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tv   Squawk Box  CNBC  January 22, 2015 6:00am-9:01am EST

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currency war. our guests include commerce secretary. morgan stanley ceo and veteran banker bob dimon. it's thursday january 22nd 2015 and squawk box begins right now. good evening everybody. welcome to squawk box. i'm becky quick. once again we are spending the day in the swiss alps and it's the perfect week for us to be in europe because the biggest market story is the ecb. policy makers are meeting. sources tell cnbc central bank will unveil a bond buying program. others put the number higher. rate decision is due around 7:45
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eastern time and mario draghi will hold a news conference at 8:30 eastern time. the euro we saw $1.5 yesterday. it bounced higher at 1162 and european stocks at least at this early hour they are relatively flat at this point the dow futures are up by 35 points. nasdaq up by 3. >> the ecb is the talk of the down here in davos. larry summers, and goldman sack's gary cowen all sitting on stage together. expectations of a bond buying program in europe already had an effect.
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she points to currency and where the euro is now countries around the world are already engaged in a currency war in an effort to boost growth. >> press andrew is supposed to give a press conference later today about the sex scandal he's involved in. this is what people are really talking about here. >> we were 100 billion a month qe. >> at one point, yeah. >> they're doing 50 billion euros. >> that was money at one time. >> what was that? probably 63 or something? >> yeah among the biggest questions in europe right now is the fate of greece lots of talk about a potential exit from the euro zone. now a snap election could put the country's bailout -- what's today's date? >> the 2 -- >> isn't it the 25th?
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>> 22nd. today's the 22nd. >> i thought it was saturday. >> i think it's the 25th? michelle knows. that's why our international correspondent has made her way to athens today in the same general area. >> she looks warm. >> she does. i'm in europe just like you. exactly. it's much warmer here than where you guys are. right now the polls show that the radical leftest leader self-described radical leader of the leftest party is going to win. he leads in the polls and he can very well be the next prime minister of this country. the only question is will he win enough seats to control the building you see behind me. the parliament. you can't just outright win your
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party. you have to be able to control parliament and convince everybody that you can get votes to go the way they're supposed to or the government collapses. you have to do it all over again. he's close to having an absolute majority. why is everybody worried about him? because when he gets into office he's going to start trying to renegotiate the bailout. they lent more than $200 billion to greece as part of their bailout program as they try to restructure their economy. he doesn't like the terms. he thinks they're too strict and the country's debt is too high. they wants the ecb to renegotiate the money, the loans they have given to greece. so that's why people are worried about whether or not there's going to be it. during the show down is he willing to walk? are the europeans going to say stuff it? that's why we have seen yields rise so sharply. we should say this. he has toned down his rhetoric draw matly from two years ago.
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even said yesterday he was going to balance the budget. he told private sector bond holders so hedge funds, pension funds and told the old greek bonds they're not going to get a hair cut. they're going to get paid back. still his economic team i met virtually all of them. they're socialists. still they insists they do not want to leave the euro. i said well you are telling the ecb you want to redo the loans. they said we don't want to refund your banks. a guest that we've had on cnbc several times, says he doesn't think it's ever going to come to that. >> it's not going to happen because the door will be open
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for the next country to exit. they're going to evaluate and exit a risk for italy, for spain, for portugal and other countries. this is going to create disaster. so we are not going to have it. >> evaluate risk. what he means is those countries yields would start to rise. right now they don't differentiate much from italy, spain, germany. but their yields are low. if you started to think that italy could leave because greece has done so then you would start to see the interest rates rise. so we have to wait and see guys. the big event is on sunday. we have to see how the yields react to what the ecb does. >> maybe you got the better end of the deal. isn't it nice right now.
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>> it is. >> then this happened. we blanket the world. much more on the ecb still ahead this morning. let's get up to date on top stories to watch. american express posted better than expected quarterly results and also reported higher quarterly expenses though and provision for bad loans. and sandisk shares getting hurt badly this morning. the current quarter and full year shares will miss wall street estimates. xilinx also under pressure. missed the mark. hurt by weak sales to brad cast and communications customers. they forecast a weaker than expected current quarter or
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revenue. >> our line-up starts off with two power players. representing combined total assets of over $45 billion to give to their causes. joining us is judith roden. the president of the rockefeller foundation and board member of comcast and citi group and the ceo of the bill and melinda gates foundation and board member of facebook and procter & gamble. thank you for joining us. >> thanks for having us. >> obviously you two do a lot of work both with governments and private companies and that is what brings you to davos. >> and unless we engage with markets and work with the private sector private investment or public and private companies we're not going to find the sustainable solutions to the issues that we care so deeply about.
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>> if your previous life you were in charge of product development there and a doctor that spend time traveling all over the place too. i guess you're in a different position now where you're going back to these drug companies and trying to workout deals to make sure that poor people in the world still get access to medicines. >> that's right. i'm trying to make advantage of the outcome i have to think about solutions where the companies can meet the expectations of their shareholders and do good things for the poor. we have come up with a number of different ideas. some of them traditional like volume guarantees, tiered pricing. >> please take at least this much and we'll guarantee if you don't sell it we'll back you up on that? >> that's right. we can use our balance sheet and if that company meets the target product profile the specifications we put out that
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include price because we need a low price we'll backstop them to make sure they can recoop their investment and make money. >> what are the new developments? >> some of the things we're excited about are novel remedies for ebola. we worked with a number of partners and we hope that others that have leaned in to help us with ebola will be able to come up with a vaccine so that's something that we have worked on but we're also working with partners on polio, malaria, i have been busy here. >> he likes to say things that make you think and that are some what controversial but one thing he was saying was don't count on advances and science for medicine. i think maybe it has something to do with he thinks maybe quality of life is more porn than length of life and extend
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the life of someone 85 years old. whether that's really dollars well spent but it got me to thinking if there's children that don't get vaccinated and die should we bring the rest of the world up to our standard of treatment that developed nations have first before we try to get even more treatment for our developed nations? if davos that might be put forth as the more correct thing to do. >> it's an and. not an or. at the gates foundation we have a strong belief in children's lives. my co-chairs bill and melinda gates put out our annual letter today but one of the goals is to improve outcomes in under five mortalities. one in ten children died in 1990. this year that's 1 in 20 and our expectation is 1 in 40 by 2040.
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that's going to take affordable vaccines more maternal and child health. we're committed to that and invested in that and i remain into innovation. so i'm definitely not negative about innovation. >> i was optimistic in knowing where molecular was right now. i thought there might be a quantum leap knowing how to design rationally drugs. i thought we were on the cusp of a golden period and he told me we're not. >> i want to live beyond 75 for the record. >> me too. so i think we are in a golden age of inknowizationnovation and one of the great things about the gates foundation is we can tap into those innovations for poor countries. >> i have a money question for you. you guys were involved with jp
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morgan about a year and a half ago where you financed do you know what i'm talking about, where you financed the losses or protected on the losses a lot of banks are now trying to get into this space of social impact bonds. do you see that as a big area? and do you see yourself being more involved with that or less? >> so we're interested in any mechanism that gets people who are talented and want to make money included in the bonds, guarantees and loans. because once they get started if people can make a business that's a great sustain blt model. we want private industry to care about our causes so you'll see more of that investments in using a number of different financial tools because we can use our balance sheet because increasingly we want the innovators to say we can make
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money and make a living. >> at the same time there's more companies trying to create accountability around fill lan throw -- philantropies based on how it is spent. >> the question is should a charity be run like a business? >> i think that looking at metrics and outcomes is essential whether you're a charity or a business. we want to deliver impact on the ground and one way that you know that is by measuring it. in the social impact bond market we help to create the structure of social impact bonds. the idea is not only to have capital guarantee it but to bring private investors, family wealth funds, individuals that really want to have a social and financial return and you can't do that unless you pressure the social return as aggressively as
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you measure the financial return. >> i know one of the focuses is urban centers. we have seen a lot of chaos recently with paris and other places. what does that mean to you? >> our two strategicals are to build better resilience and to help develop more inclusive economies and cities around the world are ground zero. it's where the growth will be in population. the economic centers of every country so we launched a challenge. we have chosen 70 of the 100 cities and we're working with them to develop resilient strategies we're hoping to pay for. each city get ace chief resilience officer and working with private sector and private markets we created a multibillion platform of goods and services the cities will have access to from the data analytics to cyber security
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risk analytics to new forms of metropolitan katzcatastrophe insurance. it's a way to create the volume that sue talked about in the health area but using the capital as the initial pilot capital and leverage. >> you work 6 days a week. it's boards and i was thinking if you're going to be on a foundation i think i might be rockefeller or gates, right? those are two pretty good one. >> they're amazing jobs. we both ran universities before this. >> i applied there and i didn't get in. >> sorry. >> it's not your fault. >> think of all the donations you would have been making to that school. >> you're busy every day. >> we are and we can really look
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at big problems and actually work with a variety of factors and work toward solving them so we're moving from the theoretical to the practical in leading these foundations and we can really see results on the ground that are pretty extraordinary. >> that's the biggest change. you talk about accountability and one of the things i'm excited about because i like to make things happen in bio tech or at the university, we're seeing real change so this increase in accountability and new approaches things are getting better. >> yeah. and more quickly, sue, don't you think? >> absolutely. >> long-term solutions and we need to invest in them but things are happening more quickly as a result of this kind of partnership and frame work. >> well judith and susan, thank you both for being here today. we really appreciate your time. >> thanks. >> okay. all right. still to come later this hour
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u.s. commerce secretary is going to join us and the president of lenovo jerry smith and sam's club president will be with us. great conversations on business and the global economy still ahead. plus part of our coverage of the world economic forum we're teaming up with facebook to bring you face to face with influential thinkers. and covering everything from smartphones to tesla. you can watch the full interview on and head to our facebook page where you can get in on the action as well. later we'll sit down with sheryl sandberg and melinda gates. submit some questions. we're back in a moment. welcome back to showdown! i'm jerry rice here discussing the big race between the
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tortoise and the hare. my guest is stephanie branton. jerry, i'm going bunny. shocker. not really. you see, the hare's "thoracic limbs" allow for greater extension and elongated strides. look for the hare to leverage this advantage. ok. vote on twitter for your chance to win a mercedes-benz big race viewing party.
