a tremendous number of people being left out, and that's why janet yellen is so important jamie diamond saying 40% of america makes $15 an hour or less that's unacceptable. but the people who make more, carl, are just -- they're stashing it or they're buying cars the car lease numbers are very good buying houses that are outside the city but they have nowhere to go. and we keep remembering that

travel and lee isure looks likei spent too much we spend too much money on airlines and hotel rooms that money is being sent back to the people who have it the people who don't need all the help janet yellen can give them >> yellen is expected to talk not just about the coming co-void relief package but also the fact that the economy recovery was k-shaped even before co-vid hit. there's a look at senate finance. we'll also hear from lloyd austin for defense tony blinken up for state. jim, to your point about travel, though, and the ongoing hope for a second half recovery, the double upgrade of axp. >> that's in line of what's going to happen with just the amazing pent up demand you talk to any airlines or manufacturers, they say look, we're never going to see anything like this again in terms of the second half, 5%

growth money being pumped in. i believe it i believe it and now, we have notes today about restaurants. darden doing well. why a lot of other people couldn't spend along with darden chipolte has been doing well people don't go fancy dinner because you can't. you just can't and i think that means that you can buy darden even though the stock is up 50 points. in a heart beat. there is, carl, i'm going to say it david, focus on this for a second >> i'm focussed. >> okay. >> david, there is so much money from gen-x and the ones that have a job, what do they do? >> they go out >> they buy stocks >> buy stocks? >> i thought they were into experiences. >> the experiences give you co-vid we're out of that. that was a bad call. >> that will come back, though, jim, and maybe they'll start doing experiences again.

>> no. david, they buy stocks. >> or maybe buying stocks is an experience >> it is they love it many of us saw a video about two people saying what we do, we have a strategy. what we do is buy stocks are that are going up and buy them and then sell them after they're up more. i say okay, how many people are saying this is a top i just say no, these people are an amnoanomaly. i see smart buyers of situations and i see situations where it's a short squeeze, but the buyers -- a lot of these ev situations that not all of us can follow there's too many companies to follow so we default to weird websites, don't take it personally if you call yourself a weirdo website, but you know when you see the nature of our audience, when you talk about a stock that you think may not be worthy -- >> you keep wanting to drag us back to this >> well, i thought it was good >> do me a favor and don't tell anybody my address, please you know, you tend to do that

sometimes. don't do that. but yes, i know what you -- of course we've been focussed on that as a reflection of the speculative nature of the market they've been with us ten months. i thought they were even younger than gen-xers. >> they love to buy. >> i said this friday. the combination of ev and a spac, it's like fission. it's like putting together -- all you need is your implosion device >> we don't talk enough about the tesla millionaires there are many millionaires created by tesla >> sure there are, when you have a company that's got that kind of market cap and an 800 gain in the stock price for a year >> i'm going to give you two that while unexciting versus tesla, gm and ford okay there. take that. >> jim, even as you're talking, jim j we do have some news recording gm's crews and this new funding round with interesting players. phil has that.

hey, phil. >> hey, carl a new round of fundraising for krus, a subsidiary of general motors it includes microsoft which is partnering with cruise all critical to the development of an autonomous vehicle network. it's microsoft, gm and other institutional investors putting another 2 billion into cruise. what's most interesting is the valuation of this latest round of fundraising for cruise is now at $30 billion for some point of reference, the last time they did a fundraising round back in july of 2019, the valuation of cruise at that time was $19 billion. that's one reason you look at shares of gm up almost 8% as people continue to say okay, cruise is a subsidiary it's not strictly gm, but they realize the value of developing

the autonomous vehicles and this is another piece in terms of gm taking that step toward reinventing the company. >> when i look at gm and i look at ford, i'm not saying they have envy, but i am saying they must question what is the tipping point where we think, say, of gm as a company that has lots of cool looking -- lebron, buying stocks. great cars and trucks and a product line that's been refreshed. and ev cars that could end up being inexpensive. what do we start doing when we think that the ev business is worth more than the entire company? >> that's a great question, jim. and i think what people are waiting for, i think they see the moves that mary barra entertainment made they like what they see, and they realize the battery technology gets high marks within the auto industry and within the ev world. people sit and say look, there's

a lot to like here what people want to see next, and this will be over the next year, let's see the products if they can match up, then i think people will buy into the road map that gm that has laid out here that's the key >> they only -- gm only has 710 billion to go in market cap to catch tesla. >> well, you know. >>. >> it's going -- >> it's 100 billion here and there. >> 71 billion and tesla is below 800 billion now. tesla starting to roll the cars off in china >> yep the model y. >> 12,141 cars according to my friends at geo warren capital. production picking up there. but they're companying domestically as well against neo which i assume the likes of gm is competing against eventually too. >> yes china will be the focus. make no mistake, not only in terms of auto sales which it has been over the last five years.

but when it comes to evs that's going to be crucial you know, over the last year, david, two years, we would always hear people say they shut down the plant for two days out in treatment the world is coming to an end. forget about fremont not entirely what you need to focus on is the shanghai gig factory that's going to be crucial to tesla's growth over the next several years. yeah, berlin is important. the new one in texas is important. fremont will be important. giga factory in shanghai, that's the crucial one. >> big news here, phil, as you point out. microsoft will also be gm's preferred cloud provider, help streamline supply chains we'll get more on this from you later today. a quick break. a lot of calls on the street yet that we've not yet gotten to including microsoft at morgan stanley named a top recovery pick for 2021. new street high for roku futures looking good and yellen in less than an hour in the

hill don't go anywhe.er

biden agenda in focus ahead of the inauguration. published report said he's planned to cancel the keystone xl pipeline. it would reverse president trump's decision in 2017 to grant the permit after president obama rejected it. a lot to unpack here on oil, jim, including halliburton this morning who says with the

quarter we believe the worst is behind us. >> yeah. that has been the wrap i understand they finally found an outlet for natural gas. and that's really important in the perm yum if you can't find it for natural gas under the biden administration you can't drill as much. once they piped it away, it's a good sign. i think that you tell me whether people are going to be going out. right now they get it from 53 to 60 you're going to need more economic activity than we currently have that said, there are a lot of people who feel this is another great second half story. i would prefer to play it -- i'd say a little bit more derivative emerson, the industrial component, and david, has a substantial oil and gas business >> it does i do laugh a bit at the oil and gas companies, the carbon producers that are turning themselves into pretzels trying to describe themselves as clean energy companies and making real efforts. i don't want to make light of

that real efforts to carbon sequestration, real things they're trying to do to change their carbon footprint, but it's kind of hard when your business model is to take it out of the ground and have it spew into the air. >> well, occidental doing something. >> the deal -- >> a game changer. >> europe ahead of us. and esg there ahead of ours. ahead of the efforts here,l although, i'd say over the last 12 months we've caught up in different areas. when it comes to environmental sustainability, they may be ahead of us. they got that memo quite some time ago at total. >> yes, when we think about what the companies are going to do and how they have to pivot because of the president-elect, it's going to be fun to see the companies that realize that suddenly there's a group of very big money managers who say we will not buy fossil fuels. that's our contribution. we're not going to buy these stocks that's the next round of

negativity it's not happened yet. he's not president yet i think there's goingto be a lot of talk about can we own these stocks and still be esg compliant? i think the answer is no they can't >> we'll talk more, jim, about your broader point that is how much macro risk is behind vaccine distribution and uptake we'll get to that along with the opening bell in about 7 minutes. don't go away. labradoodles, cronuts, skorts. (it's a skirt... and shorts) the world loves a hybrid. so do businesses. so, today they're going hybrid with ibm. a hybrid cloud approach lets them use watson ai to modernize without rebuilding, and bring all their partners and customers together in one place. that's why businesses from retail to banking are going with a smarter hybrid cloud using the tools, platform and expertise of ibm. hey, dad! hey, son!

