Transcripts For CNBC Squawk Box 20160609

Overnight in asia, the markets in china, hong kong and taiwan all closed for dragon boat festival. And early trading in europe, also red arrows. The dax is the biggest decliner. Down 1. 25 the cac and ftsi boat down 1 . Wti down but still well above 50. And george soros front page this morning. A bearish soros is lured back to trading again. Getting back into the game. Soros recently directed a series of big bearish investments, semiing stocks and buying gold in shares of gold miners. And in an article he warns the falloff from ununwinding of chinese investments likely will have global implications. Soros is worried that continued inflation in china will hurt the u. S. And others. And he say s telling the jou if britain leaves it could unleash a general exodus and the disintegration of the European Union will become practically unavoidable. Soross best known trades of course he bet against the pound in 1992 in a trade that led to 1 billion in profits. We know what the markets done. Some of his bets in gold have done well. Druckenmiller. 8 . Little more in some of the gold minors. Maybe the miners. Talking to gartman in this a second because, you know, i didnt buy the stupid stuff. He tried. I had to open an account. It took a week to get the papers in. They do this online now joe. No no im buying maple leaves. I i dont want to buy i want things i can actually hold. So finally in a position to buy on the employment day you. Get 38,000 and gold goes up 40 frickin dollars or something. I actually trade frickin dollars . Huh . Yeah. And the china thing. So now soros thinks the flows are headed the other way is this. His concern is the china slowdown1 means slowdown1 for er where. Past performance is no guarantee of future performance. And hes not been an active trader for a long time. Something like 30 billion but sees things from macro. 30 billion dollars is a good number to say ive got tom past performance. I will acknowledge. Because gold now. Im not sure it backs off. In a period of rising Interest Rates. When you are at zero you figure Interest Rates are going up some day. Which would not be great for gold. But the thing is gold ran up to 2,000 before we got full on qe one two and three and then einhorn and others got in saying were going to get and as we got to qe one two and three the rest of the world followed it came back to 1200 so it is way ahead of the consensus thinking. But if the fed cant get out if they are feckless and in effective and cant get out then they lose control. In effective. Right and then they lose control and gold does go up. So i dont think im going to have another chance. You will have plenty of chances. Below 1200 . Doubt that. Thats what i want. 1275, come on. I cant chase it. When i want i was asking can we see this is ego. This is psychological. I was only doing it to like play with the maple leaves anyway. You know, put a light there and visit shining on my face. And have like a video. And the sound of it. You have felt it before, havent you . What . Gold. You have felt coins and bouillon. There is a reason for 4,000 years people have treasured it. It is treasure. A friend and i had bought some gold. We were on the border trade in chicago and we had a vile of it. To protect ourselves and we put it in our coat pocket and it pulled our coat down and ripped our coats and were trying not to look conspicuous in chicago trying to get it to our lock box. It was really quite funny. Treasure isnt treasure if there is no gold. I dont think. A buried treasure without gold. Better be some nice jewels. And the jewels need to be set in gold. Anyway. You need to use one as the ball marker. That is classic thing to do. As what what. A ball marker. Sports thing little lady. Dont even concern yourself. Get some i do that on purpose. Touching all this stuff. You should talk. Anyway, president obama is yeah. Did you see . I just noticed. Well its nice. Its good. Sacred and holy and glowing. Obama is expected to meet with Bernie Sanders today. I think the berns got too hang in there, dude. Hang in there man. You are the one whos energized the whole campaign. It is crooked. Journal saying that. It is crooked. What do you think . Your talking points. Why do you think . Hang in there bernie. You deserve more. It is unacceptable. It is rigged it is not fair. Earned the right to say whatever he wants. Yeah. No reason to get out. You lost in every possible metric and there is no reason for you to be still doing this. There isnt. Shes got the delegates. Shes got more votes. I but hey i agree with you buddy. Hang in there. The meeting will be just divide and conquer. Will be at the white house today at 11 15 a. M. Eastern. President back from jimmy fallon i guess, and expected to push the candidate from vermont to embrace Hillary Clinton for the nominee of the party. And conservative radio talk show host hugo hewitt the latest to ham ter nominee saying the rnc these to dump trump. And while all this is going on president obama took some time to come into new york for the only late night show really worth appearing on jimmy fallon the tonight show. The main role im going to be playing in this process is to remind the people that this is a serious job. This is not reality tv. President also slow jammed the news and you can watch that when the show airs tonight. So i was talking one of the producers dennis or whomever. Thinking i might have a kindred soul in you as i say this but trump had about a tw week period where the same people that are now saying you got to get out, they were the same people all along saying hes not going to be the nominee. This isnt going to happen. Weve got to find someone else. For two weeks they have sort of had, you know, when he became the presumptive nominee. There was almost like a brief honeymoon. But the people that you mark kirk. Even paul ryan. Paul ryan was controversial for not going right away. So far week or so. Hugh hewitt. Never been a trump fan all along. Seems like hes been rubio. Every night at dinner we have a great debate over im not saying one way or another. But it is a binary choice, dennis. So who is your choice . Take my ball home or deal me another hand . Deal me another hand. [ inaudible ]. Okay. Anyway, the dump trump thing at this point it is the same as the trump will never be the nominee. He is going to go to the convention and get the nomination and then it is the damned the torpids come what may for the republican party. Probably expectations that once me became the presumptive nominee that maybe he could tone things down. Hasnt proven to be the case. Well there are people who think that the people that were behind him the most want him to and hes still going to say things that make them think well hes not going to turn into the politician. And by the way, donald trump got where he is by not listening to any of the people who told exactly. And i still looking back on it and the books will be written. But the idea that there can be 17. And some of the most qualified and guys with really four years ago they were begging to get in like Chris Christie or jeb bush. That was a problem. So many choices. Jeb bush never got more than 4 or 5 . Staggering. I was a strong kasich fan but no charisma. What are you like a rhino or something . The democrats are the ones that loved kasich. I would suggest to you that you party its not my party. The republican party. No that. Is so broken. This just reflects how broken the whole thing is. And you say that with not a hint of irony. Nominating you have the only thing that energized your party as you would say it is the 74yearold socialist. Hes the guy thats really exciting at this point. And a 69yearold socialist. Succeeding a 58yearold socialist. The extremists on both sides have somehow managed to pervert the whole system. Thats what happens. Nothing do with the parties. It has to do with people voting for those people in the country that are in a place that is not very positive right now. Regardless of that New York Times left behind and feel like they have been ignored by washington. Each day comes by becomes more and more monarchy. Draghi addressing a Economic Forum in brussels this morning. Draghi has argued Monetary Policy alone cant end the regions economic malaise. Joining us right now or who has been sitting here with us for a while a Dennis Gartman and great to see you. We just had this talk about the ecb and the Central Banks and that is probably the central theme driving just about every market now. Driving everything. Central banks have taken the central position. They are on the center stage every day. Draghis comment this is morning i thought were very serious. If you look at the euro after his comments it gave up almost 70 immediately. Hes made it abundantly clear there is not much more they can do. I think hes wrong. They can go to helicopter money and i think they should be doing that. I dont think they have a choice and i think that is where they have to go and will go but putting froern politicians to do something. Constitutes that. That was a very important change. And helicopter. And there will be more. . Exactly that. So they have started. They have started. Okay. And you think this is necessary because the economy is falling apart there . Yes. I think they have very real problems over there. The chinese circumstances weighing on europe. Europe itself is weighing on europe. The brexit vote i hate that word brexit is weighing on europe. And mr. Soros i think is correct if that vote goes the way it might be feared and it doesnt look to two that way. But if that goes that way on the periphery more and more countries will say if england is out im out. A foreign defense minister who said he thinks the problem is the vote itself. Even if they vote to stay in they will be voting to stay in and they will get better concessions from the eu and that every other nation will come back and want to renegotiate their terms of staying in as well. I think it is lose lieu. I think europe finds ints itself in a terrible untenable position. And remember the uk is only voting to stay in the Political Union and they have never been in the monetary union. A lot of people misunderstood that. They are not vote fog get or out of that. So if draghi dumps more money, what does that do to our central bank . Do we raise rates here. No. And japans negative Interest Rates and europe the real problem is negative Interest Rates. And what people dont understand is what happened in japan after they took money to negative levels, you want to take money out. It is going to cost me to keep it in and cash is really deflationary. And that is what people are missing. It doesnt get lent. Relent again. And there in creates the inflation. Japan strangely enough has to get back to positive Constitutional Rights and i dont know if they have the courage to do that. Soros thinks the way to play is to buy gold and gold miners. Maybe silver miners as well. What do you buy . I think the way is looking at currency and circumstances are. I want to own gold in the currencies that are probably most likely to weaken up. I want to old gold in euro terms. Eventually in yen terms but right now i want gold in euro terms. I think the gold with make its way easily back to parity with the u. S. Dollar. So gold in euro terms gets very strong. And paper entries on your account statements that show your ownership in gold when you yes. Really . That will work good. When you go to the border guard and say i need to get out of here and the zombie. Look ive got it right here. Everybody should own a little physical gold. What is a little . 5 . 5 of your assets . Yeah. Think about that for a guy like gartner. Thats buck and a half. If you are looking at things and you think that gold is a way to play it. But look a lot of people arent going to go heavily into these positions. Weve seen stocks hold up pretty well. S p is within alltime highs and dow is only 2 off the levels. If were in an environment like this and the fed is not going to be raising rates this is the best place the put the money. And the term tina. There is no alternative. And sadly that is the operative formula right now. When will it stop . Whenever it stops. The market has been strong. It will eventually stop and when it does it wont be pretty. But if you have faded it. And i have tried to fade it every once in a while and every time you fade it it blows up in your face. You are assuming it wont always be tina. And it might always be tina like in japan they may never raise. How many have you known who have tried to stell jgb short . Everyone you know and its been 25 years of that sort of activity. With negative interest rate. Should be be surprised they have gone to negative Constitutional Rights. I think it is a bad decision but it is a long protactive move. And. Thanks for being here. Thanks for having me on. Are you going to favorite my tweet. No. It wasnt the nicest tweet. If it was a nice tweet and i liked the tweet i would give it a little heart. That was not said with malice. That was said with knee jerk. Knee jerk. Would you ever tweet they laughed so hard that my face hurts . I tweeted i went to the Jerry Seinfeld show last night. And somebody tweets because their face hurts im going say really does because killing me. That was you expect him to like it . No but i would never tweet that. You know someone is going to tweet it is killing me. No i dont that. You have to there are a lot of nice people on the street who say very nice things about my face. If you tweet my face hurts, someone is going to yes. It is killing me. Glad you got to see Jerry Seinfeld. Unbelievable show. But it is really not out there until you have experienced it. Now it is actually worth talking about it. It is. Youve seen it. You have experienced how many times do i have to hear about the water there is a new show i just watched called the wire. And i looked, 2004. Exactly. Coming up. Its disneys world. What a great show. I love the way they portrayed the newspaper though. Hes back to the wire. And the seinfeld. Both. A flu Magic Kingdom about to open in shanghai with. Check out this day in history as we head to break. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Welcome back to squawk box. Shanghai disney set to open next week. Here a first look at the park. Why is this park important for disneys ambitions in china . China represents a great market for the walt disney company. Because our stories are not only known here but they are universal in appeal. They touch hearts all over the world no matter the country or culture. So this is i think a great reminder for disney and a Growth Market as well. And this is an extremely important step or the biggest step actually weve ever taken anywhere to grow that market. How does this park help other parts of the business in this market . Well it clearly will serve as sort of a booster rocket for people whos preex appreciation of disney. The knowledge that disney is in fact universal in appeal to people. The appreciation of knowledge of characters and stories. An immersive park experience, the disney way is something that people remember for the rest of their lives. And that goes a long way in terms of not just creating word of mouth in terms of people interest for and passion for our broaden and everything it stands for. And everything that bears its name. What is disney doing differently in this park compared to others around the world. To begin with we eliminated main street. Even our story telling here started in mandarin and translated to english so we could we work and it understand it instead of starting in english and translating to mandarin. That way it is much more authentic in terms of language and story telling or much more distinctive in that sense. The architecture. Putting a chinese tea house right in the center of this park in grand form. Disney town, using architecture that is sort of old shanghai architecture. When people see it, ah, i recognize that. I like that. So there is a tremendous amount here that is very distinctly chinese. And and were not expecting people to come in and say wow that is very chinese. Were expecting people to leave with the sense that they experienced something that was very much disney but very much felt like theirs and very much felt like home. Some are openfully criticizing you saying disney wont be successful here longer term. What do you say about that . Pricing and the experience and the pricing of the parks that those who are criticizing us are offering reflects exactly what they are offering to their people. And right after that interview bob uygur talk me on one of the new rides here. An entirely new ride called tron. A roller coaster where you are bending over on bikes and take a spin through different lit tunnels and uygur said it was really important to bring some new technology here to the park. And the caribbean also got a new remake. With new visual technology and a new pulley system to bring the boats around. And other thing about the park is how many of the rides are based off diseases nedisney ic franchises. In china a lot of people didnt grow one more traditional characters. But they do no jack sparrow and darth vader from star wars and others. And there is a place called the aisle with Treasure Cove and an area completely dedicated to pirates. You are in front of what . Right behind youlet. Im in a place called disney town. Yeah well there is a fountain actually but im in a place called disney town and it is next to another area called mickey avenue. And this is another way in which the disney really changed the park. Because in most parks in the states in europe, you have main street usa it is a replica of a small town in the United States. Uygur told me he didnt think that was going to resonate so instead they have disney avenue. And it is a way to introduce all of the characters and their back stories to the chinese people. Such as mini or daisy. Some of these characters arent really as well known over here. But i think one other thing that was interesting was something that i think surprised the disney folks themselves. And that is the popularity of the turkey leg stand. Disney fans all and in china that turkey leg is going all over social media. People wait for two hours for it here. It is popular here too but i havent seen anybody waiting in a two hour line. Thank you very much. They are calling it a chicken thigh because people here love dark meat and dont really know turkey very well. Giant chicken zl ive seen it at the park. Yeah. And i remember someone who was with us got one. And i couldnt do it. I couldnt do it. Ive never had one. You feel like henry the 8th. Who walks around carrying a turkey leg gnawing on it . Who you feel like, you know. Better then some giant thing of cotton kaebd or something. It likes look joining us now anthony diclemente. I love uygur because he has a way of saying things. You know exactly what he was saying. Were charging this, you get that. There. It was a weighing saying were disney and we know how do this z people are going to pay too have the disney experience. And disney planting the disney brand flag in china and the Bigger Picture theme is not only theme parks but of course the content, technology, Consumer Products and the disney monetization machine. Do you have any doubt it doesnt work in shanghai. I think it is going to work great. The question were getting most is how big could it be . There are 350 million income qualified people within a three hour car trip to the park. The population of the United States basically which can get there. And people have said a hundred thousand can get through the park a day. So that capacity equates to roughly mid teen, millions of tendency. Maybe 50, 60 million tendency a year. Comparison to the Magic Kingdom is about 201 millio million. We can come back to the park. Its happened in the face of a Star Wars Franchise that we know is going to be probably huge. And shanghai. And so espn has been like the word to summarize there. And comcast is right on an all time high. And some others that are dependent on whether this cord cutting or not. They are doing better. Whats why would espn and just the slightest down tick in ad growth, why is that hurting the stock all the way down to 98 . Or is it succession fears. I think it has to do with espn and the cord cutting fears around espn. Disney trades a very high multiple. But for comcast i think some of the concerns are built in as well. The Cable Networks for disney had been almost twothirds of the company. Now it is less than half. The question is whats the growth rate of espn and the Cable Network because disney trades at the high multiple. If it trades already in the mid 20s it is no at value stock so people look at it like nigh toad discount. And you look at the company. Over the last three years, espn has really grown its operating income or the Cable Network segment about 6 . The other non Cable Network segments have grown 23 . That is a question that people have as well. So for that non est espn part of disney. Would you ever consider spinning off espn . I asked that question on Earnings Call two quarters ago. And i dont think hes going to do it. I think the answer is there are enough synergies between espn and the other parts of the company. I question that answer because i dont necessarily see a lot of synergies. I think you could probably say that more a about other segments. Abc. I dont see it. Part of the mothership. The whole secession thing that was like oh. There was a tremor when that happened. Yeah. And anything come into thats going on there . , you know, there are speculative rumors people talk about other candidates for ceo. And Sheryl Sandberg [ inaudible ]. Herd her say last week she doesnt want do it. Uygurs contract got extended to june of 18 and i think hell extend beyond that. But to buy disney a little more time. That is just my opinion. Even if that is right dont you think do you think they are going to put somebody as his number two, an heir apparent or just play it out and then just replace with an outsider. Uygur had been the coo. So that is the way like to do it. That is the way they have done it in the past. Somebody internal and becomes. There are some really good internal candidate asks that could happen. But would think you would want to groom that person for a couple of years. So i think for now it is bob. I think the best successor to bob is bob kind of thick. Hes 65. And 65 is 2 new 50. Great shape too. Stairs. The versa climber. Thats ho compare to your workouts. Mine i dont want the talk i do that now. And i dont like it at all. He could at least go to 18 and like you said to 20. Anyway, thanks. The call just came in. Shes about to arrive. And with her, a flood of potential patients. A deluge of digital records. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. Where can back everybody. The june 24th referendum that can will decide the uks status within the European Union is fast approaching but what will happen if britain votes to leave the eu . Wilfred frost is here to break down the antony of the wrex. And this is complicated stuff. If they actually vote to leave that is a lot of questions. Lot of questions. Lot of uncertainty becky. The first thing to note is on the 24th of june in the instance o a brexit vote nothing legal actually happens. It is not a binding law. It is just to sflal tignal the f the british people to begin negotiations for setting the terms for the separation. It is possible they will begin negotiations in a relaxed fashion without the two year restriction. And here are the main issues the divorce lawyers will be arguing over. The first is Free Movement of people. Will britain be able to stem the flow of immigrants whilst minimizing the rights it loses for its own citizens on the european continent . Second, free trade. Ll britain get to maintain the status quo at the moment of free trade or will the eu punish them for leaving . Finally will the uk be able to passport its Financial Services which allows eu members to offer Financial Services in other eu countries based on their own domestic regulation. Will frankfurt and paris will hung troy grab market share from london and stop that from happening. . So whilst june 24th would see no immediate legal repercussions the intermittent period of uncertainty could be very damaging. And one final thing to point out. Would cameron have to resign . There would be huge pressure on him to do so and that of course could delay negotiations even further. Wed have to choose a new government before we could start. Two weeks to go. Lots at stake in the brexit vote vogt. You bring up a the very good question. Would there be this feeling of retribution coming from the people remaining in the eu. Would they want to take pound of flesh just to raise the bar if they vote to leave and make it it is a kroushl crucial thought. And the rhetoric is of course they will because they want briton say. I wonder if the sentiment would change after it happens. They have already decided they are our friendly neighbors. We want to be nice to them. And had scotland voted to leave the uk two years ago would Prime Minister David Cameron had treated them like an imposed tariffs and i dont think we would have done. Also we have a significant trade deficit with the rest of germany. They would want to maintain that free trade and we do have a net deficit with the rest of europe. There are certain sectors like Financial Services where we have a surplus and those are the areas you would have to be concerned of. But certainly there is uncertainty and as the what people are worried about. How long do those negotiations take in intermittent period. Lot of confusion and chaos in the meantime. You know, will of you translate beautifully but what the heck does whilst mean . It means exactly the same as while but one i tend to use. The word i definitely stand corrected on is naught instead of zero. Sounds beautiful and you are lifting the rest of us. So we should kind of rise to that level. Apologize for differentiating. Speak for yourself. Thank you will. Whilst we go to commercial. Coming up. Shaking up things. Were going talk to the ceo of monogo double plgo double play real is touching a ray. Amazing is moving like one. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. There is only one place where real and amazing live. Seaworld. Real. Amazing jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive welcome back everybody. It is time for the squawk planner. Weakly job less claims out at 8 30 eastern and expected to hold steady. And 10 00 a. M. April wholesale trade. And earnings Peanut Butter and je jelly makers. Smucker and. More. Amazon launching a british vertex of the fresh food delivery service. Competitive prices in parts of central and east london. Brit season one of the most developed Online Grocery markets. And since we are talking all Things Digital this morning. Weve been talking ott innovators, risk takers and inventors that make the disrupter 50 list. And mongo db is taking on big data. Selsz software for processing apps and other including nbc universal. Joining us now president and ceo of mongo db. Good morning. Great to be here. Help us understand. Techs a little tough. You run a database company. Yes. How does it work what makes it different. This you think about the any application you use. At home work or on the mobile device. All of those need to be able to store and organize information. And that information is stored in a database. Mongo db is a database designed for todays modern applications. How does it differ for example from what oracle does. People use mongo db for three reasons. One is volume. Our name is derived from a term humongou humongous. We manage massive amounts of information. And second is speed. Developers need a platform where they can rapidly build applications and third is cost. All in mongo db is 1 10 the cost of legacy solutions. Its been designed to be very nimble. We also have the luxury to price the way we want. Our competitors try to price more. And were very focused on delivering high value. When i ask do you want to remain independent i imagine you are going to say yes. But oracle has gobbled up just about everybody around it over the years. Thats been part of the business model. Has Larry Ellison ever called you. I have the utmost respect for what oracle has done. Having said that their license business has gone backwards the last six quarters. The market is moving away from them. They have been around 40 years. The technology is getting a little dated and we want to be the de facto solution for applications and no larry has not yet called. What is unique about this database that allows you to change so quick and allow the rapid updates . And who how proprietary is that and how difficult would it be for somebody else to copp it. A database is complex and not for faint of heart. But met life used us to consolidate. They spent two years and 25 million with the legacy platform and failed. Then they tried on mongo db and in 90 days got it working. We allow people to manipulate data in a very natural way. And the uber of china generates about four times the size of the American Market and they build their platform on mongo db. A lot of companies that have issues like that and dont really know that the customer is working with this product and this product together. So that is where crow see the big opportunity. Opportunities in two fronts. And increasing seeing legacy workloads trying to move to us. Real quick, before we go. Private market valuations, how much cash do you have on hand and will you have to go out into the market to get more cash . And what do you see happening in that space . Zbl zblef. Weve been fortunate to raise over 300 million incap capital. We have more than enough cash. Two were very patient. And imply to the question. Is what kind of liquidity event and we dont comment on time lines but clearly going ipo is definitely something we would consider but only consider when were ready. If you do i hope you come back. Congratulations on making the list. And we should tell you dont want you to miss a little later. Another disrupter, the interim ceo of jaunt is going to be on squawk alley at 11 00 a. M. Eastern time this morning. Name is like really important. That is like half of getting on the list. I like mongo. Mongo is you like jaunt . Theyll run out of names and then it will be like exxon again. Putting it into a computer and getting whats not used. Remember the car . Part somewhere. There was a car nova which means dont go in spanish. You have to be careful. You need something that doesnt mean anything. Coming up, a treat. Once reserved for state fairs and boardwalks, now available across the country. Is this another turkey leg story . Thats next. Why is it so hard to get the ball over the plate. Snoop dogg, the latest celebrity i can explain this. Could be partaking before the game. I dont know. Fall into the wild pitch club. I have to do this this month. The next inning you better be careful what you say. I know how to do it. Next inning of squawk box next. The 2016 cnbc disruptor 50 list released moments ago. Welcome back to squawk box. A disruption in snacking. Hostess introducing deepfried twinkies. The treat made popular at state fairs, carnivals and seaside board walks around the country are now available. Retail giant has a oneyear exclusive to sell the twinkies at walmart. Theyre in the frozen food aisle. These have been around for a long time. You deep fry them. Have you ever had one . No. You deep fry them, put ice cream on them and wash them down with tequila. The worst possible things you could do. Thats what snoop might have done. He might have done that. Im helping to tee you up for snoop. Oh, okay. 50 cent had a really rough he did. A rough pitch from the mound too. But it happened to the snoop now. Epic fail at the ballpark. Snoop dogg throwing out the first pitch at last nights San Diego Padres game. Slid out the right side of his grip. A bit outside. Actually nowhere near home plate. The wild pitch hit a spectator but there were no injuries. Here it is. A little high. He now joins 50 cent and howard stern producer gary delabata. No idea who that was. Some of the worst first pitches in history. Whoa there is a guy over there that wasnt bad. You know what, could have been an intentional walk. Thats what they throw it out there for intentional walks. Right. When we come back, changing the world of medical care and research with market talk in the mix, the lineup this morning includes dr. Ken davis of mount sinai, peter may. Glen dubin and legendary investor carl icahn. Squawk box will be right back. Stick around. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. I want to say one thing. We turned over everything. I want you to listen to me. I did not i did not send classified material. Not a single time. And i did not receive. Never. Any material that was marked or designated classified. I never told anybody to lie. Thats all i can say. These allegations are false. I dont know how it works digitally at all. Dinner may i be excused . Get the new xfinity tv app and for the First Time Ever stream live tv, watch on demand, and download your dvr shows anywhere. Crude oil hitting new highs for the year. Energy tighten harold ham says another spike it coming. The man donald trump called the king of energy joins us live this hour. The future of health front and center. A look at how philanthropy is fueling innovation in hospitals. Medical schools and beyond. Were joined by two major power players. Dr. Ken davis and peter may. That plus a big day for the panama canal. The wraps off a 5 billion expansion project allowing the ships the size of three football fields to pass through. The second hour of squawk box begins right now. Live from the beating heart of business, new york city. This is squawk box. Welcome back to squawk box here on cnbc, first in Business Worldwide. Im Rebecca Quick along with joe kernen and andrew ross sorkin. Take a look at the futures this morning after the dow closed above 18,000, and the s p is within about 12 points of its alltime high, you can see the futures giving a little bit back this morning. Dow futures down by 43 points. S p off by 6. 5. Nasdaq down by 1. Check out oil prices which pushed above 50 yesterday. Down about 40 cents this morning. Headlines this morning. Senator Bernie Sanders going to meet with president obama at the white house this morning. That meeting requested by the democratic president ial candidate. This as the pressure is growing on sanders to officially drop out of the race even as he vows to stay in. The president was in new york last night hanging out with jimmy fallon. The labor deptment is out with the weekly look at initial jobless claims in 90 minutes. Also, the house will vote on a bill today to help puerto rico deal with the 70 billion in debt. That follows months of negotiations and a contentious vote by the House Rules Committee yesterday. If it moves on to the senate, leading democrats said they will seek significant changes to the bill. Central bank speak early this morning. Mario draghi addressing an Economic Forum in brussels warning that the euro zone is at risk of suffering lasting economic damage because of weak productivity and slow growth. He has argued that Monetary Policy alone cannot end the regions economic malaise. George soros is apparently trading again. Getting back into the game amid a Global Economic uncertainty. The wall street journal saying soros recently directed a series of big bearish investments. He remains skeptical of the chinese economy. He warns the fallout from unwinding unwindi unwinding of chinese investments. As for europe he says there is a good chance the European Union will collapse from the weight of the migration crisis, challenges in greece and a potential brexit. He has been saying this for quite some time. Now hes acting on it sort of. Deflationary pressures. Im going to buy gold. You must think the deflationary pressures will be so bad there will be chaos. Like the world is ending. Right. I am not a smart man, but its like a hedge against inflation. Isnt it . Its a hedge against inflation but its also a situation where, look, if you get to the there is no alternative Dennis Gartman said hed buy old in euros at this point. I am just playing devils advocate. When it doesnt make sense, thats usually the time to anyway. We have much smarter guys here to kick this around. Stocks to watch. Restoration hardware tumbling after reporting lower than expected quarterly results. Production delays and a weak market weighed on the numbers. Guidance for the full year also missing estimates. And Britains Vodafone agreeing to sell the new zealand unit to Sky Network Television for 2. 5 billion. It will help to enhance the offerings. Boston scientific will restructure operations hoping to cut costs by more than 100 million by the year 2020. It says it doesnt plan to significantly change its employee head count. Were happy to be joined by two special guests. Two of the best and brightest from the Business World and medical community. Were focusing on how philanthropy is fueling innovation in our hospitals, medical schools and beyond. Here with us is dr. Ken davis, mount sinais Health System president and ceo. The Largest Health care system in new york and serves over 4 million patients a here. Its where henry and max sorkin were born. Peter may is here, the chairman of the board of trustees and also peters day job is as the president and Founding Partner of triant fund management. We have a lot to talk about in the activist world as well. She wants to talk about zika. We have to do a lot this morning. This is where i wanted to start. Talking about the Health Care System, but when you think about your hospital system, in terms of the budget, and were also going to have carl icahn on the show later. Another one of your ben factors. How much of the budget is coming from guys like peter and karl and others relative to funding from the government and other funding coming in from people like me and Insurance Companies paying to be there . We are a 7 billion organization, annual topline revenues. Philanthropy, in an average year, is about 250 million. So its a small percentage of what we do but its a big percentage of what we can do in innovation. Its the margin that we need really to preserve our core values. This is a tough business. In what way . Let me say it this way. Peter and i made a commitment a long time ago, even in the worst days of our work here at mount sinai, that we would preserve the value of taking care of everybody the same way. One of our hospitals lives at the juxtaposition of the richest and poorer zip codes in america. There is no greater economic disparate than there is across our northern and southern borders. We decided to take care of everybody the same way. That costs a lot of money to do. Right. Nobody pays for that. But its a tremendous drain on our system. And to preserve that and to preserve another key value that were going to make sure that your grandchildren dont suffer from the same disease as your grandparents, that we are involved in therapeutics, developing new drugs, figuring out pathophysiology. To do that requires philanthropy. Nobody is going to pay for that. I put it a slightly different way but obviously the uses ken described are absolutely correct. When you look at health care in terms of on a macro bostoasis, revenue never equals the costs because costs continue to up dramatically. One of the things were trying to change, mount sinai to address is help moving the cost curve by population health. Revenue never equals cost. The only way you can fill the gap is through philanthropy and through Royalty Income from the results of research. And those are two areas that are critical to mount sinai in terms of how were trying to build. Peter, since i know you are in the business of asks, how has it changed over the couple years or the past year in terms of the kind of big numbers and, you know there are certain people who can write a really big check. Is that where you try to focus energy these days . Do you go after the small checks . I am curious in the world of philanthropy whats happened over the past couple of years with this. New york city is unique in the world of philanthropy. This city, unlike any other place in the world, really, and certainly and in the United States, where philanthropy is a big in most European Countries philanthropy is not a big deal. Hospitals and art institutions, et cetera, are supported primarily by the government. In the u. S. Philanthropy is an important part of all of the not for profit world. New york, again, is unique, but there is tremendous competition for gifts because everybody has got a campaign. The great thing about health care is we are able to really attract younger people who are just starting their lives and having children at sinai or having children, you know, as you did at in our hospital,who want to be associated with an enterprise thats going to be part of their life forever. But in terms of dollars, you know, we try to get everybody engaged at lots of different levels. The bigger dollars obviously have more impact. I guess the reason i was going there with the question is, its really a business question to some degree given that you are in the hedge fund space, activist space. Given how tough its been for the Hedge Fund Industry and given that i assume the past couple years some of the biggest dollars you have gotten have been from that space especially in new york city, how you see it. Now people talk about peak activism, if you will. I am hoping you can speak not just to the philanthropy issue but to the business issue of where the market is and what that says about your ability then to raise funds. Well, first of all, were not a hedge fund. We are an investment fund. Trien is we like to call ourselves highly engaged. Shareholder larry fink described us that way. We like that a lot. We think were different from hedge fund now an no. We dont hedge. Thats not what we do. Most