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the u.s. and cuba are launching talks today on restoring diplomatic relations. a lot remains about this era for these countries. our next guest will be there. penny pritzker joins us now. i bet this is a big topic. not just in our country but around the world. we all remember in 40 or 50 years. >> it's a huge topic. this is the biggest change in cuban policy in the last 50 years and it's been well received whether it's among latin american country leaders. in fact i was with the vice
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premiere of china and he turned to me and said great, bold move. really exciting. so a lot of positive feedback but a lot of work to be done. >> well we were stuck in the mud kind of i think and i think even people that their entire life said we shouldn't do this probably said you know what we weren't getting anywhere. maybe we need to try that. didn't get a taste of what life can be like. maybe we slowly see things for other people in cuba. >> the president really felt strongly that our policy wasn't working and hadn't worked and therefore we had to make a change, a direction. in doing so really there's some big opportunity particularly in the areas of telecommunications and agriculture and think about it only 5% of cuban's today have access to broadband and about 2 million out of 11.5 million cubans have a cell phone. and the ability to get access to
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cell phones and television creating that is going to have a huge impact. >> the criticism comes from certain sectors where you would expect it to come but it has to do with not really being sure we can trust the things -- or that they're saying look this is what we're doing. we're going to continue to further -- i guess the leaders are going to have to constantly say we're not going to abandon our principals but in terms of things we could have extracted, are we holding their feet to the fire to get something out of this in return? >> well absolutely. look, first of all we're not abandoning our values and we're certainly not abandoning our commitment to human rights. that's why obviously diplomatic relations are so important. we can open that dialogue up and begin to address these issues but also it gives us greater access to the cuban people and
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to go correctly and be able to provide things like telecommunications telecommunications. what we know is from commercial diplomacy can come good things and change. >> is this a path way to democracy? >> we have to look at this as a long process. i don't think this is about overnight change. this is about first steps. let's have diplomatic relations. there's areas that we can do more commercial engagement and the process will continue but we have to remember the united states is not abandoning it's values at all in this move. >> we -- i think it was larry that tweeted not a word about corporate tax reform and some of the things we heard before the election and then there was an election and hearing the same
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thing. not a word. it won't happen will it in the next two years? >> i disagree. the president is very committed to trying to get business tax reform and has been looking for, as you heard secretary lou say yesterday we're looking for where is the overlap in policy so we can get something accomplished and i think given the new congress and their commitment there's a real tun. >> why do you think he didn't mention that? >> i think that he was focused on what's happening to our economy and trying to tell a story to the american people about what's the state of the u.s. economy and what's to come for the average american and that -- you heard, you look at the focus of the speech. >> what about the biggest impact, changes income taxes, estate tax and some of the issues he talked about or changes the corporate tax? >> we have to have an all of the above strategy because what the president pointed out is look our economy is growing. we created more jobs in this
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past year than in the 1990s. we have record exports. the deficit is falling. the united states and particularly compared to a lot of other parts of the rest of the world is in a really good position. we're the number one place to invest second time you know second year in a row. so he's trying to explain to the american people things are getting better but for the average person in the united states their wages have not been going up. their real wages have not been going up and he's saying what will we do to address that. >> will you be one of the point persons for fast track? >> absolutely. >> we're not just bog to oppose this. we're going to fight this tooth and nail. there's democrats that the president doesn't have in his camp. >> i have been talking to dozens of our democratic leaders both in the house and the senate who have an open mind and understand the reason that we need fast
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track and trade agreements is to get market access for our businesses to continue to be able to export into all of these countries to be able -- and this is about american leadership. if we don't set the rules for trade in the 21st century, our competitors are. >> one other question. how disappointed were you that antonio weiss was forced to pull back and become part of the treasury in a different way, if you will? >> you know what i think antonio is a terrific executive and the fact that we can get him in as soon as possible i think is a real win for the administration. and a win for our economy. >> very -- i figured i should ask what the administration thinks. >> thank you. >> madame secretary. >> thank you very much. always good to see you guys. >> you too. thank you. >> when we come back this morning, a top executive on the
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future of the pc. when squawk box returns from the mountains of davos switzerland, stick around. we'll be right back. [woman] can it make a dentist appointment when my teeth are ready? [girl] can it tell the doctor how long i have to wear this thing? [man] can it tell the flight attendant to please not wake me this time? the answer is yes, it can. so, the question your customers are really asking is can your business deliver?
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welcome back to squawk box live from davos switzerland this morning. 2015 is the year of the pc come back while others argue it's a dying breed. jerry smith is the president of the americas and he'll join us with a phone we're going to talk about. everybody says pc is dead. you say it's not. >> absolutely not. it's a $200 billion market.
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the last five or six years everyone said the pc is dead. there's real keys to that. number one we're driving innovation. >> sales numbers have shown overall pcs are declining business. that was seen as a success. >> in the near future we'll continue to see flat to positive growth. the tablet market was supposed to be in the pc. as earlier it was an f book but tablet sales have slowed down. >> at what point do they truly converge? you run window's operating system. they created a system where you can have the tablet turn into a pc and et cetera. >> it's usage models as well. people will use phones and tablets for consent viewing and
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pc's for content creation. i can see more and more people going back to pcs as a main device and using their phone as the other primary. >> as a growth driver for your company specifically you see it as a pc business or think it's the phone business. >> we're excited because we have three growth engines now. we have the mobility business so 1.4 million units on a worldwide basis and we also bought the x-86 business this year from our per perspective. >> we think it's an opportunity for us. so we're excited they did because we think with the motorolo brand the scale of both our businesses we have ip protection we didn't have before and we think mobility is a huge future for us. >> some people think that android, because it's so split up broken there's a motorola version, samsung has a version, everybody has a different take on it that it will never be able
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to excel beyond what apple has done since everybody is on the same level playing field in terms of that operating system. >> one of the reasons we bought the motorola system we thought they had the best android system out there. coming from google we think we'll have an advantage position going forward. the only candidate in my opinion, google will be the winner in the long run. look at market share. dominant market share already. over a period of time across future sets people will go to a function and help customizations that we have. >> is google your friend or frenimey? and we hear samsung might buy blackberry because they want the operating system. >> we're a hardware device company. so we don't have a software piece so they're a clear friend and partner going forward.
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we have three growth engines. servers, pcs, and phones and in 2004 you announced the deal. we have grown from 3 billion to 40 billion and went from 46 to 41. 220% better. so we think we see this as repeat in the play book twice again. so we think we can do the exact same thing across all three growth pillars. >> what about the idea that you're a chinese company? chinese roots and we heard from u.s. companies that sometimes they have trouble when they go around the world. people are concerned that look you're a u. s. company and you might be spying on us. the same holds true for a chinese based company. >> we have seven of our top ten executives are from different countries across the world. we're number one in the pc industry. we have 20% market share. we have sold safe secure pcs
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across customer's worldwide. so yes it's a threat to some people but we believe we demonstrated that we're a safe sincere partner, whether it's phones or servers or pcs and we're open and transparent across the supply chain as well. >> here's a question. we had the cfo of ibm on the show yesterday. a piece of your business is ibm. do you have a take on what's happened? >> they have a future as a partner with us and we're excited we were able to purchase the server business from them and we'll do the same thing we did on servers. >> do you have -- you sell phones, right? did you show anyone your phone? >> so i fell today. >> his phone is shattered. it was a 6 plus. >> very embarrassing. i think they even have a shot of it. >> you fell? do we have that on camera. >> there's a picture of the phone. >> of the phone. >> put music to it and everything.
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>> it was right in the middle of the street. >> are you okay? >> i'm okay. the phone is not. >> we'd love to convert you to the motorola phone. >> if you have a loaner. >> i was holding it and i think i went down on the cement with it. >> you saved yourself. >> i saved myself with my phone. here it is. >> aw. >> yeah. >> look at the difference. i don't know if they can see. can they see what's going on here? can you get in on how bad it is. >> it's really bad. you can see my kids right there. >> slivers. well there's the kids. there it is. better shot. >> the dangers of davos. >> thank you for coming in. when we come back today it's time to slip in a quick break. more than two hours of news makers still ahead including a snapshot of the consumer curtesy of the sam's club ceo and we have a packed squawk box coming up live from the world economic forum in davos switzerland. stick around. squawk box will be right back.
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that means the consumers are benefitting and going out and spending money which is good for the broad economy. >> he was commenting on the benefits of low oil prices. are consumers cashing in at the pump? we'll find out with rozsalyn brewer. thank you for being here today. if sam's club were broken out it would be the 8th largest retailer in the united states. are they turning around and spending that money they're saving at the pump immediately or are they saving it?
