Transcripts For CNBC Squawk Alley 20170808

Sarah eisen and andrew ross sorken joining us. Great to have you. Were going to have raul sud, the founder and ceo of unicorn and mike isaac of the New York Times as well in just a moment. Lets check on the markets. The s p 500 is coming off that record close yesterday and now back in record territory that weve gone positive on the s p 500. Doesnt take much these days its up about. 2 . Being led by the financials, utilities, and Consumer Discretionary thi discretion a direction airy negative samestore sales. Better than expected you got almost a 20 gain for stocks like kors the dollar is on the move at this hour. I got a jolt from the jolts report we find out that there is a record amount of job openings in this country 6. 2 million job openings and you see the dollar go from negative to positive thats popping much its up. 4 , john Something Different that we havent really seen a lot. The dollar is down about 10 so far this year. So does this change the whole vibe around the u. S. Economy being stuck in slow growth and lack of inflactition and add toh fuel that fed may be gearing up to raise rates well see. Its a move but worth monitoring indeed. Google firing the employee who wrote that controversial memo about gender representation in tech google ceo returning from vacation early writing an email to his own, to suggest a group of our colleagues have traits that make them less biologically united to that bork is offensive and not okay at the same time, there are coworkers who are questioning whether they can safely express views in their workplace they, too, feel under threat and that is also not okay. Mike, start with you i mean you cover google. First, i want to express my unpopular opinion here i was offended by the bell curve, that book that came out in the 90s. People were asserting that black people not as smart as everyone else in aggregate. This reminds me of that but i also learned in college to be civil towards people whose opinions i disagreed with and defeat bad argue ams with better arguments. Why is this okay assuminging that there is not other stuff this employee did that was fireable for going toll do this . Is this a dangerous precedent . Yeah. I mean, you know, i totally take your point i think its kind of dangerous in so far as its actually being picked up by groups out side of google who are basically saying, you know, look, this stifles our right to express ourselves google has long encouraged us to have these types of discussions inside the company and thats just what this guy was trying to do i think i mean, to sort of, you know, be fair though, there were a lot of points that are hard to kind vf a real discussion around. If youre just sort of saying like biologically women start from this, you know, particularly disadvantaged point if youre talking about engineering or this sort of tech profession that its hard to come back against that and google found this sort of legal ease way out of dealing with it in an hr way that seems to give them some cover. I dont think its going to go away i think its going to snowball mostly outside of the organization look, theres a practical reality here which is as whatever you think he said, whether he should be allowed to say it or not, it makes it impractical to work at a company like this now because its going to be very hard for him to work in groups with other people. So theres just the really. There is a lot of people you think google made a mistake by firing him . No. Im saying given the practical realities of having this person employed and how difficult it would be to work with him in the future, that to me ends the discussion however, theres a larger discussion to be had and i profoundly disagree with the memo but there say larger discussion to be had about why he has the biases and perception thats he z why, by the way, a lot of people in this country have some of the perceptions and what thats about and why they had the feelings and what were going to do about it f we dont aggress that head on, unfortunately youre never going to solve any of this raul, you worked in big tech at microsoft and you founded a couple of companies yourself and have to deal with these sorts of employee issues. Whats your take ive always been a big advocate for Corporate Culture and culture really starts with your team. It starts from the top down. And it reflects with your community, your customers, your brand. You know, culture severiis ever. In this case, google felt that they made the rights decision. And i think they made the right decision by removing this person from the company because this memo was, you know, was becoming a hot topic inside the company as well. And, you know, some of the things said in the memo, i think, were a little off putting. You know, i mean i have a daughter i put my kids in stem school and she believes that, you know, she can be anything she wants to be i just dini didnt like the memo i agree with you, especially the use of neurotic which drives me crazy but i do think that it is problematic to have a company just fire for this reason. Does it send a signal that you cant have a political or social view that is different than the companys . Does it squash that sort of internal debate . Is there free speech question . Maybe im taking it too far. How do you draw that line about when its okay to voice a opinion or not inside a company . As long as sorry that was to you. That was in response to you saying the company did the right thing. Yeah. Look, i think that as long as the opinion that youre making doesnt affect or doesnt violate the company rules, you know, in terms of respecting one another, working within a team environment, you know, that sort of thing, i think its okay. But i dont think thats the kas here i think this is a lot deeper than coming up with an opinion and saying im a right leaning person or left leaning person or whatever this is a issue and this is an issue thats been happening in Silicon Valley recently. Its been exposed recently and its, you know, its an issue that probably needed to be stopped now before it affects, you