this is the mike mayo outlook for 2017. a little bit of an ac/dc thing. bout it. what do you have to say about it? [laughter] mike: before the crisis, banks were on a highway to hell. they are still depressed and now, we think banks will be back in black. when we say that, we mean that banks, for the first time in a decade, should transition from value destruction to value creation. banks will learn the cost of capital. and if they earn the cost of capital, which we think they will, bank stocks have another 50% to increase over the next three years. back in black is a good place to be. let's start with maturity transformation and the shape of the yield curve. thatof the financials -- story, do expect that to materialize this year. that banks will make money? mike: i was a we'll may have 100 basis point increases by the fed through 2018. even with the subdued outlook, banks get back in black and earn the cost of capital in 2018. there is a trump bump. and that could move the expectations of faster economic .rowth they could restore cost of capital and then

welcome in mike mayo, banking analyst of cisa. they gotten a huge bump from the trump election. mike, good to see you again. >> thanks for having me. >> we were just talking to john. no talk about regulation. there's been a lot of talk in the market for certain about easing some of the dodd frank relation -- regulation and what it means to the banks. what's your take on this? >> well, we see 50% upside for a bank stocks over the next three years. we're bulled up on banks. a lot of the reasons not to own banks are wrong. we can go down the list whether it's credit, capital, cost, revenue, rates, regulation, engla england, italy, china, or the tenth reason not to own banks would be trump. the people say the banks have moved too far too fast. what we say is, first, the scorecard for president-elect trump is very clear to me from watching the news conference and the scorecard is gdp and jobs growth. if you want to have gdp and jobs droet, if you want to excel wait gdp growth from 2% to 3% and add jost jobs you need banks as your partner. that means not pull back all the regulations b

jonathan: that's mike mayo, clsa. dakin campbell, let's get on top of the press release and bring in holly renick. the rally we had seen, what does q-4 need to do and this is just one hint of what will come on wall street in the next week or so. what do we need to see from these earnings that validate what we've seen in the last couple months? holly: it's a good question because there's little we'll see that possibly could validate what we've seen in the market the past couple months since the election. it's interesting. i'm hearing people talk about how basically this is an earnings season that doesn't matter and is cynical but the moves we've had in the market, we're based on things speculative and forward looking and don't think there will be a ton from the earnings standpoint to justify those moves. what we could get is something to sort of continue those sort of positive sentiment going into the year, a good start to earnings obviously would be solved especially given we have a lot of expectations for what we're

mike mayo discussed why he thinks big u.s.ks will be back in black. >> banks for the first time in a decade should transfer from value destruction to value creation. they are in their cost of capital, and if they do as we think they will, bank stocks have increased 50% and have another 50% to increase over the next few years. act black is a good place to be. take a look at where european equities are trading as we had to the close. the level of the stoxx 600, it is down two thirds of 1%. will it be 13 in a row for the ftse 100? looks like it well might be. i want to bring fiat chrysler shares. they have been halted after plunging the most intraday on record. fall, down massive 16% after the government in the u.s. accused the company of using software to allow excess diesel omissions in about 104,000 vehicles. fiat believes its emission control systems do meet requirements. we will keep it on fiat, this is the close on bloomberg. ♪ mark: live from london and new york, this is the european close . i am mark barton with vonnie qu

mike mayo a recent managing director at csa. his latest is moving back in black. there he is.e. i don't know if you brought a guitar, it is nice to see you. was that photo shopped? >> it is photoshopped. >> you haven't liked the financials forever. >> let's put bank financials in perspective. since 1999 the dow has gone from 10,000 to 20,000. the bank has mot moved. two things happened, one september financial crisis. two is the reaction to the financial crisis. the attitude since the financial crisis is, in case of emergency. now, here is a -- >> i love when you bring props. >> there is my little bag. it says if case of emergency what do you do? >> break the glass? >> well that attitude -- >> i would feel like i need to do that every morning. >> that attitude is the reason why banks increased tangible cash by a trillion, deposits by 3 trademark. bank balance sheets are the most resillient in a generation. banks can enjoy another global financial crisis and be back. in fact, they can absorb two global financial crises and still be fine and so that resiliency provides a strong

far for confirmationonfirmatn hearings for president-elect f p'ump's cabinet.or >> cias nominee mike pom mayohud secretaryec dr. benn carson all on thelln schedule today. >> short recess was called duele to a power outage.utag donald trump's pick to lead the cia opened the hearing theea the hearing comes during a period of tension between the b incoming president and thehe nation intelligence community. pompeo was asked about russiaus meddling. >> do you accept the conclusions of the ic. ic. >> i've had one briefing.rief i attended the meeting which the president-elect was w briefed. everything i've seen suggests to me that theng i'v report hasn analytical product that is pro sound. >> when asked about his views on torture pompeo said heaid would always comply with theayly law and that he would not use hd enhanced interrogation techniques that fall outsideut of the army manual. >> mattis was questioned about whether he trusts donald trump's ability to learn andeard listen to his advice when its aw comes to military action.ct mattis warned orlando word is wd under threat. thr >> it's under the

veterans administration like the clevela nd the veterans administration like the cleveland lin k and mike the mayoeir great doctors, dr to by cosg rove together with their great doctors, dr toby cosgrove from the cleveland clinic has been very involved. one of the great men of business has been involved and we‘re going to straighten out the vasmt a for the vetera ns. straighten out the vasmt a for the veterans. i have been promising that for a long time and something i feel strongly on. you‘ll get the information on david and i think you‘ll be impressed with the job he does. we looked long and hard and interviewed at least 100 people. some good. some not so good, but we had a lot of talent and we think this selection will be something that will with time, with time, straighten it out and straighten it out for good because our veterans have been treated very unfairly. ok. a question, yes, john. thank you. inaudible reporter: if you do, how will that colour your attempts to build a relationship with a leader who has been accused of committing an act of espionage. these meetings are classified. so i‘