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>> we're benefitting from the fuel prices right now. it's been great for us. fuel is a great traffic driver and we do everything we can to deliver the great prices on fuel as our goods and everything else. it's great for us right now. >> how big of a positive boom? >> it adds to our traffic. we look at it in terms of our traffic. our traffic is doing well for us right now. >> when did you see the turn? >> just before the holiday. we saw the oil prices moving and gas prices at the same time. we saw traffic tick up and it's part of some of the benefits and pleasures of the holiday. >> was it an instant term with lower gas prices or is it something that you kind of see building more and more every week? >> it's building week over week. we've seen it move so fast that we saw it move week over week and improve week over week for us. >> you have a slightly differ customer than the traditional walmart customer because you are a club based company and competing with costco. who is your customer? >> our customer is really interesting because you pay to
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shop with us so our household income ranges from $80,000 a year and up. we have a little bit of an elevation in terms of who shops us versus who shops our traditional walmart stores. so you'll see goods in our stores that are more branded goods than you might see in a walmart store and we enjoy that and our member expects that from us. because we listen to them a lotmentlot. this transition we're making from boomers to millennials and this mind set is very important. that's our next customer. >> we had a gentleman on. in the lowest paid hourly wage at etna is $15 an hour. we worked it all out with him -- >> $16 an hour. >> to get to $16 an hour 10 million or 14 million in benefits. i would think at sam's club if you went to $16 an hour it would
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be a much larger number. would it be doable without hurting the results of the company and hurting your competitive position? >> you know, one thing you have to really think about at sam's and walmart is we build careers. so when you think about what's a starting rate at our facilities you have to think about we don't want you to just be a cashier for the rest of your life. we want you to grow a career. so folks that run our stores and our clubs they make six figure salaries so we want to grow them to that. >> are you paying people minimum wage or how much of your work force is that. >> very very very few of our folks are at minimum wage. less than 6,000. >> of how many? >> we have -- around the world we have 2.2 million employees around the world so that's pretty small for us. >> that makes sense to me and i've had people that are in some of the fast food restaurants say instead of having everyone immediately paid as a team leader or something, people earn
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their success and they come up and they get there quickly if they're the people you want to keep and you can't do that. but that message is not getting out. >> it's not getting out. >> in davos it's definitely not getting out. >> it's not and when you think about where in the world could you go and work right now and get training and development that does get you there and makes you feel good about the work that you do. >> and earning your success. >> and earning your success and we pride ourselves on even if you leave the company and go somewhere else we invested in that person and made them better. >> i have a membership club question. do you think of amazon prime as a membership club? >> i do. we are redefining our competitive landscape and there are some online membership concepts that you wouldn't think were competitors. i do view amazon prime as a competitor. >> do you think you'll ever really get in the same space? >> i do. what we're doing is combining
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both digital and physical space and for sam's we want to be there quicker than anyone else. we think we can do that. we have been talking about it here and engaging our associates and transformation around everything that we do our future sites will have access points that will allow us to do that better than anyone else. >> margin better or worse online versus brick and mortar. >> we'll have to look at that. we're thinking about that. >> look at that smile. >> that politics smile. >> costco is a competitor. people look at what they have done as kind of an amazing feat. what do you do to differentiate ourself and to be in the same space? >> i understand when you say they started the space but we're 32 years old. we roughly started about the same time. they're a great competitor. they make us better but i will tell you that the advancements we're making in the digital space we hope will out pace them.
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some of the things that differentiates us from them is we're growing as fast as we can to become better merchants in our company. we're excited about the work happening there and then the services that we provide. when you come into a sam's club you know that you're getting well taken care of and that membership fee that you paid you're getting every bit of that in the values and the brands and the service with the people in front of the members. >> well we want to thank you for your time today. >> thank you for having me. really appreciate it. >> cold isn't it? she's ready. >> now it's getting cold. how are you feeling? >> i'm good. >> you got that nice get-up. >> if you knew how many layers i had on. to achieve mountain sheik -- and if i add this blanket into all of my other layers look at this -- i'm like nauseous. look great. thank you. coming up, to say our next guest has worn a lot of hats would be an understatement and he was a
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world heavy weight boxing champ, a leader of a ukrainian political party and main guy in a lot of the protests you saw and he's the mayor of kiev. vitali klitschko will join us to discuss his homeland. his brother is married to hayden and they have a new baby. anyway. we'll be right back.
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to rebuild some type of
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union including other parts of ukraine and that's his eventually -- >> the idea to rebuild big empire have we ukrainian don't want back to ussr. it's our main goal after it. our main goal to build modern european democratic country. not everybody happy with this message. and everybody understand. money support, it was propaganda war. what we have in eastern ukraine. this conflict will never happens. >> and for your people you want to live a european life as well. and that's something that we -- >> we are european. >> and we understand. i'll tell you with what happens in the oil markets, we were trying to figure out if this em
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boldens putin or if it makes him maybe not quite as adventurous. but people have pointed out in the ukraine certain laws on the energy makes it impossible for foreign investment which makes you have to curry favor with putin. what happened? why the 70% or 60% taxes on energy and oil and gas? >> actually we lead long-term with low price. it's not secret. to using energy it's not so. we use five times more energy than european union. right now we implement new safety technology in ukraine. we try to be modern to make reform in ukraine. and also energy direction.
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and to be independent. from russia from energy resources. it's very important point for our country. >> might not be the way to do that. it sort of curbs investment doesn't it to some extent? >> we build good climate right now for ukraine. it's our main goal to make reform to good climate for investment. right now it's very difficult as we have people who are very interested off -- who is very afraid from success of ukraine. but our main goal to implement reform and to be successful but more democratic. our main goal is -- i know better than anyone we're fighting for our region for our dream. ukraine modern european democratic. >> what do you think about the support that you've received from the -- your friends in the
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west, from europe and from the americans at this point? >> we appreciate the support. we really appreciate for sanction. we understand as this conflict we can stop and we need from russian federation to stop to take out the military forces from ukraine territory and stop to deliver weapons to terrorists. >> well we -- i hope we come back next year and hope to see you again. i hope things are moving in the way you'd like them to. mayor klitschko, thank you. when we come back talking global market with glenn hutchins. stick around.
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good morning. after weeks of qe speculation, the ecb's big day is finally here. with mario draghi live up to expectations? some of the most powerful people on the planet are all here. we're going to take you behind closed doors and get all kinds of opinions on what needs to be done to jump start the eurozone economy. and we'll be joined by news makers and news breakers. including famed deal maker glenn hutchins and linkedin founder reed hoffman. the second hour of "squawk box" begins right now.
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welcome back to "squawk box" right here on cnbc first in business worldwide. we're in davos, switzerland. i'm andrew ross sorkin along with joe kernen and becky quick. the bank expected to announce a bond buying program for 50 euros per month. and we'll have that news for you when it breaks. the ecb is by far the biggest topic of conversation today. but plenty of other discussions going on as well including critical market topics such as plunging energy prices. this morning i spoke with india's finance mins per. >> the declining oil prices help us in many areas. they help us in cutting down subsidyies subsidies. they help us to knock down our deficits. and of course they help us in bringing down inflation. >> we'll be continuing to bring
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you some of the big headlines coming out of the panel discussions here at the forum. in our headlines this morning, it is a big day for corporate earnings. we'll be bringing you the number as they hit the tape. verizon just out. revenue slightly above consensus. check out family dollar. shareholders will be voting today on the proposal to be bought by dollar tree for $8.5 billion. they are expected to approve it though a competing offer from dollar general is still on the table. and plenty of news from ebay. the company will be exploring a sale or ipo of its business. that will cut 2400 jobs and its latest earnings was a little on the light side. >> they put up the chart, the camera came back to me. director's trick. at 8:30 eastern we're going to hear from mario draghi on exactly what he plans to do about the flagging eurozone economy.
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speculation that the eu is going to finally -- we call it please the markets. i use the word appease because it rhymes with please. the market wants something. >> if it's not good enough we'll see. let's get to our first news maker this morning. glenn hutchins is chairman of north island and vice chairman of the brookings institution and we go back and we talk about a lot of things. we have very frank discussions. you are an incredible capitalist. >> i'm not taking that as a compliment. >> how can it be taken as anything else? >> so you know how entrepreneurs work and you've seen companies from the ground up become successful and do wonderful things to create wealth and
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employ a lot of people. yet there is an income inequality that is front and center everywhere we go here in davos, that issue. you sat on a panel with larry summers. and came up with some terminations, the panel did. and i'm going to mention a couple. then you can explain it to me. raise the minimum wage. embolden and empower trade unions. make a more progressive personal income tax. close corporate loopholes. i see how all of these things -- in fact, they go back and say the centrist. is that what you talked about in this panel and say i don't agree with all this? >> you're talking about the inclusive prosperity mission. then two people wrote the report and i signed on as one of the
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commissioners. i did not sign on to all of the elements. >> is larry one of the -- >> larry was one the coauthors. one of the things i did sign on is minimum wage. if you take the minimum wage as a number multiply it by 2,000 which is roughly full-time hours per year you see what we're paying people. people can't live on $15,000. >> they can't live on $17,000 either. >> i understand that. but the primary thing i focused on in those discussions was what i called the changing nature of work. and how as a result in the changing nature of work which is a combination of things coming out of the sharing economy, increasing a number of independent contractors, people working part-time and wanting to work full-time and the long-term unemployed. we need a set of policies to address those just as we had a set to address women's needs in the workforce.
