Transcripts For CNBC Squawk Box 20171213

13 points. The nikkei was down. Closed down by a half percentage point. You did see that stocks were higher in china. Hang seng up by 1. 5 then this morning in early trading in europe, take a look things are mixed stocks are slightly low ner germager lower in germany and france. Stocks in italy down by 0. 6 then you have crude oil. Crude Oil Yesterday ended up down back below 58. This morning its up, but still below 58, trading at 57. 57 to the story of the morning the closely watched senate race in alabama, Democrat Doug Jones is the apparent winner there, though republican roy moore is not conceding just yet john harwood joins us from birmingham he has that story. Good morning good morning. This was a very big victory for the Democratic Party first time they won a United States senate race in alabama in 25 years a big defeat for President Trump and his party. Look at the numbers. Twopoint lead for doug jones. Roy moore has not yet conceded he said gods in control were still waiting for writeins and a possible recount. Though the twopoint margin is outside the boundaries for an automatic recount. If you look at the key groups that compelled doug jones victory, africanamericans with strong turnout subpar turnout in conservative areas for moore. College educated, white women, doug jones did well there. Moderates did well for doug jones. The candidate came out this is a man who prosecuted klansmen for the bombing of the 16th street baptist church, he said this was a victory for justice. Tonight is a night for rejoicing. Because as dr. King said, as dr. King liked to quote, the moral arc of the universe is long but it bends towards justice [ applause ] tonight tonight, ladies and gentlemen, tonight in this time, in this place, you helped bend that moral arc a little closer to that justice. Now there were extraordinary circumstances in the alabama race roy moore, the republican candidate, had been accused of child molestation of a 14yearold when he was in his 30s and pursuing other teenagers when he was in his 30s President Trump went in for his campaign, conducted a robocall, pulled the Republican Party back in after they tried to get out the president sent out a tweet last night, saying it was hardearned, a win is a win is a win. Well see if he keeps that tone today. Without question the republican agenda has gotten more difficult to pass by shrinking the republican majority in the senate from 52 to 51 it puts the senate in play in 2018 by providing one seat that democrats would need to take over that chamber. Unlikely that this is going to stall tax reform but not impossible we have to see what comes out of the conference you had senators like rubio and collins yesterday raising questions about the 37 rate that came out. You never know whether or not though some republicans will say we need to pull together and pass this, its also possible some small number will say, whoa, lets wait the tax bill, of course, is unpopular. It could add to the burdens of republicans in the 2018 midterms if i were to ask you, did mcconnell win or lose, you would say i would say all republicans lost i know you would. But if moore had won, he would especially to you and others, he wouldib be the hood ornament for the Republican Party. I tell you who else won, alabama and the south. Sure. If they elected roy moore t would be like it would be like 91950s america or something theres a lot of nuance. Also, john, in terms of voting youre exactly right. Let me talk about your point yeah. Youre completely right you had a potential loselose either way for republicans if they kept the seat, they would get the blowback in 2018 from roy moore when you talk about the 1950s, if you look at those exit polls last night, it was exceptional the lopsided margin that jones had among voters 45 and younger, and moore won people over 65 thats a sign that the winds of change are blowing even in the deep south the other point i expect the Republican Party will adjust to that. I know its 5149 now, who knows how roy moore would have voted sometimes with mcconnell youre exactly right. If this guy wants to get reelected again, you could see him not necessarily going down party line with democrats either he is still in alabama thats 100 true. A lot of nuance to this not to mention, this was the republic republicans who did this 22,000 writein votes from republicans who did not want to vote for moore he lost by 21,000. Right yes roy moore was exceptional in the baggage that he brought to this race we have not seen anything like this before. That caused a lot of this splintering. Andrew what do you make of the stories that this is a loss for steve bannon, and, in fact, inside the white house the president blames steve bannon. You know, this goes to the joes question before. I dont know how you parse its Steve Bannons fault, Mitch Mcconnells fault or Donald Trumps fault. This is about the nature of the most conservative core within the Republican Party especially in the deep south, which nominated roy moore, even though establishment republicans, republican donors, Republican Leaders in washington were trying hard to keep that from happening. Yes, steve bannon played a part, but i dont think steve bannon decided the election one way or the other. This is about the mate picture of the Republican Base if the Republican Party adapts, changes in ways that allows it to expand its base, they will avoid outcomes like this if they dont, they have got trouble in other states. We look at the map in 2018 and see democrats as having shots at only a couple of places. Consider tennessee next door to alabama, you have a former democratic governor jumping into that state to run for bob corkers seat. I wouldnt consider him the favorite but he has a shot when you look at the energy on the democratic side. I dont know. Roy moore was unique its hard to imagine that you could point to something even more like, you hear alleged child molester okay thats pretty bad. But you look at some of the comments hes made, you have to think this guy had some antiquated or you know, comments about lgbt. Yes exactly so comments about 9 11 comments about slavery. Right heres the other thing theres a part of me some men like to watch the world burn, thats from batman if he had gotten in there to watch mcconnell and these other guys, watch the chaos that would have resulted t would have been a media story that would have been compelling to follow. Im glad we dont need to go through that it would have been divisive, and airing the worst part of i think on net, joe, Mitch Mcconnell is happy that doug jones won. Even if its harder for him to pass that would have been harder for him to pass some elements of his agenda thats a headache he has trieded to avoid and he has avoided it would have been like a 100car crash people look at on a highway. Horrific to watch. It was loselose every republican senator running for reelection in 2018 is happy roy moore lost that race exactly it is nuanced. Even when schumer said how great this is, that would have given every democrat something to talk about. Im not sure this would have been something that could have been a positive for democrats if he had won yes 100 whats with the no tie . I dont know yesterday and today, harwood you get to a certain level its campaign trail casual. It means hes been up all night. John, we never talked about it crunching returns yes, sir. How about those screaming eagles the bc screaming eagles. Are they not an inspiration to everybody . I was very impressed. I didnt think they had that level of talent on their team. They shot lights out more power to them they they deserve to win. They built this lead, we came back, and we were ahead with three minutes to go. They knocked us back again if you would have tripped that guy a couple times no, no. Its a new gracen allen this year i dont watch sports, i know as soon as you started bringing it up, what, they beat duke . I watched it, too it was great it was tough. Im sure you enjoyed my tears over that. God, did i that schadenfreude thank you. The win by doug jones makes the gops push for tax reform more urgent. Ylan mui has details President Trump will be delivering his Closing Argument for tax reform today as republicans close in on that final version of the tax bill. The corporate rate will be 21 , and there is debate over whether that will take effect right away or delayed until 2019. The top individual rate would fall to 37 , the deduction for mortgage interest would apply to loans up to 750,000. The deduction for passthrough businesses would be 20 . A white house official confirmed these details as well to eamon javers last night and said they represent the current state of play already there is pushback, of course senator marco rubio criticized raising the corporate rate to pay for tax cuts for the wealthy and he warned of big problems if the money didnt go to expanding the Child Tax Credit instead Susan Collins says shes not a fan of lowering the top rate for individuals, but this could appease ron johnson who wanted a bigger deduction for pass through businesses the lawmakerers will hold a Public Meeting on the tax bill later today. And President Trump will peek about the tax bill later this afternoon. Republicans need to get this out of final committee by friday with what happened last night, the pressure is on back over to you ylan, thats it so, 37 21 37, 21, 20. Sounds like hut. Exactly then the mortgage is grandfathered, right mortgage is grandfathered in. The 750 deduction is higher than the 500,000 cap in the house version of the bill. But lower than the current limit of 1 million give a little bit, take a little bit. Is the alternative minimum tax in or out for corporations or individuals unclear i was unable to figure that out. There has been talk about it folks recognizing that could pose problems for businesses, particularly when you look at the corporate rate being at 21 instead of 28, but not confirmed whether its officially in or out. So that hasnt been decided yet . We were talking to sources late last night, early evening overnight im sure there were negotiations and talks going on. Well check back in this morning. Thank you very much sure. Apple making another big investment this time in texas josh lipton joins us now from the lone star state. Good morning apple just making a big announcement its going to be investing 3 390 million in finisar, a small hightech firm in california this is part of apples 1 billion advanced Manufacturing Fund that fund is to get highly skilled jobs back in may, apple announced its first investment, that was 200 million to corning this award to finisar will help to build out a new 700,000 square foot facility in sherman, texas. That will allow finisar to ramp up production of vixel chips super small, fragile and critical they enable depth and proximity sensing. That powers a range of apple technologies, including face i. D. , amoji and finisar will hire 500 people including engineers and tech people. Apple saying theyre