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all right. we really didn't get to goldman sachs other than noting the stock price up let's do it as the mad dash. >> david, i don't think the numbers are as important as the presentation the presentation i think reads like this is why we deserve special status on wall street. what we do, clients turn to goldman sachs in times of disruption it's very much of a throwback to look, we're the adviser to the stars, stars meaning the people who spend the most money and they talk about much stickier assets. they have a page no emphasis on the marcus kind of robin hood aspect, but i think they broke that out, you'd be surprised as how well it's doing. but i think it's the steady progress toward medium goals 13%, it's -- it's double what we

thought they could be. it's amazing there's a page, reaffirm strategic direction. operate more efficiently this is very different than many of the other banks this is a broad sweeping we are better than you think analysis and i'm with it. i think they are better than they think their wealth management is good. trading is good. it's their market. it's goldman's market. >> and -- >> net interest income -- >> well, as you point out, across the board whether it's wealth management or banking or other areas, they outperformed roe at 11% fourth quarter 21% return on equity >> bank of america is an -- 7% growth that should propel the stock >> goldman moved up a lot. >> right but i'm saying that -- look, anything can happen in this market but i think this is even better.

but not necessarily because of what we think. it's better because listen, we're sticking, we're good we're not bragging we're back and bigger than ever. bigger than ever i'm turning it over to carl. >> okay. >> let's watch the opening bell, guys and the s&p. 37.68 is where we kick things off. it will be a busy week for earnings overall we'll get the regional banks there's a nice mix of transports in there netflix, how would you characterize expectations going into tonight it ceases to be the favorite faang name, although they're naming to unveil 70 movies this year that's more than a movie a week. >> i watched the miami piece which was the one thing i thought was shocking it was made in 2020. i thought it was -- i learned a great deal it was terrific. netflix is going to be sticky, but carl, when we speak about

netflix, i think we have to speak about roku there's a sense somehow while netflix and disney are good, roku is unassailable it's beginning to start advertising. the run in roku is one of the great runs of all time it's not a tesla run, but this is a run, it's scratching the surface. it has i'd say the most momentum like the little people, the video i saw which is like it's going up so let's buy it and it will go up more. it's hard to argue that is that's what's happening? i mean, it went up david, what are you looking at >> i'm looking at the jpmorgan overweight on roku i'm sure carl is looking at it also >> yeah. >> yes >> want to chime in on that? >> i'll let carl chime in on that you're going to him. he keeps track of this i'll come back an streaming overall. >> don't forget, amazon is the one that made it in miami.

>> great minds they go to 475 our bull thesis largely driven by the advertising opportunity as jim says. it only ann estimated, 8 to 9% s not keeping pace with the shift in eyeballs. you probably saw the downgrade of viacom and discovery to sell. >> viacom announcing it will launch the streaming service rebranded. cbs all access rebranded on the 4th of march listen, on friday i talked about how discovery and viacom have been up since the beginning of the year roughly some 20 odd percent. discovery did introduce the streaming service. it's out there discovery plus but that note you reference, i mean, i picked up one line from the grown grade at barclays. in some ways the streaming

service like discovery plus or even cbs all access are a glorified catchup dvr service with a few originals slapped on top. it goes to at least some concerns that are out there that say, jim, netflix and disney, winners. amazon, i don't even -- it's not a content company. that's not its business. netflix, disney the winners. everybody else going to be fighting for the scraps. >> i think that's right. other than roku. -- >> and with moalone in the interview talked about it as we felt well-positioned as a platform for the distribution of the streaming services >> absolutely. >> carl, sometimes people don't read the conference calls. what do you think was the most exciting and yet a dramatic conference call we've had so far? >> stat logical. >> it's jpmorgan, jamie diamond. >> i was going to say diamond. >> dropping the s-bomb this

time i was shocked. it was in reference, carl, to the fact that he is scared because of visa, mastercard, paypal, and their stock market valuations it was a moment like we're butch and sun dance. who are those guys and a lot of the analysts are saying when are you -- it's like gm and ford. it's like guys did you not see this coming? and jamie who is very, very entertaining, i find, and just kind of said yeah. i mean, we get it. we are listen, we got to be on the run here so i thought that was the only thing that was really exciting so far in earnings season. david, you listen to that where they bleeped it out on the transcript >> and he went after plaid also. >> yeah. >> and we had the ceo come on who wouldn't go after jamie. that's probably smart. >> right >> but sort of questioning some of their practices when it comes to data. but we can't lose sight of the companies and jim makes sure of

that because their market caps are dramatically higher than they were eve an year ago when paypal and on and on visa obviously the largest where are they right now as a market cap 475 million. >> jamie is wrankled -- he's like -- but carl, there is an other worldly notion, jamie diamond puts up an unbelievable quarter. and what is he forced to talk about? fin tech and why isn't he doing as well? the younger investors like fin tech they like ev they don't like jpmorgan it's boring for them and the same way people have been telling me jim, this apple, it hasn't moved in weeks what do they expect? what have they done for me lately right? these are people who hate the cleveland browns a bunch of losers. no but i think that when you're

talking about brokerage, you're talking about the merrymen, the young people who are taking that money, the stimulus money. david, they're not buying bristol-myers. they're not. >> no. >> they're buying cciv and qs. >> don't want to pin yourself on those. >> carl, a couple things i want to hit in deal land. one that's not happening and another that did this morning involving lasers but first mgm, we talked about this last week they mgm, sports betting we talked about the growth here andover seas mgm says -- they walk away in the uk, you have to tell everybody everything there's no negotiation or not a lot that happens outside the light of day of a press release. they say after careful reflection regarding mgm's all

stock rejected proposal and exchange rate of .6, it does not intend to submit a revised proposal and will not make a firm offer for entain. the price expectations that. went up to 13 bnt 5. what i hear is they're disciplined buyers and these guys had price expectations that were higher than had been perhaps anticipated. it doesn't mean the deal won't get done down the road they have a joint venture which acts as a poison pill for mgm. no other bidder. it's either mgm or nothing given the joint venture. however, it's not going to happen today bear diller very much involved in leading the charge for mgm. aic the largest single shareholder. diller was going to step up and buy stock under any new deal

with new money but that's not going to happen he's all in in sports betting. >> we'll get to you tomorrow when he's on squawk. that's terrific. i think sports betting is huge you get things like new york that want to do it on their own. you get things like spacs that suddenly -- or fubo. you say wait a sec, if everybody gets in, they're going to get margins. if you entrench like draft kings. this weekend if you're new and mahomes has a touchdown, you get 100. mahomes got a touchdown. that's a good deal >> it does remind you of today's call they -- initiate sell at 41. i mean, their broader point is the picture is bright, but some of the share expectations are getting overdone, at least that's their view. >> well, look, i understand

that but you then take a look at pen national gaming. it's been an amazing performer doesn't have any china, obviously. up another 18% pen national gamiing is bar stol and a great national footprint i don't know if you think bar stool and pen nath are doing well, i don't think you give up on draft kings. i think it's on the forefront of what i think will be multimillion dollars you hear people on the mainstream talk about the line they tend not to know anything about the line, but it's important. that's what people bet on. david, when they say well, they joke about the line. as if the gamblers aren't the core audience now that the numbers keep going down. >> yeah. they don't know about the line >> no. >> how could you not know about the line same way they don't know about ev or battery technology