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>> so you're not excluding things that -- what i saw was close corporate loopholes but nothing about lowering the rate. it's almost as if you're saying we tried growth in the private sector and it didn't work. so there's going to be nothing pro-growth for the job creators to try to help the income inequality? seriously? >> i'm not here to defend everything in a report that someone else wrote, just so you know. i think post the state of the union of the united states right now, a lot of rhetoric. but it sounds like we've got an opportunity to get trade deals done and get after corporate tax reform. and i think both of those things would be highly growth -- >> you think there's a chance the president does sign on corporate tax reform when he said not one word in the state of the union. it was like it never happened. >> as i talk to people who are working -- i can't assess it because i'm not that close to it. but it sounds like the sides aren't that far apart on when
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these things get done. if you talk to the business round table types, they say that's the most important thing to get the economy growing. by the way, we might be the world's tallest midget but in the developed world, we're everybody's envy at this point. and i think that's the most important thing we can do to help the people who are disadvantage ed disadvantaged and i think you and i agree on that. different people have different descriptions for doing that. the way i'd approach is tax reform. >> yeah. maybe it was the piece that said it was a reasonable conclusion that summers -- because it didn't employ the wealth tax. it didn't go that far to just sock people with -- we're taking 30% of what you got. and it didn't go as high as 70%
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on marginal rates for individuals. that was the two positive things about -- >> i'm personally more in the simpson bowles tax approach which is get the rates down then you don't have to have the difference in capital gains because they're all relatively low. >> i was going to go to technology. >> i was too. you have been somebody who has seen creative talents early on. can we talk about your investments? >> we're not going to talk about individual investments, i never do that. >> shoot. >> at least not on the air. you have to keep in mind things like significantly reducing the size and capability of semiconductors which drive what we do. combined with massive software advances. as a result of which, these devices that we use are smaller
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and smaller, cheaper and cheaper, and more capable. that's happened all of our lives. every year i could come on here and say there's another iter iteration of that. it's about all the things to be embedded, it's all about what you wear it's all about semiconductors and processors being attached to smaller the i thinks. that's really exciting. this mobile internet if you take what they talked about an ad to broad band technology around the world is the biggest investment trend of our lifetime and will continue for years to come. that's why i'm really excited about the world in which we live. i see the pace of acceleration. >> let me ask you one other question. you disagree with me on this. do you worry at all that the transition cost on technology and what it does to unemployment? whether it's this time it's different in we are going to set ourselves in a very difficult way because the technology will
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take it down. >> everyone out of work. >> of course i worry about that but i think it's a problem we can solve. there's a difference between it -- >> it's been predicted before. >> and as i say we're in a place where work is going to go less industrial aged where you punch a clock and more that you have projects that you work on and objects like you own that you share where you gather income. >> the original luddites didn't want a weaving machine. >> i want all the new technology. i'm just anxious about what it does. i'm trying to figure what you do about it. >> we should recall. you take a global perspective on this, the trend in the last decade has been a massive increase in middle class lifestyles around the world. we have a long-term -- they're not going up at the speed they were before. but that's a much bigger trend
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than the technology trend. >> we had the intel guy on. it was assumed the 2028 we'll hit the wall. and it read it and it was so -- there was so much science involved, but we pushed it past 2028. there's a new material they're doing it that overcomes whatever the worry was in 2028 that we were worried about. >> if you invested $1 in this pace 50 years ago roughly when it was -- you'd be worth $4.5 billion. >> so you did that. you actually did do that. >> i've been fortunate, but not that much. >> thanks for telling us by the way. >> happy to be here. >> thank you for being here. >> great to see you. still to come this hour we have veteran banker bob diamond who will be joining us. linkedin cofounder reid hoffman as well. also as part of our coverage, we're teaming up with facebook to bring you face-to-face with
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welcome back to "squawk box." look at the futures. we're going to get the ecb statement in just a little bit. we'll see what that does. but right now dow up higher 39 points. s&p 500 looking up as well by 4 points. headlines for you. travelers expecting better than expected revenues this morning. shares trading slightly higher as well. let's take a closer look at the state of the banking industry. and who better to ask than our next news maker. bob diamond is the former ceo of barclays. good to have you on set today. >> good to be here. >> a little later this morning we'll get more information from mario draghi. expectations in the market is that we're going to see some sort of bond buying program. the number ranges up to $500
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billion. >> i think draghi has consistently delivered the message. he'll do what's necessary. >> but he hasn't had to do it yet. >> and so the expectations of $50 million a month for a year or two i think in the range of what we should expect. it's interesting in the longer term objective for europe which is really about jobs and economy is going to take more than what governor draghi can do in terms of bond buying. i think a focus on the real structural issues around labor reform, bank reform and capital markets reform. because 80% of the lending to corporates in europe are still on the balance sheets of the banks. and in the u.s. it's about 20%. and that's a big difference in terms of flexibility. >> even if he was to come up
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with something that said $50 billion a month for the next year or so you wonder what that would do for europe's economy particularly when you're looking at interstateest rates. is it successful? you mentioned there are other things that need to come along. but if this is the only thing we get, what happens? >> i think one of the things we're doing. between though u.s. economy and its out-performance in the european economy and its under-performance. i think governor draghi has done a lot. i think from 2011 and 2012 with a long-term repo operation and kind of taking the issues of solvency off the table were very positive but the structural issues i think are critical to get the economy going. >> people have come on and said
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draghi has been phenomenal incredible. and then i also read that the euros have waited so long to do this and we're almost a case study of how to do it. in terms of shock and awe. do it quickly. i guess what people are saying is draghi couldn't have done that. so i guess he's steering his way through all these other parties to get it done. but how come he's got this great rep of having it and it may be too late to work. why does it en work now? >> first of all, governor draghi deserves a strong reputation. i think there are issues outside of monetary policy. because there's a big, deep rich capital market that has developed in the u.s. that gave more tools to the fed.
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here it looks -- it's primarily limited to sovereign bonds. and so there are so many ways where reform of capital markets would be really really positive. the development of hedge funds, private equity capital, the development of high-yield bond markets or securitized mortgages. there are so many ways to get more of the benefits that i think the u.s. financial markets had post-the crisis. because they have a deep rich capital market. >> do you worry about a -- do you think that if the swiss franc gets unhinged if this market doesn't fall apart, do the folks in germany say -- you know what? larry fink was saying yesterday. do you see this all breaking up? >> i don't see it in the near term breaking up. i don't think that's on the agenda of any of the governments.
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i'm a bit of a broken record for five years. on the importance of reforming the banks and capital markets. it's the capital markets. and getting more liquidity, more depth, more substance and how important it is. with the destruction of the euro in 1999 there was such incredible promise for european government market that could compete with the u.s. treasury market. and i remember almost immediately being part of the team that issued 30 year euro telecoms. and that kind of promise is not delivered as much on the depth of the capital markets. and i'll come back to the same point which is if 80% of the lending to corporates are on the balance sheet of the banks and an oil crisis led by lower prices come and so some of the companies that have been lent to are weaker credits as a result of that and all of those loans
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are on the balance sheet of the banks, then the banks are going to stop lending, take provisions, and it's going to have a negative impact on the economy and jobs. >> you have said that when you look around the financials you see some of the best opportunities you've seen in 20 to 30 years. this is a buying opportunity as far as yourself concerned? >> i think it will be for investing and nationals. if you look at the last decade in the stock markets, not just since the crisis but in the last decade, the s&p's up 60%. financials are down 20%. banks are down 30%. and just this year banks are down 15%. >> although there's been some reasons. they've had regulatory issues. >> and some for very very good reasons. but starting to invest now where many of the eurozone banks as an example but not just the eurozone, i don't mean to stick on that, but it's kind of the subject. so many of the eurozone banks
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are pulling trade finance from africa and asia because of the need to comply with higher capital ratios. but they're also focusing on businesses on a domestic market where they have scale and where they have competitive advantage. so they are selling their non-core businesses. and the eurozone banks have announced $1.4 trillion of non-core businesses for sale. these aren't assets. these are businesses. and they're doing it at a time when the traditional buyer of bank assets for the last 20 or 30 years was the big banks. and the big banks are not buyers now. so the opportunity to buy operating companyings, operating financial companies has never been better. >> we want to thank you for your time. we hope to see you again soon. >> hope to see you very soon. coming up in the meantime, the big question of the morning. will mario draghi do a policy announcement? and we'll hear straight from the ecb president, a little more in about an hour later. and then another first.
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top news maker here. linkedin cofounder reid hoffman will join us when we return in a moment.
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coming up it's about being seen. where government officials are trying to make connections here in davos. it's also the business idea of our next guest reid hoffman. he'll join us when "squawk box" returns from the world economic forum. where are we? davos. davos, switzerland.
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welcome back to "squawk box" where we are live from davos, switzerland. here's what's in our headlines this morning. a deal in the banking industry. royal bank of canada bying city national. that works out to $93.80 a share. that's nearly a 26% premium for
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city national shareholders. we're just an hour away from the labor department's release on initial jobless claims. that's right. it's thursday. that means jobless claims. they are expected to drop to the 300,000 level from the 317,000 level we saw last week. and google is preparing to sell mobile phones. our next guest has been a legendary investor in some of silicon valley's biggest ideas. he's with us today. reid hoffman, cofounder of linkedin and author of "the start-up of you." and you're my guru of all things tech. i want to hear about what you think is the next big thing and the impact of technology on the economy. but i want to start with a topic which i talk about and ask everybody about. which is bitcoin. i constantly ask everyone about it. we had jamie dimon on who said it's going nowhere fast. and buffett said he's not thinking of it as a future
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currency. yet you have been a big fan. but the price has dropped materially. >> the least interesting thing is what its current price is. whether it's $200 or $1,000. the interesting thing is about how it's a trustless system that preserves trust without any central note and the fact you can do any issuance off there. the platform is the most interesting thing. >> and so where are we now to the term you think bitcoin is the next big thing which inning are we in? >> i think we're in inning one. and i think the fact that the price is going up and down on speculation is literally not at all a predictor did sh. >> are you invested in bitcoin itself? >> i own bitcoin and i'm invested in two companies.
