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tv   Squawk Alley  CNBC  November 10, 2016 11:00am-12:01pm EST

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the provisions in obamacare that limit the disparity between premiums charged to older people as compared to younger people, that's going to have -- that's going to benefit some but hurt others. and how balance those costs and benefits is not easy. now, you could have a complete repeal, but that would generate a lot of heat. the same is true of dodd/frank. i think there are elements of dodd/frank that donald trump and other republicans have praised while being critical of it effect on community banks and its effect on lending. so how do you keep things that might have increased the safety and diminished the risk of financial bubble and insolvency at some major institutions without -- you know, how do you preserve the good without completely eliminating the entire thing. all that is a huge challenge and
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we don't know who's going to be bearing that responsibility for donald trump. >> yep. if you're just joining us this morning 11:00 a.m. on the east coast. you're watching "squawk alley" on cnbc. these are live pictures of washington, d.c., as president-elect donald trump makes his way to the white house for the first time. always a remarkable optical chapter, something that truly sets our country apart, the degree to which our transfers of power are peaceful. we do not expect to see trump before this meeting. we're told he's made his way in through the residence entrance, so we'll have to wait perhaps for some photo-ops that happen in the oval following this meeting, which we do not know how long that will be. jon fortt, kayla with us here, on a day we're watching the optics of politics. the very real quotes in the markets where the divergence between the trump trade materials, growth, is colliding
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with a serious downdraft in tech. amazon just the latest example. >> amazon is an example of one of the companies that trump as a candidate singled out for punishment saying, oh, are they going to have problems. that was retribution for "the washington post" writing something he didn't like, went right after jeff bezos. that will be important for the business community to see. trump took shots at lot of great american companies and it will be interesting and important to see how he handles it. >> somebody called it a trump grudge trade. do you think that exist sms. >> i think it's absolutely a risk. amazon does, as it gains power and has so many operations, tax implications so, many things. there are many, many ways if he were to follow through on that threat that he could screw up business for amazon. >> there's trump the man and the things he has said, but then there's trump the movement. in many ways this election was a referendum on job losses, on globalization, and i'm wondering, henry, as a lot of
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processes in our economy get automated, if you think that there is more of a widespread turn against technology and against the industry. >> i think stepping back, if you go back 200 years, 93% of the workers in the united states were farmers. we got through that, we went to the industrial revolution. that radically changed everything. now we're moving to technology. we've always had this shift. unemployment is actually at ha reasonable level. what we need to do is get wages up. >> we have to looift there for one second and get to the deal book conference where mark bartolini the speaking and i imagine will address not only trump but the affordable care act. >> i think the expansion of medicaid are all very important programs we need to continue. so how do those get passed going forward? then we have this population that really currently uses the exchange, which are people between 45 and 65 who have chronic illness and can't afford their own insurance outside the exchange and need to be subsidized. so i think on the first
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population, he's going to make that happen. we can keep those program changes in place. they weren't part of the aca in a lot of ways anyway. medicaid expansion laws. i think the unts on medicaid expansion probably are a block grant to states that says you manage it. here's your money. >> so what does this mean to your business, though? when this happened, a lot of stocks actually went through the roof yesterday. yours went down. >> no, it actually went up. we're up $14 a share over the last two days. >> i thought you originally went down. >> we did, but it went -- >> you zoomed back up, my apologies. >> because it's over the deal, right? so the whole doj, doj blocking our deal with humana, who's suing us, and so everybody's now running the -- you know, running the arbitrage on the deal. >> and so what happens? >> what happens with the -- >> this circumstance. does this make sense? >> i don't know what happens. i don't know what the doj does. >> imsaying to your entire business strategy, over the past year you built that whole new business strategy.
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>> the strategy is the same. nothing changes. 81% of the american public hate their health insurance. they hate the health care system. we have too many uninsured. it's not affordable, even for people making six figure, so it still has to be fixed. we still need to insure everybody. the approaches will be different from a policy standpoint and a funding standpoint, but we still need to have a product that's affordable, more personalized, simpler to use, that people can buy like they buy everything else today. >> is there any conceivable way that under trump there will still be -- although those 22 million americans who are part of this will still be insured at the end of the day? >> realize more than half of that are people on medication expansion, so we can solve that problem with medicaid expansion. we have about 2.5 million who are students and other people who are on our parent plans. so you've got 12.5 million, 13 million people who we can continue fairly simply.
