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tv   Squawk Alley  CNBC  December 22, 2016 11:00am-12:01pm EST

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we'll see if that interim period the last week of the year is going to have any strength. >> been a good run for stocks. been a better run for bitcoin. just wanted to mention this because the price is above 800 again. one of the best investments of the year up 87%. so for all you haters out there, china, india also. we'll looift on that ♪ for "squawk on the street" and send it to you, kayla, for "squawk alley." >> thanks, guys. 8:00 a.m. at uber headquarters in san francisco, 11:00 a.m. here on wall street and "squawk alley" is live.
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good thursday morning. thanks for joining us on "squawk alley." jon fortt, david faber with me at post 9. carl quintanilla has the day off. we are still within the reach of dow 20,000, although it seems we are gate geting a little further away than we were at the beginning of the week. blue chip index hovering. a big story in the run-up so where we are now has been financials. the sector on a tear since the election and could help us push past dow 20,000 if and when the momentum comes back to the market. let's bring in jim mcdonald, chief investment strategist at northern trust asset management and marty, bank and equity strategie strategies. marty, if you had thought this would be the headline on january 1st of this year, i mean, so many people didn't see this coming for the banks because they had been repressed for so long. but the question now is what is fair value for this group? >> well, you need to put in context how you started the year, which was, you know, the
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downturn of energy, look at a possible recession, and that really pushed us to the low end of our trading range. when you look at the dramatic shift between february and year end, a lot of it is a reversal from real pessimism to, you know, some optimism and increasing interest rates. so we believe that, you know, you probably got one or two rate hikes priced in. if you can get another two or three next year along with the corporate tax break, we still think that this group has a double-digit upside from here. >> interestingly, though, jim, one of the reasons why we've been talking about the dow moving so much is because the dow is a little bit more sensitive to the financials because of the way that it is weighted. but it does seem that overall in the market there hasn't really been this fresh infusion of money. it's just been people trading around in different sectors or rotating sideways. where do you think new money will come from? >> well, i think it's important to put the rally into context. the average rally after an election over the last 100 years or so has been under 1%.
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so we have had a huge run so far. i think there has been an uptick in investor cement that will bring new money off the sidelines. and it's my sense that many investors are overweight cash and they also could use bond holdings as a source of new funds. so i don't think we're going to have a lack of new buyers. the final thing i'd add is if we get a reduction of the tax on overseas profits that could lead to a jump in buybacks next year. >> a jump in buybacks would give how much of a floor to stocks, jim? how much money do you think companies are willing to spend and that would assume that there wouldn't be some sort of penalty tied to tax reform that, you know, companies need to spend more on capital expenditures instead of doing things like buybacks and dividends. ? >> if you look back at 2004, the last time we had a big cut in the repatriation tax, there was a surge of buybacks. i would expect hundreds of billions of dollars to come back
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in to buybacks through a reduced patriation tax so i think it will be meaning ffl that gets done in 2017. >> marty, i mean, when you think about the -- and the financials group, people focus in on the vijay n regionals but how much would broad-based tax reform actually affect that group? those aren't necessarily the companies that are transacting for multinational clients. they're not the ones who are keeping money offshore, so how much room do they have to run from tax reform? >> really what you're looking at with the banks is the marginal tax rate. so if we reduce it by five to ten percentage points, that's a direct increase in their earnings and what you look at is really the more profitable superregional banks if you think about it, the more profitable you are, the better you get a benefit when you get a tax break spom you get banks like u.s. bank corps or eve whan we're looking at with huntington and their new revised judgment ward
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profitability with the first acquisition, getting some nice benefits here incremental tax breaks. >> is that where you want to focus then on the regionals and more of the domestic players than the bigger banks? >> we would, because we do believe that deregulation is going to come more in raising the thresholds, so we start looking at the $10 billion threshold or the $50 billion threshold moving to $100 billion or $250 billion, that gives the smaller regional banks a lot of leniency with capital deploym t deployment, a lot less pressure on their expenses so we do think those superregional banks would be a good place to look at with the rate sensitivities they get with higher interest rates as well. >> jim, i'm wondering what you see in terms of what congress is going to do next year that could have an impact on banks and their outlook. just in terms of what you expect. i mean, this republican-controlled congress agenda to be. >> well, there's a couple impacts of the banks.