thrilled to partner with finisar over the next couple of years to push the boundaries y ies of vixel innov. The new facility in sherman, texas, will open up the middle half of next year. Josh, thank you very much we have more coming up. Media movers disney, fox, comcast all trading higher after comcast stepped away from buying assets from fox. We expect an announcement from disney regarding this as early as tomorrow. I think we should do that meeting tomorrow. Well wait. What did you think about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading companies see it and see it throughwith digital. A used car, truck, suv. Thats smart. Truecar can help. Its great for finding a new car, but you already knew that. Its also great for finding the perfect used car. Youll see what a fair price is, and you can connect with a truecar certified dealer. So, no matter what youre looking for. There it is. This is how buying a used car should be. This is truecar. Welcome back to squawk box. Sources telling us that disney and 21st century fox are on a glide path towards a thursday deal for a valuable handful of fox assets joining us is tim nolan. Good morning to you. Lets start on the basics. You look at this transaction, you think its a win for disney . I think it is i think its an excellent move for disney what it brings to disney is a couple interesting things. One is a much stronger studio presence and content for ott service. Second an issue that maybe is not talked about too often in the press, the fact that fox has a powerful series of International Cable assets, that gives disney more distribution potential for branding think about all the brand building disney wants to do. Lets talk over the top service first. Bob iger came out and said he would start his own over the top service. When the deal was first rumored, the idea was, now we have a library, all these other assets. We can put that on this new over the top service. As people have started to think about it more, then theres a talk emerging that maybe you merge or basically rebrand or just take hulu, which they can troll a c control and turn that into your service, what do you think happens . Its an embarrassment of riches for disney if they get this done. They own 63 of hulu, and they have a Live Streaming virtual bundle, then with the bam tech service, they have the streaming capability to put all their content on any way i dont know which they would choose they have both options available. Comcast owns 30 of hulu, 10 owned by time warner do you buy those partners out or do they go along for a free ride this has been a partnership of thrlehree companies for years now. They have managed through the changes. I dont know if anything has to change comcast consent degree ends next year, so they may exit if they choose to. Time warner entered hulu before they announced the at t acquisition. With at t running directv now, does time warner need to be part of hulu and that directv now service . I dont think much about that being a problem. Do you still want to own 21st century fox . The remnants, the stub, whatever you think is left of it, which is substantial sure. Its a good company with powerful assets. Think fox shares have moved from 26 bucks, 27 bucks to 34 on this deal speculation if a deal is announced around the current price of 34, 35, a lot of that value would have been realized. Lets wait for the announcement. Are you a believer that 21st century fox remains a publicly Standalone Company or gets rolled up with news corp. Or do you let them both hang out there. The murdoches would still control both companies if its an all share deal, the murdochs are owning a stake in disney, they might wanted to own that for some time clearly it looks like they want to sell to a good company in the shape of disney. What we believe and what the news has been talking about lately, James Murdoch may be next in line to be running disney a few years down the line you have an interesting dynamic, you have one brother running fox and another one running disney which, by the way, is like pacman merger. You can take over control of all of them. I think the murdoches have clearly said for some time, they have particularly interest in live news and sports content they would still have that they split out fox and news corp. A few years ago. They would own stock in disney which eventually they could sell down im sure they would take their time to do that. If youre a betting man, are you betting on James Murdoch to be a part of this transaction . I dont think its a deal breaker. I think its likely thats the next step for disney there is no obvious successor for bob iger the two previously presumed candidates have left disney. Iger said he thought he was leaving by the end of fiscal 19. Thats not much time to develop someone internally maybe theres somebody waiting in the wings but James Murdoch, the fact he has all this experience Running International businesses and tv weaknesses, thats where the weakness has been in successors to bob iger. I think the fit is there disney is such a big complex animal the theme parks, so many other things, tying all of those back together thats the weak spotted in james resume, not having that experience previous disney ceos have come in and made the rounds internally and got to know the company well on the one hand you have somebody potentially waiting here that would know the trouble the businesses within disney theres no perfect fit thank you thank you we will watch for that transaction. Its a mouse, a complex animal now part mouse part fox. Because the fox said. Exactly coming up, Stocking Stuffers for your portfolio barrons is out with the list of top stocks for 2018. Well reveal the names that could make you some money after the break. If you have anything left to invest after your bitcoin binge. Heres a look at yesterdays s p 500 winners and losers [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Win an uncertain world . K predictable income pgim sees alpha in real assets. Like agriculture to feed the world. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over 120 billion dollars in real assets. Partner with pgim. The Global Investment management businesses of prudential. Im not really a, i thought wall street guy. Ns. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade welcome back youre watching squawk box live from the Nasdaq Market site in times square. Good morning welcome back to squawk box. Look at u. S. Equity futures at this hour. Dow looks like it would open about 42 points higher nasdaq 10 points higher. The s p up 3 points. The big news this morning out of alabama. Democrat doug jones is the apart winner there defeating republican roy moore trump recently tweeting the reason i originally endorsed Luther Strange and his numbers went up, i said roy moore would not be able to win the election. I was right. Roy worked hard, but the deck was stacked against him. A little selfrationalization in the morning. He was right. He was right. He was right the first time until Luther Strange 100 he was right on that course thats why some reports this morning are blaming steve bannon for pushing pushing roy moore to begin with the fed will be front and center on investors minds today. Theres one piece of Economic Data coming out before that decision this afternoon. Keep an eye on the november Consumer Price index it will be released at 8 30 a. M. Eastern time well bring that to you. The fed statement is due at 2 00 p. M. Along with the latest economic productions janet yellen will hold a News Conference at 2 30 p. M catch all of this, complete coverage on Cnbc Steve Liesman will be at all of it covering all of it. Hopefully asking the chair i imagine this will be her last press conference i think so. Well watch for that. Jack is here. Barrons is out with their list of favorite stocks for 2018. It has chosen ten bargains thats interesting bargains the way to go joining us is jack otter barrons editor at large the reason i say that, i can think of value, i can think of momentum dont know if a bargain needs to be on a value basis. If you are picking winners that already appreciate, they may still appreciate more. Thats a tough question we did take two winners who have appreciated as two of the ten. You mentioned the cpi. Whats happening in the market now, youre probably later today going to say cpi wasnt 2 inflation is nowhere to be seen. Inflation has been rampant in asset prices stock valuations going up, up, up bond valuations going up as yields fall. Bitcoin bitcoin so, its actually tough sitting down this year, trying to find stocks that we could recommend you can do the momo play and hope we get another 12 months out of this we tried to actually mostly look for unloved stocks, Master Limited partnership was one choice one of the few things hated in the market no. Thats the direction were going. Usually when we do well, its because we found badly when we do badly, its because we didnt believe something going up would keep going up there has been a lift in leadership taking place. Yes theres a financial on our list. Financials seem to be taking over leadership. With tax cuts, with rates rising, we expect those are all good things. This is an unloved sector. It took a long time after the financial crisis for people to finally be willing to invest in banks. So we think theyll do well. How difficult would it be to explain your methodology or did you use a screen of some kind . Did you plug in certain things return on equity you mentioned sentiment. Unloved. In short, no. We tried to keep it diverse. So you just picked ten stocks that looked good yes two seen the initial parts, one is andrew barry, been on the staff forever. Has a great track record he has fantastic sources a lot of hedge fund guys, institutional investors, we talk to them a lot. It looks like theyre alphabet cal i deduced that Applied Materials, berkshire, delta. Mlps, not just we nose epd, enterprise partners, and i had a meeting two days ago with a bunch of top financial advisers, one of whom is very bearish, going to a lot to of cash one of the few things she liked is epd its starting to fund its operations through internally generated growth, which is a big deal for these Master Limited partnerships, they could issue equity all they wanted and the market would buy it. Theyre starting to get more discipline, but still unloved by the market youre getting 6. 