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just by changing the way we fund it. it's the population that are currently in the exchanges which are largely struggling and in a big way. there really are people that are too young for medicare but need the support of a medicare-like program. so secretary clinton's program around extending medicare for more down to people that have a means test, age 50, 55, is a reasonably good solution because the medicare advantage program works. you can support people in that program. we have high quality ratings, over 90% quality ratings from people who use it compared to 81% negative in commercial insurance. so if we go after that program and say how do we make medicare available for people who can't afford it otherwise, who don't have employer insurance and need a subsidy, we can make that work. >> based on the things he has said, though, do you think that's possible? >> yes. >> you do. >> yes. i don't think you can take 17 million people or how many number of people you think it
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is. it's 17 million to 20 million people, you can't put them on the street without insurance. >> so let me ask you this, though. trump has said he favors keeping one key aspect of all this, which is effectively outlawing the old practices of refusing to cover people with pre-existing conditions. >> that's the guarantee issue. >> how do you make that work economically if the exchange doesn't exist? and not so suggest by the way the exchange currently has devised is working either. >> right, right. it's all about -- so the insurance model used to be the mod where he will we get as many people as we can in the boat with an average risk pool and that we'd underwrite it at a cost structure that would allow us to grow only a little built every year so that we didn't take on bad risk. that's the old insurance policy. that's the model the aca was built on, a flawed model. what we have found out in the medicare population, particularly medicare advantage, 75-year-olds with three or more chronic morbidities, if you embrace them and make sure they're taking their meds,
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getting to doctor, their social live, they're active, you can actually reduce those costs. and the reason that the industry started taking care of 75-year-olds with three chronic morbidities is the government said we'll pay you for taking that risk. so if we have an underwriting model that says if the person is sick we'll pay you more -- >> that will be a story we'll watch for months, probably years, the story of health care, the fate of obamacare, whatever trump care may look like. that is mark bertolini talking about some of the challenges inherent in repealing and replacing it with something else. dow is up 71 points but the s&p negive to the tune of 7 and the nasdaq obviously very close to having its worst day since september after the initial run-up. there's a lot of debate about this, henry, about whether or not the rally was the market relieved of having no contested election, whether it was truly a bet on global growth and u.s. growth with trump's new policies. >> i think it was the concession speech -- not the concession
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speech -- the victory speech, which was very gracious, sudd suddenly more all americans, the smart-money view of trump for this whole 18 months, he doesn't mean anything he is saying. it is just to get elected. he's a perfectly reasonable, smart guy. he will now pragmatically manage the economy and the country and we'll go forward and that's what folks heard from what was a great speech. that was a relief to a lot of people. so not surprising the market rallied on that. >> there are a couple of big issues, big questions i think where president trump is concerned that face tech right now. one is around law enforcement and encryption. he had that big attack on apple during the campaign saying, you know, boycott apple because of its position on encryption. and the other i think is this question of balancing the disruption that tech brings against those people who are left behind, which is the reason arguably why president-elect trump won the rust belt. tech's answer to that tends to be education. hey, you know, fill in that gap in between a high school diploma
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and a bachelor's degree so that everybody can be lifted up. but what will policy-wise president trump's answer be and will that cause a clash with tech that really causes big issues? >> well, that is the question that everybody is wrestling with right now is what are the actual policies, because mr. trump, for 18 mos, has been great at attacking everything and offering very broad solutions that are often very different depending on what mood he has been in. now we're going to get down to actual specifics on health care, on technology, and those specifics are going to matter a lot. and everyone is just waiting. what are we going to get? >> well, it's no question that silicon valley was opposed to a trump presidency during his campaign, but you have the likes of jeff bezos coming out and saying, wish him well, business community trying to unify, jamie diamond saying we need to listen to the voices of the people who voted for him who are not empowered by this economy.
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but a venture capitalist says i'm announcing a funding a legitimate campaign for california to become its own nation. >> calexit. >> a nice story and emotion. i'm sure a lot of people are feeling that around the country, but i think the speeches yesterday in general were encouraging. hillary clinton gave a great speech. obama gave a great speech. that's what you do after a decision like this. incredibly emotional and traumatic and exhilarating on one side and -- >> but the people have spoken. does the hyperbole need to end at this point? >> at some level it absolutely does. we have to get down to decisions. what is president trump going to do? he is brilliant at what he has done for the past 18 months, which is engaging people, getting them fired up, being a wonderful speaker. now we have to get down to actual policy and governing pap very different job. >> but this is not a minor issue, i think. it speaks to the depth of the divide, the depth of the shock that we've heard about, and we've been talking about in
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earlier hours here, that the democrats are feeling. when you have people taking the streets saying "not my president," which is the kind of language that the left decried about president obama just minutes ago, it seems when you have people talking about california seceding, as there was talk about texas seceding, come on. >> speaking of tech stocks, in a downdraft, interesting wrinkle on fitbit, which has been halted, now resumed. let's get to dom chu with this. dom? >> what we have are fitbit shares which have been swinging wildly because earlier today there was a regulatory filing that said that a certain entity based in china called abm capital was looking to start preliminary communications about a possible tender offer for fitbit shares. those shares spiked up higher. we are exercising a little bit of skepticism here because we have scoured the regulatory filing, we don't see anything spubl there. this is also the first-ever regulatory filing these guys have really ever made.