know, other parts of the company. I want to quote this one piece from that original memo. The former employee said, many of these differences are small and theyre significant overlap between men and women. So you cant say anything about an individual given these population level distributions. So though a lot of people are qua quoting saying women cant code, i think some would argue thats not exactly what he said again, i dont agree with the overall premise of this memo what im pushing back on this idea if he wrote a memo that said, dear sarah, that all women are better than men, we wouldnt be having this conversation today. Amen. We would say i get your point and thats more complicated i profoundly disagree with what he wrote there is something going on here. Heres the problem with that. 20 of the tech jobs at google are filled by women. Its comparable numbers with apple and facebook 25 of manage ment positions of that company are filled by women. So if he said the opposite, it would have different implications Silicon Valley already has sexism and gender problems as revealed by uber scandal mike, you cover more, of course, than just Google Alphabet out there is this conversation getting broader . Certainly there are issues around reaction to President Trumps win, the idea that not everybody shares californias mainstream point of view about social issues. Do you think is going to spark more conversation in hr departments about getting ahead of when this inevitably happens at another company how they should respond and what steps they should take so they dont appear to be caught flatfooted the way alphabet was . Totally right its funny after a lot of this broke yesterday and over the weekend, i had a bunch of facebook employees reach out to me and say, look, you know this is stuff that weve been talking about or having real intense arguments about since before the election there were incidents inside of facebook that had folks writing, you know, black lives matter on the wall of facebook where you can sort of do corporate sanction graffiti. And then folks would actually cross it out and write all lives matteren that became like a real sort of Sticking Point of contention so these issues and views are not like uncommon out here i think if you want to gain a sort of, you know, if you want to take a sense of utility away from this and say what can we learn from this, i think its going to sort of empower other folks at these other companies to say well why are we sort of firing this guy . Why can we not sort of express this and its just going to get bigger and blow up even more and start spreading. Facebook is the first place id look rooight now. Moving to ousted founders, the uber founder trying to shut down suggestions travis kalanickel return to the company as ceo kemp telling employees, the search for a ceo is the top board priority and despite rumors im sure youve seien in the news, travis is not returning as ceo were committed to hiring a world class ceo to lead uber mike, you cover this company does this mean travis is never returning as ceo does it just mean hes not returning as the next ceo . Thats a lot of good sort of legal ease so there are a few things going on here. One, i am ive been told that none of the Board Members actually knew that garret was going to write this memo and sort of float it so it is kind of a surprise. But, you know, just to sort of know whats going on in the background here, travis is absolutely trying to work his way back into a very senior if not operating rolle inside of th company. He had a hand in the discussions around meg whitman were going. A lot of the leaks around there which ultimately ended up in meg not taking the job or sort of taking herself out of the candidacy. I think hes not i mean this is his baby. Hes not going to let it go and hes going to continue to try to fight to get back in there but i think some members of the board are trying to squash at least the idea that he would be the next ceo and that theyve given up on looking for a qualified candidate. Hes also trying to lobby a bunch of employees to give him support right now internally and hes still talking to, like, tons of folks inside mike, is he helping or hurting the process . Meaning, are there ceo candidates out there that have been brought into the room they see whats going on they see what travis may or may not want to do and saying, you know what dont want to be a part of this . Yeah. Absolutely so a few weeks ago he was actively interviewing. He is still a board member and still has input into whos going to be the next ceo and so when they were first doing some of the intro interductry meetings, he would talk to the candidates as if it was an inestability that he would be coming back some n. Some sort of senior role and that put people off. Like any candidate, any ceo that wants to come noointo the compay and say this is the next version of uber needs to know they will have that authority. And travis sort of assuming that hes going to come back or even hopinging that the next candidate will be okay with that just sort of hampers them from the start. En that have the constraint. The three that are left, are they okay . Are the lee that are left on the short list that were told about, the three men, are they cool with working side by side with travis . I dont think that i dont think that theyve necessarily signed the latest i heard, i dont think they signed on for okay traffic sis going to be my coceo but because i think the rest of the board is tamping down the ideas that travis is going to come back and work right next to them all right raul sud and mike isaac, thank you for joining us today. Thanks. Still to come on squawk alley, the market rally and the president s role in it we debate andrews column. Plus, a cnbc exclusive coming your way with Jp Morgan Chase ceo jamie dimon. A busy hour with s p 500 back at record hhsn quk leig osawaly. For years, centurylink has been promising fast internet to Small Businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. What did you find . Oh, i think the answer is now not so much as it