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zappo is a wallet. if you want to buy bitcoin and hold it there. and then blockstream creates bitcoin into a platform. >> if you were a viewer and thinking of buying bitcoins would you? as an investment? >> i -- >> like a currency. >> well currency investment slightly different. and so the advice i give my friends is don't buy any bitcoin that you wouldn't be comfortable losing. rather like a seed investment in a technology -- >> wait a second. i wouldn't feel comfortable losing any of it. >> then don't by bitcoin. i give similar investment in angel investing. if you're going to put money in a start-up company, only put in enough money you're comfortable losing. >> so it's like vegas. >> it's not like you're just rolling the dice on whether you get a six, seven, eight is the outcome. but it's the fact it's a risky adventure which might end up being -- >> does this displace american
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express or mastercard or visa or paypal or what have you? >> i think the possibilities are -- for example, one is it can bank the unbanked in a lot o the markets where the banking system is too expensive. second thing is you can create machine to machine commerce which could do all kinds of different things in terms of enabling services. but the simplest one would be is you think of your car becoming a software vehicle. you could automatically handle parking, bridge tolls, all of the rest of it if it had a machine to machine currency. >> i just mentioned paypal and it inspired me to think of something else which is carl icahn. ebay recently decided it was going to split paypal. carl icahn had wanted to do that. you came out aggressively against carl icahn's thought. then of course nine months later, ebay does it anyway. who is right? >> so well, my -- the thesis i
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advanced is the way you do these is you back a management team with a plan. so the thing i was opposing in icahn's view was to say, well the management team should simply split the companies and we have no plans. it's just a financial transaction. i was like, no no. you're building long-term value. so we have a plan we're splitting them. we know how to create more value with that. >> but doesn't that mean that carl icahn was right the first time? >> well he didn't have a management team with a plan. >> but the idea was right. >> i think the question is -- look. what i said specifically in my piece is you can go either way. when i wrote the first piece, i said you could go either way if you have a strategic plan of what you're doing. at the time the ceo was saying i have more of a plan together. now, i think also he had already been thinking about how he could create more value splitting them apart but wanted to do so as part of a strategic action. >> different question. sharing an economy and impact on the real economy which is to say
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you're involved with airbnb. all of these different jobs are getting split up in different ways. long-term, better or worse for society? >> i think much better for society in terms of a question of choice distribution of labor. now, if you say does this shrink the number of dollars in a system? that's part of how an economy grows. if less go to this they can go to other things. so it may ultimately reduce the amount expended on staying at overnight hotels. that's okay. that's part of what progress is. >> on the flipside for lei boar it's created a freelance economy. is that a good thing? >> given that participation is voluntary, given that for example, the question of do i want to rent a room or want to rent my apartment, i have a choice to do that. that may be something where i can pay my mortgage and gives me additional income that supplements the other things i'm doing. those things are very valuable. >> andrew wants to know whether machines are going to take over
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the world and there are jobs not left for people. >> i'd say just news anchors. >> that's been done has a single person said you're right? everyone says it's -- >> tom friedman has come on and said that i'm right. i think. another journalist. i have one person in my pocket on this. >> okay. you don't think so. disruptive technology has been around for awhile -- >> all economic progress comes through technology. sure there are no buggy manufacturers or horse carriages. >> and it's incredibly disrupter for the buggy owners and their families. >> but that is progress. >> that's what i've read in the past nap we do it as an american institute. we need to manage it for the people affected at the time but there will be success for generations much better off because of it. >> exactly. >> i have a venture capital
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question for you. look at a company like google they're doing interesting things. some people think they're doing too much on rnd. do you think the model should be if you're a good company like that to let people like you do what you do and pick off and buy them. or do you think big companies should be spending big money? >> actually google i think is a test case of doing some very good rnd. android, they bought a small company but they invested hundreds of millions of dollars in doing it. and android creates an explosion of the smartphone system. self-driving cars. we're not making as much progress in it if there wasn't one saying i know how to solve this problem. >> they spend hundreds of millions of dollars on some of these projects. does it pay off as a shareholder? is that what you want? the company being a creative sort of funder -- >> or would you prefer the venture capital dollars to be going into -- >> so venture capital dollars work well if you start at five to ten, get some success.
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go to 20 to 30 have some success. like the first iphone would never have been funded by a venture capitalist. it's just too much beyond the pail. then you have projects that have strategic synergies with the company. that's a good one to do with the company versus something else. that being said you don't want to spend money everywhere. >> some of the ones at google make sense. the others seem like they're high in the sky. this is just a fun project. >> but on the other hand, part of venture is sometimes it doesn't work. taking a risk you say we want to be innovators and risk takers. that means sometimes it doesn't work. that's actually a good thing. >> airbnb when does it go public? >> don't know. >> i recently -- you're an observer on the board. you must have a sense of what the thinking is. >> there are no discussions. >> there are no discussions, okay. you look at elon musk an old friend of yours you worked with. >> yes. >> what do you think of tesla?
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and what do you think of the value of tesla right now? >> so i think the thing most that think about tesla is how software transforms a car. one of the pieces of advice i give people is drive one to see how software works. so i can walk into my tesla one morning and all of a sudden i have calendar integration. it says that's where you're going and it drives there. that platform on top of a car is what's going to make tesla interesting. >> i asked in the beginning what inning we were in for bitcoin. what inning are we in in terms of venture capital? people think we're moving more and more towards a bubble of some sort. sort of where are we? >> well it's clearly frothy. the valuations are very high. the problem is what does it look like retrospectively? a lot of times you sit out of investment because i think that's too high. and then it actually goes higher. so you try to play
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intelligently. i think there's still good investments to be made. we've made a couple this year. but you have to be more careful with frothy investments. >> eighth inning? >> that presumes there's an end. at worse there's a cycle. >> thank you. >> thank you. >> appreciate it very much. >> reid hoffman knows a lot more about technology than i do. >> you just figured that out? >> and you. >> more than all of us. >> that's why we invited him on. >> i didn't know it was this much more. >> didn't know what you didn't know. >> thank you. you sit around thinking a lot, don't you? >> i talk to people. >> you talk to people. >> yes. >> i talked to you and still don't know what you said. i like when you said you want me to get more in the weeds with bitcoins. i was already lost with the platform versus the currency and the goal. and you said do you want me to get complicated. >> i realized i was going out on a plank. >> yeah. please don't. okay. among the headlines this
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morning, kinder morgan is entering the bakken shale. announcing a line founded by continental resources head. barclays ceo firing back at an interview here in davos. says his bank is cooperating with an investigation into so-called dark pools. >> it's an ongoing case. as you know there's very little i can say about it but our position is always to cooperate with the agencies. we believe we having cooperating. as you know we've robustly responded to the allegations that were made against us. that's going through the courts and this is the next pace. >> for more on the interview, go to that is the right address. >> that is the correct address. >> all right. up next breaking news from the european central bank.
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the decision on interest rates and instant reaction is next. as we head to break -- it's sunny now. i'm squinting. i have my sunglasses but i don't know that -- can we wear those? >> no. you're not allowed to. >> here's jpmorgan ceo jamie dimon on how draghi is doing. "squawk box" will be right back. >> i think mario draghi has done a great job and i hope it works. i think they should probably do something. it shouldn't mask the fact that they need structural reform. they really need structural reform in europe. [woman] can it make a dentist appointment when my teeth are ready? [girl] can it tell the doctor how long i have to wear this thing? [man] can it tell the flight attendant to please not wake me this time?
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the xc60 crossover. from volvo. lease the well-equipped volvo xc60 today. visit your local volvo showroom for details. i. welcome back to "squawk box." breaking news. the european central bank leaving interest rates unchanged. let me tell you what those are. they are .03% on the margin lending facility. .05% on the main financing. and negative minus .2%. of course this is not the big announcement we're waiting ffr. that big announcement is expected to come at 8:30 eastern
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time. and they are saying it will come to 8:30 according to to our breaking news expert there. let me tell you what we're looking for right now. the keys will be how big it is. we're looking for about 50 billion euro or $58 billion a month to last for about a year. the ecb has said it wants to bring its balance sheet up by a trillion euros. how long will it last? supposed to be about a year. some speculating it could be two years. what is bought? do they buy all of the sovereign bonds of european central bank members or for example do they leave out non-investment grade and how the risk is shared? does the risk reside at the european central bank? i do want to give a nice comment here from morgan stanley in their leadup to this thing. they're saying the most accurate description of what the market's view is quote, they will act, it will not be enough and the macropicture will not materially change. not a lot expected here from the market. although the ecb does have to
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meet those expectations i believe. joe, back to you. >> all right, steve. stick around. steph steve sedgwick joins us here in davos with reaction and our chief international correspondent michelle caruso-cabrera. it always says t caruso-cabrera. like she added another name. you've got three already. she's in greece this morning. you're over here. can you -- we've got to get those rates below 40 basis points to stimulate things. >> i just checked. here's the thing. i'm going to go back two years, two and a half years. july 2012. mansion house speech in the united kingdom draghi said within our mandate we'll do whatever it takes. and for two and a half years the europeans had them right down yields. let me remind everyone. in ireland we're 40% yields at the high.
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irish paper now trading at 1.27. the spanish were trading at 7.6. they're at 1.5 now. the italians two year paper italy it was trading 6.5%. what are they paying now? they're paying 1.77%. the euro it was around 1.58. we're now trading around 1.16 as well. we have had the bang for the buck nap is the point. we've had had everything since 2012 when draghi said he would do this. he's relied on credit for two and a half years. now he's finally doing what he said he would do potentially. >> why does he have to do it when it worked already? >> i guess people will turn around saying whatever it takes. you've done absolutely nothing. yes there are two programs in which is that as well. they're in their infancy. and that's one caveat in terms of quantitative easing. let's say as steve was saying
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we get 600 billion euros a year. that takes us up to what is it 2.6 trillion euros. and that is still smaller than it was in 2012. i just got one more technical point as well. as steve was saying what are this going to buy, if they do it on how much central bank has put into the european central bank they'll be buying bunds. they'll be buying o ingbuying. how low does it have to get to stimulate demand? >> there's a lot of skepticism as well because the lower rates go it doesn't matter if your economy is fundamentally broken. we spent the last two days here to figure out if greece has done any of the recommended structural reforms. a lot of complaints here about austerity. yes they've cut budgets and salaries, but with they done anything to make the economy grow? came in and went through greek legislation and said do these
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300 or 400 things and you'll improve your economy. what have they done? very little of those recommendations. the pharmacy sector here to own a pharmacy you must be a pharmacist. you're only allowed to own one. your profit margins are set by the government. what you're allowed to sell is set by the government. when you're allowed to be open or closed set by the government. they said get rid of all that. they refuse. now they're allowed to be open when they wanted. that was the big reform that they did. but the ability to buy advil, tylenol anywhere else but a pharmacy, impossible. it's really -- there are things in this economy that would be unfathomable to an american business person and they haven't fixed them here yet. >> michelle why would this far left guy -- i mean why would he be the one to do all these pro had- -free market reforms?