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we looked at the address for this abm capital. it's in shanghai, china. we cannot find the actual location. we've called the phone number listed for this company. we have not been able to get through. we have e-mails out to both fitbit and the securities and exchange commission with regard to what kind of things can possibly happen at this point. we have not heard anything back yet. the s.e.c. does say that they don't typically scan for the accuracy of some of these particular filings. but still, that's the reason why fitbit shares are as volatile as they are. as we know more, guys, we'll bring you more. carl, that's what we have for right now. back to you. >> after a week like the one it's had and gopro for that matter, you might think it teets topic for some discussion at some larger tech companies and investment boutiques. >> hardware is hard, it's difficult, and both young companies are having a lot of trouble. >> both have tried to make the case when things were going very well, we're not a hard work company, not a gadget company, we are a media company, building this network of services,
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hardware is sort of ancillary. both cases note xhooetly not true. they are gadget companies that is a brutally competitive business, news cycles every year, and both have gotten hammered as a result of it. >> now that the smartphone cycle has very clearly topped out and the expectation was the baton gets handled to maybe it's watching, maybe it's drones, maybe it's -- we're seeing problems with the watches and wearables, problems with gopro's drones taking off, literally. we're seeing challenges in the action camera market. so it raises questions about the holiday season. is there something that is going to take over or is it going to be maybe not an electronics and general merchandise -- >> that ties into the broader theme of whether or not, henry, you think having the election past, having transitions like this happen without drama, allows people to go back in to take a mortgage, to go out to dinner, to buy a car, to buy holiday gifts, right? that's going to be a big fourth quarter story. >> absolutely. might have has to go on, but the
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drama around the political system and the protests and the democrats feeling exactly the way a lot of republicans have felt for the last eight years, more strongly in a lot of cases, that is going to continue. so it's going to be as they say interesting times sfoop well, certainly this morning on "squawk box," terry lundgren, the ceo of macy's, said he hopes to be a beneficiary of some of that optimism going into the holiday season, their inventory is at the optimal point and people appear to be ready to spend. >> good he's viewing that way because again another great american company that trump took a serious shot at so it will be interesting to see what happens there as well. >> i'm making a list of the trump grudge stuff. amazon, apple, starbucks, ford, utx -- there are a lot in there. when we come back, we'll talk more about business leaders from silicon valley to wall street reacting to president-elect trump's surprise victory. we'll talk to former aufls depot and autozone ceo steve odlan. we'll talk to liberty ceo greg
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we are awaiting pictures of president-elect meeting president obama following his historic election victory. thousands of ceos have written a letter in an attempt to restore fracture. what should ceos expect from a future trump administration? joining us now, steve odlan, a cnbc contributor, good morning. >> good morning. >> i'm wondering, you certainly, office depot, autozone, and even in the grocery business, dealt in a lot of these very communities that seemed to go for donald trump, just had a really rough time as far as economic development and opportunity. are there things that you expect president trump to do or hope
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that president trump will do to address the needs in these communities that have expressed such concern. we've talked a lot about these things already this morning, but i think that the business community and america in general are looking for donald trump and this new administration and this unity of government, frankly, to act. they're sick of the dprid lock, it's locking up our growth, and they need to act. they need to act on the health care situation. we need to remove -- they will call it repeal and replace, but in essence they'll keep all the popular policies and they'll reform it. second, they need to deal with corporate tax. we talked about this $900 billion stimulus, fiscal stimulus a few years ago that didn't work. imagine a $2 trillion stimulus of bringing and repatriating all of this cash and reforming the corporate tax. talk about job creation. third, of course, is regulation, and regulation is killing small
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business, killing growth, and they're looking for a dial-back in some of the regulatory schemes. finally infrastructure, which also requires a regulatory revision because it takes eight years to get a project going and through the red tape. they need regulatory reform in that. >> but steve, does that help scranton, pennsylvania, which went much closer this time than it did the last cycle, these types of communities where working-class americans are just ticked off and feel like the economic recovery to the extent there has been one has gone to urban areas, not to them? i hear all those things you're saying. health care, corporate taxes, infrastructure. is infrastructure spending really going to help scranton that much? >> yes, a lot. and i think middle america understands this. you know, middle american jobs, middle class jobs are all about building infrastructure. they're about dealing with the cost of health care, dealing with exports in trade and making trade fairer. all of these themes come back
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and resonate with the middle-class americans and the rural areas. so it absolutely -- these policies, while they sound grand and wonky, they are actually the things that people talk about outside of the bicoastal areas. and in order to create these jobs they understand that the handcuffs that regulatory schemes have put on them need to be relinquished. >> steve, you know, what some people call gridlock others call checks and balances. even though you do have consistency of party across the three branches of government, i mean, trump's prabrand of conservativism doesn't match up with the republicans in congress and he's never been a politician before so he's not as familiar with working some of those back channels. sit true that we're going to have the end to gridlock beginning january 20th? >> we are but not for that reason that it's a unified party. remember, donald trump spent 68 years as democrat and only recently has become a republican and they're skeptical of that.