>> they're very bad on ev. >> how are they on lasers? co-lumentum buying coherent. co-sheernt shares rising light is getting hit leer. lumentum getting hit right now they derive about 33% from the consumer smart phone market coherent you get them together and as you might imagine, they say we're going to be able to kraez address a lot more markets in a lot more effective way. $115 million is what they're citing as potential synergies. you see the premium closing recently on the 15th jim, who know? lasers >> lasers. >> not since james bond in gold finger have we seen a laser used

in any sort ofway. >> we always think about that one as well. >> lasers, maybe their time as come we see a lot of manufacturing being done obviously when you go to a tesla plant, there's not that many people >> a lot of 3-d sensing applications. >> yes, and you see the burst in 3-d. ddd did have a great quarter there's no doubt about it. it was a good quarter. people are trying to catch up. ddd, the famous 3-d systems, here it goes again but then again, the short position is 28%. so you don't know whether people are buying it here because they like the 3-d space or because they want to bust the shorts which has become a very common strategy for many younger people who think that these shorts have to be destroyed as if they are bugs on a windshield >> that's been the view of a few people over the last few years that's for sure. guys, session high about 272. off of that just a touch

let's get to bob this morning. hey, bob >> good morning, carl. happy tuesday, everybody this is it this is yellen's go big rally. that's what's going on here. i think the market's concern is there's a big difference between a $1 trillion stimulus and a $1 trillion stimulus which is what some people are saying they're going to have to compromise at that's a large difference. if there's anything the federal reserve learned since the financial crisis is go big rather than small. i think many people wanted to do even more in 2008 after they saw the results, and if anything wanted to be more aggressive you'll see yellen really swing for the fences here. that's what the markets are anticipating you see the moves here interesting to watch semi conductors generally outperform technology throughout the last several weeks. the retailers have been doing great. energy oil is back toward 53 the pipeline news not hurting anybody. industrials have been modest

outperformers but not great on the year consumer staples another defensive lagging all throughout 2021 lagging again today. four to one advancing the declining stocks near a new high. what does the market need to keep going a larger stimulus package, but the biggest vaccine rollout. there's concerns about the variants out there, particularly in south america a lot of notes about that over the weekend. i think the two big things in the last week. a manageable rise in rates a lot of talk act avoiding the taper tantrum. the stuff that happened in 2018, got to avoid that. manageable rise in rates and higher earnings. there were a lot of people hopeful about the guidance so far the numbers are good. it's too early here's the story 2019 was great historic high 2020, dropped 25% in the earnings numbers and they're expecting it to come back at another historic high in 2021.

$167 those numbers, that's 22.5 times forward earnings we have to get those numbers up. a lot of people are saying they're going to come up goldman sachs think they're too low. well, maybe. q 3 they were right. q 4, we'll see they've got to get better guidance this quarter is not really about -- this earnings season is not about the fourth quarter it's about companies being more confident about the first and the second quarters. meantime, isn't it nice to see some of the old school market stocks we gave up on kind of come back? look at general motors today you heard phil talking about what was going on there with the cruise announcement with microsoft. they had upgrades recently and exxon has been doing much better two upgrades last week i don't know if the dividend is safe people are starting to act like that and best buy and tappest ry, th old school doing better. the broader markets, energy

stocks leading any kind of energy stocks leading. clean energy, fossil nefuels an commodities and small caps those are the things moving the market there's the stimulus play. the laggards are gold, long-term bonds, defensive names like consumer staples and tech is leading a little because faang has been weak overall. the fund manager survey, it's clear what they're concerned about. they're worried about steeper yield curve and higher inflation as an issue. the two big issues, peak growth on vaccine and peak liquidity on stimulus they're early to be worried on the that, i think, but those are second half worries. back to you, david >> remember a year where we haven't had higher yields and inflation. still to come, sir richmond branson is going to join us on virgin orbit's successful at lite -

satellite launch first, speaking of yields, they are rising across the board. you see it ahead of janet yellen's confirmation hearing. we'll cover it live. in europe, data showing investor confidence rising in jegermany n the eurozone the ball is now in the senate's court over in italy. let's finish with a look at the dollar weaker we'll be right back.

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issue of getting 100 million doses in the first 100 days is absolutely a doable thing. what the president-elect is going to do is where need be to invoke the dpa to get the kinds of things we need. whatever they may be, be they tests or vaccines. in other words, to just not be hesitant to use whatever mechanisms we can to get everything on track and in the

flow that he predicts. the feasibility of his goal is absolutely clear there's no doubt about that. that can be done >> that's dr. fauci on meet the press. dove tails with what jpmorgan said this morning. what jpmorga this morning, the biggest mark row risk appears to be vaccine supply, distribution, and uptake >> yeah, totally look, i would love to have the scenario that dr. fauci laid out. i don't think you can possibly be as badly as what was laid out earlier a couple months ago. i think the issue is there could be 100 million vaccine doses but they may not get to where they have to go unless you have j&j i think j&j is the secret to the 100 million because j&j doesn't need the refrigeration problems and it can be kept at room temperature. so i don't know. without j&j, that's just not possible it's just not. and i think it's an unfortunate to raise expectations like that.

>> gottlieb over the weekend, meantime, tweeted we might see, jim, three to four weeks of declining case loads and then if this new variant doubles in prevalence, which is widely expected, you could be looking at heightened infection rates into the spring. the council of economic advisors says that every day the vaccine is pulled forward, meaning ramped up, accelerated, it's worth $10 billion to society >> that's a high one britain has handled this so badly, we think, but they have national health care and their percentage that they have rolled out is quite dramatic, david, versus the united states they have a federal program kind of that is run by the government the big government national health care what do we have? can you get it at cvs, walgreen

at staten island it's because of my age i didn't pull rank how you doing? you're fine. >> you're old. >> watch mi"mad money"? i did not play the "mad money" card crazy money. stupid money. >> we are happy for you, jim. >> thank you. >> i am headed to dose number two. >> i am halfway there. >> yeah. dow's up 112 don't go away. ♪♪ hey you, yeah you. i opened a sofi money account and it was the first time that i realized i could be earning interest back on my money. i just discovered sofi, and i'm an investor with a diversified portfolio. who am i?! i refinanced my student loans with sofi

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starting in a few moments treasury secretary nominee janet yellen in front of senate finance on covid relief, the dollar, the debt, the k shaped recovery and why she thinks it's attas t t big th srtatheop of the hour don't go anywhere.