happens. Before, yes. Now first of all, he is 100 right. Youll get the credit on the upside and the down side and well all measure and judge this in four years or eight years from now so as to where we are today, i would contend given the fact there has been next to no legislation of any sort,its very hard to look at where we are today and say that whats what trump has done has somehow changed the market forces. It did early on. But its the earnings now. You cant look and say well look he has this deregulatory stance and thats what it is and we have go listen to a Conference Call of apple when is the last time that tim cook mentioned regulations on a Conference Call . Part of the feel of this post election environment is that the details, the facts as we think, maybe dont matter as much as our gut. How we feel. Maybe there is Something Else thats really going on beyond the signals. I wonder sometimes when there are these what would have been geopolitical shocks that market no longer seem to recognize if theres part of that ethos that is seeping into the market so the positive earnings, yes. They cause a lift. The things that would normally cause a down draft dont seem to and why would that be Central Banks maybe its a trump effect of a different sort. Ill agree with you the dollar lost all of the post election gains that was a trump trade too it totally got wiped out even President Trump himself that is all confidence in me guess what its down 10 this year. Lets debate this further. For more on the markets with the dow and s p 500 at record highs, lets bring in david rosenberg, author of breakfast with dave and Vice President and head of invest ment group. David, what do you think how much credit does President Trump get for a 23 rise since the election for the nasdaq . Well, i dont think that he gets much credit at all as far as im concerned when you look at the sectors that you would pen in as being buys, if you would have won the election which he did, theyve actually underperformed the market you cant really isolate u. S. Politics from what is going on in the rest of the world you have a situation where, for example, chinese Economic Growth is stabilized. Theres no more capital fight. Theyre rebuilding their Foreign Exchange reserves. That he merged that is a source of stability. Youve got strength necessity merging markets. And we went into the year with the concerns being that brechl brexit was going to morph and we had a macron victory in france and Angela Merkels ratings have been rarely as high as they are today at the end of the summer you cant look at one thing and say this is what explains what is happening in the stock market it is a global stock market. A lot of other things have happened lets talk about one other thing, for example, the fact that the fed is no longer viewed in the marketplace as being very aggressive price less than 50 50 despite what the feds been saying for another rate hike this year. So all of a sudden liquidity has become more abunld andant of whs happened its hard to connect the dots to the presidency i put that on the back burner. That sort of jifz with what you said i think were in violent agreement. Thats scary. Charles, you are in violent agreement . If you look at the sectors, it is technology that was the big winner once President Trump got on the campaign trail it went up. This is a discounting mechanism that looks to the future it brings back future earnings to the present and right now the stock market is still expecting cuts in Corporate Taxes, a friendlier workenvironment for u. S. Companies, all of those things are being discounted which is a big part of why the market is going up lets say tomorrow the Trump Administration said we stopped our plans on tax reform. Were not going to have a change in the Corporate Tax rate. What would happen to the stock market it gets killed so the market is absolutely up because of expectations that republicans in general, dont put it on trump, republicans are going to be successful in creating a more business friendly environment look at for Profit Education stock which is up about 80 . Not because Trump Administration has done anything spectacular for them just because they stopped penalizing so, charles, if youre right, then eventually the clock should run out on us actually seeing movement on some of the key policies, some of the legislation the market is expecting. When do you think that happens well, the stocks are worth the present value of the cash flows into perpetuity. So even if i lose six months or nine months, so long as people still have the same confidence that its coming, i doesnt make that much difference thats why the delay in the tax reform is not that big a deal. What is a big deal is if people start losing confidence in i inevitab inevitableness. I think it is Something Like 28 marginal tax rate. The thoughts of 15, 16, 17 arent going to happen, obviously. But there is Something Like 27, 28 f we get 25 , andrew, i think the stock market would be up significantly on that news what about the economy, david . What would it mean for kofrpt earnings and economic forecasts which i know youre not impressed by the recent data no. Theres no evidence at all of any economic acceleration. But i want to go back to the view that tax cuts are being priced in. Theres no evidence of that. I mean, its rhetoric. But when you take a look at the companies with the highest tax rates and the past three months of actually underperformed the market and when you talk about discounting future cash flows, you have to do that with a particular Interest Rate the big move this year outside the u. S. Dollar but thats associated with what im talking about expectations of the fed racing rates aggressively. And thats been imbedded in the ten year treasury note yield which has gone down roughly 40 basis points this year you have to discount the future cash flows by a particular Interest Rate and market Interest Rates in the United States have actually gone down i think that if were going to, you know, connect the dots back to the president , its the fact that whatever agenda he had a h. Was refla he had