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the most important has been the jump in interest rates so that's out of the control of congress. the second will be there will be regulatory relief, whether it is through actual legislation from congress or whether it's just through more lax oversights and easier oversights of the regulation that's in place. so i would expect some targeted rollback of some of regulation, for example, within dodd/frank, but interest rates are going to help, and then i think just an easier oversight environment clearly will be a benefit to the banks. >> jim, finally, what percentage of your portfolio would you hold in cash? because we've heard so many people say you need to be fully invested here, don't keep any cash because it's not paying you anything, but are you keeping money around for a rainy day? >> no. our tactical recommended level of cash is zero. now, in the real world, clients always have to have some cash on hand to meet upcoming spending needs, but weed rather be even in the investment grade bond
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market today than in cash because of the low level of rates. >> all right. we will leave it there. jim mcdonald, marty moseby, our thanks to both of you. >> happy holidays. >> same to you. when we come back, new evidence suggests russia was, indeed, trying to undermine the u.s. presidential election. and then why the u.s. is blacklisting one of ali bab ba's most popular e% websites. and later, the experiment is over. uber pumping the brakes on its san francisco self-driving operation. find out why, up next. what's the value of capital? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter.
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on xfinity x1. there's new evidence that suggests russia was indeed trying to have an impact on the u.s. presidential election according to cyber security firm crowd strike, specific malware used by russia against ukraine back in 2014 was also found in dnc servers in recent weeks. join us now inside that compound, jason calacanis and john broad. yet another link linking russia to she's hacking allegations. and, john, i mean, get a little technical for us here. there's a specific kind of signature on the kind of malware used in this attack. you know, a group associated with russia, used it to target weapons systems that ukraine had on the ground during that conflict. what does this add to the conversation around this?
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>> it's -- it continues to be something out of a movie, but basically, what crowd strike has found is that the dnc hack was a variant of a hack that was used against ukrainian military officials which leads us all, you know, every u.s. intelligence agency, and crowd strike, too, believe that russia was, indeed, involved in the hack. >> jason, as we look at this issue, which has become political at the highest level because of the president-elect donald trump has cast doubt on the intelligence reports linking russia to the dnc hack, i mean, now that we have this digital fingerprint in essence, how do you think it changes the conference both overall and within the technology community? >> first off, it's time for our monthly review. number one, privacy is an allusion. two, turn on two factor awe thentification. and write every e-mail as if it's a blog post because you
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will be hacked at some point. yeah, it's more thaefld this is coming from russia. obviously, you know, we've been continue ka talking about what's the ultimate cost of hacking. trade secrets, the ashley madison hack, people's personal privacy. now it seems hike the actual cost could be putin placing the president of the united states in office. now, i don't know this is the number one reason, certainly not the number one reason hillary lost but it will be in the top five when we look back on it. and it should be very disturbing to all americans, very disturbing that the president doesn't trust the fbi or the cia. and the evidence is going to just keep coming out. if anybody's doing this in russ russia, they're obviously doing it for putin. there's nobody in russia who is behaving in any way that is not in the interest of putin or else you will be put in jail, tortured and murdered. so this is a farce that we have trump saying, hey, ignore this
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and the fbi and cia don't know what they're talking about. is it possible a 400-pound hacker did this digital signature, got an i.p. address from russia? of course it's possible but not probable. >> you've had congressmen on both sides of the zeiaisle up i arms over this saying this is a bipartisan issue. but at the same time, you had the president in his press briefing last week saying we could retaliate if russia doesn't cut it out. what does retaliation look like? is that something we want to see? >> we have to send a message this is completely unacceptable. it's a threat to our government -- [ yelling ] our system of government. so, yes, we need to retaliate as they have done with us. what's going on here?