8 dividend. Alphabet is the only momo exactly Applied Materials, still tech definitely tech but hurt recently we think its a great way to play ai at 13 times earnings, these chipmakers need that help from Applied Materials i remember when i was a stockbroker, i put a lot of my clients in something called symbolics. Artificial intelligence, like 1984 before its time when is its time . Its still before its time how many years ago is that 30 thats a little early. The last time Richard Shelby got elected as a democrat did ha republican he did. Sorry, it was 93 it took that long nothing was happening in ai bark then the idea that something i wonder, it still feels like youre waiting when it makes a quantum leap xep there a except there are cars on the road with no driver. Is that really ai i want consciousness. I want machine consciousness. I dont want that to arrive quite yet. How come delta is on and not other airlines because its really the class of the sector right now in terms of Good Management im very angry at delta for losing my garment bag and not finding t but i fly get ta because even though were all cramped, they do a bit better job than competitors what about the other Airlines Airlines are unloved now. God knows anyone who has flown, theyre doing a good job of packing as many passengers in there. We think its a decent sector because they are disciplined its hard to say that. Ben graham, 50, 70 years ago said dont invest in airlines. He was right for a half century. Now theyve finally gotten religion half the market multiple, its not a bad idea you have Berkshire Hathaway on the list. They play a high tax rate. They pay a high tax rate and have deferred tax liabilities which will suddenly look better. The railroads and so forth will do well, if Economic Activity picks up theres a lot of reasons that look good for berkshire. What happens to warren is a question he himself has said in his deadpan way, the company may be broken up upon my death and how old is for parts the tax rate is coming down, the economy is picking up, 100 billion in cash, its like giving your money to a brilliant manager, he will invest it well. What are you worried about are you worried about sky net and a hunter killer, aerial hunter killer coming do you remember the opening scenes of terminator is that what i were visualizing . I was visualizing that. I dont stay awake at night worry being that you cant do this hear it . We have the music. Nice. Wow. Remember these opening scenes yes totem decembal destruction, g on skulls. Do they need us i dont know if smart machines need us. Do you know how theyll feel about us they wont have feelings. They will hopefully not sadistic towards flesh and blood. They dont need us. You seem concerned about that you immediately said i dont need that kind of ai thats true im a terminator fan. Who isnt. Exactly youll be back ill be ack he will when we come back, this morning a Top Executive from one of the Worlds Largest toy companies. We will talk to skip kodak from lego about holiday sales and the impact of the new star wars movie on its branded sets. At the top of the hour, our guest host is larry bossidy. Later in the show, peter roskam will join us live. Youre watching squawk box on cnbc ronoh really . Gs going on at schwab. Thank you clients . Well jd power did just rank them highest in Investor Satisfaction with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to Wealth Management. Welcome back this is a critical week for just about every toy company and toy executive all around the world but its a bigger week for our next guest, who has been watching holiday sales even as the release of star wars tomorrow presents a big opportunity for his company to sell more toys joining us is skip kodak, Senior Vice President of Lego Group Americas thank you very much for being here thank you, becky. Lets talk about this the tiein with star wars, what does that mean for lego how many of the toys that you sell are directly related to some like a big rollout like this so, the Star Wars Franchise is a big deal to the lego group. Weve been in business together with lucas and now disney for 18 years on this franchise. Its an incredibly important part of our business it attracts all sorts of users, young and old. Kids of all ages as we go into the Holiday Season, we have high hopes for what the star wars movie will do in terms of creating more interest for our part, in addition to the star wars movie, were eager to see how this impacts total sales. I know in the first heart of the year, there was some decreased revenue lines coming in i say that with the sav yaccave lego has turned things around the last several years the numbers have been big. Explain whats been happening. Absolutely. As reported, the downturn came in many developed markets over the past few years, but weve grown at double digit rates over the last many years. We got to a window where we needed to consolidate that growth we have been through a phase with our business as well as with our broader marketing aims to make sure we can prepare ourselves for growth as we move forward. As we come into the Holiday Season, were seeing results from many initiatives we have undertaken this year in all of our markets to get back to positive which means what in terms of sales lines . For the sales line for the year across the globe, we expect the company to show a positive year which is a great comeback given the First Half Results we have published, and great growth noi momentum picking up in the Holiday Season when you say pick up, are we talking low Single Digits, mid to high Single Digits . I realize its a private company. Directionally something in the low Single Digits. In terms of what it means every time you roll out a leg golf movie, how does that spike sales . It depends on the movie some movies we rolled out during the course of this past year the Lego Batman Movie is geared into our core audience so those things resonate across the universe of people who enjoy lego, but then also into a universe of kids who just enjoy great character base play. A movie Like Star Wars will attract a wider demographic, including now in the u. S. Particularly the first generation lego players, who are now parents. As they look for opportunities to game time with their families, Share Interests more and more as they look for experiences over just simply acquiring things a movie Like Star Wars can be a pivotal piece for our business i played a lot of video games. I dont understand why it makes sense to have a lego batman or a lego raiders of the lost arc or star wars video game, and all the characters look like theyre made of legos. I dont understand why it works. It does. My kids play with them every day. Theyre fun do you still make those theyre playing on ipads. On ipads. This is on big tvs. Could you do a star wars movie, lego movie . Is that possible you know what thats a great question. All things are possible. Right now we dont have a plan to do a Lego Star Wars movie but we do have lots of content so vignettes from movies or movie trailers we do in a lego style. In fact, for last jedi we have one of those in the marketplace. Someone was thinking out of the box. Theres no reason you would think that putting together a physical lego thing would translate to video games or movies, but it does. It terms of creating your own characters in terms of licensing new ones, are there things in the works that we dont know about yet that could scale at that level i think there are opportunities for that all of the time you know, of course theres a benefit to working with external partners who have these welldeveloped ips and benefits to developing our own ips. We started off with an idea that said this character based play and good versus bad guy engagement could be an idea. That has blossomed into a major franchise up to being film worthy is there one line representing the greatest strength or sales . Is it star wars or ninjago the ninjago is a great model for what were after as a company a line that drives engagement and gives us the opportunity to reach across multiple platforms, be it the movie, physical play, digital play through games or our lego life application, where we can bring kids together in a safe place to play and share creations, and kind of inspire each other as peers. Thats one space the other thing thats interesting over the course of the last year is weve seen a return to classic play so we have a range of items that dont come with building instructions, but just open up the box and Start Building theres a resurgence in these sorts of more experiential styles of play and lego is uniquely positioned to take on that trend. The thing im most excited about is a lego land coming to new york when because we have kids right in the age. When is has opening . I dont have all the details. Our good im quite certain its going to be very soon i knowweve done some groundbreaking, and then also, i know that the local government is also involved and supportive. News you can use. You know that little device you have to try to separate the legos when you mess up and you put two legos together the brick separator the separator doesnt work, then you try to jam your fingernail in there. Is there a better way . Theres not a better safer way than the brick separator, but i can confirm there are different ways people do separate bricks occasionally which is what i need to know we do this every day at our house. Fingernails are good, and then sometimes you can actually use the single bricks themselves to separate each other single bricks themselves. Oh, you mean ill show you sometime when im in the studio. Lever right between. Im taking you up on that i may invite you over to the house, actually. I cant imagine the theme park is going to be done putting all these Little Things together it will take a long time. Irts going to seems like it e five, ten years at least it takes some time, for sure, and theres a whole crew of people who are excellent at that work, but it does take some time including the building thank you for coming on i have to tell you, my kids often say what kind of people do you interview . Theyre going to be excited about this one yes you are like the biggest you would be the biggest star that weve ever had we are very grateful for you to be here. Coming up when we return, the debate that squawk fans will find familiar. Should babies be allowed in first class . The clooneyfoths und e solution that may smooth things over. Well tell you about it after the break. What we do every night is like something out of a strange dream. Except that the next morning. It all makes sense. Fedex powers Global Commerce with vast, farreaching networks. Deep knowledge of industries. And, yes. Maybe a little magic. I thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back this story you got to hear about. George and amal clooney made a lot of new friends on a new flight talk about babies in first class. Listen p to this reports say when the clooneys were traveling home from the u. K. With their young twins they handed out noise cancelling headphones to everyone in first class. They had the logo of George Clooneys tequila brand and came with a note apologizing ahead of time if the twins cried. The babies were reportedly quiet throughout the flight. Now, isnt the noise cancelling headphones they liked or the fact that george and amal were handing them out . My question, are they the big expensive noise cancelling ones or the little ones that you buy in bulk. To be truly noise cancelling i buy skull candy, and i buy, like, five, six at a time because the wires dont eventually, and everybody wears them in my house i lost my