trading." >> you rarely get united health not going up i think they will have a good number tomorrow and i think it's going to start off the health care part of the engs season, which should be very positive. >> all right jim, look forward to hearing more about that. how about tonight? >> logitech is down like goldman sachs. we have to go into that because this is the, one of the best and hottest areas in e-commerce and gaming i can't wait >> jim, the one thing i wanted to get your temperature on before we close out the hour was

denseler and chopra at s.e.c. and the consumer financial protection board, some of the headlines this morning were outlook darkens for wall street, denseler could be the most aggressive regulator in two decades. >> oh, please. he will figure out the right thing for the consumer that's his background. i think we are in good shape for people who own stocks. do not fear gensler. he is too sophisticated. >> so really no sector risk, at least the financials >> no, gensler wants what's good for the consumer maybe not wall street, but sometimes they dovetail. >> all right jim, we will see you tonight. >> thank you >> how about -- and david, we never covered cohn's tweet about the mets. >> which one you mean firing the general manager? >> jared porter, yes >> it's unfortunate, carl. but steve doesn't -- listen he knows how to run his business.

that's it. let the guy in. get i rid of the guys. we are very excited about the trades i am feeling good. steve cohen is in control of that franchise >> that's for sure the communication window is opened up for sure on twitter at least. jim, see you tonight. >> thank you very much. >> 8:00 p.m. eastern time. good tuesday morning, everybody. welcome to another hour of "squawk on the street. i'm carl quintanilla we await the confirmation hearing for former fed chair and treasury secretary janet yellen. we will take you there live as soon as it begins. not the only thing this hour, morgan a big interview, too. >> that is right we will speak with sir richard branson alongside virgin orbit's ceo dan hart they sent a 70 foot tall and ten mini nasa satellites into orbit on sunday. a big milestone for commercial

space that propels virgin orbit which was spun out of virgin galactic in 2017 into a very exclusive but growing group of commercial space companies achieving, well, orbit but, first, let's bring in our elon moy and steve liesman with more on what we can expect from the yellen confirmation hearing. i want to start with you in terms of expectations. i realize that as the incoming treasury secretary, the position doesn't mean she can pass ledge station or implement monetary policy, but it is seen very closely given the fact that we are expecting more details on that $1.9 trillion stimulus proposal is that sort of the key thing to hone in on from a market standpoint today >> yeah, i think so, morgan. i think what's going to be interesting to see is sort of how yellen approaches what is going to be a new and more political position for her we are used to seeing her as an economist, as the fed chair, studiously apolitical, trying

not to tell congress who do. in this role, that's what she is supposed to do, tell congress what the administration would like to achieve and forcefully advocate for that. she is going to be one of the chief spokes perspective, if you will, for this new covid rescue package. and even though she intends to take on this more political role in her opening statement she will say she hopes to buil support in a bipartisan manner and so i think you are also going to hear from lawmakers on both sides of the aisle hoping she will perhaps bring more sense of unity and bipartisan support to some of these ideas. >> steve, i want your thoughts on this. this idea of, i guess, a policy stance around perhaps letting the economy run hotter as we see this recovery begin to take root this year and not only what that means from a monetary policy standpoint but also what it means from a fiscal one and how

yellen could, i guess, position herself given the fact that she h has had that expanse of experience on the monetary side in the past. >> yeah, great questions i think it's sort of taking stock of where we start, which is we're still in a really deep hole here. i think that's a really important point of view that the incoming administration looks at on a lot of metrics, morgan, we are still worse than we were at the worst point of the financial crisis back in '08-'09 then layer on top of that the idea that the general feeling certainly among democratic economists, perhaps conventional wisdom, they didn't spend enough on the fiscal side and that fed policy was awfully halting they came forward with quantitative easing and said, you know what? we are going to do 600 and stop or 800 and stop, whatever it was, and on the third iteration of quantitative easing they said we are going to do this

open-ended did you get much of a response in the economy i think those two ideas animate policy right now plus the idea which has been put forward by olivia blanchard that, you know what? when an economy borrows at less than its growth rate, that the impact of the debt is not as great as -- or really to be feared and that may or may not be true, but certainly, morgan, the idea of fearing debt levels at 60, 70, 80% of gdp have proven to be wrong. interesting rates are still low. they have only risen a bit since it was announced -- since really the democrats won the senate. >> right steve, that's got to underpin a lot of the thinking here, doesn't it if it turns out to be incorrect, then those who are concerned about a burgeoning national debt will eventually be correct as well. >> yeah. but it's not random, david rates just don't go up on a random basis

a big reason why rates would go up wiould be because of inflation. and yet government tax receipts are rather exquisitely correlated to inflation. it's not like they go up in a vacuum you're right there is no cap on the rate. that is true when we borrow to spend. but at the same time, we have enormous abilities to pay and it has not proven to be much of a burden at this point and i don't know, david, how many people do you know that have lost money betting against higher rates over time it's a pretty long line of people. >> the concern is for higher rates and infliation at this tie of year and it never happens, steve. >> yeah. >> yeah. >> here we go again. now you have this change with the, you know, from republicans to democrats being in charge and all of a sudden it is the rule that the opposing party ends up carr caring a lot about the deficit. >> always. >> elon, i am curious about some of the picks we have seen, whether it is yellen, whether

it's marty walsh, former union leader for labor secretary, picks in terms of financial regulators f stocks back in focus for example. i think there is a sense that with a biden administration you are going to see some, i guess, maybe tighter financial regulations taking shape or a review or a return to some of the regulations that were ruled back in dodd-frank, for example. what is your sense >> well, i think you heard cramer say it earlier that he is not worried about some of the regulatory picks that the biden administration has been named at the least so far in terms of the sort of approach at least that yellen will take, one of the things that you guys were talking about was sort of the concern about the national debt being larger and perhaps, know, creating a bubble in the future they are going it focus right now on the pain and suffering that people are feeling in the immediate moment you are going to hear her talk about the k-shaped recovery and the impact that it's having

particularly on communities of color. i think that's where the focus for this administration is going to be. they are really looking at these first 100 days as what is happening to alleviate pain and suffering now and then focus on what can happen down the road, whether it be regulatory, whether it be longer-term investment right now the focus is on the moment and that's i think what you will hear yellen underscore and emphasize in her testimony. >> looking forward to that in a few moments. guys, thanks so much setting us up for an important day. joining us, president and research and lee baker the owner and president at apex financial. morning, guys, good to see you both. >> good to be here >> ed, it's hard not to turn to you first having coined the phrase bond vigilantes in the first place. do you see that kind of uprising happening given the fact that the debt is up 50% in four

years? >> well, the bond vigilantes have been buried but not dead. central bankers, particularly the fed, have done everything they can to bury the bond vigilantes the fed has been much more important. they are starting again. the bond yield hit an all-time record lee the ten-year treasury hit a low early august of 0.5% and now we are up over 1%. i think the bond yield, if it wasn't for the intervention of the fed, would be at 2% today. so the fed is clearly doing a lot of intervening in the bond market to keep a lid on the bonds, and today janet yellen is going to say take the money and run. it's cheap let's spend it and that just is going to set the stage for a very strong economy, even maybe in the first half the year now. remember a lot of people were worrying about double dips in the first half of the year