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what's going on here? >> you probably don't want to retaliate all that much. one of the things about politics and these delicate relations is we like to calm these things down and keep the world functioning. retaliation could be very effective. we just have to take where all the money goes in russia and pub accomplish it and it would create massive chaos there. if you back somebody like putin into a corner, that may not be pretty. we want to resolve these things quietly. >> we'll see if that can happen. meanwhile, the u.s. putting a unit of alibaba, moving to china, on its notorious markets blacklist, the trade representatives office says a consumer to consumer shopping website isn't doing enough to police the sale of counterfeit goods and is in violation of intellectual property rights. this is on again, off again, with alibaba and tow bow. the response from alibaba is
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that maybe this has more to do with the political environment than the facts of this case. how does that and the president-elect rhetoric around china influence the way business is being done and some of these counterfeit issues are seen? >> you nailed it. they were on the list in 2011, off the list in 2012, now back on the list. the president of alibaba has said several things. we've eliminated twice as many groups in 2016 as we have in 2015, all of which can't be wrong on our platform. the third is i wonder if these are facts or part of the political climate which is very concerning. but certainly understandable given what the incoming administration as said. >> jason, alibaba doesn't do that much business here. i'm not sure it has that much large an impact at all on their business given they are still all about china, but it does send i guess some sort of a
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message, doesn't it? >> yeah. i mean, we are having our intellectual property ripped off in china, constantly streaming, television shows and obviously the logos and the trademarks. if you go on ebay, people go on ebay to buy counterfeit apple products all the time because dongles cost $50 or $40 at apple and you can get them for $5 plus shipping on ebay. it's hard to orun one of these marketplaces and you're going to play whac-a-mole. but for alibaba and owning the stock, this is kind of a big issue they can't get this under control. i would not recommend that people who are owning stocks own a stock in a market where it's completely to bake, what the company is doing and then on top of that, you have currency manipulation and now we have a third factor nobody anticipated which is trump is starting a trade war with china. you do not need to own stocks in china. there are enough amazing american companies you can buy technology stocks with, google,
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facebook, amazon. i would not touch this stock. i would not go here them until we figure out what he's xwoik to do. >> amazon has its own problems with counterfeits. they took counterfeit sellers to court this year for the first time. >> this is a known problem with a large peer to peer marketplace. i don't think it has huge impacts on alibaba. yes, there are brand implications trying to enter the u.s. and expand it to southeast asia. . a announcement the stock dropped less than a percent, down a little more than this morning. i don't think so this is a big deal. what's interesting here is the correlation between this and fake news. you have large peer to peer marketplaces with the goods. it's becoming much more real and this is an issue. ? fake is becoming much more real. little scary. uber, meanwhile, halting its
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self-driving test in san francisco after about a week and a half, this after the state dmv revoked registration for the 16 cars involved in the program. uber says it will look for other means to deploy the technology in the state. in the past, uber has thumbed its nose at the authorities, initially did that in this case, saying how can you tell us to take these cars off the road when self-driving teslas are okay? it looks like the state of california came back strong with this one and uber is backing down. what do you think they do next? >> so, just a quick disclaimer, haven't talked to anybody at the company about the issue and i am a share holdener the company, obviously. just in terms of self-drive, we have a definition going on here. i drove the studio in my model x, which is self-drives, it has auto pilot, but the truth is the way all of these are constructed the definition is really that you have two functions that you're handing over the car, one
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is adaptive cruise control, which many people listening have, and the other is lane assist, keeping you in the lane. the instructions are very clear, whether it's google's cars, tesla's cars or uber's cars, your hand has to be on the wheel and you're driving the car yourself. you're just giving a little control over in terms of the distance between you and the car in front of you and if you stop paying attention, it will keep you in the lane. these are not self-driving cars right now. they're assisted cars and i think it's just a definition a problem. uber has a history of helping move regulators toward in terms of these deafs. >> they market these as self-driving cars. i got the e-mail, i live in the bay area, these cars were running red lights, part of the reason it drew regulators' attention. >> this is odd to me. uber is saying we're not
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self-driving because we have a hume en in the front seat monitoring the car at all times. i don't find the permit overly onerous. 20 companies in california have the permit including google, tesla, and ford. you have to identify when you've gotten into an accident. that's probably what's spooking uber. uber has done this to get regulators to move. in this one with a public safety issue, i don't seat it. >> they have a large scale trial in pittsburgh, supposed to be the emerald city for test-driving these things because they have four seasons, lots of hills, the city was not laid out in a grid. they have a lot of windy corners. why not just keep your testing to one city and see how it goes and then broad ount from there? why do they need to be in
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san francisco before figuring it out? >> they don't have the same disclosure requirements but they've said we want california, we're 100% committed to california. the problem is the dmv statewide. also the san francisco mayor, ed lee, who's traditionally come out in favor of technology companies and disruption has appeared apparently come out in favor of the dmv on this one. >> i'm sure they're not giving up. they're a public company. jason, jon, thanks for join us. >> thank you. >> when we come back, we'll break out the 2017 stock playbook looking at new ways for you to make money in the new year. plus, don't forget dow 20,000. it is still elusive. why the sudden stall? art cashin will explain.