was reflationary and the gap in the bond markets between the u. S. And say germany or the rest of the world have resulted in the u. S. Dollar going down 10 since so tell me exactly if the view is of reflation if, the view its america first, then how does u. S. Dollar go down 10 . Fa in fact, its flat to down for the year so the big stimulus and the big liquidity, and this unpacks Global Markets and there is this 10 decline in the u. S. Dollar that doesnt happen every single day. And thats the equivalent of 100 basis points worth of fed Interest Rate cuts not hikes thats your big stimulus coming in to risk assets so far this year its a good debate, guys. Thank you for making your cases. And were going to continue to have it here on cnbc as we watch the markets hit new record highs. Thank you. We have breaking news involving netflix now. Julia is out west covering it. Thats right. David letterman is returning to the small screen for a new Netflix Series the yet to be named show will be six episodes combining indepth interviews with field segments it will premier in 2018. Letterman was the longest aserving host in latenight television letterman joking in the release, if he retires, spend more time with your familiar lishgs check with your family first and no word on whether hell keep the beard. Sarah, back over to you. That is what i was going to ask. I was going ask about jon stewart. He was supposed to do that hbo thing and we never got it. Jewel yashgs thank you. Go find some answers to the much needed questions still to come, its been almost one month since his now infamous comments about washington, d. C. , dysfunction and how it feels to be an american abroad. Remember this . We have become one of the most bureaucratic confusing litigious societies on the planet its almost an embarrassment being an american citizen traveling around the world and listening to the stupid. [ beep ] we have to deal with in this country. Lets see if he still feels that way coming up, a cnbc exclusive with mi morgan chase chairman and ceo jae dimon. Squawk alley will be right back because, when you really, really want to be there, but you cant. At cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready, because were helping leading companies see it and see it throughwith digital. Heres your cnbc news update House Minority whip steny hoyer senz republicans and democrats are united how about that on new sanctions imposed on iran he and House Majority leader Kevin Mccarthy are touring israel with 53 house freshmen members. 235 or 236 republicans voted with 193 or 192 democrats to expand the sanctions against iran for missiles, for human rights abuses and for supporting terrorism. So i would say to you that parties are pretty united, not pretty united, very united kenyans lining up to vote in the countrys president ial election pushed through a gate en masse at a polling station when it opened early this morning. Some people got hurt some fainted following that stampede mcdonalds says they will double the number of its restaurants in china in thenex five years surpassing japan as the companys second biggest market outside the United States. It hopes to grow sales in china by double digits in each of the next five years. Thats our cnbc news update for this hour. Back to squawk alley. Sarah . Contessa, thank you and with that, well send it out to chicago and our own will ford frost with a special guest. Will, take it away sayer yashgs thank you very much yes, indeed, im joined about it chairman and ceo of Jp Morgan Chase, jamie dimon good morning you to. Happy to be here, will. Great to have you here. And specifically in chicago. You spent seven years of your career here. You happy to be back i am. I love chicago we moved here i moved here to be chairman and ceo. The whole family moved they went to school here i think its a wonderful town. The people are wonderful the restaurants are wonderful. I hope you enjoyed it last night. A very lively atmosphere. Its great to be here. Lets talk about the specific reason why we are here so part of jp morgans 350 million commitment to investing in skills develop ment youre investing half a million today in a Foundation Robotics Training Facility here so why that investment today absolutely critical that the businesses work to create jobs and create a healthy environment. Thats what a bank does. Investing in companies and loans. So if you look back here this place is teaching kids as apprenticeships, electrical robotic, these machines back here they get out, theyll have jobs earning 45,000 to 65,000 we spent 250 million around the world doing. This i think its critical to do we have to participate and, you know, make Society Better for hem. You have done a tloost lot o in detroit and now chicago still the way you frame this there is a gap you said an oped in june that its a moral and economic crisis that too many young people leave high School Without clear pathways to a successful future. Whos fault is that . Is that the fault of the u. S. Government i dont want to blame anien with purn. Half the kids in these schools do not graduate. Ien into i mean that is a disgrace. A lot of kids that graduate both high schools of vocational schools and community colleges, they should have a livelihood when they get out. There are tons of jobs available, robotics, coding, medical jobs, construction type jobs, aviation, automotive they get out and have apprenticeships and trained and certified. Go on to college afterwards if they want and great jobs you know, we as a society have to do a better job america used to do this really well and we dont anymore. We have to get back to the habit of making sure kids gut oat not just learning about life but livelihood zbhchlt youre saying america doesnt do enough of this today on your recent q2 Earnings Call you did speak about washington and the gridlock there so much so you said, its almost an embarrassment to be an american. What did you mean by that . Is. First of all, im very proud of america what embarrass mez is our ability to get instfrastructure done properly. The last major hub bultd was denver dh china has