with this stimulus package, we are going to get a very strong economy and that's bound to put some more upward pressure on the bond yields. but the fed is going to try its best to keep it down >> lee, to ed's point, it's that global growth and u.s. growth expected this year i think jpmorgan is looking at what they think will be the strongest global gdp growth in 20 years any reason to doubt that >> i'd say the only reason to doubt it would be an issue of magnitude. i don't think there is any reason at all to doubt growth. now, as we see the virus mutating and variants coming up, could see reason to think it will slow down, but no reason to think there won't be growth. >> so, ed, i am curious about your take on the economy this year i mean, there seems to be this growing expectation in recent days, recent weeks by the second half of the year we could have economic growth that's much stronger than perhaps had been

anticipated. so that's on the one hand. on the other hand, we are seeing this slower than expected rollout in distribution of vaccines the data right now is not so great. we have these covid variants coming out as well i mean, how do you see -- what is your outlook for this year and how much of that will actually be dig ctated by the policy of the people like yellen that we are focused on today >> the macroeconomic data certainly suggests that ever since we reduced the restrictions, eliminated the restrictions for severe lockdowns, we have had a v-shaped recovery. as long as we don't go to those kinds of extreme restrictions that we had in march and april, it looks to me as though a lot of us have learned to live with the virus, work around it, study around it, and keep our lives going. it just doesn't seem to make any sense. but when you look at the actual macro data, it's been phenomenal in some ways, i think what we are dealing with here is not the

old adage don't fight the fed. it's the new adage, don't fight t fed. you might as well put the treasury and fed in the same building they are working very hard to basically give us what some economists call modern monetary theory i call it modern monetary theory on steroids and speed. it's extraordinary. >> lee, given the fact -- i realize in the near term we seem to be oversold and ripe for a bounce, but your take on the dollar and just the weakening in general we have seen in the midst of all this stimulus. >> we see the dollar weakening, but as a financial advisor i look for the opportunity in a situation. clients, as we are having these discussions, to me it presents an opportunity to say, listen, we have a weaker dollar so maybe overweight the portfolio globally again, we are expecting global expansion this year. and so that means there is going to be some opportunities and no pun intended, but it allows us

to get a bigger bang for our buck with the weakening dollar. >> ed, you mentioned sort of the coming together of the fed and the treasury i mean, there is an embodiment of that. her name is janet yellen. >> correct. >> i am curious as to what your expectations may be for the yellen treasury here given what you just described in terms of fed and treasury and their cooperation. >> well, i think you have got a heck of a tag team between general manager and jerome powell at the fed. all the more reason to really think about these two entities as not only being independent anymore, but working very close side by side to deal with the recovery from the pandemic and so the fed has been doing something that is really forbidden in the past, which is to tell fiscal policy more we want more spending. they have been doing that ever

sin the c.a.r.e.s. act they said, we want more, and, well, biden is delivering more janet yellen is going to support more and the result is going to be super charging the economy. >> lee, to your clients and back to the equity market itself, what is the sentiment you are seeing out there we have seen pockets of this market become more speculative in nature. at the same time, there are those who believe we are sort of entering bubble territory when you look at valuations what are youseeing amongst you compliant base >> you are seeing a bit of a mixed bag. i was listening earlier and one of the thoughts that triggered, i am hearing a little bit of this idea that people want what is sexy and boring things that do well just aren't appealing anymore. so the idea of picking up value as it rotates for some people just isn't enough and there is this desire to find the next peloton or next tesla. it's just not out there. but overall people are feeling

pretty good about the markets. i am hearing a lot more sentiment around things like minimum wage and a bigger focus on the economy in a broader way, but it's a bit of a mixed bag as it speaks to equities. >> i'd like to end on that with you, ed, as well we spend a lot of time on air talking about robin hood and reddit and gen x and stimulus checks going into equities is that overstated as an overall flow dynamic >> i think it's part of the dynamic. i don't think it's as much of a driver as widely thought the reality is we've got a party going on it's increasingly reminiscent of the party of 1999, the prince song comes to mind as a result but the nasdaq is up, what, over 100% since march 23rd of last year when the fed came in with qe forever, as i like to call

it another 100% and we will basically match what we had in 1999/2000. i think that's the track where i'm right now. >> and dropping some prince references on our air. we love it good to see you. lee baker, thanks so much. >> glad to be here, and i love some prince. >> me, too still to come, we will take you live to that senate finance hearing as soon as yellen begins her opening marks. later, sir richard branson and dan hart we have got a big show still ahead. don't go anywhere. we see the major averages move rehi

goldman sachs and bank of america out with earnings earlier today. wilford has a look at the numbers. the stocks are all down now. goldman may be scratching its head not that goldman can actually scratch its head, but investors must be because they had a very good quarter, yet the stock down. >> the key reason why they are down and the banks are down on friday, up 40 to 50% the last three months depending which name you are looking at. let's quickly kick off with bank of america numbers pretty solid revenue behind expectations, eps just ahead the key point here, jpmorgan, wells fargo, citi and bank of america saw provisions for bad loans fall dramatically. though still just positive for bank of america this morning all banks, therefore, showing

that based on current expectations, the worst is behind them and for the economy as a whole due to the pandemic the bank also expressed optimism that net interest income bls umd in q3 answer if the improvement in q4 was marginal goldman sachs smashed estimates on both lines. the beat was drink by asset management where revenue was 3.2 billion. equity trading also impressive all of 2020, fixed income and equity, trading was up 43% versus 2019. return on equity came in at 21.1% in q4 and 15% for the full year when you strip out the expense, most of which should be behind them. ahead of what they guided to for investor day is a target of 13%. here was goldman sachs ceo david solomon on outlook for investment banking in 2021 >> we are cautiously optimistic on the outlook for investment banking given the robust

activity levels in the capital markets and the elevated strategic activity on the back of improving ceo confidence reflected in the near record backlog at the end of the year. >> he added this note of overall caution. >> let me underscore that progress on economic growth is contingent on an effective vaccine rollout program globally i urge political leaders at all levels across all jurisdictions to do everything possible to implement a coordinated and comprehensive distribution plan. in its absence, economic recovery will be unnecessarily delayed. >> stocks down a little bit in the actual market. sorry. down a percent each. both up sharply of course over the last three months. i think the theme for both is how much can these gains be sustained for the likes of goldman sachs who have had a strong year, being an investment bank, and bank of america, how much really will net income interest, for example, improve

from here in the year ahead if rates are sort of hovering where they are rather than soaring as some might have hoped for. >> yeah. you make, of course, the key point, the stocks ran up the last few months. although given that number from goldman sachs one might have expected the stock would be showing something positive on goldman, i wonder, you know, we talked about their effort in consumer, so to speak, with the markets brand. yet it represents still such a small percentage of their overall revenues and earnings, if any earnings at all any voice given to that on the conference call, or at least some questions about whether they are going to continue to make the effort they are there >> yeah. so i think the q&a is just probably starting now. but the cfo commented on markets and the consumer bank and expressed how they paid slightly higher than they wanted on deposit costs given that rates fell and they were paying a little bit of a premium compared to rivals. expressed optimism they would