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>> as 2016 draws to a close, cnbc is breaking out the 2017 clay book.
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we're looking at ways you can make money in the coming here. this hour we're focusing of course on tech and our own josh lipton has more on that. >> the nasdaq surged to new highs this year and 2017 promises new fireworks with dynamic gadgets, service, and the ongoing cloud wars. first, google's head is in the cloud. the search giant controls controls just 5% of the cloud infrastructure market. in 2017, google will double that, putting pressure on industry leaders like amazon and microsoft. second, trump doesn't scare cook. on the campaign trail, trump went after apple saying he wants iphone production home in the u.s. that's not going to make. the economics of bringing large-scale, low-skill assembly work back here don't make sense. tim cook will count they're he
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already directly employs some 80,000 people. third, the ipo tech pipeline heats up for the enterprise. >> nap makes its public debut next year. but tights smaller enterprise-focused start-ups that will dominate the ipo market in 2017. okta, mulesoft, and opt dynamics will go public. big established companies want to see the financials of their vendors before opening up their wallets. >> now, i know that my friend jon fortt disagrees strongly with my call on google's cloud efforts. jon, sticking with that call, i think 2017 is diane green's year. i think she's going to sign more marquee clients. our colleague ari levy reporting google is in our lead position to get paypal's business, more deals with intel, diane, don't let me down. back to you. >> a bold prediction, josh
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lipton. i would expect no less. thank you. still to come, art cashin on the hunt for dow 20,000. and then howe donald trump backing up his tough talk on china, how he's doing that with a new hire. details and possible fallout are coming up. we'll be right back. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.
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good morning, i'm sue herera. here is your cnbc news update at
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this hour. germany's interior ministry confirming the fribts of anis amri's have been found in the vehicle's cab. the discovery strengthens in the case linking him to monday's attack. the taliban claiming it was behind a suicide attack in the house of an afghan member of parliament. the attack killed at least five people and wounded a number of others. the lawmaker was one of those wounded. a declassified house intelligence committee reports says edward snowden continues to have contact with russian intelligence services. the new material also says the pentagon found 13 high-risk security issues caused by snowden's disclosures to media outlets. and uber has removed its self-driving cars from san francisco streets. the state's department of motorcycles revoked the recommend administration of 16 uber self-driving vehicles because they didn't have a proper testing permit. that's the news update this hour. let's get back downtown, kayla, back to you. >> all right. thanks so much, sue.