done 57 in the last ten years. We mentioned education i travel around the world and you meet president s and prime ministers, everyone knows that they need a Healthy Business environment to create jobs and wages and to have a Healthy Business environment, you need a competitive tax system our taxes becoming less competitive over the last 20 years. Everyone improved theirs we simply havent. I can go on and on i think we need to acknowledge america is the best country in the planet im a complete patriot this is the shining city in the hill but we should acknowledge our problems and fix them. Because the lafk fixing them is actually hurt average americans jobs, wages and caused a lot of the turmoil we have in society today. You mentioned tax reform there. And lots of hope initially when trump was elected. Do you think it does get delivered on during his first term in office you know, i dont know. Look, im i hope. So im going to work towards that effort. It is just critical we do it i became the chairman of the brt, 200 Major Companies business roundtable. They employ 15 Million People. They do a lot of the capital xpenld tour expenditures the point of that is to get competitive tax reform, skills initiatives and infrastructure and smart regulation, et cetera. A lot of ceos are going to get involved to move the agenda forward. Im hopeful. You speak to the people in washington, they say theyre going to get together and have a republican platform. We need one republican tax return and thent brt is going to put muzzle behind it to get it the brt just started for the first time doing advertising were going to vehave events to start educating people how important tax reform is for jobs and wages and businesses and Small Businesses its not about big corporations. Its about our country specifically on the tax reform issue, youre in the middle also at the moment of your companys annual bus tour and in a couple days time youll be welcoming Mitch Mcconnell as part of that to discuss the importance of tax reform s that right . Hell be joining us at something that were doing in lexington or louisville, Something Like that and the bus tour, you know, we do every year we do other tours. But we get to meet clients and customers and employees and show appreciation we learn a lot like on the bus between these cities and well have been in minneapolis, milwaukee, madison, chicago, indianapolis. This is super time consuming. Is it worth it absolutely. Its four or five days we learn a lot from our customers. We get to say thank you. We have appreciation events. We do town halls later on were doing a town hall for 2500 people. On the bus in between, we ask people what can we do better we ask our tellers, our branch managers, invest ment advisors we take that list and fix it we learn a lot and we do the same with customers. You meet them, they tend to tell you what youre doing well and some that youre not doing so well. Specifically when Mitch Mcconnell joins you, what you are saying is your advice . Is the failure for seeing various bills get through on congress on him and senate or on the trump add sngs. Im not going to blame anyone Everyone Wants to get it done. At least everyone in the Republican Party we dont quite know if the democrats want to do with tax reform my major point is we should get together and work as hard as we can to get it done f we fail, we fail im going give ut my best shot i think its critical to america. Zbl lets talk about deregulation as well. Were you encourage of the contents of the financial deregulation no one in none of the major bank i know going back to propriety trading this is recalibrating the things dhanlt work very well we calibrate capital liquidity i gave one example which i wrote about in jims letter where mortgage lending is so constrained by rules, regulations and cost, et cetera that its unavailable to whole groups of people like younger people, prior defaults, imgranlti immigrants and First Time Buyers thats not right that may have held them back by a five to seven year period. It should be fixed the regulators know that and they want to get it done the treasury portion is a lot of things that should be looked at, calibrated what do you say to the critics of that white paper, the treasury white paper that say its going to benefit your share price more than it benefits the u. S. Economy i think people focus on the wrong thing. Do the right thing and when you benefits or doesnt benefit my share price is not the issue do the right thing dont do the wrong thing so can you hurt my share price and hurt the American Public at the same time so the fact is what is the right calibration . It has nothing to with j. P. Morgan share price ichlt a patriot before the chairman and ceo of jp morgan i think its very important. What actually works . What doesnt work . Go back to that kind of con instruct. The share price as side point hitting an all time high today as well. So congratulations on that congratulations to the 250,000 people who worked hard for the last ten years serving 50 million customers households, 60 countries, large corporations and my hats off to all of you from j. P. Morgan chase, thank you. Lets talk a little bit about something that already happened even before we got to deregulation and that is the c car tests where you are approved to pay out over 100 of your earnings 107 many analysts thought you asked more more like 8067 you were bullish and asked foirt and they approved it was that encouraging can you pay out 130 next year so first of all, we believe in stress testing and theyve become very rigorous i think thats a good thing. Our preference is always to grow the company organically. So if you actually ask me, id rather use that to buy back stock or grow the company. And some people think that banks are buying back stock or doing Something Like that and therefore not making loans the fact is loans and stuff like that are con stranld strained b things if i had a chase and things were different, a lot of the capital would have been used making loans to help funneled american society. I think well going about a to that at one point. The