meet their overall cost reduction target outlined a year ago. if even if they pay a fraction too much as rates fell, they are still paying less than when they were totally wholesale funded. so essentially i'd frame his comments in the earnings call we are still on track it's something we are pleased we are doing, even if 2020 wasn't the ultimate year for that area of the business. i think the other thing he was echoing quite clearly was operational leverage he was saying that their revenue full year up 22%, expenses only up 8%. that's really come through things like there are this year. how much of that is sustainable? probably not all of it, but probably some of it. that's the dance we will have to d in the early quarters of next year the outlook on investment banking was strong trading clearly relies on very high activity in the market space, which presumably won't come through to the same extent in '21 as it did in '20. >> we have had a number of

guests on air who have basically said this is the year for fintech. and certainly we are seeing some of those big fintech unicorns start to go public, deals made i know you have been covering this closely for a while now in terms of that tech adoption and what it means for the big banks, i am just wondering how some of the different ceos and executives on earnings calls have been categorizing that or talking about it. >> jamie dimon said friday the big banks should be scared bleepless by the threat from fintech. he said this is an area we are investing it, we are on top of, we expect to win so help me god, i think was his full quote check it on cnbc.com for that. brian moynihan i think echoed as he has done eight quarters in a row a similar sentiment with a little more reserved language, which is to point at the enormous growth they have on their apps as well the question, of course, is whether they can be disenter

meetiated by paypal and square or whether they threaten smaller banks. they are not going to get the multiple that a square and paypal have, but they are getting cost reductions because of tech and provided they don't lose big market share, that should help them in due course we are not seeing it in cost reduction in 2020 because of the pandemic and large costs involved there but the theme of tech investment for the big banks should be one of slowly but steadily reducing costs without losing market share. >> interesting the goldman call apparently is incredibly long. they are just now getting to q&a about 50 minutes in. solomon said that they will bring markets to the u.k. in the second half, and i thought this line was interesting the extreme volatility of 2020 is unlikely to repeat given the government actions taken last year certainly we can hope that will be the case? >> yeah. i heard that's the case. he made that in terms of the macro, he made the comment which we played about the importance

of vaccines and the rollout there. overall volatility in the markets and how it plays into their trading revenue was a comment i think he was referring to by what you picked up on, which is clearly suggesting that the trading performance probably won't be replicated next year, whereas he and stephen saying that the backlog in m&a for the investment bankers is as good as they have seen for a long time maybe investment bank can pick up a bit of slack if trading tails off. but we will see what happens there. in terms of the u.k., they have rolled out markets as a savings product and had to stop attracting fwoss there because they reached a limit much quicker than expected. i think alluding to rolling out the lending products as well >> yes markets invest, for sure we will see what the q&a brings. thanks so much wilford frost handling the banks morning. we are waiting for yellen on the hill listening to grassley and some others speak meantime, as soon as she begins, we will get to it. don't go away.

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some introductory comments from senator wyden there we await janet yellen's testimony in front of senate finance. at the same time, developments for the nominee for dhs secretary and the director of national intelligence nominee avril haines later today we will get anthony blinken and defense secretary nominee austin it's going to be interesting grassly was talking about the importance of not raising tooks too much, and we'll see how much of yellen's dovish reputation comes into play this morning. >> yeah, grassley pointing to an interview, i believe, president-elect biden did with our network, with sorkin, talking about not raising taxes on people who earn less than $400,000 a year. but it's going be important in terms of tax policy. that's not where we are today. it's just about spending and how

much we are going to do. by the way, that's today in dealing with the economy and the pandemic it's not even getting to what is a potential infrastructure bill that many people, by the way, the left and the right, hope will hit congress at some point. i saw some reporting that joe manchin, an important perhaps swing vote in the senate in the democratically controlled senate now, is in favor of a lot of spending on infrastructure if at least he is quoted correctly. >> we have been talking about the need for an infrastructure deal how many years now? there have been a time we saw some ofthose infrastructure-related stocks rally during the trump tenure as well in anticipation of an infrastructure deal. so it what be interesting and i think it would probably be pretty positive. particularly from a market standpoint if we see something like that. wie note going back to of these hearings this creek, general lloyd austin, carl, as you mentioned at 3:00 p.m. today is going to be one i keep an eye on given the fact that we haven't

seen much in terms of the moves in defense stocks. it will be interesting to get his take on what that could look like, the outlook could look like, things like china, for example. meantime, congress is putting travel companies on alert. >> this week hotels would be sold out in washington, d.c. hotel occupancy during the past inaugurations for president trump and president obama was around 97% this year will be very different with the virginia governor and d.c. mayor urging americans not to travel to the capitol day to the risk of violence now, companies have really issued different responses to this airbnb blocking all reservations in d.c. around the event rival expedia, vrbo, is not blocking reservations, but requiring those booking a property around d.c. and state capitols to reconfirm their identity with government-issued i.d.s so they can be revetted.

hotels, they remain open the operators tell cnbc they have updated security measures at their properties. despite attempts to discourage travel, hopper says it saw a 32% increase in flight searches to d.c. last friday compared to the previous week. the u.s. house oversight committee sent a letter to 20 of the biggest travel companies, including marriott, expedia, car rental companies, hertz, among others, to retain customer information and implement additional screening to ensure, quote, they are not being used to facilitate violence or domestic terrorism this as security continues to tighten in the capitol as well as across different states in the nation back to you. >> covering travel as you do, i wonder how much attention you are giving this morning to some of the restrictions from international travel, countries like brazil that the trump white house had sought to end and that the biden administration is now saying no can do >> yeah, that first anunes

from president trump lifting restrictions from various countries from europe to brazil was definitely a surprise, but then to see that response from president-elect biden's secretary, incoming press secretary, that would be reversed, was certainly an interesting story to watch over the last 24 hours. i think because you saw the response from the biden campaign so early, so fast, suggests why you are not seeing a big reaction in travel stocks today, carl >> that's definitely a longer-term dynamic. a lot to get to. thanks we will check back later on. david, we were talking with jim about the american express upgrade. there is this growing sense that international travel clearly will be the last thing to truly recover, and that has huge implications for cities that rely on overseas tourists like new york city. >> oh, man, if you get me started on new york and the list of things that new york has to

worry about, we will be here for quite some time, carl. business travel comes up a lot in our conversations when we have the ceos of some of the major airlines because goldman sachs, for example, just their expenses being so low and their operating leverage how much is that people not getting on airplanes also? and the cost to travel going down, obviously, because they are not spending on that. when will business travel come back and will it ever approximate where it was in 2019 prior to the pandemic, morgan? because there are plenty of people out there who have realized they can do a lot by sitting in their living room, kitchen, dining room, whatever you want to call it, not to mention their desk and their office. >> you know who i think will have interesting thoughtsen this sir richard branson. we have him on to talk about space and sort of the latest milestones from one ever his space startups, but certainly we have seen quite an intense year

for his broader virgin group portfolio as well given the fact that it is so focused on leisure travel and hospitality i mean, virgin atlantic has been doi doing cargo flights to offset some of that lost passenger travel you're right when we talk about airlines and we talk about these travel and leisure stocks, for example, consumer discretionary names, we are talking about that whole economic recovery story, and that hinges so closely on a vaccine rollout, which, of course, every day we get more headlines, some conflicting how that is actually going right now, right, carl am. >> indeed, morgan. as we watch senator wyden there, the discussion going on as we await yellen, it does involve sectors, guys, that are key to our audience for example, wyden is saying that he plans to replace 44

energy tax breaks to reduce carbon emissions energy is actually doing pretty well today, david. we are going to be looking at big pivots in energy policy probably the next couple of months. >> no doubt. you say that, and of course one the key purechures in our stock market is gm and the efforts that that company is making in electric vehicles. i its cruise division a key there. new investment from microsoft. look at shares of gm, if we can. they are up over 7%. the moves the stock has had of late as it continued to roll out new announcement after announcement in terms of its efforts in ev. morgan, again, back to the broader conversation, as we await yellen, we expect the biden administration is going to be very aggressive in making climate policy a key part of its economic policy. and certainly we have seen so much money and innovation moving into ev and it's not just reflected solely in the 800 roughly billion dollars market value of tesla. >> that's right.