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but remember, he is a commercial real estate developer. his whole life has been dedicated to making a deal. he's written books about it. it's buying at a low price, improving, then selling at a high price, getting people together. but he's never failed to make a deal. the point he keeps making, whether it's trade or whether it's a wall, these are opening bids in a deal in order shock people into moving off of the situation. so i think that he is going to be more approachable from a deal standpoint. he's less ideologicalally anchored and i think we will see progress. >> we've had this discussion before, though, steve. i mean, it's one thing to come in with aggressive bids or aggressive -- takes on a deal, another thing to play those things out in media and accepting whether it's good or bad publicity. the market's not used to that. >> no. >> it needs time to develop some pattern recognition. >> you're right.
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and you've seen him shift from the rhetoric of a campaign now to a more conciliatory tone. i think the market reaction to a large extent is, you know, a sigh of relief that that's what's happening. it's all peaceful. look, the thing with the tech stocks is he has been very hard about jobs created overseas. most of these tech companies manufacture overseas. he's been hard on china and i think that the reaction here in the markets to tech stocks is simply that the cost of labor issue. you know, look, he is not going to damage trade. i mean, we're 5% of the world's population. we need trade. we need exports. middle class jobs depend on exports. he will do nothing to damage that. but what he wants to do and what a middle-class america and scranton, pennsylvania, want is he wants -- they want fairness. they want people to stop cheating. they want china to stop stealing our stuff. and these are the themes that resonated. so i think the tone will change, carl. i think you're right. and they need to change because
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he needs to be more diplomatic. the rest of the world is not used to dealing with commercial real estate developers. it isn't fun. >> well, we're going to have a honeymoon period, it seems, as we always do, but then we're going to see what the tone and policies truly are. steve odlan from the committee for economic development, thanks for joining us. >> thank you. >> take a look at where the markets are. the dow is off its high, which at earlier levels in the session was up 179. currently up 133. about half of components in the red and components in the green. interday record high shortly after open. we'll keep an eye on that when we come back.
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continuing to watch the markets, take a look at some of the sectors being affected today, perhaps maybe not so much by politics but the phenomenon of rising fields, real estate, telecome, a few of the sectors in a bunch of different
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crosscurrents. we continue to have our eye on the white house as president-elect donald trump makes his first visit to the oval office ahead of his inauguration in january. dow still up 117. back in a minute.
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sergey lavrov says russia is ready to work with president-elect donald trump adding he hopes relations between rushs ssia and the u.s. stabilizes. he made those comments earlier today. kurdish militants attacked a government building in southeast turkey injuring at least three people, including a district governor. no word on his condition. an improvised explosive device was used. british scientists have developed a new hiv test that plugs into your laptop. it detects the virus in a drop of blood and creates an electrical signal that can be read by a computer. results come in under 30 minutes with 95% accuracy. starbucks annual holiday cups are back in stores today. this year there are 13 of them. 12 are red with holiday themes. one clear with a wreath for cold beverages. customer who is buy a holiday bemplg get one free through monday. that's your cnbc news update. back to "squawk alley." thanks, scott. we'll get the close in europe
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and across the uk. seema mody is back at hq. >> european stocks erasing the gains made earlier today that were an extension of wednesday's post-u.s. election rerally. global strategists have been burning the midnight candle trying to understand what a trump presidency would mean for international markets. when it pertains to europe, analysts say more spending on infrastructure. that may be good for some of europe's industrial players have been hurt by the slowdown in china. just moments ago president-elect trump invited teresa may to washington, d.c., saying the relationship between him and the uk prime minister should mirror that of margaret thatcher and ronald reagan. if trump unveils protectionist trade strategies, analysts say that could have a sizable impact on the eurozone, which is an export-dependent nation. jpmorgan says the common thread linking brexit, the trump election, would promote populist change and a potential risk for europe, which is already dealing with high political uncertainty across the nation.