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>> you're absolutely right. he said he wants to renegotiate the debt and he wants to raise the minimum wage. he says raising the minimum wage, you're going to get more money in people's pockets. what you need to do is push down profit margins in other ways. you need technology to move productivity. i mean i don't think -- keep in mind, he's thrown out an olive brank branch in the last day. his prescription for making this economy grow many would say it's not a prescription for it. >> leisman, correct something for me. e with keep saying it's an all-time low on the euro. wasn't it below par for awhile? >> yeah. it was 99 98. i was just looking that up. i want to back to what steve sedgwick was saying. why do it if rates are so low? and i want to tell you how a central banker might think about this. they're not looking strictly speaking at rates. but one of the things they're really targeting here is
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inflation and inflation expectations. they have a 2% mandate. they're projected to miss that mandate for many years to come. so they have to act here because that's their mandate. they have to act to infect what we call inflation expectations. and if they didn't act, the fear would be inflation expectations would continue to essentially free fall. so they're targeting low interest rates in order to help inflation. but the real goal here is to target inflation but they believe that is primarily influenced on what people expect inflation to be. and if they didn't act, you might ask yourself what the world looked like over there. beck y i?y becky? >> all right. thank you, all. when we come back this morning, a face-to-face with sir richard branson and right here in davos. while they have different day jobs, they are on the same page in one thing. and that is the importance of team. hear what they have to say after the break.
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also at the top of the hour james gorman will be joining us. we'll talk ecb with him, financials, and the president's plans to increase taxes on wall street.
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as part of our coverage of the world economic forum, we are teaming up with facebook to
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bring to face-to-face with influential leaders and thinkers. yesterday we brought richard branson and together and they had interesting things to say. ♪ >> what do you think so far? >> it's like a business version of sundance. >> wrote in if you were given a chance to turn back time what is it you'd do differently? >> i don't think i'm change very much. i think both of us have been blessed with the lives we've led. it hasn't always gone according to plan but that's made life that much more interesting when it works out. i'd love to fly. i'd love to be peter pan. but you can't have everything you want in life. >> but you're flying.
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if i was to turn back time i wish i would have been able to take my grandma to the inauguration in 2008. >> kelly says richard are you still going up in space and could i tag along with you? >> well -- >> i want to ask that too. >> you can go to our facebook page for more. up next we have the ceo of morgan stanley. plus look at the futures. we'll be monitoring all of this as we get close tore the announcement from mario draghi's news conference. the dow up 100 points. "squawk box" will be right back.
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europe front and center. investors awaiting mario draghi's comments on the ecb's rate decision as they attempt to beat back deflation and spur the region's economy. we have full coverage just ahead. leaders of the biggest companies and world leaders discusses matters close to your money. the ceo of novartis on the future of medicine in the pharma sector. plus michael dell's take on the
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pc business one year after going private. the final hour of "squawk box" from davos, switzerland, begins right now. clouds rolling in and clouds bring wind. anyway, that's our problem. not yours. welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. we're about 30 minutes away from what could be the biggest news conference of mario draghi's career as president of the ecb. in the last half hour they announced a decision to keep rates the same again. it seems every time we wait for ecb decision. it's out, it's out. unchanged. promising to announce further measures when draghi speaks we will bring you his comments when they happen. here are the futures in this
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country at this hour which have been picking up as the morning went on. now up 102, triple digits. that has to do with when anyone eases anywhere whether it's japan or europe we like it. because -- >> more money. >> -- all of our crack addict traders that still want free money, they bid up the futures. >> nothing's been announced yet. >> no nothing. >> so they're bidding it up on the expectation of what we're going to hear at 8:30 eastern. >> which to me can only mean disappointment. but maybe not. we will see. back in the united states a number of big corporate stories to tell you about this morning. royal bank of canada buying city national for $98 per share in cash or stock. it's a nearly 26% premium for shareholders. thap noise in the background a helicopter probably bringing somebody here or there.
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also travelers trading slightly higher. and verizon, the company hit by a pension and severance cost revenue slightly light. this week we've heard from financial titans including larry fink, brian moynihan on the state of global markets. joining us now is james gorman, morgan stanley ceo. we've been watching the job you've been doing for five years. things get going and it's almost three steps forward, a half step back maybe. this was a tough quarter and it wasn't just morgan stanley. describe what all the banks really got hit with. it was trading. tough trading, low interest rates? >> somebody asked me on the way over here what i thought about the quarter. i said goodish. which i think is fair. we had -- first thing, we had a number of unusual things that occurred in the quarter. some positive some negative. all positive in terms of getting them behind us and further
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distance from the crisis. separate from that the trading environment was tough. back half of december very tough. came through it okay. good news is the core businesses that are non-trading did very well in this environment. >> you know people say morgan stanley, goldman sachs. there's still the perception that just in terms of pure operating results you still have some work to do to get to that level with goldman to get to 10% return on ek with ity. others say the stock has moved as if you're there. so when you're not there, maybe the stock is ahead of itself. >> i think you asked me this question last year. listen, goldman's a great competitor, great company. we run our business based on our business model. we have some strategic choices which are very clear. and we made them over the last several years. they've changed our model, changed our profile. and it will take a couple of years to get to our full performance level, but we're confident. and obviously the market and how
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the stock has performed for the last two years, number one in our sector. >> let me ask a question i've also asked you before. should we be comparing morgan stanley and goldman sachs given the undertaking you have? >> oh sure. every bank has parts to it. if it's the universals that also have the swiss banks with investment banking. we and goldman overlap in many businesses and several we don't. >> was wealth management something you've pointed to that's been a bright spot were the results mixed there as well this time? that's because of the environment as well? or were you very pleased? >> actually results were terrific. there were three things you really want to look at in wealth management. one is the total revenues. and we had a record i think in our history. the second was the flows. and we had tremendous flows which is clients bring more money to the franchise. the third of course is pretext
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margin. that was off because we took the judge relating to the compensation deferrals. so no it's very happy with those results. >> let me ask you, with the trading revenue itself for the fixed incomes, currencies, and commodities, we talk to people all the time saying i would love to have volatility back. is it a great thing unless you have them moving in crazy directions when it comes to interest rates and oil? >> yeah. i mean volatility is a good thing in trading business but also you don't want so much volatility that clients aren't active. so there's a tension and a balance. listen, the fiked income markets and commodities were very tough. we had oil the last six months that's dropped 15% of its value. obviously the markets were tough. but equities are just fine. so we have very strong world leadings leadings equity sales. >> we're going to hear from mario draghi in about 20
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minutes. what do you expect him to do? what do you want him to do? >> what i want him to do is to show a little leg. ipg i think it's time we move forward with the qe program. we've seen it in the yiet i believe successfully. we're seeing it in japan. confronting deflation in europe. it's not the be all and end all, but it's a necessary step. and if the rumors are right of what they're proposing which looks like about 50 billion euro a month, unclear if it's open ended or not or shared risk to the sovereigns or not, but if the rumors are right at that kind of level, i think the market will respond well to it. >> i mean, it's obvious the different places the u.s. is and europe is right? it's glaringly obvious as we're trying to figure whether the fed raises rates and these guys are finally just coming to the party. will in your view is it morgan's view that they move in june in the united states? or it's not a given?
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>> if you look at the u.s. and i've said this for awhile i think the risk of return in the u.s. is strong relative to any other developed economy in the world. large economies that's been in maybe 30 or 40 years. the u.s. is doing terrifically. problem is we have so much scar tissue from the crisis we just don't like admitting it. if you look at unemployment under 6%. you look at the strength in the dollar. you look at the return of the housing markets. you look at the appreciation 401(k) plans, cheap energy. the list goes on and on and on. the one problem is where the minimum wanlges are. and that's starting to be addressed. i'm very confident about the u.s. outlook growing 3% to 4%. >> would you raise in june? >> i would definitely raise in june. >> do you think they will? >> i think they will but what do we know? it's up to the board of governors. >> i hope they do. >> joe, it's a sign of strength. >> right. >> it's a sign of confidence. it's recognition the u.s. is back on track. >> if the u.s. is hurting, why
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not leave it low? >> because you run the risk of a bubble. >> quick question. jamie dimon said he felt that banks were under assault by regulators. he walked it back a little bit yesterday. he wasn't as pronounced with that. did you feel under assault? >> to be fair to jamie i think i walked it back a lot. live tv is live tv. listen. we're not under assault from regulators. there's obviously been more regulatory change in the last five years than there's been in probably the last 50. and all of us are adjusting our businesses to reflect that. >> do you think he's going to have to adjust his business? >> i can't speak for anybody else. it's tough enough doing my job without worrying about somebody else's job. >> you were at least under assault by the media and the warren-ites. in certain sectors -- >> you think he's under assault by the sorkin-ites. >> i said warren-ite.
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i don't want to be redundant. >> in this business you have to have a thick skin. what we're all looking for is job growth in this country and we're starting to get it. >> in this business you need to have a thick skin too. >> thank you very much. we will see you soon. coming up the company ranks as one of the top selling drug makers in the world with sales topping $57 billion. the ceo of novartis to discuss pricing and much more. then in the next half hour we'll hear from the ecb's mario draghi. also michael dell will stop by the desk here in davos as well as scott minerd of guggenheim as "squawk box" returns.