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markets meanwhile just closing moments ago in the uk and across europe. let's get to seema mody, who has that. >> european stocks are once again pulling back from the closing highs they reached two days ago but a very different story for the euro. the currency is hitting a one-week high against the u.s. dollar. there is a debate brewing inside the european central bank as to whether the central bank should ease further in 2017 or hold off given the number of elections taking place next year. according to a reuters report, ecb may hold off on more stimulus until after it will german election in september of next year because many individuals in germany see the ec b's policies as harmful to sabre. expect that to be a topic discussed as we see other countries go to the polls as well, france, italy, the netherlands, and speaking of italy, the troubled italian
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lender under pressure as it moves closer to potentially receiving a bailout from the government. today we saw shares move lower by almost 7%. on the m&a front, the swiss drugmaker hitting a record high today after saying it has entered exclusive deal talks with johnson & johnson. shares up more than 4%. in fact, the best performing stock in the euro stoxx 600 index today. as we end out the year, i want to take a look at the year to date performance of some of the major european indices. you'll see that germany -- stocks in germany and france are now in positive territory. in fact, up by around 7% for germany, france up 4%, but the big winner is the ftse 100. despite the uk referendum, it's the weakness in the pound that continues to drive stocks higher there, up 13% in the uk. david? >> thank you very much, seema. seema mody. markets are hitting some raps in the states, of course, as the march to 20,000 on the dow continues. let's bring in art cashin, ubs
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director of floor operations. given up a little more on the s&p as we've gone along this morning. >> it's not actually disturbing but it's annoying that this watched paot we're looking at here, the dow slipped below 1,900, that may begin to dishearten people a little bit. the interesting thing we've been saying is that while they haven't gone through 20,000, they haven't strayed too far from it. so that's been reasonably good. i'm beginning to see some signs of selling in asia, particularly in the emerging markets and that may be the other side of the coin on the trump rally that they're beginning to wonder if he's going to look for border adjustments and other things that may make trade a little bit more difficult, and they're going to have a tough time with
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their companies over there making things whole. now, it might just be short and temporary, the absentees for the holidays but i would start to keep an eye on that, even keeping an eye on europe, have which has begun to soften over the last couple days here. >> yeah. well, i mean, it doesn't appear to be a secret that china's going to be a key issue and there is a seminal change going on potentially in the way we deal with that country. >> yeah. >> we think this is going to be an investment feed so to speak that we're dealing with a lot in -- >> yeah, and as i say it's going beyond china. you're seeing it in the emerging markets, vietnam, the philippines, a variety of other places, indonesia starting to see a little bit of pressure here. >> anywhere where there's low-cost manufacturing. >> exactly. so they're going -- is he going to put a surcharge in are we going to get to see things. secondarily, i think it will be interesting over the christmas weekend to see if there's much
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pushback about the discussion of tax reform and can we do it low-cost, no cost, how is it going to be done. the tea party people are beginning to stand up and say wait a minute, awe yao haven't really continue sulsulted us, a people begin to realize this is not going to be nearly instantaneous, then you may see the trump rally slow down a bit. >> kellyanne conway on "squawk box" this morning seemed to be drawing comparisons to george bush, the tax plan that got passed by june of 2001, the george w. bush tax package, saying that's a reasonable deadline to think, june, july. >> well, june, july, i think is somewhat ambitious. but then again, she's closer to the game than i am, but i've been watching it a little bit longer than she has. so i would tell you i think that's a little bit ambitious. and when they begin to see any of this slowing down, it's going to be there. as i've said time and time
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again, some of my sources in washington say they may divert slightly by looking for the ninth supreme court justice and that will delay things a little bit before we get to everything else. >> art, you mentioned china being the other side of the coin to the trump rally. i wonder how important is it for congress and the president next year to figure out what the alternative to tpp is, because a lot of people are concerned china is going to do a bunch of trade deals in asia and essentially lock u.s. and u.s. companies out. >> yeah, no, i think there is a problem there. a lot of people have said that by avoiding the tpp we're giving china a better chance. i'm going to be intrigued to see how the president-elect's policy begins to work out. there are people who feel that one of the reasons that he looks like he's kind of cottoned up to putin is to put china further on edge, to have it look as though
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there could be some kind of working roim betwework working relationship between russia and the u.s. and that would make things a little tougher for china. the other thing to watch for is mr. abe in japan has wanted to improve military there. if trump gives him endorsement for, that that will put the squeeze further on china. so we won't have it just on the trade area. the whole relationship will be something to be watched carefully. >> how does the market react to a trade war? >> not well. not well at all. and that's why they've got to be careful. you know, an enormous amount of the earnings for the dow and many of the other indices come from offshore. and we still haven't gotten any detail on brexit. you know, people talk as if, well, brexit doesn't matter anymore, it washed away. the reason that we didn't continue down after brexit is
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that it got postponed. that nothing's being done. so we could have a rather volatile and tumultuous first quarter if all these things come back up. although if you look at the vix, you would swear nothing's going to happen. >> a lot of ways to go up to to where the vix is now, 11-something. >> yeah. >> all right. art, thank you. >> my pleasure. >> art cashin. >> when we come back, ian bremmer on why donald trump is tapping known china hawk peter navarro to head up his national trade council. first, rick santelli, what are you watching today? >> you know, i'm going to have to get involved in that conversation. you know, we've been lost on the path of growth for a number of years. and we need to make changes. and the only way you make changes are to change policy. that's the timetable and how calculated is the hope in this endeavor? that's what we'll talk about after the break.