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france, italy, and germany. of course that italian referendum three weeks away. keep a close eye on trump potentially strengthening relations with turkey and russia as we've been speaking about. think tank your asia says trump isless likely to be critical on erdogan's authoritarianism. that is one relationship we'll watch, u.s. and turkey. and with russia, they may be more inclined to ease sanctions on russia and trump's victory could reduce the political risk around the country. in terms of stocks and bochbds bonds on the move, we are seeing a sell-off in oour zone bonds. investors are betting that these protectionist trade policies and increased fiscal spending during a trump presidency may actually boost inflation, german and french ten-year yields each hitting six-month highs. italian yields jumping to a
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one-year high. back the you, kayla. >> thanks so much, seema, with the close in europe. the dow opened to all-time highs earlier today but the nasdaq moving lower that have volatile trade following the election. big moves from apple, facebook, amazon to the downside. we spoke with prince talal earlier on sidewa"squawk on the street." >> the fact that mr. donald trump is coming from the business community, has the majority in both houses -- the house of representatives and the senate, i think there's no excuse at all for the republican party right now dominant in the united states not to deliver this the growth that's expected from them. >> louis alexander is nomura's u.s. chief economist. mark wunderlich is a chief strategist. you heard the prince talking about republican control across
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congress and the white house and what that means for growth. is it as simple as that? >> well, look -- >> yeah, but it's got to happen first, too, right? >> let's go to art hogan. >> yeah, so when you start to look at some of the positive, all of that sounds great. yesterday's rally had everything to do with unwinding some crowded trades that anticipated a hillary clinton election result that didn't come to fruition so we saw the biotechs and the financials take off. so i think today as we settle, okay, yes, lit take time to unfold. we'll probably have a more business friendly environment, both taxes and regulation, hand how does that play out. but a lot of those moves we saw yesterday could get ahead of themselves. probably the biggest one-day move fi of us can remember. some of that will be given back. this is certainly going to play out. i think points made in that interview are certainly positive. but, you know, understand that that's all in the future, right, everything sort of, you know, a more friendly regulatory environment, lower taxes, repatd
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ration of capital, all business friendly things, and they'll start in the first quarter of next year. i think today's the day after, realizing we're celebrating yesterday but we still have a couple months to get through before anything gets put to work. >> and of course you're talking about the rollback of regulation, which is why biotech soared, health care was up, and why the banking sector was up as well. louis, that's just one piece of the puzzle. where you think about growth and inflation and the lack of drama in a potential transition, drop in the corporate tax rate, how do you expect that to manifest itself in the market long-term? >> look, i think there's more uncertainty than is being acknowledged here. trump has -- we are going to get fiscal stimulus pip think that's pretty clear. but i think on the trade front he's going to rat it will sabre. and a lot of u.s. corporations are dependent on external markets. in addition to that, i would argue what he's talked about doing op the immigration side is
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going to be bad for potential growth in the long run, and i think it's ultimately potentially disruptive many the short run. so i get the side of it is that is business friendly, but i think people are underestimating the degree of uncertainty around some of the things that have been core of what he's been talk about, particularly on trade and immigration. >> art, one of the things that jumps out at me is around technology, the cloud, there's this issue around encryption, this issue around whether the u.s. government can get access to data in overseas servers. you know, there was friction with the obama administration about that. i think you'd have to expect more with a trump administration. how much does that factor in to a trump administration's impact on growth industries like tech, do you think, as you start to model these things out and get more detail next year. >> yeah, that's a great question. and anything that sort of starts to creep back into things we talked about on campaign trail versus things we could talk about in the white house, you know, sort of fall under that category of protectionism and
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how bad that can be, especially in technology. i think all of that is true. flipside of that is how many of those technology companies that we just talked about, including the old legacy companies and the new faster growing companies have a pile of cash they'd love to repatriate and put to better use. there is some puts and takes on this entire argument and i don't disagree with you. things that are anti-business, whether it's talking about tariffs or trade wars, talking about protectionism, i think that will be the negative impact. that's what we haven't heard yet. today is a new day. we've had a kinder, gentler trump who came out with an overly gracious acceptance speech, having a nice meeting in the white house. we talk about the first 100 days, what what my plans are, who i'm going to surround myself with, we'll start to have a better idea how this will play out. >> i'm looking at s&p sectors by total cash and short-term investments, right, i mean, information technology is way, way at the top. so why isn't it responding more to hopes of some kind of repatriation? >> that's a great point. the reason is it doesn't fit
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cleverly into the easy roadmap that we had on the first day. it's not a biotech, not a health care stock, not an infrastructure plight, not a financial. technology sort of sat in the middle. on the other end of the spectrum, it's not negatively impacted by higher rates like a utility or telecom. it's hard for us to see, what do we do with technology? rotate out after that and buy health care stocks, get into the corner the large banks and regional banks. i think right now we're sort of forgetting about the potential benefit that technology companies will have if they can bring that money back, put it to shareholder friendly use like increasing cap ex, mergers and acquisition, heaven forbid buyback of shares but apple is a great example of that, you look at an ibm, sysco, microsoft, we've been talking about repatriating that for years. i think it will be a little while before we get that accomplished but you bring up an excellent point. why is technology off when they have a potential benefit.