hedge funds are hedged theyre having its not an easy time to make a lot of money in the Hedge Fund World today. Against gains for their investors, kind of. Hopefully not. They have been. Well its been a tough time. The kind of volatility that exists makes it difficult. We invest in companies. We are not portfolio managers. We invest in companies where we see an opportunity for the company to improve by focusing on improving them improving on the operating side. Its a longterm view, very different from a typical portfolio management, hedge fund, longshort balance. We think of ourselves as businessmen who invest in a portfolio. Back to your question on philanthropy. Basically whats happened is, first of all, a people have generated an enormous amount of wealth over the last several years. Fortunately, we live in a world where there is a good ethic to give back, and people feel a responsibility. So i have not seen any slowdown in our ability to raise funds. And in fact, were probably going to be starting a new campaign relatively soon. We dont call you an activist or we wont even call you a hedge fund. When you think about activism, do you people talk about peak activism, the lowhanging fruit is gone. You are now investing in g. E. Thats as far from being an activist or even a constructivist kind of investment given that it truly is a, we like this company, were long this company, and thats what the investment is. Its more than that. Weve been following ge for a very long time. Both nelson and garden, my other Founding Partners at trian have had long standing relationships with jeff immelt and their lead director. We followed the company. We always felt, once they got out of the credit business, the opportunity for focusing on the industrial businesses, which are the best industrial businesses in the world. Theyre involved in energy development, theyre involved in airplane engines, things with long tails. Great service revenue. But in the case of ge, we consider ourselves validation capital. So what happened with ge is they made the announcement that they are getting out of credit. And everybody basically kind of yawned because they felt that management has been talking about a lot of those things for a long time and our involvement and our engagement in issuing our white paper and showing the things we thought they should do, has really given credibility to the move that they are making and has had a very good effect on people realizing that there are engaged shareholders who are going to essentially hold management accountable for achieving the goals. Wasnt there a time, peter, when being able to finance the sales of your own products, you know, at advantageous rates you sort of had it coming and going, wasnt that a Good Business model . Deregulation. We saw revenues going from 10 billion to 300 billion. It was a great business until ge game a sifi. Then the kind of return they could get on capital disappeared. It wasnt gges fault . You could say regulation had a lot to do with it. It was a Good Business model for a while. It was a Good Business model. A lot of the alternative investment guys started to get into some of the products ge was selling. In our view ge has the best industrial businesses in the world, and they now are they had a lot of excess overhead that resulted from getting to be a gigantic conglomerate. Now they are paring back on a lot of it. Theyre moving to boston, giving them an opportunity to slim down on the corporate offices again and focusing their management and r d strictly on their industrial businesses and on a tremendous i. T. Business that they have. Their industrial businesses are second to none. There has been some scuttlebutt that compared to siemens or other competitors that there are places where the quality or i dont know the service or something wasnt i just heard anecdotal evidence, over the years, about siemens, oh, if you go there, there was some equipment you think its best in class. We think the three verticals that they have in terms of their Power Generation and water generation and their airline business, aircraft engine business as well as their medical businesses are best in class. And the timing long term will be okay with doesnt matter when you buy some of these things, i guess. There have been some unfortunate top calling in one of the guests, it was amazing to be able to get in before the big drop. Its a relatively small part of their overall portfolio. Were longterm players. We have great confidence in the company. Its still 30. 60 when welch was there. It wasnt 30 a year ago. Eight years ago it wasnt six. Or it was six. Under six. Correct. That would have been a good time to buy. Peter and ken will stick around. More to talk to both of you about. More from our guests after the break, including a closer look at zika and the summer months ahead. It affects this company, but not just just you. Youre concerned. Savannah is not going to brazil. Steph curry ratings for basketball pretty unbelievable. The futures right now, down 45 points. 13 on the nasdaq. Down 7 on the s p. Louder. Something well show you. Through small things, big things, and spur of the moment things. Big things, for decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Back with our guest host dr. Ken davis. President and ceo of mount sinai Health System and peter may, chairman of the borard of trustees. Authorities say zika has blanketed threequarters of puerto rico and now it may get worse that its prime mosquito season. This is something a lot of people have been watching closely. There have been no transmitted cases in the continental United States. New york has the highest population of people who have the zika virus in the continental u. S. The concern is that some of people who come back and will be bitten by a mosquito and those mosquitos will bite other people and there you go. There is the epidemic. This is a scary time. On the one hand 80 of people dont know they get it. On the other hand, if you are a pregnant lady and you get this disease, it can be devastating. Snood the. The best understanding is it can be transmitted at any point through the tree trimesters. I think the lack of understanding is one of the most frightening things. For instance, we dont know whether the number of babies affected is 1 of pregnant women who carry zika or i have seen studies saying that it could be 60 , 80 , 90 . Some say 30 . Every trimester seems to affect something. This is a horrible outcome. Microcephaly, the small heads, this is disability for life. When the congress sits and debates whether we should do, 1. 1. 1. 6 billion. They dont realize the downstream costs to the economy is enormous. What should we be doing with the funds . We have to do prevention, education. We have to clean up the places for the mosquitos live. We have to be able to tell people what to do to avoid being bitten. Its not just congress. I sent becky something i saw yesterday that 500 million was, by the president , was taken from a zika fund and put into the u. N. Climate change fund. Did you know that . There has also been other monies moved around. There was money we kept aside for ebola which, you know, a year ago we were very, very frightened about. Thats been moved to potentially for zika. I am not an expert on this. It doesnt stay people who are infected are not infected for life. It goes away. What were also unsure of is how long it stays, for instance, in the bloodstream. And semen, how long it can be sexually transmitted. A mans semen could have it for three or six months. Is it your expectation well be living with this for a year or two or for decades . Hard to know. Hard to know. If its like some other viruses like this, dengue fever, it could be and malaria, it could be with us for a very long time. West nile. If its like some of the other things, it could be gone in two or three years. Even if its the best case, two to three years, we could have a lot of women exposed during these next summers are you testing now . We test. We have an automatic tool that asks them where are you traveling, where have you been . If theyve been in the caribbean and have any kind of symptoms, we get blood drawn. If they havent i have asked for a zika test as well because i am pregnant. Probably every woman who is pregnant, no matter what baseline, check it out. 80 of women, no symptoms. How big of a problem are the olympics in brazil . That is a back and forth contention. Its winter there. Its not as serious of an issue. Then people are questioning the who scientists saying they have a reason to be conflicted with them talking down some things. Just yesterday there were reports from within brazil saying that, oh, the number of new zika cases that are going to come are very small during this period. Its the winter. People are going to be enclosed in safe places. There are others who say, no, this is a real serious threat and this is how zika can escape into a larger environment. Which side do you come down on . I am not an Infectious Disease expert. As a general way, i think that pregnant women really have to watch out here. I would urge the side of caution. What does that mean . Stay in . Dont dont go to an environment if it were me i wouldnt go. You wouldnt go down there . Sure. If it comes here you cant even go outside. As a pregnant woman you wouldnt go down there. Right. What if it becomes like puerto rico and its mosquito season and there are mosquitos everywhere. I have had doctors tell me not to go outside. You might think about delaying pregnancy. What if youre too late for that . Then you have to stay inside or have long sleeves, long pants and go out with insecticide. Thats what several doctors have told me. They have found the eradication of the mosquitos is effective, where theyre spending the money on it. That seems like the best program. Thats why the government is not is not doing that more full scale. For people want to bring back det. There is always a downside here. We have to weigh one pesticide versus another. There is another interesting approach which is to send out genetically modified flies that mate with the other flies and they mosquitos. I guess you didnt see the movie. What do you mean . Genetically modified flies . Youre ready to try that . Seriously . I am on board with that. That was a great movie. Jeff goldblum . He is talking about mosquitos, not flies. Genetically modified flies to go after mosquitos. Not a good idea. Certain people would say, are you out of your mind . Its not just gmo, its what happens to other populations that rely on the mosquitos. There are particularly bad mosquitos were worried about. Can you hang out for a while . Peter is with me. At least i have someone on my immature level. Well come back and talk a lot more. In the meantime. Remembering the greatest friends, family and fans of mohammed ali. Price of oil this morning hitting fresh 2016 highs. We have oil man harold ham who will join us with his new call on where he expects oil prices to be in the second half of the year and beyond. Squawk returns in a moment. Can a toothpaste do everything well . This clean was like pow. It felt like i had just gone to the dentist. My teeth are glowing. They are so white. 6x cleaning , 6x whiteninga in the certain spots that i get very sensitive. I really notice a difference. And at two weeks superior sensitivity relief to sensodyne i actually really like the two steps step 1 cleans and relieves sensitivity, step 2 whitens. Its the whole package. No ones done this. Crest healthy, beautiful smiles for life. Welcome back to squawk box this morning here on cnbc, first in Business Worldwide. Were about an hour away from our exclusive interview with carl icahn at 8 30 a. M. Eastern time. In studio now sharing thoughts on the market and health care. Peter may, Trian Fund Management and dr. Ken davis, ceo of mount sinai Health System. First, a couple stories. Labor departments weekly initial jobless claims report coming out in about an hour. Economists looking for claims to rise to 270,000 for last week, that would be up from 267,000 the prior week. Also, another change could be ahead for diet pepsi. Wall street journal saying new changes could be announced this week as pepsico tries to stem slumping sales. Last august they eliminated aspar tame as the artificial sweetener and replaced it with suke ra lows. You might have views about that. I dont know mr. Pepsi. We can talk about that in a little bit u. S. Solar market installations will nearly double this year according to a report by a Research Firm gtm. The search largely attributed to the expiration of a federal tax credit for Solar Projects at the end of this year. Islamic Funeral Prayer Service will be held for muhammad ali today, the threetime heavyweight boxing champion died last week at the age of 74. The service will be held at freedom hall in his home dotownf louisville, kentucky. Public memorial set for friday. Free tickets for the event sold out in less than an hour. Or were given out in less than an hour. They were free. They werent sold. At a newspaper they would agonize over that, andrew. Right . No. You can agonize. [ laughter ] theyre free tickets. How can they be sold out . You run out of seats. Okay. Well, thats thats different. All right. I think its different. Crude extending gains for another day. Fresh 2016 highs. Do a correction down the road. Harold hamm, americas richest oil man. Really . Oh. I dont know. I never checked. Thats awesome he made headlines in january when no one believed you when the demise of croyude was great exaggerated. You said it was rebound to 60 a barrel by the end of the year. He joins us now. We got to 51, which was from 27, a big move. Big move. Okay. So you still 60 you think might be low . I do. I you know, in looking forward, i mean basically today we have two things that affect us. Used to we had three. Basically opec has always been a big one for the last 40 years. Today its theyre kind of a nonevent at this time. Electing not to weigh in. So were saying we have nopec. Coming back to supply and demand. Thats what were dealing with. When you look at the curves, whats happened is we have seen declines primarily from disruption and also decline rates of horizontal fields, a little bit more than everybody thought. So were seeing those curves cross about a quarter early. 