and i think it was up something like 20% to end last week as well and it does dovetail back into the conversation we were having about infrastructure and how this is foeded into a bigger infrastructure deal as well. but, david, perhaps nobody knows this better than you i mean, spacs, the spac market, some of the hottest, gis, mergers we have seen take root in that market have been around this very topic. it has been learned electric vehicles, clean energy and clean tech i spoke to fortress last week as well they are focused not only on lng, new forfort res energies, e implementation of hydrogen and hydrogen not just in terms of fuel cells in vehicles, but from a power generation a utility standpoint as well to your point, david, we are just going to see and hear more about some of these new technologies where energy is

concerned. it is interesting though that we are seeing the rally and the moves, the investor, i guess, statement around some of these names as we come to market alongside the rally in more traditional energy names with energy again the top sector today for the s&p. >> yeah. and the spac torrent of spacs doesn't stop we got another eight today that are getting ready to price we have had 53 already this year 53 spacs that have priced. doesn't mean they have done their deal yet but, carl, it's really shocking. and it bgoes back to our conversation about the financials you saw the numbers from goldman sachs. the issuance numbers have been dramatic and it's interesting they benefit on the issuance for the spac and then it's considered a merger, right, so that actually gets added to the table for m&a as well. they are benefiting on all

sides. the spac, this spac move, let's call it, over the last year has really been a huge boon for many of these investment banks. >> indeed. and it's nice to get that two for one. there is feinstein, i believe. we are still a few moments away from yellen. david, i was curious to see jim this morning sort of knock down the wire stories that suggest that we are in for a new period of intense regulatory pressure on the banks, although you have to imagine that spacs are going to get at least a second look from gensler and his team? >> yeah. maybe on disclosure there is some questions, although the enthusiasm that i hear amongst participants in this marketplace is at a high, and there is a belief that they are going to be with us, spacs, i mean, obviously the special purpose acquisition corporation is not new, but we know it has made it into the mainstream in a way we had not seen previously.

there is an expectation, carl, i think that it is not going to change, that this is going to be an effective way for many companies to come public while it may die down a bit, we will see a lot of it let's listen in to janet yellen about to begin her testimony. >> i share your view with respect to transparency. you and i have worked on those issues i also want to put on the record that the treasury's record over the past four years on this dismal, things like fin sin, we have got to do better. let's do it in a bipartisan way. >> you bet thank you very much. now i didn't congratulate dr. yellen on her appointment. i do that now and ask her to make her opening statement >> chairman grassley, ranking member wyden, members of the committee, it's an honor to appear before you. and senator feinstein, thank you

for that very kind introduction. i have immense respect for the task before this committee rebuilding the american economy from its sharpest downturn in history. if i'm fortunate enough to be confirmed, i would sktrive to b a good partner in that work. i have spent almost my entire life thinking about economics and how it can help people during hard times. my father was a doctor in brooklyn it was more of a working-class neighborhood back then his patients would take the bus up from their jobs at factories or docks and they'd come to our stoop because that's where my dad's office was, in our basement he was the kind of doctor who treated the whole patient. he knew about their lives, about when they had been fired or

couldn't pay those remain some of the clearest moments in my childhood. my parents had been children of the depression, and they had a visceral reaction to economic hardship economics is sometimes considered a dry csubject, but i have always tried to approach my science the same way my father approached his, as a means to help people. this committee, i believe, has viewed it the same way, especially during these last few months when economists look back on the pandemic i expect they'll conclude that congress' actions averted a lot of suffering but more must be done. economists don't always agree, but i think there is a consensus now without further action we risk a longer, more painful recession now and longer-term

scarring of the economy later. the pandemic has caused widespread devastation whole industries have paused their work 18 million unemployment insurance claims are being paid every week food bank shelves are going empty. the damage has been sweeping as the president-elect said last thursday, our response must be, too. over the next few months we are going to need more aid to distribute the vaccine, to reopen schools, to help states keep firefighters and teachers on the job we will need more funding to make sure unemployment insurance checks still go out and to help families who are at risk of going hungary or losing the roof over their heads we think the president-elect -- neither the president-elect nor

i propose this relief package without an appreciation for the country's debt burden. with interest rates at historic lows, the smartest thing we can do is act big. in the long run, i believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time people worry about a k-shaped recoverry, but well before covid-19 infected a single american, we were living in a k-shaped economy, one where wealth built upon wealth while working families fell farther behind this is especially true for people of color. at the fed, i became accustomed to the institution's dual mandate, to promote stable prices and maximum employment.

as treasury secretary, i think there will be a dual mission, too. helping americans enduring the final months of this pandemic, keeping people safe while getting them back to work. that's our first task. but then there is the longer-term project. we have to rebuild our economy so that it creates more prosperity for more people and ensures that american workers can compete in an increasingly competitive global economy members of the committee, these are very ambitious goals, and i know we will need to work together you can count on me to do that in a bipartisan way. my husband and son are watching us on c-span from the other room they are not only wonderful people, they're also wonderful and opinionated economists themselves so, i'm used to debate about these issues in the house, and

i'd welcome it in the senate thank you. i look forward to your questions. >> thank you, dr. yellen before i go to questioning, i have 3-0 bigtory questions we ask all nominees before this committee. and they are usually stated in three exactly the same way first, is there anything that you are aware of in your background that might present a conflict of interest with the duties of the office to which you have been nominated? >> no, senator grassley. i don't believe i have any conflict of interest >> okay. do you know any reason, personal or otherwise, that would in any way prevent you from fully and honorably discharging the responsibilities of the office to which you have been nominated? >> no, i do not. >> do you agree without

reservation to respond to any reasonable summons to appear and testify before any duly constituted committee of the congress if you are confirmed? >> i will. i will testify if they ask me before a committee of congress. >> and, finally, do you commit to providing a prompt response in writing to any questions addressed to you by any senator of this committee? >> yes, i commit to that >> in regard to that last one, i hope i think senator biden, as senator, would agree with me that when the trump administration first came in, they issued some sort of a regulation that they were going to only answer questions for committee chairmen we finally got them off of it. i don't know whether they answered every question of every senator or not they probably did not. i hope we don't hear that from

this administration, that you have to be a chairman of a committee to get an answer to your question. before i ask the first question, but it's kind of along the lines of the question i was going to ask you, i just heard your opening comment about learning so much from your father, about the workers of america and about the business of america. i hope you will continually remind people that you have that background and you take it into consideration every opportunity you can because i think people think of you being in public service for such a long time, may have forgotten that, just like i think a lot of people think that after chuck grassley has been in the united states senate for 40 years, he's forgotten the ten years he spent on the assembly line with the workers of iowa.