good bose thats my Christmas Present to myself i thought you found what do you pay unfortunately, you are going to pay no 250 for the bose ones over the ear bose and then the little these are the quiet comfort ones the over the ear ones are pretty good. You got to buy a lot of them and use them theyre loud they last for years is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. Because when you approach investing with a tireless desire to beat the status quo, Something Wonderful can happen. Those people might just get what they wanted out of life. Or maybe even more. Its Life Insurance and wharetirement solutions toic . Help you reach your goals. Its having the confidence to create the future thats most meaningful to you. Its protection for generations of families, and 150 years of strength and stability. And when youre able to harness all of that, thats the power of pacific. Ask a Financial Advisor about pacific life. It is decision day with the fed sitting at record highs, and policymakers getting ready to make their final Rate Decision of the year. Larry is here to talk global markets, the economy, Corporate Tax reform we may even touch on derek jeter. Whats the deal . Still a yankee plus, investment guru ken fisher erring on the side of caution whether it comes to Corporate Tax cuts why he says it may not correlate to higher stock prices he will join us to explain plus, alabama getaway nbc news is projecting that Democrat Doug Jones is the winner in a senate race against republican challenger roy moore. That story and your top corporate stories. Plus, details on the tax reform. All straight ahead as the second hour of squawk box begins right now. Live from the beating heart of business, new york city this is squawk box. In the meantime, check out the futures atthis hour. Weve been watching things, and so far weve got green arrows once again not too many days we come in and see red arrows in the morning, but thats not just what happens at the end of the day. Yesterday the dow and the s p 500 both setting record hes, but the nasdaq gave back a little bit of ground this morning it looks like the dow has indicated up by 36 points s p would open up by another two points, and the nasdaq would open up by nine. Heres whats making headlines at this hour the fed is expected to raise Interest Rates today as it concludes its twoday meeting. If so, it would be the third rate hike of 2017. The prior ones occurred back in march, and then in june. Steve liesman is in washington for that decision and for Janet Yellens final News Conference as fed chair the lack of inflation has been among the Central Banks chief concerns we are watching shares of honeywell this morning the outlook for the current quarter, and obviously weve been talking to lear about this in just a moment there is some previous management that just set that at 15 years ago, i mean, it just amazes me but the things that you cultivate. Youve seen that happen. Its time for them to blossom. You reap what you sew the stock market from the obama stock market, that was Ronald Reagan right . That goes back to remember the tax cuts and the yeah okay things take time they take a few years. Lets talk about billionaire investor stanley, sitting down with Cnbcs Kelly Evans yesterday. His bullish bets stocks have paid off this year, but he conceded his macrocalls werent as successful. I would have to say its probably the worst year ive had relative to the set of opportunities out there i could ever recall. I understand why you have this impression because the day after the election i was on your network and pretty much was very constructive involved 13 f filings. Looks like im making a fortune in stocks. I have done very well in stocks. I have really, really mistraded macro. Stocks have bailed me out, so barring a miracle, thats not going to happen. Youre not up 30 im not up anywhere near 30 . Im not up double dej its. You know, im having, again, relative the opportunity to set a terrible year. Its going to be my first barring a miracle, its going to be my first down year in currencies ever. Druckenmiller also talked taxes, and he is furious about one part of the plan in particular i was so offended by the carried interest provision the fact that theyre keeping it in place so people who well, its outrageous we have doctors and lawyers in blue states. Tax rates going up dramatically. Professionals. If thats not income, i dont know what it is. You are doing other peoples capital. Thats a good argument. You can see 100 right. Theres unintended consequences to all of this. Unintended consequences to every tags there are from a fairness perspective i love the position that he is in because he manages billions of dollars, but just for himself and his employees that advantage his family. Duchane is him im not arguing theres another point here. This individual tax reform thats forthcoming is going to look like a dodge breakfast when everybody is done. What is a dogs breakfast a little bit of this. A little bit of that one of the things theyre doing now is if i buy honeywell at two different times and i sell it first in, first out i have to sell the first purchase regardless of whether i want it from a tax standpoint, and miss it. The mutual funds are exempt. Individuals are not exempt if you are in connecticut, theyre killing you on state and local taxes. Theres another provision that provides what i just mentioned that hurts i mean, you have to get out of these states the fifo thing, in the past people have gained into take losses on, you know, stuff that they bought recently and keep the stuff they bought long absolutely. I know, but thats all sort of legitimate. Its come on but if you have assets but if you have assets and you decide to sell them, why does the government decide to you harvest the ones you just bought offset that loss against some gains. You got somewhere else joe, it wasnt like that to start where. You wouldnt all of a sudden make it that way youre criticizing my strategy come on. You wouldnt design i dont think you design it with deduction of state income taxes either i dont think you design it from scratch like that. Its like that now its impossible to get rid of without people having i thought dont you you live in florida you dont pay no, still live in connecticut. I go to florida. Thats the thing. Thats intellectual deficit that i have to overcome. At the moment im in connecticut, and i hate the fact that i have to get out i never wanted to live just because of taxes but you do now. Particularly jurisdiction i guess im going to have to. Will you become a passer . I hate the definition i do have my own llc, but i dont qualify. Personal services doesnt qualify for the pass through theres a lot of i like the bill, by the way, despite the i know. Same way toomey yesterday, we were i was pointing out other things that a reagan tax bill, the idea would have been you leave as much of the private sector as you can, and just treated better there. Capital works better you cut expenses if you are worried about deficits and what the government is end and ispending a lot of people in new york, new jersey, connecticut, california, and elsewhere, taxes are going up 10 , 15 . He goes i hear you, joe. But youre an outliar. He called me an outlier. I want low Corporate Tax rates i can see for the greater good we might get to 3 or 4 gdp more consistently. That will cause wage gains well get more jobs. It will help the economy i think its going to help ing no, but think about the in terms of who the percentage who is going to truly win, says shareholders are going to win certainly thats the ultimate that will go back to the economy, but what im saying if you are looking at true winners and true losers, the biggest winners its still better to have the shares going up. Having asset infliegs from having to deal with us a weak economy with cheap money and central bankers. Shareholders have made money there too, but it wasnt based on thats a really good point, though thats a small amount of money. It doesnt matter from the opposite perspective the optics, im not going to spend money. We asked the senator about this yesterday, and his point was you are going to see a lot more businesses created llcs created just because of new companies being created, but how do we figure out which ones are people who are diverting themselves and turning themselves into no question and then you might as well include them at the beginning. Were outliers. Not to talk about ourselves all the time, but agent fees you get audited every year because we write off if you are socalled talent, which is like calling a bald guy curly its a joke when they call people on tv talent. The irs sees a huge writeoff. Its every month they dont believe you can spend that much as an expense, but then they see what it is, and every year they do it and think theyre going to nail you, but those are no good anymore. You are complaining, but you like it. Once in a while late at night, i think about it myself, and i start crying in 186 what was done differently because he was involved with that was that they stepped on everybodys toes. This one it feels like some toes got squished and some got left alone. Thats like leaving so youre not making everybody feel equally kind of kwisquished is problem. Just totally admitting everything other times the republicans are trying to do something, and they screw up at the last minute, and it doesnt pass. I want this to pass, but they do screw it up, and it doesnt im a little bit more okay. So you didnt get it done. Okay so the state and local taxes are deductible chairman and ceo of honey well and cnbc contributor. Were going to talk about your predictions, but derek jeter, its like what the what is this he is a double agent for the yankees. Come on. Im a red sox fan. The tax plan or jeter giving that guy up for what did he get . He got a second baseman you know you know what were talking about, andrew . The mvp of the National League is coming to the yankees they already got this guy, judge. Thats like 110 home runs. Yeah. Not to mention the catcher sanchez. He is a big power guy too. Nobody likes the yankees. Even new york people like the mets that was a bad day. Yankees have a pretty big fan base its just not versus the rest of the field. I dont know. Cincinnati fan, buying a team like steinbrenner used to do is not what else do you want larry, getting back to business, the fed is going to raise today. Is that easy. Yep. 25 basis points. I think maybe three times zbeks e next year assuming the economy continues to perform as well as it is. We have some people even supposing they could raise rates four times are you okay with that i think the economy you know, its been two quarters at 3 gdp well probably be closer to 2. 