90 to 120 days. Actually, people thought it would be later in the year, and actually in the Second Quarter we have seen the curves cross. So moved up about 90 to 120 days. And so were at 51 right now. 51, 52. Toward the end of the year i might have been 15 , 20 conservative. If we went back to 100, lets say, and any Horizontal Drill was draftable or the hardest to get stuff became profitable in this country, how much oil could we produce . Could we be selfsufficient . Were going to have the ability in this country to oversupply the market again. Can we supply ourselves completely, harold . We can. We have said that by 2020 we could be independent in america. So we believe that. Do you believe the democrats would put a damper on Horizontal Drilling . Well, they have. If Hillary Clinton were elected, will there be a significant damper on do you believe her . We dont know what to believe . She says stuff she is dealing with Bernie Sanders. When she gets elected, she may not do any of it. We call it death by a thousand cuts. Overregulate this industry, the oil and gas industry, to curb what we do here, its not the best thing to do for sure. We do have the ability to oversupply the market. I think producers will be very cautious going forward. Right. In new york you have got the narrative that theyre still talking about the water contamination. The Obama Administration is talking about leaving hydrocarbons in the ground because of climate change. If that happens for the next four to eight years, i mean, you saw what happened to the coal industry. That wasnt pretty. No, its not pretty. Absolutely put coal practically out of business. Basically had intentions a lot of coal miners and Coal Companies out of business. That was a great quote. Targets right on our back to do the same thing. So you are a trump guy, bottom line. I am. Came out for trump. So thats where im at. Would you be Energy Secretary . Would i be . If asked . Gosh, i have not been asked to be anything. Andrew, youre a journalist. Go for it. He is a racist do you feel uncomfortable about any of the things that he has said . You know you know, the Clinton Campaign is going to try to disrupt everybody, and what he says or what to get people away from the two things thats really important. Thats the economy and the future of america. Right. So theyre going to try to disrupt you feel completely comfortable with everything hes said . You know. I have not listened to everything that he has said. I have listened to a lot of it. A lot of his comment about the judge . I wasnt there to listen to that, no. Regardless, people you know, people are thinking about two things. Theyre thinking about the future of america. Right. And what what can be done to change to get back on course, make America Great again. The American People this is a great phenomenon going on today that he started in america. To make people believe again in our country. Its a great thing. You dont worry about the i mean, youve talked about the divisive nature of president obama before when weve been here. You dont think that some of the comments he has made we need to elect a uniter like hillary. I am not suggesting that. Are you a hillary guy, ken . Are you comfortable with everything she has done in terms of the email and the Clinton Foundation and benghazi and travelgate and the cattle futures and are you comfortable with all those things . You know, were not electing the almighty. Were electing the alternative. That works with both sides, i guess. Here is the thing i need i need a hillary ill do it. You can say Hillary Clinton has done terrible things. The email things were terrible. And you can still decide that you want to support. He could say donald trump has said terrible, horrible things but he hasnt said that. Thats what i was trying to ask about. Youre not condemning his comments. You actually agree with his comments. Maybe actions are worse than words. You know what. I think there is clearly a divide in this country. Where are you, peter . I dont want to get into politics. I want to see this Country First of all you could say i want to see america made great again and wed know what you meant. America is great. It is. 70 of the people dont feel like its that great. A lot of people are really frustrated because there has been a huge divide between the 1 ers and everybody else. I think that has to be dealt with. That involves really changing our education systems, longterm solutions. We need a government that can start working again. Thats the most frustrating thing. Whoever ends up getting elected has got to figure out how to work with congress. Thats my view. Then we have to decide what the right action that a president working in concert with congress would do at this point. Whether its more government or cutting back on some of the government we already have. I certainly believe the government has gone too far, but i also believe that, you know, we have to give everybody a fair shake. Right. Or at least a fair opportunity. Exactly. I agree. Harold, thank you. Thank you. Good to be here with you. You did well. Youre fine. It was like wolf blitzer almost. Ken langone was on yesterday, condemned what trump said and said he couldnt support Hillary Clinton. A completely reasonable answer too. Right . Sure. I am just putting it out there. When we come back this morning, its one of the seven wonders of the modern world. 34 years in the making. 50 miles long. Mary thompson joins us from panama with looking at how the updates to the canal will reshape delivery. You see the dow down about 50 points this morning. S p futures down by 7. Nasdaq off by 13. Squawk box will be right back. Using 60,000 points from my chase ink card i bought all the fruit. Veggies. And herbs needed to create a popup pickyourown juice bar in the middle of the city, so now everyone knows. We have some of the freshest juice in town. See what the power of points can do for your business. Learn more at chase. Com ink a new era in Global Shipping launches this month. The nineyear project to build a new lane accommodating megaships in the panama canal is close to colleagu completion. Thats where we find our Mary Thompson this morning. Mary, good morning. Reporter good morning to you, becky. They broke ground on the new lane back in 2009. Since then its pretty much been a 24 7 operation costing over 5. 25 billion. The official opening is not until the end of the month, but we are here today for a wet run of the new locks. A ship coming in from the atlantic will pass through. These locks can raise and lower ships a third larger than those that pass through the original locks of the panama canal. That means megaaships carrying over 45 of the worlds cargo can now access this shortcut. Ushering in a new era of global trade. It means a shorter route. It means a reduction of co 2 emissions. So thats good for the world. It means better prices for the people that are promoting the merchandise because they are going to get economies of scale. Reporter Boston Consulting Group estimates the new lane could cut shipping costs by 30 making some east coast ports more competitive with those on the west and the panama canal competitive with the suez canal. The ships will pay tolls over the 250,000 average. Profit could double to 2 billion over the next 15 years to the panamanian government. The new lane has exporters and importers rethinking how and where to ship goods. This has set off a race among the east coast ports to make sure theyre ready to accept the megaships. The west coast ports have been upgrading their facilities to make sure they maintain their edge. More on that part of the story coming up on squawk on the street. Coming up, stocks to watch this morning. Quick look first at the futures before we head to a break. Dow could open off 54 points. S p off 7 and nasdaq off 14 points. Squawk returns in a moment. I take prilosec otc each morning for my frequent heartburn because you cant beat zero heartburn ahhh the sweet taste of victory prilosec otc. One pill each morning. 24 hours. Zero heartburn. Which control this joystick. No, im actually over at the ge booth. Were creating the operating system for industry. Its called predix. Its gonna change the way the world works. Ok, im telling my brain to tell the drone to get you a copy of my resume. Umm, maybe keep your hands on the controller. Look out ohhhhhhhhhh. You know what, im just gonna email it to you. Yeah thats probably safer. Ok, cool. Shoshow me more like this. E. Show me previously watched. Whats recommended for me. X1 makes it easy to find what you love. Call or go online and switch to x1. Only with xfinity. We are back with our special guests for the hour dr. Ken davis and peter may. Peter, i just want to talk to you a little bit you talked to nelson, im sure. Its not a macro viewpoint by any stretch. But you will find opportunities no matter what the backdrop. I guess we had i think it was welch who said we have been habituated. This is what we do for gdp growth and we dont think its possible to escape that because its the new normal. The world is where we are and were dealing with exogenous factors and there is nothing we can do. Is that your viewpoint . We dont pay a lot of attention to macro. At all . Were very concentrated portfolio. We have six to eight investments at any one time, very big positions. We are looking for the needle in the haystack. Were looking for a really Great Company where we think that management either hasnt gotten it right or there are real opportunities to improve it. When you have that kind of a model, you really there are always companies that arent running in the best way they possibly can. The macro doesnt have that much impact on us. Doctor, while we have you here, i dont know what the mean or median premium increase will be this year, you are seeing United Health care and a lot of Insurance Companies dealing with effects of the aca. Is there one thing, if you were king, that you could adjust that would somehow bring down premiums, bring down deductibles, somehow make it easier for people to there is just no one thing. Its too complicated. One of the things we have to remember it, the risk was inappropriately estimated because there was an assumption that there would be more Healthy People who would be in the risk pools. Youre saying the levels that were set, the actuarial levels. Yes. Assumed a healthier population. And because the penalties are what they are, which is relatively modest, people made a decision they would rather take the risks than pay the and pay the penalty. So you dont have the kind of riching po risk pool that youd like. Thats been a killer. So what happens . President will leave office. And then were going to see what happens in 2017 to the premiums. I mean, how ive seen 40 numbers in cases. You can pick the 40 numbers. Some numbers have been smaller than that. Increases in insurance premiums. Yes. So its all over the place. Do you do a catastrophic do you get something where you pay for most things but are covered for the catastrophic stuff . What you do is change the way health care is delivered. And thats really thats what were trying to do at mount sinai and what one of the Little Things that was in the in obamacare and Affordable Care act was pilot programs to create population management models. And mount sinai had one of the first. The whole idea is to change the way you emphasize taking care of people to keep them healthy rather than only taking care of them when theyre sick because the incentive system today is to overtest and to do more procedures because thats how people get paid as opposed to taking care of a patient and making sure outcome versus exactly. Thats the only way to bend the cost curve. There have been innovative programs along that line. The idea is to align the patient, the payer, and the provider of care so that they all want to do the same thing. And that same thing should be keep people well, keep them out of the hospital, out of the emergency room and get the most efficient care possible. Which makes total sense but its also a prescription you have been telling us about for years. Whats the catalyst to make that change happen . The payers. The payers have to say that the way this is going to happen is were going to pay you for a group of people. Thats all youre going to get and were not going to pay you every time you do something. That changes the whole the whole paradigm. The biggest payer being medicare . Medicare, medicaid. Do we see is the eventual answer going to be a public option or a singlepayer model . If we continue to see premium increases every year people will be clamoring for something else. Bernie sanders was already running on a single payer platform. I think what well see is more and more of the payers asking for contracts that pay for a population. It wont be a single payer. This country will never be able to agree to a singlepayer system. I see that as very unlikely. I see that well continue to have multiple payers and those payers will sit down what about a public option . The public option was taken out of the aca initially. Hillarycare could be resurrected with eight years with hillary as president. Have you talked to her about that . I havent talked to her about that, no. I think that the reason the the idea for the public option was that the overhead that the medicare provides is a lot less than the overhead that you get from private insurance. Medicares overhead is about three cents on the dollar. Geez the overhead for the private insurers by the aca is 15 or 20 cents on the dollar. So the question of whether you can have a public option is whether it might moderate whats going on in the exchanges. But its not there. When we talk about health care, it is so emotionally charged. And so idealogically charged. What troubles me is its rarely enough pragmatically charged that we dont get answers that may be really the things that will work best. Remember for years we were told by krugman and the like that the v. A. Was the model for singlepayer. Look how well the v. A. Works. V. A. Is grossly underfunded is the problem. We have a lot of veterans who come back that was the word, that the government can do this. It was a much smaller program. It has to do with management. At the end of the day when does a governmentrun program not have to do with management. Youre right but cms, the center for medicare happens to be one of the best managed Government Programs around. What is it now . 