it's important that they be reminded of these backgrounds. dr. yellen, how will you work at treasury to ensure - >> all right we are going to continue to monitor that that is the confirmation hearing of janet yellen as treasury secretary. we will bring you any headlines as we get them right now currently focus on that proposed stimulus package from president-elect biden meantime, though, over the weekend virgin orbit successfully deploying ten tiny satellites to orbit for nasa using a 70-foot rocket air launched from the wing averett row fitted virgin atlantic 747 jet with the success of the flight, which you see right there, the company, that was spun off from virgin galactic a few years ago, now planning to officially transition to commercial service as it prepares for the next mission. joining us now is virgin orbit founder sir richard branson. also the billionaire founder of the virgin group and virgin orbit's ceo dan hart good morning to you both and congratulations on a successful mission over the weekend

>> thank you very much. >> sir richard, i want to begin with you given the fact that we just saw this key milestone over the weekend, your reaction not only to that flight, but also but alo it positions this space start-up virgin orbit for future service. >> well, we have been relieved and almost indicted at the same time the team couldn't have done a better job it's a picture-perfect success and every single cell they hit this is the first-ever air launch of a rocket all nine satellites were deployed in the exact correct orbit. all of them are now beaming back to earth and, therefore, nasa, who put them in our rockets are

absolutely elated and delighted. so the mission couldn't have gone better. and it means we can now ramp-up the making of those rockets and satellites for the future and expand the company and, you know, as quickly as possible but it's taken about seven or eight years to get to here and this team has done magnificently. >> it's virgin orbit and an elite class of a small group of companies that have reached orbit. i am considered what it looks like, given the fact it is a competitive landscape, there are other space startups targeting that small rocket launch rocket like some of the big ones offering ride share. >> well, we had a huge amount of interest we brought a huge capability to space launch on sunday, where we can take off from an airport and fly in space we have a manifest of government, nasa, as well as

national security as well as commercial and our manifest is currently well over a dozen lights and that's pretty large we have gotten flooded with e-mails and texts and calls over the weekend. a commercial customer signed another contract, as a matter of fact, as soon as we shut off the second-stage engine on sunday. so we're looking at a really bright future. >> i wonder that on the eve of the inauguration for president-elect biden, i wonder what you think this administration is going to mean, dan, for space not only from a civil standpoint but also from a national security one >> well, you know, space has become central to so much of what we do and how we operate as a country. it's a bipartisan topic. it's the foundation of how our national security apparatus works. it's core in our understanding of a planet, earth science,

physics, interplanetary. and there the an enormous economy that is starting to grow we're at $400 billion globally today it's forecasted to be a couple of trillion in 20 years that's all a non-partisant topic i oom excia.m. excited about th i am excited about the new government >> i wonder how orbit and sister company virgin galactic, you took public through a spac a little less than a year-and-a-half ago now, it certainly has gotten a lot of investor attention i wonder how virgin would birx would you consider taking it public given this milestone? >> obviously, i think we're doing well we're the only company in the world that is offering an air launch system. so, you know, we can put

satellites up. we will be able to put up flights up once we really ramp up the factories and manufacturing among rockets and satellites within 24 hours and we can do it anywhere in the world to any orbit so, up to now, i think we have bundled everything, ourselves, with the help of a relatively small partner who has been a tremendous partner, but i think, you know, we're now in a stage where we want to ramp things up, we will raise finance to take it to the next stage now that we have proven the concept. whether we do a spac one day, we'd love the experience of the spac with virgin galactic. there is a lot of people out there who have invested in it. and, you know, and it's been a fantastic success knits own right. you know, so, that's a

possibility and it's definitely on the table as a possibility going forward. >> interesting i do wonder, richard, just speaking of virgin galactic, we've seen an incredible run in that stock i wonder how you, yourself, see it, whether the share price has gotten ahead of itself or you see this as a sign of except-up demand from investors buying into this space in the future? >> i have been well programmed before i go on programs like this because we're a public company. let's not forget questions like that but, you know, but i think that, yeah, people know what virgin galactic is. you know, they know what the track record is. and, you know, they're making their own judgments and, you know, whether the stock is directly priced or not is something we have to remember on

questions like that. >> fair enough i do want to shift gears i mean, we have seen the impact on covid of the space industry over this past year. in general, relative to other industries, it has held up a bit better, if not, for timelines shifting a bit richard, i realize covid is a very personal thing to you my condolences goes out to you and your family, i know you lost your mother recently to that disease. so it's a personal situation for you. i wonder, though, from a business standpoint, just looking at the broader virgin group portfolio, what your outlook is for travel and at leisure in 2021? >> well, first of all, i'd like to say that dan and the team got this launch away to fight and lots of team members getting covid. and, yes, it was delayed for a bit. but it adds to their incredible success. yes, we've got a lot of

companies around the world that are pretty well grounded at the moment, virgin atlantic. cruise companies, such as fitness centers and so on and so on and so the vaccination is critical and, you know, it's with you feel to see great britain moving rapidly to get more vulnerable people vaccinated it's wonderful to see biden promising 100 million vaccinations in the next three months vaccinations is everything and once people have, once vulnerable people in particular have been vaccinated, i think all kind of businesses can start opening up again, restaurants, travel companies, cruise companies. that hopefully there will be a proven vaccination, a piece of paper that the people can use to be able to get on and play without, you know, having to be

tested or, you know, with you know having quarantined and, you know, so i think we're hopefully looking to the end of this nightmare that it's affected so many people. >> yeah, to that point, given the fact we are seeing a rollout, albeit in the u.s. slower than i think initially expected you have taken a number of actions over the past year to keep virgin group companies afloat in the midst of this pandemic, perhaps most notably the airlines do you feel more financial action may need to be taken in the meantime or the worse is the really over? >> it depends how long, how long that the planes are grounded on the floor. and i mean with virgin atlantic cargo team have done magnificently. they have taken these empty planes that used to be full of passenger and they've doubled

the amount of cargo that we carried normally and that has really helped us pay a lot of bills the team at virgin have done a magnificent job in raising private money and you know that has kept the airline afloat during 12 months, as most of the planes have been ground. so, yeah, i mean, i would hope that in three or four month's time, most of the vulnerable people have been vaccinated, that we can start looking forward to late spring or summer beginning to get back to normality again. and i think that, we will be stronger than we were before and meaner and meaner and i think virgin atlantic will have a great future >> i realize we veered off of space and finally i have a question that is, you are one of the most renowned business leaders and entrepreneurs i think the world over

you do have so many business around so many different parts of the country you put out a pretty heart felt blog about what we have seen go on here in the u.s. in recent weeks, the storming of the capitol and the like i just wonder what your thoughts from a socioeconomic standpoint are on what we've seen in the u.s., whether i guess brand america has been tarnished >> yes, the brand america, for those of us living outside america, we're incredibly sad to see this speaking of democracy being damaged in a way it has been but we're hopeful and i think we're hopeful that, i mean, i am lucky enough to have gotten to know biden over the years. i am hopeful that he really will do everything he can to bridge the divide he'll do everything he can to understand you know what it was about from trump supporters that they liked about trump and addressed those issues and, you know,