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ta that's next year. >> i know your per view is the u.s., but i want to look outside the u.s. far second because it has been the case this year that events globally have been what affect u.s. markets. overnight donald trump has become a diplomat. he's been on the phone with leaders of south korea, ireland, the uk and of course brexit is being talked about as the corollary for trump's victory. we do have elections in the next year in italy, austria, the netherlands, hong kong. do you expect volatility to come from outside the u.s.? and do you expect the results that we saw from elections so far this year to basically be the precursors for those? >> look, i think it's pretty clear the's something sort of broad going on in the world arnold some of these issues and i do think we should expect surprises in those elections going forward. and potentially some of that generating volatility back here in the u.s. look, i think we're at a cusp of some pretty big changes. trump has essentially said that he doesn't believe that u.s.
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should continue to try and play the leadership role that it has for most of the postwar period. ultimately, there are questions about how the global economy is going to work in that regard. if i could say something more about trade and how this sort of filters into this, i think there's a lot of skepticism about whether or not trump would immediately impose import tariffs. to some degree, i share ta skeptici skepticism, but i think it's pretty clear he's going to threat on the do that. in some ways to have effects on both financial markets, on real economic stuff so, trade flows and prices, the threat of protection i think is potentially an issue as well. trump's made it pretty clear he wants to see the u.s. run smaller trade deficits. and in some sense i think you have to think about what his objectives are. soy think there's a built of this, you know, sort of say, well, he's not going to do this immediately. i think it's been pretty clear he's going to threaten to it and that's got to be part of how markets and the economy is going to react to this. >> yeah. i mean, he's got a honeymoon
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awaiting him. it's the centerpiece arguably of his entire economic message. i mean, if he doesn't deliver on that in the first 100 days, you wouldn't blame supporters for being outraged. >> if i could say one more thing about repatriation, it's a big deal. it's something we've been waiting for for a long time. but i think people are getting it wrong if they think it's going to lead to higher capital spending in the u.s. there's ban lot of -- a lot of work that's been done on trying to understand why investment has been so low in the u.s. and a lack of financing is not on the list of reasons. so if people think that suddenly, you know, corporations being able to bring back this cash is somebody going to change their incentives for doing cap exin the u.s., i think that's a mistake. could it lead to more m&a activity, more buyback? sure. it may be good for the stock market, but i think the notion that that's going to affect the fundamental economics of capital spending i think is a mistake. >> yeah. they can raise money for just
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about nothing in almost any jurisdiction they want. so we'll see exactly how that plays out for now. thanks to both of you. we want to get back to the deal book conference with breaking news regarding donald trump's pick for treasury secretary. kate kelly, what are you hearing? >> hey, there, kayla. in recent days since trump's upset victory for president, of course, jamie diamond, the chairman and ceo of jpmorgan, has apparently been considered aloud by some as a possible treasury secretary. i reached out to the campaign, have not connected with them for comment, also reached out to jpmorgan. they declined to comment beyond dimon's previous statements which as recently as september have been to say he would not be interested in that job and that was a time we didn't know who the president-elect would be. dimon, not clear where conversations stand right now. there might be a list of people considering. reportedly the campaign finance chairman for mr. trump was the front-runner although a lot of details yet to be determined. i think this would probably be a
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sigh of relief for wall street to know that dimon was on a potential list because it's a more mainstream candidate than someone who's embraced less traditional ideas. we'll be eager to hear more about this. i'll bring you any developments. today we'll be hearing from the chairman and ceo of goldman sachs and the hedge fund manager at deal book. >> interesting news coming out of an administration where wall street felt demonized, where they inked close to $100 billion in settlements with various government agencies. of course a lot of that was tied to activity during and after and leading up to the financial crisis. but certainly you mentioned this would be welcome news by wall street. it would be a shift change in the conversation in the way that wall street is treated after a period of extremely heavy regulation and where, you know, wall street fat cats were the center of a lot of blame and
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post-crisis rhetoric. >> of course you're quoting president barack obama there, kayla. i think the sands are shifting quite dramatically in the last couple days alone. you saw hillary clinton really became a mainstream wall street candidate. i was covering campaign finance for the last few mos and it was really on her roster of who's who of people from major law firms, major securities firms, private equity, hedge funds and so on, whereas trump was considered the anti-establishment figure, he criticized clinton for her ties to wall street, her paid speeches to goldman sachs and others and so on. however, it seems from the market reaction and some of these early signals including this idea that perhaps trump's advisers would consider jamie dimon as a treasury secretary candidate, even if he has said historically he's not interested, that suggests that actually it may be a more traditional sort of pro-business mind-set that's governing trump and his circle of aides and that the appointees might be more pro growth, more friendly to wall
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street. we've heard about a possible repeal of obamacare centerly, but i was thinking dodd/frank. things are transforming quite dramatically even in the early hours. >> what should we make of the fact that the early candidates for treasury secretary that we're hearing have goldman sachs and jpmorgan on their resumes and both donald trump and the likes of bernie sanders made hay over the fact they weren't going to go to the well of these establishment names, the big banks and put them in power? do you expect them to hear perhaps different names as well or is this a case of reality being a bit different from campaign rhetoric? >> well, i think it could be a bit of each, really. first of all, i don't know how long the list of potential candidates is. it may be that there are 20 of them and dimon is simply one. we've certainly heard about one or two others. i think as i was just saying there may be a little bit more of a reverse to the mean here in terms of a republican presidency that's a little more favorable to mainstream business figures.