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♪ we're drowning in information.
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where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. coming up, carl icann will join us. a big cap tech stock hitting an all-time high today but one analyst says a double-digit rally is still ahead. we've made it our "call of the day." kayla, see you in a little less than 20 minutes. >> now out to the cme group, rick santelli and "the santelli exchange." rick? >> thanks, kayla.
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you know, a lot of discussion and rightly so by everybody with regard to what the markets are signaling. the markets in and of themselves aren't of the economy, but many of the investors behind the moves in the markets have direct correlations into how the economy grows, stays the same, or shrinks. to that end, we've gone through a period where we've all been optimistic about growth or had hope about growth, but the policies in place really weren't growth policies. and i think history has born that out and over time will bear it out in an even larger banner. what we have now is a market that's demonstrating as our passion just had a conversation about that things will get better, but is it really the same type of hope? i think it's much more calculated hope. let's pursue hit the way. we used to use the analogy when you go into a mall, there's a red dot, you are here. when you get lost, you have gps in your car, it goes through a recalculate. when you get lost, you end up
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going slower, taking wrong turns and ultimately there's a certain amount of time you lose. so the real issue here is how much time could we make up? if we've been going the wrong way for eight years will it take eight years to get back and the market is way ahead of things? there is logic to that. there's also lodge toik the notion that if you try to get back to where you go, if you have a clear, concise goal, you know the direction and the intersection, you maybe get there a little faster. you don't get sidetracked and you don't get weighed down with the notion that you're in the middle of nowhere. think about some of these issues. you know, with regard to the epa, right now we have somebody that's being put in charge, scott pruett, oklahoma attorney general. he sued the epa and in many cases overturned at least in regard to his issues pruett some of the policiepolicies. they weren't great policies. why? because when it comes to things with regard to the epa, it should .so proactive.
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congress should have a role in issues. you haven't have a fourth branch of government that does things that congress can't get done because congress is put there by the will of the people. rick perry for energy. president obama and many of the politicians in office the last few years really like some of the positives we've seen on energy. the fact that we are pretty much making enough energy to satisfy our own needs. but those policies came up as a rogue growth. they weren't really fertilized by any policy of the current administration. i guess what i'm getting at is there's going to be a lot of pushback on most of the nominees, whether wilbur ross, andy puzder, betsy debose. why? because reversing bad growth means reversing policy and that's the type of change that becomes idealist nick nature. all the people that are running entities today are running them in a notion of being more aggressive for a goal. well, most of the people that president-elect trump is putting in charge of these entities,
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these fourth branch of governments, these cabinet position, are more interested in finding palatable ways, for example, on epa not to pollute but to do it in a fashion that doesn't put a heavy boot on the economy. so these things are going to be difficult. but i think that it's a much more calculated hope and the ma more correct than wrong than what we've come from, and i fully suspect that we could do that in a lot less than it took us to get on the wrong course. jon fortt, back to you. ? thank you, rick santelli. coming up, donald trump, the president-elect, backing up his tough talk on china with a new hire. eurasian group president ian bremmer weighs in next. and an inside look at an amazon warehouse as the company gears up to handle your last-minute holiday shoppers when "squawk alley" returns. take one.
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anywhere, any... let's lose the 'anywhere, anytime' too. you can't download on-the-go, there's no dvr, yada yada yada. stream some stuff! somewhere! sometimes! you totally nailed that buddy. simple. don't let directv now limit your entertainment. only xfinity gives you more to stream to any screen. another well-known face to cnbc viewers is getting a job in the trump administration. the president-elect tapping economist peter navarro to run a new national trade council. the group will be based in the white house. navarro is the author of "death by china" and he has taken a very hawkish approach towards relations with that country. joining us now on the phone for a reaction to the pick, eurasia group president ian bremmer. navarro the main adviser on china. what do you think? >> well, look, i actually have known peter navarro far while. i think he's a smart, incredible guy.