goal is not to go to bigger payout go. To lesser payout and spend more time growing our company, financing the economy. I already mentioned the tl could be a trillion dollar more of Mortgage Loans and a portion of that is our bank that would have fuelled the american growth. Thats what we should be focusing on. You know, not the payout in terms of other uses, what about acquisitions i, for one, was surprised to see you involved in the bidding for well pay a ukbased payments company. It is not a cheap one. 9 billion or Something Like that i mean in recent years, the big u. S. Banks have been nowhere in terms of acquisitions it is smug built a large part of your kr career on. Are you going to be able to go back to that its important to note that we cannot buy a bank in the United States by law obviously we cant do. That we didnt make a bid on world pay. They asked us to look at and we started looking at and went into Something Else one day it will be acquisitions. Again, my preference is organic. We grow every business were in around the world organically there might be small acquisitions if they happen, this is not a promise, theyre probably going to be more around technology, products and services than they are about anything you consider more traditional banking and, of course, you cant do any of that without Regulatory Approval and the regulators make it known to us what they would allow us to do and not allow us to do the depth of their troubles last september when their share price was a lot lower, did you did the thought cross your mind of trying to bid for Deutsche Bank . Whether to help them out or help you out . No. Never came across your mind no. We wouldnt have been able to buy Deutsche Bank by our regulators i made the point publicly that they recovered they had major problems. They are man made problems they were not a financial crisis and it wasnt a lot of capital that youre talking about. When i talked to regulators, for a very amount of capital that, will not be a problem. And so you dont want to have a financial problem because a bank needs a little capital. In terms of markets at the moment, are you concerned about the level of bond markets . Is there a bubble there . And when the fed does start to normalize the balance sheet, is that going to cause problems for some people . When you say am i concerned im not concerned for jp morgan, well be fine whatever the environment is im not that concerned i do think that bond prices, you know, spreads, bond prices are high, spreads are low. Im not going to call it a bubble i wouldnt personally be buying a ten year sovereign debt anywhere around the world. My view is the fed is doing the right things, raising rates, you know, telling people theyre going to start reducing the balance sheet. The likely outcome is that it will be fine and particularly for the American Economy doing well, so the fed is doing these things in the face of a strong economy, i dont think its going to be that disruptive. All i ever pointed out is there is a chance it could be disruptive there is a possibility because we never had the reverse of qe 1, 2, or 3 before. If you see the United States doing it and the receive not the environment that people expect people cannot predict the future my view is you cant make something certain that is not certain and there is a chance this wont go well but you know what . Theyll figure it out. The fed will respond appropriately if things are not going the way they see fit. We talk about markets dynamics the last two or three years has been one of a strong rising dollar. Last two or three months thats turned around in the opposite direction what is your view on the dollar and is that going to become a sort of trend that were stuck in now number i hate to forecast things like currencies and you are currencies move generally, you know, there is an expectation in the world when the expectation changes, the currencies tend to move. And the expectations are usually around two things. Im oversimplifying. This one is the country going fast or slower than people expected versus other countries . And now were a little bit slower weve seen europe pick up and japan pick up. And Interest Rates are going to go higher or lower, less than expecttation thats people thought. Those two things are driving a slightly lower dollar. If the American Company picks up, the dollar will start to get strong again. Whether we consider the sort of main take away from q2 earnings from the big banks, i say one of them would be a sign that the gap is narrowing between you and some of your biggest rivals ci citi had a great quarter bank of america had two or three good quarters s that something that hurts you the competition no. Im a patriot. I want all my competitors to do well i want to do better. But i it this recovery of the American Financial system is great for america. We always expected people to become competitive again if you ever have a business meeting with me and talk about the competent tishgs i always say there is competition its going to be good. And its coming after your business wlchlt it is bank a, bank b, bank c or d, i doesnt matter to me we always expect that. I think we told people that we expect that it will get harder for us. A lot of competition. We have so much good stuff coming from an electronic trading to online Self Directed trading to i cant even tell the people buttons of stuff coming that i think will be really exciting and the company will grow and doing a better job serving our clients. One of the new interductions is chase sapphire. There is a lot of competition in that space the takeup is very strong. Were coming to year anniversary. Are you learning since that the profitability is going to be less good than youd hoped so first of all, the takeoff, we sold in two weeks what we expect to do in a year of course the benefit of the card and its a Big Marketing expense for sapphire because of all free throw stuff that goes there. The benefit comes over seven years. So in any new product, you always look at what is happening. You know, attrition rates, spending rates, lending rates. Great