55 for medicare . 60 . 65. Would you take it to 55 . I think the option for people to go medicare at 55 would be a good option. Raise the age on social security. Now with the the president has moved left on that. Now were going to increase social security. So have both candidates. From both parties. Hes not not talking about indexing it for a while. I wonder in the medicare overhead, what is Medicare Fraud . How does it offset the overhead. Its hard to put a finger on that exactly. Wait. Your expectation is that there is no fraud no fraud by any other payer . No. Sure. A morning of news breakers and breakers on squawk box. Hedge fund pioneer glenn dubin. Carl icahn, the legendary investor best known for his big bets on stocks. He is also making a name for himself in philanthropy. Well talk markets. The trails aials and tribulatio trump. A special hour of squawk box begins right now. Live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box here on cnbc, first in Business Worldwide. Im joe kernen along with Rebecca Quick and andrew ross sorkin. Less than 90 minutes away from the opening bell on wall street. Futures continue to be weak after whats been a couple pretty good weeks for the bulls. Back above 18,000. Well be below that if we open here this morning down 57 points on the dow. About 8 on the s p. Nasdaq indicated down just under 14. A couple of top stories to talk about this morning. Oil prices pulling back a bit after hitting 2016 highs. Pr ecb president mario draghi saying the eurozone is at risk of suffering lasting economic damage due to weak productivity and slowing growth. Brussels this morning, draghi argued the Monetary Policy cannot end the regions economic malaise. Bernie sanders meets with the president today. I would like to be a fly on the wall for that conversation. We are continuing our change the world summit right now with one of the pioneers of the Hedge Fund Industry. Joining us right now is glenn dubin, cofounder of highbridge capital management, one of the Worlds Largest hedge funds. He and his wife eva established the dubin Breast Cancer at mount sinai in 2011. Thank you for being here. Nice to be here. Thank you. We are talking about all kinds of things. Well dig into a lot of subjects. Lets start with the Breast Cancer center, why you think that this is important and what innovations you have actually seen since the center opened. Why dont i tell you the origin of the center, which was my wife being diagnosed with Breast Cancer. In 2003. Here is this perfectly healthy 40yearold woman with three children under 7 years old being told you have Breast Cancer. What was her diagnosis . It was early stage and ultimately treated successfully, but you can imagine the shock. My wife is a physician. So she absorbed all this information, being told, again, you have earlystage Breast Cancer. She went about navigating the world of cancer treatment. But she had the ability to navigate that that probably a lot of people didnt have. Yes. As a physician. Even for her, it was overwhelming. Right. You know, the complexity, the fragmentation of cancer treatment, going from one doctor on one side of town to the other doctor on the other side of town. Who arent necessarily speaking with each other and making sure what theyre treating on both sides works and getting differing opinions. It was overwhelming. After being successfully treated at mount sinai she made the decision, why dont i use my experience as both a patient and my training as a physician to create a better model. Thats really the beginnings of the dubin Breast Cancer. So in terms of where we are, it seems like every week there is new information that comes out when its concerning cancer that we are Getting Better and better at targeting some of these things. Focusing, figuring out better treatments for am so some of th situations. What have you seen . Obviously Cancer Research is paramount. But our focus at the Dubin Breast Center, though we have an association with the Tisch Cancer Institute where theyre doing extraordinary work and research, our focus at the Dubin Breast Center is treatment, to provide the best possible care and treatment to women who are diagnosed with Breast Cancer. Its very rewarding. For my wife eva, who is deeply involved. She goes to the center every day. She meets with patients. She meets with doctors. She meets with the administrators of the center. There is a real reward in seeing this center provide help to people with cancer. Dr. Davis, obviously thats the type of philanthropic giving its not just about the money, its about the input and the involvement too. How would you say having partners like this . Eva is a very special person, as is glenn. Their presence makes a huge difference in the center. Their values are communicated in what we do every day. Whats very, very special about the dubin center, when you come in, is that you realize it is a lower stress environment. Here are people thats saying a lot. Thats right. I mean, here are people who come at a pivotal and an awful time in their lives. Got this diagnosis that is lifethreatening. And we try to produce an environment that is as caring, kind, compassionate as possible to decrease the stress levels. And evas input into that has been critical. She had a perspective that few of us had. The feedback we get about the dubin center, its one of the nicest things that we do. Can that be replicated through other areas . Obviously anybody who has a Critical Illness we have tried to do this in the rutenberg center, use it as a model for how to deliver care. Glenn put his finger on something when he talked about what it was like for eva at the beginning, when she went everywhere and care was fragmented. I think its probably the basic consumer situation today, the experience that most people have when they go in with a Critical Care condition. We want every doctor to come to the dubin center. The patients dont go outside. When your mammography and testing is done, its in the dubin center. Your surgeon meets you in the dubin center. If its radiation oncology you get that there. Everybody meeting in the dubin center. Its comprehensive, integrated care that puts the least stress possible on the patients. I think that part is hugely important and probably one of the cracks that most people end up slipping through in the Health Care System today is that youre being treated for one thing without the doctors necessarily communicating, if you have heart issues, if you have diabetes, anything else going on, a prescription that one doctor gives you, some sort of a fix that one doctor gives you can conflict with something else. How do we figure you would think we would be better at fixing that in this day and age of technology and medical records that are more easily accessible but we are not there yet. Were not. We have to do a better job of it. In an integrated Health Care System like ours its easier to do that. Were all on the same medical record, we can see everybodys problems. In the dubin center you are more than your cancer. That means not just the personality issues that you bring but sometimes you have other comorbidities that have to be taken care of. You have hypertension. You had elevated lipids. And were able to take care of all of those things together and not forget about it. I guess my question is, mount sinai is the gold standard. We think so. How do we get the rest of medical centers to a similar situation . We have to integrate care. We have to be able to afford an Electronic Medical record everywhere. We have to be able to afford the kind of case managers that can coordinate care. We have to change the way we deliver care. As peter was talking about it, this is not any longer about every time were going to do something were going to get paid. This has to be an integrated care system from the beginning that is as efficient as possible, does things in the lowestcost environment and is focused on quality. Glenn, can we talk to you about the markets while we sit here. This is a critical time in health care and a critical time with the markets. Central Bank Activities around the globe have gotten people to the point where they think higher rates may never be coming and a lot of people questioning what that means and what they should be doing. How do you see the macro environment . I am kind of out of the markets for the most part. Not looking on a daily basis. I could look at the environment that were in right now, the kind of grinding market higher, zero Interest Rates, very little volatility, it could continue for a long time. And people are asking me because i have been involved in the Hedge Fund Industry for so long, what will the effect be of this grinding higher market low interest market be for the Hedge Fund Industry . Quite frankly. Its not good. I look back at my career when i started 30someodd years ago. It was a much different environment. First of all, the Competitive Landscape was dramatically different. I can count on two hands the number of real competitors that we had. Obviously thats changed dramatically. But also environmentally. I have to stress that it is not a Good Environment for many of these hedge fund strategists. You mean because of the markets . Because of the additional competition from other arenas . Because of regulation . Lets look back at what i think is probably the best decade that fueled Hedge Fund Industries growth. 2000 to 2010. That, not coincidentally in my opinion, was the worst tenyear period in stock market history going back to the 1930s. No performance on the stock market. Higher Interest Rates, bigger spreads, more volatility. And a less competitive environment. Its interesting. We hear from people today that the volatility is part of the problem. You dont sound like you agree with that. 14. Relative to what we have seen in the last four or five years. I dont know if you saw the wall street journal this morning. George soros making a big bet that the world is practically coming to an end depending on how you look at it. He thinks that between brexit. Potential hard landing in china and other things its weird. He says pound is indicating brexit is not going to happen. He is an expert on the pound. He is buying gold like its going out of business. Right. Well, george soros is george soros for a reason. Doesnt mean hell be right but he is investing 30 billion, family money which is more than we pool our yeah. Maybe all of us could and still maybe even with you. Maybe not. No. We leave glenn out. Then well be thank you, joe. All my money has gone to philanthropy. I know that. Thats good. We found out, 250 out of 8 billion. That was depressing to hear. Saddest part about this. 250 of the budget of the budget. It was revenue. Revenue doesnt cover the costs unfortunately. But the revenue doesnt cover the costs, which is why you need the cushion. Right. I guess, dr. Davis, when you look at the innovations, where do you want this money to go . Where are the best uses for it . Where are the best practicalities . You probably have many answers. There are a lot of frontiers that have a possibility of major payoffs. We are seeing it in cancer now. Immunotherapy is revolutionizing cancer. Genomics is another part of that thats revolutionizing cancer. Its likely in 10, 20 years we have a lot of curable cancer that were unthinkable ten years ago. Or living with. Maybe not even curing. Making it a chronic disease. Absolutely right. We should buy some rest home stock, i think. Be a lot of people over 90. The real question that we dont talk very much about is, how close are we to you know to decoding whats the biology of aging. Dont get me excited here, doc. I think its a little beyond i know. Were just going to miss. Thats the worst thing. Were going to miss it for a hundred thousand years men have been living and dying. We get right up to where we could have done it and were going to miss it. Thats the irony. The galapagos turtle lives to 120, 130. The fruit fly lives a couple of weeks maybe. So my dog will live maybe 15. Whats the biology of aging . Were going to crack that. When we do, boy, is that going to change. Dr. Davis is our guest host for the rest of the program. Glenn, thank you so much for joining us. Coming up, carl icahn joins us live. Well ask him about his new position at allergan. His decision to dump apple and all of his charitable giving. Youre watching squawk box here on cnbc, first in Business Worldwide. Dr. Davis is our guest host here on cnbc, first in business of control. Legislature. Stand up to this price gouging. Prices. Relief act. Of control. Legislature. Stand up to this price gouging. Prices. Relief act. We do these quick breaks between we got to get our commercials in and everything. We have to take another break before we get to icahn. Youll take pictures on the first day of school, kindergarten, for your kids. You are at a different point. There comes a time its prom season. Our viewers know my daughter from a young age. This was last night. I promised her when she was born. Thats when she was born. Viewers know her from her little redhead. The red hair has continued. That is last night. She looks gorgeous i showed this guy when he came over showed him my clock. I said this is not for any reason but i happen to have one. Can you believe it . That was a senior prom. She is only a sophomore. Thats how quickly thats how quickly it you know she looks all