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he's a real academic that's done a lot of work on china. his orientation towards china absolutely is more towards the -- they are an antagonist that needs to be hit back and contained and constrained. so it is more in line with a lot of the statements that trump has been making on china recently in terms of currency manipulation, unfair trade practices. i think it's consistent, but he's not a crazy -- and he's certainly not someone that has -- this is not like ben carson for hud. it's absolutely credible that 1/2 row would have a position like this. >> right. if the idea of containing and constraining china, and what certainly seemed to be the moves by the trump administration prior to actually taking office to do that, what are your expectations here being familiar as you seem to be to a certain extent with mr. navarro and overall given what we've seen so far from the president-elect? >> well, you know, one of the conversations i've had with peter was specifically around,
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you know, how you can effectively contain and constrain china if you don't have a strong relationship with american allies in the region. you kind of have to pick and choose which way you want to go. and, you know, peter was also opposed to the trans-pacific partnership, as is trump. and the problem is that that was the one thing is that was the one thing that was a mechanism to get all of america's allies onboard with u.s.-led trade as opposed to china-led trade f. you're going to tell america's allies that you're not going to give them this commitment, you're not going to follow through on what's most important for avoiding a china-led system, and then you're beating up on china, you're going to end up with a lot of kun interest tries doing what the philippines did under obama, say the future is actually china and not the united states, i can't trust these guys. even if trump is seen to be very credible in offering new alternatives for how the americans will work with america's asian allies, a lot of them are going to think, well, he will be running for election again effectively in two years
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and who knows what we get next. at least with china it's the devil we know -- whatever is happening will continue to happen. so i do think that the environment for the entire trump administration on china is going to be much more challenging to negotiate, and i don't think they've gotten their heads around that yet. >> ian, just this week, the transition team said that wilbur ross, who has been tapped as the designee for commerce secretary would be chiefly in charge of running the trade policy under the new administration. so what role do you think this national trade council will fill, and how should we be thinking about navarro's appointment through that lens? >> i don't think they know yet. wilbur ross is an extremely capable fellow, one of the best appointments they've made so far. but let's also keep in mind he personally has been in favor of free trade and the tpp, what they're going to look like in terms of alignment on actual
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policy, things trump himself hasn't been concerned about at all until very recently is an open question but navarro from the beginning when no one believed that trump had a chance, navarro was trump's one guy advising him on international trade. and he was writing the white papers, the position papers. again, he's certainly credible. i would have been stunned if he didn't get a position but i also can tell you that right up until the republican national convention navarro had not met in person with trump once, so, you know, you have a lot of advisers that may be capable but that doesn't mean that trump is giving them the time of day personally. how trump actually decides to work with them is going to have a lot to do with trump's own style of governance. is he going to do a lot of decidinging, be involved in daily policy meetings or is he going to say, pence, that's what you're in charge of. and then it's a very different administration. let's face it, none of us actually will know that until
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january 20th rolls along. including trump himself. >> if you're one of the people worried about a trade war with china and a number of investors a are, how does this navarro position tip the scales and towards that happening in 2017-2018? >> i'm less worried about a trade war. i'm more worried about them back ing into inadvertent escalation like you saw on taiwan. you have to understand the kind he's do have some red lines. they can hit back on trade, right, if the united states hits them a little, they hit us a little. it's much easier for trump to understand, wait a second, i just got myself in trouble, maybe i don't want to push much harder. it's going to be -- there are going to be a lot of people around. >> so, ian, it is a dynamic situation. do you have any expectations the chinese will respond sooner rather than later? >> sure. the chinese have already said
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that they're going to take sanctions against an unnamed automotive producer as a consequence of trump's statements around taiwan. there are going to be escalatory steps. in the early days the relationship will not be good when trump comes in. it's easy to back down on that. i'm more worried over taiwan and north korea where the stakes are a lot higher and where trump just doesn't have capable people yet advising him. >> ian, i'm reading a tweet that just came in a few minutes ago from the president-elect in your area of ex perfect tease. the united states must expand its nuclear capability until such time as the world comes to its senses regarding nukes. that could mean anything. what is your reaction to a tweet like that? >> if putin tweeted, he would have sent the same tweet out.