5 in 2018. Even though the Economic Outlook is as good as its ever been i mean, you take a look at cars and housing and corporate profits. The Household Net Worth is highest ever Consumer Confidence higher than 15 years things are go as good as theyre going to get not to mention that the rest of the world is getting better. Europe is coming on strong china, they say, is slumping slumping to 6 india, 7 . Tiny economy still 7 i think things look really good on the economic front. All right well have honeywell, did you call them and say can you release this news a little t on squawk box why today are they talking about all this stuff if my name is mentioned over there, people look at it and say, well, who is he they do i dont think so. Its coming up coming up when we return, house conference member peter on tax reform as the chairman of the house weighs and means subcommittee on tax policy directly involved with the merging of the senate and tax house plans. He is going to join us after the break. Then the cochief Investment Officer of fisher investments, thinks they will boston stocks higher, and he will be here to explain why. Then the wall street journal Holman Jenkins discusses the battle between at t and the Justice Department well talk about it. Youre watching squawk here on cnbc record time. At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. You myour joints. Thing for your heart. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Welcome back President Trump will make the final pitch for the tax plan in a speech today our next guest is a member of the committee that is tasked with merging the house and the senate plans to try and come up with one that everyone can agree on good luck with that. It is in the works at this point. Peter of illinoiss sixth district also serves as the senate of the weighs means subcommittee on tax policy and thank you for being here today thank you very much good morning good morning. We are hearing a lot of bits and pieces about what this emerging plan may look like, and i want to run some of these pieces by you. We hear that the top individual rate at this point is 37 . Can you confirm that so im not going to confirm any of those things other than to say when it all comes together, it all comes together. I think the larger point is listening to your Group Therapy session before the break, wow, what an insight into you guys. I think when it all comes down to it, weve crossed a rubicon, and that is, you know, people who are looking at various points of drit simple, great you know, like no problem. The critics need to come in. When it all comes down to it, what we all know is we cant stay here. This has to happen were determined to get it done. Does that mean, like, damn the torpedos this means even if this plan isnt perfect, even if it has all kinds of problems like weve seen earlier this week reported that there would be some people who would be paying more than 100 in taxes. Its okay. Its better than what we have now. No, no, no. More than 100 in taxes is not okay its not damn the torpedos full speed ahead, but it is this. I give this analogy to a guy at home i said, you know when you return a car to the airport and you drive over that spiky thing, and it says dont back up because damage is caused thats exactly where we are right now. Both sides have crossed over, and now were determined to debt it done. Look, theres not a representation here. Its two good bills. Im glad you were amused by our conversation oh, my. Can i just tell you, as were putting the tax bill together, the concept of talent agents, youre right never came to mind we never thought of anybody being how about this . Every day i read about what a huge giveaway this is to the wealthy, and i got to be itad and feathered with that every day, and my taxes are probably going up 20 welcome to the politics of 2017 reagan cut taxes for everyone you think its fine that it goes up 10 to 20 on certain people that happen to be, you know what im telling you is in the political reality of today when you are dealing with a complicated house and a complicated senate with complicated reconciliation rules. Obviously were heres my question to you, which is very different. Do you look at the tax plan or at taxes in america as any kind of representation of values in america, which is to say some sense if its going to be some kind of progressive tax system, that its done in some way that feels generally fair where people say to themselves, you know what, the guy who is getting paid the most is going to pay more than the guy who is getting paid not just the least, but even the guy who is getting paid a little bit less than that because whats happening here is that you have a system or, frankly, the true outliars, people who are really making the most, the true billionaires in the world, are actually going to pay materially less, and what you have done is now raised the taxes on people who are doing really, really well, but not nearly as well as some of those. You are making a representation that some people with incredible wealth are getting away, like bandits heres my point. What about carried interest you make a change of this magnitude in the tax code, and you are right. I mean, moving forward people are going to be reconfiguring and reallocating and trying to process through how it is that they how it is that they deal with this. The notion of theres sort of this to speak to it, i think in the nature of the discussion on the one hand, i mean, listening to your discussion before the break, on the one hand youre rooting for this to get done because you know its the right thing to do. You know our tax corporations, yes ut about the individual side is a mess. Yeah, but you know that you cannot deal with chairman, just explain because its a flash point, maybe call it call it whatever you want, but to the extent people are frustrated with whats going on, just do carried interest with us for a second these are modest real estate deals. You want constituents, but, again, full speed ahead. You bet your life i want to protect my constituents. Thats absolutely my responsibility what about people who use medical deductions that may be some of your less wealthy constituents and were going to be facing very high increases in their own pay that is coming up fair point. They have a lot riding on this there are children who use therapies. They have eyes wide open. Drs more of a design in my opinion to the house bill as it was structured, and weve talked about this literally in years passed for ever since dave camp is chairman and then when ryan was chairman and now with brady. The senate has a different feel to it, and the different feel from the senate is less structural or less wholie isistn terms of a design, and the senate feels to me like, hey, how do you get 51 votes on a bill for eight years you hear barack obama tag about, you know, i can pay folks can pay a little bit more, and were going to redistribute that to these middle class people, and theyre going to and lets say that you saw that and you didnt want you didnt like the redistribution mantra. Republicans get voted in they got the senate and the house. Now you find out with their tax bill, once again, youre the folks that are doing a little better are paying much more and were redis different what good was it to what good was it to vote republican when you came in and did it even worse than obama wait until the well, wait until you see the final bill if you are in suburban chicago, youre begging for mercy. Because they jammed through a massive tax hike on you. What were trying to do is try to reconcile that. Thats what im trying to do one thing you set out to do, you were trying this as it was billed at the outset, this was going to be high on simple fewing it. You havent reached that objective. Welcome to the legislative politics i didnt say you did thats right. That is exactly what the house bill does. You could have filled it out on something as simple as a postcard if you signed hr1 into law. You also said youre there for your constituents, and you are there to represent them. You also mentioned that you are talking about very high state and local taxes in your state. Whats going to happen with the salt lines is 10,000 enough . Will that make everybody happy do you want to see more than that look, you have 10,000, and i think heres part of the challenge as tax policy is being evaluated. Theres so many teams when people are looking at one particular deduction and saying, oh, the sunrises and sets on that particular deduction. If you dont look at it within the totally of the whole where the rates are going, where the brackets are going, its completely out of context. Yeah, i fought hard to make sure property taxes was included in that 10,000 now were trying to make other adjustments to bring relief where we can up and down the line i think when it all comes down it to it, this is a good bill. It will be better than where we are today, and youll be talking about it positively in the future we all said were for it. Not all of us, but, you know, a good the some of the people here. You know, maybe a thank you from you. Thats all were asking. Were taking one more the team and trying to help you with Corporate Taxes, but just a thank you would be, you know coming up, when we return much more from larry, our guest host, and his take on embattled General Electric heres todays aflac question, everybody. It involves bitcoin. The first bitcoin transaction occurred in 2010 lgi was it . Wel ve you the answer when squawk returns in a moment and a gentle wavelike motion. Liberate your spine. Aflac and reach, toes blossoming. Not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. So he had your back . Yup in just one day, we process, approve and pay. One day pay. Only from aflac what we do every night is like something out of a strange dream. Except that the next morning. It all makes sense. Fedex powers Global Commerce with vast, farreaching networks. Deep knowledge of industries. And, yes. Maybe a little magic. Welcome back here is the answer the first bitcoin transaction occurred in 2010 what was it . The answer 10,000 bitcoins for two papa johns piec johns pizzas. Today they would be worth 170,000 not bad among the stories that are front and center this morning, Mortgage Applications fell by 2. 3 last week thats according to the latest figures from the Mortgage Bankers association. Both new purchase am containings and refinancing activity declined the average 30 year Mortgage Rate rose one basis point during the week to 4. 2 drug maker eli lily is making optimistic statements about its 2018 prospects thanks to Strong Demand for recently launched products lily is forecasting earnings at 4. 60 to 4. 70 a share that compared to a consensus estimate of 4. 64. And ebay doesnt currently accept bitcoin as payment, but it may be moving in that direction. Senior Vice President scott cutler told Yahoo Finance that ebay is seriously considering accepting bitcoin, although in his words were not quite there yet. The latest Opec Monthly Oil report is out, and jackie deangeles has the details. Good morning to you well, the headline is that opec production went down last month. Now just under 32. 