grown up. I said to my wife youre going to cry. She didnt because she had to pin the guy because will, the guys name, he got struck when he tried to put the there is a beautneer and a corsage. She didnt cry. Youre tearing up . Youll see. Senior prom. Pretty cool. Coming up another break and then well get to carl icahn who will be with us for as long as we can keep him. Well give wopnerapner a run fo money. Politics, investing and push to change the world. Get bill ackman on the phone. Maybe they can start fighting. Well be right back. Okay, so whats our latest data say . Our customer is a 21yearold female. Heavily into basketball. Wait. Data just changed. Now shes into disc sports. Ah, no shes not. Since when . Since now. Shes into tai chi. She found disc sports too stressful. Hold on. Let me ask you this. Whats she gonna like six months from now . Who do we have on aerial karate . Steve. Steve. Steve. And alexis. Uh, no. Just steve. Just steve. Just steve. Live business, powered by sap. When you run live, you run simple. Uh, maybe we should call i. T. Welcome back to squawk box this morning. Continuing our change the world series this morning with mount sinai i was thinking saint. You could be a saint too. Joining us is legendary investor carl icahn. He has pledged nearly 200 million to mount sinai and the medical school is named after him. A lot to talk to carl about this morning. Stocks and the markets. We want to talk about charity first, if we could. All right, andrew. Here we go. Thank you for waking up early. First of all, when is the last time you have been up at this hour . You know, i was up i was watching your whole program. I was up at 6 00 doing some work. Wow catching up on some stuff. It helped me. I got some work done and was listening to you guys. Thank you for waking up early for us. Hey, ill do anything for you. You know that, you guys. Its not secretary icahn yet, is it . Treasury secretary icahn . You dont have to worry about that, joe. What do you mean . Im not worried about it. Well, thats not going to happen. I am not going to move to washington. You could do it you could be treasury secretary on a phoneer carl. I wouldnt be able to go on your program if i were secretary. If you were watching at 6 00 you probably heard us talk about the wall street journal cover story. George soros. Im looking forward to reading it. Didnt get the wall street journal yet. Look, i havent read it. I think he is a very smart guy, george soros. Listening to what you said he said, i cant help but think he has a couple real good points. You know, i think there is you know, i have been saying it. I think that you have a sort of a false market, by zero Interest Rates. You have to be cognizant of it. Look at stocks today. What happened to graham and dod. When i grew up and learned this stuff, was a young broker. You looked at companys assets and liabilities. Today these things you got a lot of companies out there going at negative net worth. You are paying 25 billion, 30 billion for some of these companies that dont have any patents, dont have any proprietary technology. Carl, there were many times in the past where you were i have mentioned this on the air. It probably got back to you. We had dinner 15, 20 years ago. You have always had a problem with the overall market and valuations. You are a guy who knows how to pick, obviously, from your record, you know how to pick individual stocks. But the markets rise in valuation has amazed you. You have had chagrin about that for years. Is it more so now . Youre right in one part of what you are saying. I dont think anybody can really pick the market on any shortterm basis. I think thats sort of a ridiculous thing. Its almost like picking the red or the white you know, will red, white or black come up on a roulette table. I dont think ive always been bearish. Look at our record. You know, theres ups and downs. There is no question about that. But i dont i think there are times ive been pretty bullish. But i really think now i look at this market and you just say, look at some of these values. And you just have to wonder. And you have to now, look, i am no expert on china. But i read a lot about it. You read hey, you read different experts tell you there could be a major problem there. Others say there wont be. How do you know . But its a richisk. Let me tell you one thing. If china really blows up. I was reading carl bass report on it a few months ago. If it ever happens like that, and it could, youre going to have a major, major problem in our markets with that. I dont know that it will happen. Im not saying it will, but you really have you certainly have a credit problem over there. I dont think anybody denies that. However, you know, if you have a very strong dictatorial country, they can deal with things like that. So well see what happens. But its certainly a risk. You cant ignore it. I dont think anybody can ignore it. I dont think the most bullish guy in the world would ignore it. I had dinner with a couple of ceos last night. One ceo and a cfo of a a company that we own in freeport. And ill tell you. You talk about copper. And, you know, we think, you know, copper is sort of cheap and that theres going to be less supply, more demand. Then you say, well, yeah, but what happens if china has a hmm. All of a sudden all bets are off. Who picked up the tab . I had it in my home. So you did. I have a lot of dinners at my home, andrew. You can talk more freely. I meet a lot of ceos at my apartment. We have a good chef. Poor gayle. Working her fingers to the bone. Gayle was at this dinner. She gets involved with some of this stuff. She is good. She is a great operator. You pick on her a little bit but carl, when you talk about your concerns about the market, though, you are actually putting your money where your mouth is. You have brought down some of your stock positions, and if i am right, based on these latest sec filings, you have more cash on hand i guess for opportunities if things do go becky, its a little bit you know, overstated, because if you look at what we call our fund, we probably are net short. But we own a lot of companies at i. E. P. You really do have a builtin hedge, you know, where we we hedge out the stuff. But if you look at our overall picture, were probably long because of of the we own the refineries. We own the rail car business. We own pepboys now. So you really sort of have a hedge going on in the fund. But so we have made too much of it when weve looked at your positions and figured well, i dont think you could look at it that way and say, oh, my god, youre overshort because thats just in the fund numbers. But if you look we have billions of dollars of value in companies that we own. As i said, the refineries and the rail car business is a huge business. And we own it. So if you count that, i would say were net long. It is a little worrisome to me that we actually are that long. Great point. Carl, i want to we have ken here. I want to get back to what youre doing with mount sinai for a minute and then back to stocks including the comments on the dell decision last week, which i imagine you might have a view on. Politics after the break. Since ken is here. Explain this. You are a value investor. When you give away money, how do you think about it . You have given 200 million to mount sinai. And more. Whats the thought process. I assume hundreds of people call you every day asking for money. How do you actually make the decision . You look at a couple of areas im really sort of interested in, and i feel i feel its sort of unfairly well start with education. Our educational system in this country is abyizmal. We have Charter Schools. We give a lot of scholarships away. The kids in this country dont have a break. You look at new york city, one of the wealthiest probably the wealthiest city in the world. This wealth gap is right here in new york. Yet, if you look at it, you go north of 90th street and you have these kids that just are not educated. Its really a sad phenomenon. You have a government that spends 11,000, 12,000 a kid and they dont get an education. Then i set out to prove this. Then i really got into it. So i said, you know, this is just terrible what youre doing. So i get a Charter School down the street in the bronx, down the street and those kids read as as well as the kids in scarsdale, for instance, because, you know thats not true. I dont operate the school. But you have a system there where you can fire a teacher if theyre not doing a good job. You have accountability. Thats one of the that comes to the so you take mount sinai. I was on the board of trustees. I never go to meetings. I have too much to do. And i dont you know, i cant sit around listening to everybody pontificate. Nothing wrong the trustees are great there and they do a great job. My point was they asked me to go in, but you had to pick a new ceo. This is many years ago. I went to that. They say, carl, you have real good ceos at your place. We interviewed seven, eight guys. Sitting there. Ken davis came along. And i said to the guys on the search committee. Your search is over. Take this guy. Just take him. They listened to me. Thats how ken really was there. And he has done a phenomenal job. I think, in most businesses, just like in a hospital, you have to get the right guy to run it. And ken has done a great job. And that thats why i gave them a lot of money, because i got to know ken, and i figured that he was going to really be able to use that money and to make this mount sinai a great hospital, which we needed to badly in this city. There were eight of these hospitals. I dont have to tell you what trouble they were. Now look at the turn around at mount sinai. Ken did a great job. Peter may did a great job as the chairman. I love Something Like that. I dont have to be involved myself. I have dinner with ken every few months. And i i think that the city owes him a debt of gratitude. Another turnaround job. Thank you for that, carl. It really was. Were going to press the pause button. When we come back we have to talk about politics with you. I do want to get to the dell issue and a number of other stocks that you have involvement in. Hang with us for a little bit. Dow down by 60. Nasdaq off by 15. S p down by 7. When we come back, much more to discuss with carl icahn. Kpmgs focus is to elevate women on and off the course. Through the kpmg womens leadership summit, kpmg is empowering the next generation of women leaders. And with the kpmg future leaders program, were inspiring future generations. Its a responsibility that belongs to all of us. In new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. Like in buffalo, where the largest solar gigafactory in the western hemisphere will soon energize the world. And in syracuse, where imagination is in production. Let us help grow your companys tomorrow today at business. Ny. Gov we are back with our special guest. Legendary investor carl icahn. Our guest host dr. Ken davis is with us as well. Got a lot of companies to talk about you to you about, carl. Herbali herbalife, valeant. Quickly. We call it the 800pound gorilla in the room. Thats donald trump. You have known him a long time. I know youre friendly with donald trump and have been, i guess, somewhat supportive of his candidacy. Has anything changed your view on that in the last couple of weeks . No, not at all. I think you need someone like donald in washington very badly. I know if you ever go down there its no secret. I dont think many would argue, there is just pure gridlock there. You have different constituencies, different ideologies and really cant get anything done. Thats very, very bad for this country at this time. The Federal Reserve is holding up this economy, and they i just dont think you can have zero Interest Rates for much longer without having these bubbles explode on you. You need fiscal stimulus. The whole obsession with the deficit is ridiculous. The right wing of the republican party, if you talk to them, you ask them, whats so bad about the deficit at this time and really they cant answer it. There is no answer. I would say that it in an economy like ours where you have a reserve currency, the fear of the deficit is just completely overdone. And right now you need well, donald hasnt really spoken about that, but you need somebody to go in there and break this gridlock. I know donald for years. And he he is a consensus builder. He knows how to deal with people. And if you dont have that in washington, were going to just have more carl, the talking point dejour, if youre with trump, youre with a racist. And thats i dont know. There is an entire contingent of people that are making that case, including the daily news. I am with racist or whatever paul ryan yeah, he is a racist but i still think he should be president. You know, i it would be easier for you to do this part of the interview. You know him. Is he a racist . I know him. I think its ridiculous. Come on its an absurdity. I dont know if you i dont know what racist means. He there will be riots in the streets i was just told, carl. Riots outside the white house. There will be, i dont know, open warfare, righ basically . No. I dont think come on, joe. This is ridiculous. I was told that. I think its ridiculous. I mean, if they cant find anything worse to talk about donald than say some nonsense, i mean, that just gets you angry. If you look lets talk about all the problems with Hillary Clinton. I tried that. What are we going to do. Words are worse than actions, i was told. In fairness. We had ken langone on yesterday. He is supporting donald trump but he said he thought Donald Trumps comments about the judge were what he called, quote, disgraceful. He condemned the comments. He was not happy about that. I dont think anyone that supports donald is happy about that. I mean, i think sometimes donald will say things that become very provocative and so i am not here to defend donald saying that about the judge. I am here to talk about who would be by far the best president. Were not here to talk about that either. But if youre asking me who would be the best president i dont think there is any comparison. I think that just look the record of Hillary Clinton. I mean, its sort of funny. She gets up and says, im here, were going to clean up this mess. Where in the hell has she been for 40 years. Look at Eleanor Roosevelt and what she accomplished. Hillary could have done all these great things. Now she says, im going to clean up this mess. Its sort of absurd. Elizabeth warren and hillary both calling him a failed businessman. I guess theyre referring to the casinos or any of the individual bankruptcies. But i dont think that trump enterprise was quite as successful as the Clinton Foundation, carl in terms of generating you might say that. Of course, the Clinton Foundation has a lot of advantages. But i am not sheer to trahere t clintons. I am saying to you that you have to get this gridlock fixed. You have to get a change. And i think donald will accomplish that. Its sort of as simple as that, joe and andrew. I think its as simple as saying that we need, in this country, a major change, or we will have riots in the streets. Given that we are talking about trying to improve the economy, a couple of stocks i wanted to mention to you. I mentioned before the break the dell decision. You had argued for a long time that when michael dell was taking the Company Private the price was too low. You got him to bump the price. The judge in the case said actually market price is still not enough. What do you make of that . You make of it is what the major problem, i say, in our corporations today. So many boards are so bad. Its really a sad commentary. Here this board gives away 7. 