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welcome back to "squawk box," everybody. we are live in davos, switzerland, at the world economic forum. u.s. equities have picked up significant significantly. this is in anticipation of what we will likely be hearing from mario draghi in the next 16 1/2 minutes. right now the s&p futures up by 10.5 points and the nasdaq up by 11.5. novartis is one of the world's leading drug makers and continues to be a leader in
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vaccines and prescription medicines. the man behind the swiss-based company's growth joins us now. joe jimenez is here. you were minding your own business in the swiss national bank made that move. you must have thought what's that going to do to me. the first thing is it helped in terms of dollars. >> it did. >> expressed in dollars, your stock went up. >> yeah. it was quite a surprise. i think the swiss national bank had to make the move. it was generating a pile of euros so they had to delink. the speed with which it happened and the magnitude of the change was pretty disruptive. so we're taking a hard look at what it means. the good thing about novartis was that we were very geographically dispersed. we had a cost base all over the world. so we're well insulated. >> you totally restructured what novartis is. the last time you were here we were talking about it. now you have a year -- part of the method of your madness is because generics are such an
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important thing for a major pharmaceutical company to get involved. because it's the future of under cost control and affordable care act and everything else that we need to do. >> the whole genesis behind the transformation we made on our portfolio, we announced it in april. the second part of the deal should close in 2015. the whole genesis was to focus on three leading businesses. our innovative pharmaceutical and generics. we're the only that has both innovative pharmaceuticals and also low cost generics. so we're able to go to health systems around the world and talk about the fact that we're hepping them lower total health care and we're able to bring new innovative drugs like our new heart pill. >> we get around when we're over here. we're in demand. people just want to be with us. no but we've had people make
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the case where we were and it's all off the record so we don't mention it. but there's a notion that the pharmaceutical companies made a deal in terms of medicare. because medicare the biggest buyer in the world is unable to talk you guys down in prices that somehow the free market is not working and therefore pharmaceutical pricing is out of control, way too high, and one of the biggest thing that adds to the health care costs rising too quickly. >> i've heard that comment. and that before. but if you go back to what the pharmaceutical industry did when we supported part of the affordable care act around insuring americans, you know i'm an american and i'm running a swiss company. so i see all countries, most developed countries with universal health care. the u.s. was one of the only countries that does not have universal health care. so we strongly supported that.
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we did contribute towards it with ihigher medicaid rebates and with fees affordable care act fees. so we are funding part of the affordable care act. but when you think about the health care costs, particularly in the u.s. we are going to have to lower total health care costs. you know, we estimate that about a quarter of all health care spending in the u.s. is wasted because we haven't yet really shifted from a transactional approach towards an outcomes based approach. >> this is the thing. you need patent protection, obviously, because it costs a lot of money to develop drugs. then there's small markets so you need orphan drugs to help a small group of people. but if at the same time and i understand that. drugs are expensive to develop. but is it really a good idea that the biggest buyer can't negotiate? does it make it a free market? will you see the competition necessary to bring down costs? >> obviously the u.s. is a free
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pricing market. >> but medicare is the biggest buyer. and whatever the drug company says you have to pay. >> there are negotiations that take place. the thing to think about in terms of drug pricing -- not just drug pricing, but it's really total health care cost. we have to shift from a fee for service system towards an outcomes based system where everybody is incented -- >> it's just too bad you're in the -- >> i want to know the distinction between the margin you get on your drugs in the united states versus just about everywhere else. how would you break that down? >> we've publicly shown or publicly discussed the fact that u.s. pricing is higher than the rest of the world. >> how much higher? >> we haven't disclosed that. i don't think anybody wants to go into those details. >> 20 30 50% higher? >> no no. what's wrong is the cost of doing business in the u.s. is
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higher. although you have a higher price for your -- >> i'm talking profit margin. forgetting about whatever it costs you to market which i recognize could be more expensive, the profit margin of the united states versus everywhere else. >> the profit margin is higher than the rest of the world but not like everybody thinks. not because it is not -- it's because the cost structure in the u.s. the cost of doing business is to high in the u.s. -- >> for your industry that the u.s. is the only place innovating anymore because when you cap prices everywhere else they don't innovate. and we're the only ones still innovating in terms of new drugs. if you're just innovating to get extended release versions to extend patent protection or -- >> that's why at novartis we're taking both sides. we're saying we're going to do new drugs. this heart failure drug is going to lower -- well we have proven
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clinically that we can reduce hospitalization by 20%. right now heart failure costs $100 billion a year. most of that is hospitalization. we're working on the generic side as well. we have to offer low cost but high quality generics. >> andrew's young. you don't take any pills. >> vitamins. >> yeah. so you want to cap all the prices. >> a few weeks ago i took z-pack. generic. >> you're not going to be young forever. you're not. >> joe, thank you for joining us. great to see you. >> thank you. when we come back the market event of the morning, week, maybe even the year. mario draghi promising to announce new measures. set to begin within minutes. "squawk box" will be right back.
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when we come back this morning, mario draghi's news conference is set to begin. we're monitoring it. we'll bring you updates as it happens. plus michael dell on the future of the pc market life as a private company, and much more. as we head to break look at how the european markets are trading. slightly higher. opinions. there's no shortage in this world.
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from the mumble beginnings of a dorm room at the university of texas, michael dell built an
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empire that became a household name. looking to innovate the industry once again and here to talk about this is michael dell. he is the chairman and ceo of dell. he's also on the foundation board of the economic forum. thanks for coming. >> thank you for having me. >> let's talk about this new revolution. dell is private. you have taken pcs and stealing market share left and right. so i think your market share growth was better than the top two competitors you go against. i just saw stuff you're planning on rolling out that you were showing off in vegas and i saw it described as sexy, thin, sensuous sensuous. that's a whole new dell. >> we've had eight quarters in a row now gaining share in pcs. we did gain more share than the other top two competitors. both worldwide and importantly in the united states the largest country market in the
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world. and the rest of our business is doing well also. last quarter our software business grew more than 20%. in services we're helping our customers with digital transformation and moving through the cloud. and in the data center with servers, infrastructure virtualization, cloud containers. we're seeing rapid growth this quarter in the teens. so being a private company is great. we're able to focus on the more medium and long-term and we're focused on our customers. all of our energy is focused on our customers and long-term success. >> do you think the success you've had has been entirely because you've been a privately held company and you don't have to deal with quarterly issues quarterly numbers, quarterly calls? >> i wouldn't say entirely but certainly it's freed up perhaps 20% of my time. it's created incredible alignment across the company in terms of what we're trying to
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achieve. and we've said longer range or aspirational goals. we've had some nice upgrades from the rating agencies and strong cash flows. so business is healthy. >> are there specific things you would point to in terms of investments in rnd that you think would have been unpalate unpalatable to the investor? >> when you look back at what was going on when dell was a public company, there was a bit of a debate about should dell go off and acquire all these new customers? should dell invest in the rnd projects? and, you know we know who won the debate. we're still investing. and it's working and thank you very much. so we're doing it at a faster pace. and, you know particularly in this whole transformation that's
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going on to what's talked about here in davos is the digital transformation. how do i enable my company with these new tools? cyber is another area. we have our secure works unit. it's helping our customers deal with the cyber threats. we see 80 billion events per day. we're out there in the front lines protecting our customers from the challenges. >> michael, i guess, we watch this happen and the landscape is like littered with digital equipments. and there was a time we saw the macs and pads and there was a perception that it's over for certain companies. and five years from now, will there be a new dell laptop that is somehow so much better than what we have today that it will take over the marketplace and still be something that can have a viable company that's three times the size of your company
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now? will that continue? i don't understand. i don't understand how the marketplace moves. >> let me help you out with math here. there are about 1.8 billion pcs in the world. and about 35% of them are more than four years old. and what happens is every so often we come out with a new one like the ones that becky just described that are interesting enough compelling enough sensuous enough that the customer says i've got to have that one. it's much better than the one i had four five six, seven years ago. so we're seeing waves of replacement. microsoft is now talking about windows 10. we think that will be a catalyst. i think it will continue. also the form of the device is changing. we have tablets. we have convertible machines. we have virtual machines. we have ma shoonschines with immersive displays. certainly if you look at
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productivity, you have 3.5 billion people just in china, india india, africa who don't have the devices. we're optimistic. and as you said in the beginning, even in a market that's maybe not growing so much, even shrinking a bit, we think we can keep gaining shares. so we'd like to add four more to the eight quarters in a row, make it twelve in a row of gaining shares. >> do you consider your fortunes tied to microsoft and windows? >> they're certainly a very important partner. and i would say one of our most -- if not our most important partner. and, you know i think windows certainly in the corporate market is doing quite well. we're actually gaining share in both corporate and consumer. and we're quite optimistic about
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windows 10. >> have you talked to carl icahn lately? >> no. >> have you had any good like names for him that you have lately that you can tell us here? >> our matter with him -- i've said match i won game over. >> okay. that's good. i like that. >> i have a different question for you. now that we can also call you an entrepreneur but a turnaround artist of your own company, there's another company we talk a lot about the past couple days that may be in need of a turnaround which is ibm. do you think ibm is fixable. >> they were in the hardware business. they're not so much in the hardware business anymore. and, you know we are growing where they're exiting. and, you know, i think we all have to pay attention to these lessons of how do companies change and evolve.
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right now it's kind of stalled. >> i guess the other thing i was thinking, you know i was always a pc windows person but i never really knew what i was doing. so then i did get some mac stuff and it was so intuitive and so easy that i've got this perception that mac has won in terms of the operating system. or something. >> do you know what their share is of the pc market? >> nothing. >> 7% or something. >> so you can -- they're not going to stay number one forever even in my mind right? >> well, you've got, you know the other 90% of the market so that's something to consider. >> this is my own problem is what you're saying. >> not necessarily your problem. it's a great big market and certainly it's not just those devices. you have the end device market is changing. you have smartphones, tablets, and the internet of things where you have embedded computing and we're getting more involved in
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that making these small devices and then capturing all this data. helping our customers internet the data and bring insights from it. so the device market is you know moving into -- as the cost indicator comes down you can embed them in anything and you go from 10 billion and up. >> will there be a time i'm using somebody else's tablet? >> you personally? i can't speak for that. >> probably not. because it's got to be pretty simple. >> our tablet market is growing. just to give you -- >> and that's an android tablet market. >> and windows. the difference between a tablet and a notebook is a keyboard. so these are derivative products. you also see a popular product right now are the two in one transformers. not every person in the world can afford a smartphone a
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notebook computer and a tablet. so for many tablet and the notebook computer are coming together as one. >> i broke my phone. do you have a phone for me yet? >> no. >> are you going to get in into that business? >> could we take a break? >> we're going to take a break. >> we're going to keep him around. >> i wouldn't do this if i didn't get paid i don't think. just to learn things. >> every time new smartphones are minted there's a new server. >> michael, thank you so much. >> thank you. >> thank you for going slow with me. up next mario draghi's news conference is about to begin. we'll get his reaction from goougen gooug guggenheim's chief investment officer scott minerd. he's coming up next.