5 Million Barrels a day. I need to put this in context for you. At the end of last year before the Production Cut was announced, production ramped up. Almost as if the cartel knew they were going to cut so they should ramp up purposely to cut from a higher base yearonyear theyre only down 195,000 barrels. Remember, the promised cut is 1. 8 million. The saudis have seemed to do their part the end of 2016, they were pumping 10. 4 Million Barrels a day. Now just under ten million nigeria is up yearonyear so is libya, iraq, and iran. Bottom line, opec has done a good job jawboning the market up and getting the prices closer to 60, but its expected that the Production Cuts might not be able to last remember, theres no evidence in terms of complete compliance here, and right now the prospects are the highest. U. S. Production 9. 7 Million Barrels a day, record levels its going to be tough to hold on in 2018 a correction in terms of price could be ahead a lot of the reasons that weve seen the levels kept steady is because of people not being able to produce more because of things that have happened along the way so they couldnt change. Right they couldnt kmeet. Thank you sure. Quickly, we have about a minute before we go to break i have thought about this a lot. I have you think about the way that you are trying to help wage gains for the people that have been left out for the past 20 years or so. Thats what we want to do here other way you do it, doesnt cause economic growth, and you end up with the fed in here and asset values go up and the middle class gets nothing. I mean, i can do it. I mean, i i go along with this its a better way than we try to do it before, but its hard to push that. You rob people of dignity and pride. You provide jobs, and there are things in this bill on the corporate side that i think are going to generate jobs it depends who scores it or what method ethus to score it as long as its within a range this is going to cost if a tax reform bill is designed the way it should be, everybody should be isnt that the way it works . There is a notion if if you are stepping on anybodys toes, it must be a good bill right im not convinced you are now they have selected us as opposed to others, and therefore, were the state legislatures of the blue states deserve it i happen to live in one of them, but they do deserve it for the way they, you know if nothing else, the way they vote right they elect democrats then let pensions go crazy he thinks that rich people live in the blue states so they pay a lot of federal income tax. We are about to have a sort of economic civil war in america. No, i do i think that when you really understand where the money is you are going to be leading the you are going to be leading the north. If you first of all, the majority of blue states in america pay much more because theyre on the water, larry. Rich people live there much more into the system than they get out. Its a fact. Im not that doesnt mean you shouldnt reign in the state legislature. They elect democrats to get benefits zplu shouldnt get a break from living in a state that income tax federal income tax should be the cost will be the same wherever you live, dont you think . I do, but i dont think thats realistic, and thats why people are going to florida. Because you live in connecticut. Also, the cost of living is much higher in some places you cant get educated in missouri better jobs better jobs. Better education Better Health care i mean, this is what happens you build in infrastructure, and infrastructure costs money thats not what caused it getting rid of medical deductions honestly, more than the salt issues everybodys toes are thats the place to take care of themselves. Everybody but steve schwartz. Well be right back. Ken fisher is set with us. Cannot live without it. So if you cant live without it. Why arent you using this guy . It makes your wifi awesomely fast. No. Still nope. Now were talking it gets you wifi here, here, and here. It even lets you take a time out. No no yes yes, indeed. Amazing speed, coverage and control. All with an xfi gateway. Find your awesome, and change the way you wifi. Many on World Trade Center will push stocks higher as Companies Invest more money back into the company and create more jobs thats the argument. One investment guru is not buying into that theory. Joining us right now is ken fisher, the executive chairman and cochief Investment Officer of fisher investments. Why . Pretty simple when you stop and think about it im always amazed that more people dont, but just take the long history of the stock market with all the tax cuts and all the tax hikes that weve had of a lot of different types and you just look at what did the market do in the next 12 months afterwards its a Pretty Simple question. I understand why people think tax cuts good, tax hikes bad in reality, what markets do for a living is preprice stuff what i do is markets. Thats my thing what im asking you is a different question the market went up already gone up 35 because it expects this to happen youre saying its the aftermath thats not the market is not going to continue to go up i didnt let me just refine that a little bit k on. What im really saying is that when you look at this phenomenon, what it speaks to in the future is foreign doing better than u. S. , which is kwha weve already started to do, and weve been doing i believe this is a bull market, and bull markets continue until they end a lot of people say got to put your money in europe, but its not been a good trade relative to whats going on here let me go back to what we did say 12 months ago, and thats in a the inaugural year of a president s term is usually a place where foreign leads, and we started moving in the foreign at the beginning of last year. And then when the First Quarter of the inaugural year is foreign leading, the rest of the year leads. The last nine months lead 90 of the time ken, tell me, youve had a wonderful career in terms of knowing markets. Youve been in on the bitcoin frenzy, or will you get in in terms of some of the other alternatives in crypto currency . I dont know about it if some of you can predict bitcoin prices with any high confidence, they dont need any advice from me about anything. Additionally, if they actually think they know where bitcoin is going, theyre probably not going to take any advice from me whats the point a lot of people make a lot of money. Let me just say that another way to think about bitcoin, which i dont think most people do, is to take the peak of prior bubbles, whatever they were, forgetting about what you think bitcoin is or isnt, and line up the peak with trading days before and after and look at the magnitude up and down, and if you look at bitcoin coming up to this point today and over lay it with the peak, it dwarves all those other bubbles. Gold a couple of times 1929 1990 with the nikkei 2000 with nasdaq whether its a bubble or not, the price move around that is every bubble that ever occurred. What does it say about the market, or does it say anything . What i think is that in every normal cycle that falls through the John Templeton model is you move through that optimism phase and you are about to start facing yoo euphoria. You hit a period where theres some kind of window pain into the euphoria that separated from the classic stocks where youll see it later thats what i think bitcoin is i think its the window we havent seen it yet. Oh, we still have people worrying about stuff thats nonsensical. We saw people worrying about high valuations, which have never been predict odd a one, three, or fiveyear basis. We still have people worrying about new highs in the market, which they stopped doing when you get to use for why when you get to euphoria, they dont worry about all the normal stuff because they think its a new world and its all different now, which is, of course, John Templetons famous line that the fo four most dangerous words in the human language is its different this time. Thats the time to worry when you stop worrying. The bubble is about to burst when everyone asks if its a bubble right thats a scary concept back in 1998 and 1999, we did talk about you know, the annoying comparisons of where those internet stocks were remember, they were you would add up boeing, ford, and something that helped me get to the same market cap as aol, and now they finally came home to roost, bit not for a while bitcoin is only 400 billion, isnt it its a little thing thats why i think its a window pane it could go to 1 trillion easily its the same thing in the early 1990s that net scape was right if that window pane into something we havent seen for a long time oh, yeah, yeah. Absolutely its that window pane into the coming euphoria. What do you mean pain oh, you mean the glass itself. Thank you, sir always goodholidays coming up, how the Justice Department went wrong on at t. The latest article on the merger proposed merger of at t and time warner thats next. Check out the futures at this hour up again, they usually are. Green up 43 on the dow keep it here news anchor downtown traffic is still bad. Expect massive delays. radio channel changing news anchor 2 all lanes on highway 50 remain closed at this hour. news anchor 3 the stats are in and this city leads with some of the worst traffic, with the average driver sitting in gridlock the equivalent of three days a year. For every hour that youre idling in your car, youre sending about half a gallon of gasoline up in the air. That amounts, over the course of the week, to about 10 pounds of carbon dioxide. Growth is good, but when it starts impacting our quality of air and quality of life, thats a problem. So forwardthinking cities like sacramento are investing in streets that are smarter and greener. The solution was right under our feet. Asphalt. Or to be more precise, intelligent asphalt. By embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to study and analyze the flow of traffic. Then, we will take all of that data and we use it to optimize the timing of lights, so that traffic flows easier and travel times are shorter. And sacramento is just the beginning. With advances in cameras, sensors, and network speeds, we have the ability to make cities smarter, and happier. What excites me about this technology is that were using some of the most cuttingedge machinelearning, and ai, to help solve the most fundamental challenges that cities face around the world. Who knew asphalt could help save the environment . lani and the possibilities are endless. The knee jerk reaction is that, you know, trump doesnt like cnn, so he his fingerprints are on this opposition for at t and time warner youre not convinced that that is the answer, but there could be some other answers for where the new guy got this i think no matter where the new guy comes down, trump is saying what he did opposing the deal during the campaign taints his deliberations. No matter what he does, it is going to be looked at in the light of is he trying to bow down to trump or show his independence to trump, and always it pushes away from the merits of the deal you are talking about the