client he will we dont know exactly yet. We track it and feel okay. It can be better or worse than we thought its been a great product and really enjoyed it. It is great for millennials by the way. Obviously as a bank, we have a lot of things to do with the clients in addition to the credit cards what i wavent nt to talk abo morgan and the future. Your cfo left recently when you consider other heir apparents in the past have all left as well, what would you naught down to why all the great minds left your company look, i am thrilled that those folks all doing quite well i applaud all the stuff theyre doing. We have the best tall nenlt Jp Morgan Chase ive ever seen. And so you met some of the people some of you out there have met some of the people we have huge success and great people for succession of the bank people are going to leave and do their own things and, you know, you got applaud. That thats what happens to a company. So were in great shape. The issue of jenldgender equ has raised its head in the workplace recently, particularly Certain Companies in Silicon Valley you would say that wall street is ahead of Silicon Valley on that as annish snu. As an issue . Yes ive been trying to get the froes write a story. 30 of our top 200 people are women. They vun believable jobs global jobs, m a, invest ment banking, Equity Capital markets, credit card, retail. We have a black woman that runs our Retail Division that is on this trip for us im so proud of what weve done. Most Companies Want to do a good job. I think its great and what about on racial equality is there more that jp morgan needs do there the other very important thing about jenlder equality and racial equality, the door to that is people at a company feel trusted and respected and equal opportunity. Can you speak to everyone. There is not favoritism. There is not groups of people and not politics if you dont get rid of that, youll have youll never have gender diversity so africanamericans, were making a special effort because we acknowledge that what weve done as well as any korncorpora out, we have done jp morgan well we set up a separate group we have schools recruiting, we have retention, trying to hire more senior africanamerican talent it is working. The numbers are Getting Better we have to acknowledge the reason its different is because its a different history, a different background you know, a the love africanamericans didnt grow up in the same neighborhoods as white people so to make it special is a good thing. I get asked very often why not us well, were doing great with women. Were doing great with asians and hispanics. We have to do better with africanamerican and we are going to i just want to touch a little bit on the london issue, the issue that cost your firm billions of dollars and a lot of headlines a few years back n june, relatively recently, bruno exel published views in detail on the internet. For the first time he did very clearly and specifically point the finger at you. What what s. Your response to that accusation . First of all, bruno my personal view is not the guy to blame. Okay he was doing what he was asked to do. It got too big and out of control. He wanted from what i understand, he wanted to do something about it and Companies Make mistakes, okay and there are good mistakes and bad mistakes we made a mistake and confessed it right away. Bad risk and bat bad controd cos its in the past i want to point out that heres heres a typical example of no customer got hurt. It was us. It embarrassed us. It hurt our company. No customer got hurt and we fixed the problem. And so i agree obviously make mistakes in life. How you deal with mistakes is more important than when you make them or not youre going to make them. I dont know any business person out there, anyone in any size company who hasnt made a mistake of some sort and, of course, we make mistakes a lot of people come after you about that mistake you have to deal with that i want to talk to you a little bit about your family you spoken at length today about your love for your employees, the impact they have made in bringing you to where you are today and your career. What about specifically your family and their impact on yourr career would you be where you are today without their support . I think ive always said, family first, country second, jpmorgan, literally, last. Jpmorgan is the best i can do for my country and my family win spend a lot of time with them. I spend a lot of time with the family, weekends, i have two granddaughters, i have threedaul wife those are kind of the two things i do and of course, without my parents died recently. Without your family and the support of your family and what you learn from them and in the good times and the tough times, you may not have a great life. I always tell people at Jpmorgan Chase, youve got to take care of your friends, your family, your spirit, your mind, your body, your soul, otherwise you wont have a fulfilling life and those are important. The job is important, too, because you spend most of your time at the job, but those things are more important. You mentioned the tough times. What do you think the single toughest moment of your career was . People expect me to say the london whale, not even close and though it was painful for the company and i was quite worried about that, because it hurts the people in the company, we are flesh and blood, and some say when i got fired, nope i think the worst time and its kind of represented by when i called up the Management Team and my board of directors, both on friday night and saturday night, the weekend that lehman is going bankrupt and told them that you were going to have the worst, scariest weak that youve ever seen in the Financial Markets or the Financial System in the United States and that Jpmorgan Chase will do everything we can to help our country. We did a lot of things just to help the country, not for profit almost ten years ago that was. Before i come to the sort of conclusion, you said on the Earnings Call, weve touched on part of that already, but you saidnt Earnings Call, you didnt think growth would