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that could be part of the thinking. but of course donald trump is a president-elect of total uncertainty, right? we just really don't know where he's going to go from a policy standpoint, where he's going to go from an appointee standpoint. this is all really early days. jamie dimon is someone who has often been brought up for this role whether the candidate hails from the democratic or the republican side of the aisle, probably because he's so experienced and we also hald of course frank paulsen in this seat, former goldman sachs chairman and ceo and everybody has their contributes but i think was regarded to have done a successful job 1/2 gaiting us through that period. >> brings to mind the memo dimon wrote to employees earlier this week diminishing "leaders from across the public, private, and nonprofit sectors need to collaborate to find meaningful solutions that create greater economic growth and opportunity for all." we'll check in with steve liesman and get some reaction on this. the knee-jerk response is this is not exactly drain the swamp.
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>> my knee-jerk reaction is does this mean that the long, cold winter in which the bankers have been out in the cold for is now over? and kelly was talking about this earlier and you guys. politics surrounding this has kind of exiled bankers from government for a very long time. and also the politics of jamie dimon are very interesting to me. i guess widely regarded to be certainly center and maybe even democratic here, i think that's pretty clear. the idea that he may be one. but he has some very strong feelings about dodd/frank. he has lived with the new regulations, but he feels like those new regulations have been holding back economic growth and that he has money at his bank that he would like to lend but can't because of it. so the idea that bankers could possibly be brought back into the conversation i think their exile has personally, my opinion, has hurt the ability to change the laws and make them more favorable for the economy
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overall. so this could be a very interesting development. i'd be interested to see what's happening now with the xlf itself. because one of the things that while the banking composites there that have been doing well is the idea that dodd/frank could be idea dodd frank could relaxed or otherwise amended or even scrapped, i suppose is a word that's been used and the idea of bringing jamie dimon back in will tell you that there's some reform and i think the politics of this given who supported trump and why they supported trump are very interesting and may be counter to the rhetoric from the campaign. >> well, steve, it's interesting because over the last few quarters jamie dimon's tone on regulation has actually softened. he was extremely critical in years past, but recently has acknowledged the banking system is safer especially in the wake of breaxit, that u.s. banks are more competitive than their international counterparts because of how safe they have become since the crisis. certainly we could keep debating the ef ka
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theficacy but, kate, we've been talking about the washington impact. jpmorgan is a bank that has been working on a succession plan, has had well-groomed executives in recent years. is there any word on who would run jpmorgan if he were to take this job? >> kayla, that's such a good question. i know it's one you and i have speculated about off camera for years, both of us knowing the company well and that not being clear. certainly they have senior executives i know jamie dimon thinks highly of, whether that's marianne lake, whether that's head of the asset management business mary erdos, the ceo or others. i think they've been building that bench. to me, when i first heard this idea of jamie having been approached in recent days, the timing felt like perhaps it could be appropriate for someone who was interested because he has had a long and successful run there and we do have, thank goodness, the financial crisis
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in our rear-view mirror but every indication i've seen so far is that he is not interested. one person familiar with the matter told me he had conveyed that but, you know, when i spoke it to the bank earlier today they said look at his past comments. we're going to stick with those. and he has said before he knew the outcome once again of the election that he wouldn't want to do it. >> kayla, can i weigh in on t s this, part of what's out there even if it's not jamie dimon, the idea that there are people being considered for jobs of high competency, i heard former s.e.c. guy being discussed for being put in charge of dodd/frank has been heartening for the market. one of the great questions about the trump campaign has been the lack of the expertise at the policy level, you but the idea they're reaching out and even considering this type of level i think is something that has kind of buoyed the market optimism. paul atkins has been involved, the former s.e.c. guy.