gentleman that inherited this, but you point out that he a lot of the work had already been done by the obama yeah. This thing has been sitting out there for a year, and the obama holdovers applied all of the analysis that they applied to previous comcast deals, which either they shot down comcast, time warner cable, or the deal that they heavily conditioned comcast, Nbc Universal is the same basic thing does a distributor who also owns content, does he have an ability to run up the prices of that content on his competitors and shift their subscribers to him the new gentleman, the trump appointee, he has said he doesnt believe in behavioral remedies that takes that out of the picture. Thats the key. Lets go back to that for a second he is somebody who 13 months earlier had said he thought that this should be passed, that it had a much lower bar than the comcastnbc deal did by the way, he was somebody who was a lobbyist for comcast in the deal he personally has changed his opinion greatly in the last 13 months he just got there in september. The whole year of worth by the Justice Department i have seen from the people undermooem him i have seen that work. Applying the old obama era thinking if this is an antitrust problem, were not going to do a comcast Consent Decree instead well draw a hard line and youll make divest tours that was the contribution. He removed from himself. Were going to play nice. Its impossible for us not to. Theyre sending out the contracts in advance dont i you think if a judge looks at that youll think thats a Winning Strategy or no . Well, as long as he has his philosophical objection to that approach, thats the problem he has just put himself on the table as hard and fast against those kinds of solutions my whole point is that the antitrust objections to the deal are pretty bogus. Im the big skeptic of antitrust anyway, but the deals are very controversial when they involve the media and comcast type Consent Decree is a way to appease the political crowd but still led rationale deals go forwards so companies can try new strategies and new asset combinations i think the mistake was not to avail himself of that opportunity to pay off the political crowd and still let this deal go ahead you know, you didnt say it, but you certainly implied that got to go might be beyond his skis in this assignment. What do you think really well, that was part of the point of my column ten seconds he wasnt political enough. Thats the problem got an agent . No, i dont okay. Wlle ghba e brit ck nobodys putting their money into equities. Theyre not investing in commodities or fixed income. What people are really putting their money into is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. 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Zm doug jones the winner in had the Alabama Senate race. Tonight is a night for rejoicing. Cnbc gets new details on the final version of the republican tax bill count down to the fed. We are just hours away from the Central Banks final Rate Decision of the year well tell you what to expect straight ahead plus, could regulation be good for bitcoin were going to talk to the dojs former crypto capital tsar as the final hour of squawk box begins right now live from the most powerful city in the world, new york. This is squawk box. Its all fine good morning welcome back to squawk box. Cnbc live from the Nasdaq Market site in times square the ceo of Honeywell College out the futures right now. Futures are indicated up again theyre in the green up another 35 points this morning. The tenyear, which i think is something we want to keep an eye on here, because it was at 242 earlier, and rick santeli was talking about 244. If it gets above that, it could mean maybe the long awaited move to higher tenyear yields. 241 right now. For every 1,000 you invest, you can use 35 cents a year. Even then there might be a time when i have to pay them where you have to actually with inflation, you probably can you believe some of the they put money in that 35 cents a year you get on 1,000 i dont know how they think about it it certainly doesnt make any sense to me. I think i mean, it was hard for me to do the math, but trying to figure out whether its 35 cents. I think it really is 35 cents. They have a savings culture over there weve want got that habit over here right so that must guide their thinking even though economically it doesnt make necessian sense. It seems like home run. Okay. Lets tell you whats making headlines at this hour were getting new details about the final tax plan two sources telling cnbc that the corporate rate is now going to be 21 . No final word on whether it will take effect right away or potentially in 2019. In the top individual rate it would fall to 37 . Now, thats lower than the senates original proposal for a 38. 5 top rate in the deduction for pass throughs. It would be 20 . President trump will deliver a Closing Argument on tax reformulator today were going to talk much more about this with former senator max baucus in the next few minutes. That Company Manufacturers opted cal compointsents, part of apples billion dollar advanced Manufacturing Fund attorney general cook announced right here on cnbc earlier this year target has unveiled a new tool aimed at people who may think gift cards are too impersonal. The feature called gift now lets you browse target. Com and pick items that are sent via email the recipient can accept the gift or use it to buy Something Else its a gift card with a little spin today is dday for the fed. The central bank set to release its statement at 2 00 p. M. Eastern time janet yellen will sit for what is likely to be her last press conference in it the top job Steve Liesman is in washington this morning he is getting ready for that Rate Decision, and, steve, what can you tell us ahead of it . The market didnt even bring in a price hike fullrily now two hikes are priced in, and its working on that third one that 28 , 30 number for that hike and thats the highest weve seen in a while. There are a couple of questions for todays meeting. First, do any of the members three members have indicated they are less comfortable hiking rates because of low inflation starting to forecasting in not three hikes, but a or at least begin to get close to that third, theres the fed lowering the Unemployment Rate forecast to below the 3 range and notch up its growth outlook. Ian shepherdson writing this morning chief economist in our view an Unemployment Rate forecast for next year which doesnt begin with a three would lack credibility that would be very interesting guys, i think a lot of the tenyear of todays meeting is going to come from the inflation number were going to get. If inflation is seen ticking up, the fed will do that hike with more confidence and perhaps be more confident about forecasting rate hikes next year i think if you are beginning to see inflation start to tick up, youve had a little bit better wage numbers, and i think that theres a question as to whether or not these numbers are going to come around with the question of was it transitory, are there secular issues it gives a certain confidence theyll have to saying more rate hikes are on the way if they get a better inflation number today . Steve, stay right with us were going to talk more about this, but we want tobring in another voice. Do you think inflation is that key of a number this morning . I agree with steve that the 25 basis point rate hike is in the bag. The debate is more about the future trajectory of Monetary Policy i think that the cpi number that were going to be getting in a few minutes is an important input in their thinking about the inflation process. Inflation has been perkier over the last two or three months if its going to continue, if its. 2 monthtomonth, its a little bit more in a direction than inflation is recovering if its less than that, then that will lend fodder to the dofz in the debate i pretty much think theyre not talking about so much where the economy is today, but where inflation and unemployment are likely to be where do you think unemployment is likely to be steve mentioned a three handle is that given that were just at 4 right now weve got this 4. 1 Unemployment Rate, and theres a lot of momentum in the labor market it takes Something Like 90,000 jobs a month to keep the Unemployment Rate constant were running more like 170,000, 1 75,000 a month that means that as we move in to 2018 there is going to be a fair amount of downward pressure on the Unemployment Rate, and im expecting a number maybe by the end of next year 3. 7 i could imagine a slightly lower number for unemployment. What do you think, nathan of the new fed chairman, mr. Powell is he going to have a different view than yellen has had how do you think about that . So jay powell is reapable, smart, a good listener i think the powell fed is going to try to drive right down the middle of the road theyre going to try to avoid being hawkish. Theyre going to try to avoid being dovish im pretty bullish on what the future holds steve there are potentially somebody wrote in response to our survey that powell may go back and say, you know what, why arent all the meetings as calm as the one today there may be some big issues for powell to being thatle and, remember, it was 1996 whether chairman greenspan made an historic call. He saw the productivity happening in the economy he said, you know what, something is happening here, and im not going to raise rates it turned out to be a good call, an historic call this idea of solving this issue of is lower inflation cyclical because of the Global Nature of labor. Also because of the Amazon Effect thats out in the economy. Powell may find a need to come up with an historic decision here, and it may happen sooner rather than later. I agree with the thrust of what you are saying, but i think that is more of an issue of moving the fed funds rate from 2 to 3 . Its not so much a discussion of moving it from where we are today towards that two handle. That a real fed funds rate somewhere around zero or absolutely positive is a good watch and wait place for the federal reserve, and then if inflation seemds structurally depressed, maybe well have a period where a fed funds rate with the two handle is the peak of the cycle the fed can wait and watch once theyre at that two range in a zero or slightly positive growth fed funds rate, but i dont think they want a deeply negative real fed funds rate as theyre watching inflation at this stage in the cycle where. Hey, steve. You have what is probably going to be the last press conference from janet yellen today. Do you think shes going to be more reflective in this . Do you think its going to be more business as usual i think its business as usual. I think yellen has shown for quite a while that her first allegianceance is to the institution. Remember, shes been at the fed on and off, but mostly on, for a very long time since the 1990s. I think nathan will tell you that there are a few institutions in government where there is more sort of internal loyalty to the institution than at the federal reserve, and i think sheets going to go out in a way that she believes is the one that leaves the fed in the best shape possible for her exit i dont think there will be any grandstanding. I dont think there will be much of a val dikz. Shes proud of her record, but i think she thinks her record speaks for itself. I think it will. You know, unemployment ram down. The growth accelerated she engineered despite the kind of dovish criticism she got. She engineered the first rate hikes in a decade and began reducing the balance i think those are pretty good accomplishments to wear on your sleeve if i can just say to you guys about japan. I know you were talking about that, and i think nathan would back this up look, inflation is positive in japan. If you think that. I think theyre on the Positive Side of the zero line when it comes to inflation, but i think theres an underlying fear there of deflation. A quarter and a dime. Its one of the reasons the fed wants to avoid it. I dont even a stick of gum maybe if you divide divvy it up. In addition, they have a number of institutions there like their postal savings system that what they do is the postal savings system is government owned, and it takes savings from japanese citizens and recycles it into the government Securities Market there are a number of mechanisms there that support this rate even if you may not be attracted some vefrmt. Im not crazy at 2. 