get worse without washington in action its just that it could get better when washington starts to pass those reforms weve talked about. What about since the Earnings Call theres been a lot of bumpiness in the Trump Administration over the summer are you starting to get nervous about the outlook for Economic Growth under the Trump Administration the point the real point is, is that the American Economy is 150 Million People go to work every day. Its businesses like this, its everyone here. Its maybe shocking for people to understand, that in spite of geopolitics sometimes, in spite of washington, that resiliency and strength in that system is pretty good. Most people dont go to work thinking about washington. They go to work thinking about their kids and their family and their job and their customer and stuff like that. What i was saying is that america is going 2 in spite of some of that gridlock. If business and government collaborated more, we got some of these things done, we would be growing faster. Thats my main point about that. Jamie, to round things off, at the peak of the financial crisis, you sent to your friend and treasury secretary, hank pa paulson, a note of support at a moment he was taking a lot of heat it was a quotation from Teddy Roosevelt about criticism. It read this, its not the critic who counts, but the man goes to the man whos actually in the ring, whos face is marred by sweat and blood and dust if he fails, at least he fails while staring greatly. Youve criticized washington recently one day, will you cease to be the critic of politics and step into the arena yourself . No. Im not stepping into the arena. And im not criticizing washington okay, im criticizing us collective collectively collectively, tleerpd the leadership of america hasnt done the things that will get us jobs and wages we dont do enough analysis and pla planning im trying to do my share to get us working together. Hank paulson who did an unbelievable job in that crisis, and youve read how he suffered through it he did some great stuff for america and i still applaud his actions. Even though jpmorgan paid a huge price for some of them after the fact jamie, thank you very much for joining us in the Business News arena today we are veryua grateful. Jamie dimon. Always a pleasure thank you chairman and ceo of Jpmorgan Chase. Thank you, wilfried frost out there in chicago and our thanks to jamie dimon as well, guys wideranging interview about his family, about his patriotism, about his thoughts on tax reform, which hes expectediexpected in what stood out to me was his call on the bond market. Thats where the high you know, jamie always has he has a tough job in that he is trying to thread a particular needle, which is and i was glad thatwilf asked about the comments he made on the call i think we actually have i think we have that tape. Should we show it right now . Oh not yet we dont. But the point being that while he will say hes a patriot and hes not embarrassed by the country, he also is embarrassed in large part, i would contend, by lots of things that have taken place and how he describes that and says that is not enough structure. Is a tricky little game and tying it together with the theme we were discussing earlier, you know, he was asked flat out, wilf asked him, is wall street haud ahead of silicn valley on diversity, and he said yes. And had some comments, specifically, why on that. Not often that we get that kind of unscripted talk about culture and diversity. A topic that can be controversial. But he did address it head on. Right okay, speaking of jamie dimon, i should say, he is among the allstar lineup at cnbcs delivering alpha investor summit coming up on september 12th. Joining secretary mnuchimnuchin lot more, you can pick up tickets and get information. Its all availlen liriab odeveng alpha. Com. Squasquawk alley returns in a moment you always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Chances are, the last time yoyou got robbed. An, i know i got a loan 20 years ago, and i got robbed. Thats why i started lendingtree the only place you can compare up to 5 real offers side by side, for free. Its like shopping for hotels online, but our average customer can save twenty thousand dollars. At lendingtree, you know youre getting the best deal. So take the power back and come to lendingtree. Com, because at lendingtree when banks compete, you win. Everyone wants to get it done, or at least everyone in the Republican Party we dont quite know if democrats want to do tax reform. But my major point is we should all get together and work as hard as we can to get it done. I think its critical to america. Thats jamie dimon saying he doesnt want to point fingers and cast blame as to why things havent gotten done yet, but he remains optimistic that something will get done with this Republican Congress i think hes going on tour with Mitch Mcconnell in kentucky i was just going to say, a lot of people on twitter asking and wilf asked him whether he wants to get into the arena. Im starting to think maybe he wants to get more in the arena wearing a denim shirt that casual rolled up shirt yes i dont know. A lot of these ceos, mark zuckerberg, included, seemed to like kind of playing politicians on tv, but i dont know if they really want to jump in and get batted around tits absolutely the ceo election you know whats coming up after the bell today disney you know what they say about bob iger potential well his franchises have been good for america and certainly good for disney shareholders, more disney certainly in terms of content coming up. Sarah, always good and of course, andrew ross sorkin, thanks for joining us on squawk alley. Lets toss it over to the half. E repor report. Im scott wapner a perfect ten. The dow going for another record close today. It would be its tenth straight how long can this rally go, even as some now are warning of trouble ahead. Joining us for the hour, joe terranova, stephanie link, josh brown. We begin with stocks pushing higher once again today. Josh, i just heard you talk about the xlf and the breakout it had 24 1 2 was obvious re