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that's been what's heartening to the market. >> steve, that's a great point. i think in a case like this is going to be reassuring to people. it's also interesting as an early indication of goodwill all around and in an effort to collaborate whether it's president obama hosting president-elect trump today or hillary clinton's concession speech yesterday, people are trying to rally behind our democracy here. eric schmidt here saying this was a remarkable victory and the candidate is to be commended for that and let's see how we can work together and making a pitch for his own concerns about immigration. >> let me bust in here because if you wanted to get a reaction from anyone on this news, it would be rick santelli. rick, what do you think? >> reporter: i think we're all losing a bit of sight of why trump is there. trump wasn't voted in because they just think he's a neat guy and he needs a little more power. he was voted there for a reason. he was voted there and sent with a message. now this isn't anything about jamie dimon in particular, but i
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think it really speaks to the market and this notion of a kumbaya moment, satisfy global investors. the people that put donald trump there put him there for a reason, that personal liberties and freedoms aren't for sale. okay. so whether global investors lose money in an amazon or a google or you through the subsidies of a tesla, as is bearing out, it seems markets get it more than the people discussing the post-election results. listen, in the end, whether it's brexit or whether it's people who voted for trump, whether it's the tea party, whatever movement it is, it's all that raw nerve. and the raw nerve doesn't want the blessing of an imf, of a world bank, it doesn't want the blessing of other global investors are going to lose money or not. it wants something done about this country as the first person. and i think the point that's being missed is if it's all kumbaya, no action, and maybe doesn't have to do it all,
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there's just a few issues that really need some work at the moment, taxes, obamacare. now with regard to things like tariffs, i think there's time and i think definitely many in the press took him a lot more literally is that great quote said, but the people that support trump and sent him there aren't going to sit back and watch him all of a sudden negotiate away all the issues that put him there. >> so, rick, what are you saying, rick? what are you saying? that jamie dimon is along the lines of what trump was talking about? >>. >> reporter: this isn't about jamie dimon. >> we're talking about that now, rick. sorry with about that. >> reporter: because the conversation here is about how to appease the markets, how to appease -- this isn't about appeasinging! we're done appeasing. >> how does jamie dimon play with those people who you say put trump in office? >> reporter: i'm not sure that the people that put trump in office are going to question what trump does. >> okay. >> reporter: i question as to why we think somebody or an enterity would be good or bad as
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long as they bring the mess ablg that institutions that should fail, fail. institutions that shouldn't be bailed aren't bailed. jamie dimon didn't tear up that check mr. paulson handed him. a lot of people still remember those things. you know, donald trump stood up -- maybe it wasn't pretty -- but he stood up because it takes a lot of breaking of eggs to make an omelet that's going to satisfy the appetite of the people who put him there. it isn't about if we can find kumbaya. it's about the best path. we're a consumption economy. tariffs, all the trade issue, it really isn't trying to penalize anybody. it's about getting the best deal. and if that is an uneven process and global investors get hurt, there is no better time to try to fix it than to be in the middle of one of the most consumer driven economies. an export economy couldn't do it. if it's broke, you've got to fix
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it. >> shorter santelli is, if trump thinks it's a good idea -- so his supporters trust him? >> reporter: right. but that trust is only going to take him so far. they're going to be watching he does, and i think we still are missing that. >> hey, can i ask kate a quick question? >> yes. >> kate, my sources this morning even were still talking about manutian for treasury. were you able to do anything on that? >> no. i'll make the caveat that i am not privy to how many names are on the list or the entire list but, no, my sense is this is something being con at the point plated vis-a-vis jamie dimon. it's not even been officially offered to him that i'm aware of although i think his stance has been and as far as i can tell would continue to be unlikely that he would want it to do it. i think he may still be in play. that's the wide and tis persuasion. i think tom berrick is another name that has come up.
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merely that dimon might be part of that. the team is mulling. >> jpm was up 3% on the morning. certainly there would be for the bank itself. >> we're at new highs. right across the board the bank sector is at new highs and with good reason. the reflation trade now. that has all the banks flying. one thing i think is ironic, a huge fine jpmorgan paid to settle the whole mortgage debacle around the financial crisis. interesting he's now being considered for that.
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morgan is at a new high. wells fargo and all the big regional banks like regions financial, sitting at 52-week highs and, by the way, a little more high priced stocks in the dow are in the banking area. back you to you. >> bob pisani, we'll pay attention to that and other discussions that will stem from this namely who would run not just the bank but the investment bank or whoever took dimon's job who would take that job. we're a long way from that. >> a company too big to manage, who could manage it? that's the question. something that we have not talked as much today the prospect of better loan growth in 2017. >> it's really the yield story. yes, the fed and what they do
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helps credit card payments and some of those other yields but mortgages are priced on the ten year. that goes up, they make more money. >> ten year, by the way, which hit 209, the highest since january 2015. disney tonight, let's get back to headquarters and "the half." and welcome to "the halftime report." i'm scott wapner. why stocks are staging a big reversal this hour. the big names in tech that are falling and what it means for your money this hour. with us today joe it terranova, the brothers najarian. stocks opened at all-time highs boost ed by the financials and health care. tech, though, is rolling over. you can see it towards the bottom of your list down as a sector by 2%. it is taking some very big names, pete, with it. the chips are down. microsoft is down. and money is just going into other


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