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he's been say iing the same thi russia needs to modernize its weapons. it's a nice way to show that you're strong, certainly trump has been consistent. nuclear proliferation is something they are focused on. one of the reasons they say they will rip up the iran deal and will be pushing hard on north korea. those are dangerous things for them to do. u.s. proliferation policy, anti-proliferation policy, has failed completely with north korea, frankly, since the bush administration straight through obama. they have 20 nukes now and they're not inclined to get rid of all of them. they have to get rid of all of them. if push decides to push on that unilaterally they have push back really hard. the iran deal is at best half a measure and a lot of people don't like it.
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it's a multilateral deal. you could read this as trump saying, hey, i kind of know that i can't do much on north korea and iran. it's the world not coming to its senses so i'm going to build up our world's best military including our nuclear weapons and that will be my response to it. if that were the response, that would be fairly benign or not overtly stupid. if this becomes part of a we're now going to use this and beat up on the iranians and the north koreans and do so unilaterally we're going to get ourselves in a lot of trouble. >> ian, you said if putin tweeted he would have sent the same thing out. putin does not tweet. president xi does not tweet. they play their cards much more closely to the vet. are there more net benefits to having this overt show of strength, or do you think at some point trump should do these things behind closed doors? >> look, it would be better for all of us if trump had slightly
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more self-confidence and was capable of actually just accepting successes and failures without having to publicize everything as being the greatest, that's one of the things that makes him potentially much more volatile as a president. trump -- putin doesn't feel the need to tweet. trump does. but putin is a dictator and doesn't have any -- you can't exactly criticize putin internally, publicly. if you do, you have problems. trump still has to deal with an actual free media. you and i can say whatever we want about him and at least so far not many consequences to us for that. now, you know, i think it would be better for everybody if trump were it to relinquish the galaxy when he actually becomes president. it has the potential to cause a lot of problems not just for the markets but for international stability. >> right. well, so many of these things were left open to interpretation. we always appreciate your
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interpretation. ian, you thank you. ian bremmer. three days until chryistmas and amazon is working to convince consumers when it comes to last-minute shopping forget the big box stores. amazon prime is the way to go. live in midtown at an amazon warehouse with some details. courtney? >> reporter: hi there, jon. if you haven't checked off your list yet historically you have to go to a mall, go to a store. if you were a prime member and live in one of the 30 cities where amazon prime now is available, you could get there 25,000 items that are here with me now delivered to you in two hours or potentially less. so yesterday we actual ly tried it out. we placed an order with amazon prime now to fulfill our charity wish list. now the selection is more limited, of course, than the full site. we were able to get almost everything we needed from cook ware to tools. i placed the order just before 2:00. we had a camera at the prime now facility here to catch the order being fulfilled. it happened in just eight minutes. the earliest free delivery
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window was from 4:00 to 6:00, so while i wrapped other gifts the delivery person left the facility around 2:45 and jumped on the subway with our items and a big orange backpack. he got to me around 3:10 p.m. so 50 minutes earlier than the window and 90 minutes after i had ordered. he scanned the items and then off he went. now many retailers are using modern decoriers for that delivery and shipping from their stores. nordstrom and rent a runway use uber rush, target insta cart. macy's deliv and walmart is still trying out grocery delivery in three cities. we haven't heard much on the progress. in fairness we tried to use traditional retailers yesterday but none of them could actually deliver it to me the same day, and, unfortunately, i wasn't able to leave the apartment. back over to you. >> all right, courtney reagan doing yeoman's work as an amazon warehouse here in manhattan. thank you. with just about 30 seconds left until noon, the dow down 50
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points. the s&p down eight, losing quite a bit of steam here in the markets despite being so close to 20,000 earlier this the week. >> you were dealing with that while i was away. we may be dealing with it next week while so many are away. a quiet session so far and perhaps some of this worry about trade leaking into the overall market. >> david, thank you for joining us. that does it for us on "squawk alley." over to scott wapner and "the halftime report." and welcome to "the halftime report." i'm scott wapner. the dow with its march to 20,000 this hour. we begin today with a special newsmaker interview. the billionaire investor just named as a special adviser to president-elect trump. carl, welcome back. it's nice to talk to you today. i think people had been speculating what, if any, role you would have within a trump administration. now we know it is going to be the special adviseon

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