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welcome back to "squawk box." we're going to send you right out to the mario draghi press conference. he just welcomed in a new member of the european central bank. here is mario draghi. >> -- bank governors take turns holding voting rights on council. the details of this rotation system are available on the ecb's website. we will now report on the outcome of today's meeting of the governing council which was also attended by the commission
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vice president. based on our regular economic and monetary analysis we conducted a total reassessment of the outlook for price developments and of the monetary stimulus achieved. as a result the governs council took the following decisions. first, it decided to launch an expanded asset purchase program encompassing the existing purchase programs for backed securities and bonds. under this expanded program, the combined monthly purchases of public and private sector securities will amount to 60 billion euros. they are intended to be carried
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out until end september 2016. and will in any case be conducted until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below but close to 2% over the median term. in march 2015 the euro system will start to purchase euro denominated investment grade securities issued by agencies and european institutions in the securities market -- in the secondary market. the purchases of securities will be based on the euro system national central bank's shares in the ecb's capital key. some additional eligibility
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criteria will be applied in the case of countries under an eu imf adjustment program. second, the governing council decided to change the pricing of the six remaining targeted longer term refinancing operations operations. accordingly, the interest rate applicable to future operations will be equal to the rate on the euro system prevailing at the time when each is conducted. thereby removing the ten basis point spread over the mro rate that applied to the first two tel teltros. third, in line with our fall guidance, we decided to keep the key ecb interest rates
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unchanged. as regards the additional asset purchases, the governing council regains control over all features of the program and ecb will coordinate the purchases. thereby the singleness of the monetary policy. the euro system will make use of the centralized implementation to mobilize its resources. with regard to the sharing of hypothetical losses the governing council decided that purchases of securities of european institutions which will be 12% of the additional asset purchases and which will be purchased by the ncbs will be subject to lost sharing. the rest of the ncb's additional
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asset purchases will not be subject to lost sharing. the ecb will hold 8% of the additional asset purchases. this implies that 20% of the additional asset purchases will be subject to a regime of risk sharing. separate press releases with more detailed information on the expanded asset purchase program and the pricing of the teltros will be published this afternoon at 3:30 p.m. today's monetary policy decision on additional asset purchases -- >> okay. there you have it. the momentous moment there. european central bank mario draghi i think exceeding market expectations saying it's a 60 billion euro program. it runs through september 2016 but he did leave it open ended saying that it will be in place
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until basically they get back to their 2% inflation target or feel they're on their way back. to the question of risk sharing, a portion of the purchases will be done -- risk will be shared on a portion of those purchases. and finally he did say that for those companies that are in an eu imf adjustment there will be some additional criteria. we'll wait to see how the market reacts to this guys. but a little more than had been expected. but i think the key here is the extent to which this is open ended and not really a finite program. andrew andrew? >> thank you, steve. the market moving on that. you're seeing the dow up. gone up to 150, come down just a bit. i want to get more reaction and insight into this big decision coming out of the ecb and where this might leave rates in 2015. with us is scott minerd. he's at guggenheim. steve sedgwick also joining us
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as well. help us with one piece of this. 60 billion, but it's inclusive of the previous program. >> exactly. >> so originally we thought 50 billion. what is the real number? >> we don't know yet. they've only got the abs in its infancy. it hasn't revved up to full capacity, so to speak. that is an interesting point. we need to see the technical details. if it doesn't come out in the press conference we reckon it will be out around 9:30 eastern time. that's when they put out the details. couple of other significant things in there as well. starts march 2015. you saw michelle talking we've got this key election this weekend. and is cypress gets in their gdp is enormous. 240 billion euros of that is at the -- is with the ecb, basically. the problem there is is the greek paper going to be part of this? and the loss sharing as well.
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we talked about 20% risk sharing. 80% won't be. the germans did not want any risk sharing at all on this purchasing as well. so i'm just wondering when we see the technical details if the germans got what they wanted. >> here's my question for scott. you wrote recently any announcement especially if it's done in january, we're in january, is likely to limit qe to a size smaller than will ultimately be necessary. was today enough? >> well i mean the way dr. draghi described the program, you could argue both sides. first off, i don't think another trillion dollars in purchases is enough to achieve what ethe ecb is trying to do. but he was careful in his wording to say the program is going to go through 2016 but also, you know based on whether we're getting to our 2% target. so i think there was a lot of ambiguity. but the thing i find most interesting is the fact that the bond market both in the u.s. and europe have sold off on this news which is telling us that
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the market is interpreting this as working and being stimlative and we're seeing it in both bonds. >> we spent a lot more and didn't get the 2% inflation, didn't we? >> that's right. >> that's why it almost sounds like qe infinity. they might be trying to do this for three years before you get to 2% as dead as it is there. >> i'll get back to the point i made an hour ago. it's had a massive decline. it's selling off on the back of this statement as well. so the open ended nape of eded nature of this, whether they're going to take it to 3 trillion euros, they're going further than that. it goes to september 2016 but potentially unended -- open ended. i think that's the key feature as well. they will throw as much money at this as well. the euro will continue to fall potentially. >> could japan ever engender 2% inflation? and do they really think they can do it or do they just want to prevent deflation? >> here's the thing. people have been saying to me
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the transition is broken in europe. these have been made for capital not to put the economy. that's been a demand rather. so there is a demand drought, the transition mechanism necessarily working. so it won't create growth. it won't create inflation, but it will send the euro lower. >> it's interesting kwb joe, what you said. because i agree with your insight and take on what you said. the transmission mechanism for qe in the united states was a lot stronger than the transmission mechanism in europe. and i think it's ultimately going to take a lot more than what we did in the united states to get this thing going. >> do you think the united states really is at 2% inflation right now? maybe we are. i don't know. with oil, it's a big wild card all of a sudden too. >> i think we're not going to know that until the oil shock's out of the way. that means we're not going to get a clear perspective on this until the second half of this year. >> scott, you said you think it will take a lot more. do you think that is leeway that
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mario draghi has when he's dealing with the germans? >> it's interesting because i think we put a deadline of september 2016 on the program, but then said but we may go longer. >> so that was to germans. >> exactly. >> to keep the market at bay, if possible? >> exactly. i -- i find that dr. draghi to be politically astute and he will probably have to do a lot of maneuvering, if he really wants to take this concept. >> if you held government paper, ridiculously low yields which have come from 8% to 2% to 1.52 what do you want to do with money? you don't want to put it minus 2%. asset managers have said they're not going to put that back into the economy. they're buy big blue chip companies forced into high yielding equities as well how does that boost transmission mechanism? how does that get growth in inflation. >> in the united states transmission mechanism dr. draghi relied upon was the
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wealth effect. in europe because fewer individuals own stock, i don't know that you're going to get the same bang for europe. >> we've got to leave the conversation there. scott and steve, thank you. >> next we'll have jim cramer from the new york stock exchange get his thoughts about all of this. "squawk box" live from davos, switzerland. we'll be right back. startup-ny. it's working for new york state. already 55 companies are investing over $98 million dollars and creating over 2100 jobs. from long island to all across upstate
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let's get down to the new york stock exchange. jim cramer joins us. jim, liesman, no time liesman has something he wants to say. quick 30-second, your take on the 60 billion, whether they ever get to 2% inflation. >> this is more than i could hope -- more than anyone could hope for. if this isn't enough in some people's eyes forget it you're going to be disappointed. the guy's giving it all she's got. really doesn't sound like germany's objecting to this. i like. i like the fact that our interest rates went up instantly. this is -- this is the ultimate. this is as big as they can give you. >> i kind of like it jim. we'll go to steve -- i like it when we don't have to do it. remember when japan did it we got a couple hundred points on
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the dow. now europe's doing it. our markets go up. it's like free. >> this is malcolm x, by any means necessary. if futures trade down it's because no one can ever be satisfied. a lot of good stuff here. >> okay. great. thanks, see you in a couple of minutes. we'll go back to liesman later. >> back to steve liesman. >> liesman now. >> steve right now. mr. liesman. >> andrew how are you? >> what are you thinking. >> the big question is how much the market expected. take a look at euro. the euro did in fact weaken not to its lowest levels ever obviously but went from and 16 down to 115, bounce off the bottom, you can see that there. you saw u.s. ten year yield dropped a bit on it u.s. stocks strengthened markedly and fell off. wonder what it had to do with remember 60 billion euro includes stuff we already knew about. we don't know what that total
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was before, the abs and other things. you may want to quiz steve on that whether or not it's 60 billion of new money, some portion of this money was already discounted by the market. so unclear what the market considers to be new money here. and a lot of ups and downs in marks we're covering all day. andrew? >> all right. thank you for that steve. other steve saying we'll be able to learn more about those numbers when -- >> 115 on the euro. here we are in the one country not linked to the euro. one place not linked to the stupid euro. coming up highlights from another very big packed day of davos newsmakers here on "squawk box." back in a moment.
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what we know is is from commercial diplomacy, can come some very good things and change. i don't think this is about overnight change. this is about first steps. >> fuel is usually a great traffic drive somewhere we do everything we can to deliver the great prices on fuel and goods and everything else. it's great for us now. >> u.s. is doing terrifically. we have so much scar tissue from the crisis we don't like admitting. u.s. outlook growing 3% to 4
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hrs. >> would you raise? >> i would raise. >> great lineup today. guess what? we have another great lineup for you tomorrow. a lot of fun here. make sure you join us tomorrow. right now, it's time for "squawk on the street." ♪ >> good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber at the new york stock exchange. 60 billion euros a month, how mu the ecb will purchase in assets beginning in march, nearly 2 1/2 years after mario draghi said he'd do whatever it takes to stop deflation. more than the markets expected and futures are higher. oil stable. ten-year yields above 1.9. euro has come down a bit. road map begin is with beginning of qe. markets moving on draghi's news


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