5 billion, and all you can say is, well, they made a mistake. Thats fine. Business judgment. Its absurd. I was there. I made a bid, and they wouldnt even dignify it, literally. They just gave this to dell. You know, we really set in it. Nothing can be done. You have these laws. I will tell you thats another thing that has to be done. You have to change the laws of corporate governance. This is the epitome of what we are talking about. The quintessential example of where boards are just terrible. And here they give away 7. 5 billion and nobody wants to do anything. They say, oh, thats okay. Business judgment. Its an absurdity and dell literally walked away with it. If the board lets them get away with it, so be it. You really cant even blame dell. Though i think the whole thing is unconscionable. What can you do . I have enough to do, so im not going to lead a crusade on this. But it is a sad commentary. Different stock i wanted to talk about. You got out of apple. I am curious, is there a price at which youd get back into apple . I really think apple is a Great Company. I have to tell you that, you know, we made all we made several billion dollars on it. You look at the portfolio. You say, you know, apple is a Great Company, but what happens if china really has trouble. And you know, china was sort of, you know, shaking the trees a little bit there, talking about apple, saying they want more and why dont you wake up one day, you know, china starts giving them trouble. I still think apple is a Great Company. I like tim cook. I think hes doing a great job. I would get back in if i felt more secure about china, which i dont think anybody can tell you that china is not going to have a problem, even though it might be a very small one. But its look, i i think chinas banks, we all know, could have a real credit problem. In hindsight should they have bought back all the stock you wanted them to buy, carl . Maybe they need it now for whatever the next big thing is going to be. Joe, come on. Theyre sitting with 200 billion over in cash there. Hey, i am the first to say, joe, that there are too many buybacks by the way. I think that Many Companies are doing buybacks rather than putting money into muchneeded capital improvements. Many companies i could point out and im short on some of them though im not going into my short positions. Ill tell you this. You really have sort of a real problem, if you want to think about it. You have ceos, just think about this as a paradigm. You have ceos that have a lot of vesting thats coming up. Say they know that in three years or four years from now there is going to be you vest. The three years comes due. Now theyre vesting. They want the stock up, when their options are vested. They want them up. What do they do . Instead of taking the money that janet yellen gives them via the courtesy of zero Interest Rates, instead of putting it into capital expenditures. Where is the money going into capital . Look at the productivity in the country. Its terrible. What do the guys do . You cant blame them. They make themselves 100 million bucks. I am no great fan of buybacks. On a graham and dodd basis, a lot of analysts and even you to some extent a year ago said it was at eight times earnings. It had all this cash. Its cheap. It seemed like a slamdunk that it should be what are we talking about . Apple now . Yeah. It should be a trilliondollar Company Based on multiples. As we know, the e in multiple, it can change. I still think apple is a Great Company. I think its very hard to ever break into their ecosystem. I havent changed my opinion on the fact that they have you sold it all. I sold it for a different reason. I sold it because i worried about, you know i have a company too thats sort of thats public even though i own most of it. I am worried sometimes you worry about the near term. People say i am a shortterm guy. I am not. My average Holding Period is seven years. You guys say im shortterm and im not. You seemed so sure about apple. I was counting on you. Next thing you know youre out, carl. Well, things change. I worry about china. China came you know, china is a problem. You have to change your opinion sometimes, right . I know. I agreed with you in the previous thing. Seemed like a slamdunk. I dont know if it was. Can we talk about one of your newest positions. We found out you have a large position in allergan. I know part of this is a bet on the ceo there, Brent Saunders who you worked with in the past at forest labs. You made a lot of money when you were involved with that and forest was eventually acquired by activists. The company said they dont expect you to get too involved with Company Management or anything. I smiled when i saw that because i dont see you as a passive investor. Becky, ill start with this. I love not to get too involved. I am not too involved with mount sinai because i have a good guy running it. Dr. Davis said the same thing. But yeah. Ill give you an example. Maybe thats a bad analogy. I have companies where we own, like apple, for instance, we have a good ceo. You dont micromanage. You dont get involved. You big ideas about apple, though. He did a great job. Brent, i know him fairly well. He did a great job at forest. I will say that thats one of the reasons i bought allergan. I saw allergan fall apart. When we had forest we made a great deal of money on forest because he came in there i was instrumental, and i am proud to say, to have him become the ceo. He got that thing sold, did great. So activist went up. I figured, what do i want to keep it for. I sold it. I made a big profit, but we sold it and it kept going higher. I said, if it comes down ill look at it because brent is a really good manager. It fell apart because pfizer completely wrongly it was tinged with the brush of valeant. It was a great its simple. You look at allergan. The thing got way down to close to the 200 level. And we bought a lot of stock. We just looked at the numbers. Allergan has a great pipeline. A great pipeline. And it also has a deal with tever. Its a risk if it doesnt go through. You talk about the antitrust laws and all that, its pretty much a fait accompli, i hope. Even if it didnt go through, which i think it will, you look at the numbers. Allergan is just simply undervalued with a good with a very good ceo. Its really a simple question. Carl, on the screen we also showed the stock price of valeant. I know your friend bill ackman is suffering through this. Would you buy that stock . Frankly, would you short that stock at this point . Well, i dont know enough about it to say i would short it, but i definitely would not buy it. I just dont know what you know, when a company has these problems, i am not smart enough to know how deep they are. And so you wait. I have learned that. Youve got to say, look, you got to worry about every stock you buy. Do they have problems. Hidden problems. You have to worry about that when you do it. But if you know theyve got problems, i guess its like a sick person. If you know theyre sick, well, you dont let them run the marathon. You dont bet on them in a race. So i think, as far as im concerned, i should not be saying i dont like valeant because i really dont know very much about it. I never liked the model they had. I never really liked that model. I think a lot of the Pharma Companies have that kind of a problem where, you know, youre i dont understand where analysts dont look at the at the these patent clips more. Yeah. But again, i shouldnt even be talking about valeant. I wouldnt own it. Im not buying it for the reasons i say. But i certainly dont know that its got a problem or anything like anything like that. You picked out a Pretty Simple one in the past. When youre buying things, you came in Pretty Simple. You didnt know everything, did you, carl . No, didnt know them, but i did talk to people that did know them very well. And loved those drugs. I can talk to somebody that is really knowledgeable in pharma, i can look at the numbers, and thats good enough for me. But what more can i do . I look at it. I cant talk to anybody that knows what valeant is. I dont think anybody can. You know there were problems and theres nobody that could tell me, can say the problems are over, lets not worry about it. The guys thought that when it was 80. But youre getting me into something that i really shouldnt be talking about. The existential threat to herbalife from the government, if it does get settled, and i dont know what theyre talking about, its not that much money, i mean, its a lot, but its not that much. Does that close the book on whether ackman is right or not, if they do settle and theyre allowed to stay in business . I can say one thing, and i think i can say it safely. My lawyers might not want me to say this. Were on the board, and i have a copy. But i will say it, and ive said it before. And ill say it again. Ackman is completely and totally wrong on this company. You know, ackman is a smart guy and all, but he is just deadwrong. This Company Creates work for a lot of people. And to say it doesnt is ridiculous. As far as im concerned, ive said it publicly enough, its not a pyramid company. And it creates jobs. And thats all im going to say on it. Just sort of mixed up those tickets. Should have been on a buy on hlf and a sell on, what is it, vrx or whatever . Should have been a sell on valeant at 300. Youre not beginning to get me into ackman. Weve made up. We talk to each other. So im not going to say anything bad about him, except i disagree with him, and it doesnt mean im saying anything bad. I just disagree with him totally on herbalife. But im not going to say another word about anything else. Heres a stock youre not going to want to talk about, and theyre going to kill me because they want to go to break. Hertz. I cant talk about it much. Were on the board there. But you do know that i bought stock very recently. Thats why im asking the question. Okay. So you know that. That speaks a lot. I cant say any more, because were on the board. I have loved having you on, ive got to say. I know you had to get up early, but i think this is the venue for you, out of all of the cnbc venues. Thats just my opinion. I would agree. Becky, right . Carl, thank you for joining us. I like talking to you guys. Awesome. Thank you. Come on whenever you want. Coming up, this mornings biggest movers. Stay tuned youre watching squawk box on cnbc. Coming up, dr. Ken davis of mount sinai wraps up a big morning. Stick around. More after this. Actions speak louder. Something well show you. Through small things, big things, and spur of the moment things. Plumping surface cells for a dramatic transformation. Big things, without the need for fillers. Your concert tee might show your age. Your skin never will. Olay regenerist. Olay. Ageless. And try regenerist microsculpting eyeswirl. It instantly hydrates to plump and lift. What if 30,000 people download the new app . Were good. Okay. What if a Million People download the new app . Were good. Five million . Good. We scale on demand. Hybrid infrastructure, boom. Ok. What if 30 Million People download the app . Were not good. Were total heroes. Scale on demand with the Number One Company in cloud infrastructure. Welcome back, everybody. Our guest host dr. Ken davis. Thank you for all the guests that youve brought on with you today. What do you think about what carl had to say today . Carl is a very special guy. His commitment to philanthropy is really quite substantial. Hes helped a lot of underprivileged kids we call it icahn scholars. Theyve gone on to harvard, yale, princeton, and its all because of carl. We want to thank you for your time. I feel like we only touched on a top of all the subjects we want to get to today, but we always appreciate seeing you here and thank you for your time. That does it for us today, everybody. Weve been watching the futures. They have been under pressure. Check it out with squawk on the street next. Good thursday morning. Im Carl Quintanilla with david faber and mike santoli. Cramer is off today. The anxiety about Global Growth and now bond yields starting to weigh on the premarket, that. Kos after the highest close for the s p. The u. S. Tenure testing its lows for the year of about 166 and claims were muted once again. You might have heard a few moments ago carl icahn on squawk not impressed by the recent market runup