4 either. Well give you the 1,000 back, and most of the and release the whole stamp thank you very much for being here today pleasure. Well see you a little later. Coming up, former senator max baucus worked on the last major tax overhaul in the 1980s and get his take on the new tax plan thats coming up next. Later, will regulation help or hurt bitcoin were going to talk to the first ever Digital Currency coordinator for the department of justice stay tuned youre wchg quatinsawk box on cnbc your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Alabama Democrat Doug Jones is the winner in that closely watched senate race, but republican roy moore is not conceding. Its the first time in more than two decades that a democrat has flipped an Alabama Senate seat President Trump tweeting originally the way i his numbers went up mightily is that i said roy moore would not be able to win the general election i was right. Roy worked hard, but the deck was stacked against him. We havent talked about that at all. In the we know people characterize it as a loselose for the Republican Party before the election this is kind of the lesser of two losses, dont you think . You know, i was hoping for kind of a solution that he would win. The state will stay with that perception that its like that its the deep south, and theyre never going to get out of you heard the great philosopher Charles Barclay say just the other day he is great stop being idiots for heaven sakes. This is an easy one. He was pointing towards jones as the victor, and he was notwithstanding the allegations which are truer true or not, but the other stuff. Just are the stuff that actually willingly were positive. You dont want the hood ornament of this is who is representing the Republican Party this is your guy roy moore. The other side of the coin is we need the seat i know that i know that. I understand that. He wouldnt necessarily vote with being many connell anyway, and this guy, if he wants to get reelected in three years, he is still from alabama, he may not always go down the max baucus rubber stamp everything that ma max is here. Lets talk tax reform. Former senator of montana, who is chairman of the and he looks like you are a cheshire cat. You are like the 5149 i do. Frankly, think what this means is this election voters spoke. If you were doing tax reform, you would do lower Corporate Taxes, but a different way of doing it do i have that right i think 1986 is a pretty good paradigm its a pretty good model how this would be done right first, it was bipartisan im just saying thats what we did, and it works. Second, it was deficit neutral we had a rule that we could not add to the deficit that was great discipline. It was not progressive tax reductions were more across the board for more income groups as with corporations it was fairer. It was true reform you think wealthy people are accruing the from the in most states you are talking about estate taxes. No, across the board. Estate tax reduction and the passthroughs and even passthroughs even the corporate rates wealthier people get the greater benefit with corporate rate reductions people do make the point that the top 10 its hard to cut taxes. This bill wideens the gap between the wealthy and less wealthy. Not if it causes job creation and wage gains well, whats a major obligation of a corporate ceo . Shareholders do you something to work buybacks more on bonuses. More dividends more than job creation if gdp were to go up and demand were to increase even against their best intentions, th these greedy ceos would expand plans. You use the Biggest Little word in the english language if whats happened is im talking about aftermath of big tax reductions, it does not boost the economy near as much as there he is i guess youre a shareholder, but youre also youre a guy who wants the best for america and for middle class why does he drink this cool aid . Theyll do whatever it takes to cop a phrase. For 30 years weve wanted republicans have wanted to cut tax rates. The whole time, just greedy. Cutting taxes is fine its how you do it its got to be fairer and in a way that the people feel comfortable with look at the polls. Its how the individual tax rate is being handled. Thats the issue if you think you need to step on everybodys toes, that is what you would expect. No. Its not but thats it goes to the estate taxes goes to how people are going to itemize their medical care it goes to all of these things, and it goes to the passthrough, goes to the carried interest it goes to everything that doesnt if you think that theres the values of america are somehow embedded and encompassed in the tax policy, which it has to be, theres a sense that theres something wrong. I want to stand up for the ceo that, yes, they get corporate rates. Remember, they become more competitive now across the world. It was to address lack of competitiveness between american high rates and other countries thats clear thats good. Thats a good part of this bill. In my view it goes way too far, way too much giveback to the most wealthy and its not sufficiently an alternative. I wish you lived in connecticut because if you can figure out my taxes and im getting a break, i would like to know how yeah, exactly well, come to montana may have to we would love to have you were coming right back breaking Economic Data in just a moment i think that shes a very nice girl. You never got the brakes looked at . Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Breaking Economic News well get november cpi data next its a number the fed is watching very closely. As we head to a break, take a look at the u. S. Equity futures. T gen aosinherecrs the board. Squawk box will be right back. Cannot live without it. So if you cant live without it. Why arent you using this guy . It makes your wifi awesomely fast. No. Still nope. Now were talking it gets you wifi here, here, and here. It even lets you take a time out. No no yes yes, indeed. Amazing speed, coverage and control. All with an xfi gateway. Find your awesome, and change the way you wifi. Were live at the Nasdaq Market site in times square. Were seconds away from november cpi. Want to show you the futures before we bring you that number. Just in 20 seconds from now. Dow looks like it would open up about 50 points higher nasdaq up about 11 s p 500 up about three points. Well show you the tenyear as well 2. 42 just came down marginally. Rick standing by at the cme in chicago. Good to see you, rickster. Hi, andrew. Tell us the number. All right survey says november read on cpi calculating, calculating here we go well, i see some of the data yearoveryear cpi is up 2. 2 looks like up. 4 up. 4. Yearoveryear up is. 7 thats interesting if we consider the data points are a little bit hotter than we were expecting and yearoveryear is 2. 2, so yearoveryear core is up 2. 7. I apologize. That 2. 2 is. 2 higher than the last look, but they are up about as expected with regard to we were looking for a bit hotter, and after yesterdays ppi, it seems as though the market is looking. It isnt really looking at the inflation. We have actually moved down a couple of basis points were now at 238 that was close to 242. Theres a lot of things that are going into this. If we look at real average Weekly Earnings yearoveryear, they were up. 8. Hourly earnings up. 2. Theres a lot of things out. Of course, the Rate Decision today, were looking at the dollar index backing away a bit. European yields getting a bounce off what was the lowest yield closes since june. Now to tax reform the plan still in flux, but the wealthy are already taking steps to minimize the impact are all things wealthy expert here, robert frank has been digging into this, and he joins us now with more good morning, andrew. As you know, when theres a tax, theres always a loophole. It accounts for the wealthy that are already devising strategies to get around or minimize the negative impact of tax reform. Of course, most people are getting at a tax cut under this plan, but some parts of the plan are going to be costly especially to those high earners and high tax states. In some states certain tax pards can pay their estimated tax for next year and take the deduction now before it disapds. Other states do allow prepayment of your 2018 taxes now, and some other governments do as well check with your accountant because every situation is different now. Harvest your losses. Accountants are saying sell the tax lots that are losses the older ones capture those losses to offset future Capital Gains before the end of the year you can also gift those lots that have a low cost basis on the oldest ones you purchased because you might want be able to in the future lastly, lodge in the mortgage. It looks like theyre going to cap that at 750,000. Existing mortgages are grandfathered in if you are looking to get a new mortgage or refinance, do it before december 31st finally,ing they recommend holding off on charity until next year when the amt goes away are you then deducting 28 next year its going to be 37 for the old andrew, can you tell me how to maximize the taxes that i would pay into the government for services, for the one that before this latest tax the one that i used to know friends of mine yes, you did. Until it was actually his. Were out liers, joe. Yes, we are the guy was laughing at me im okay just thank dont make fun of me there are hundreds of thousands of outliers who pay a huge amount in tax the tax plan has never been without controversy and question a lot of people are prepaying. What were going to see is this unintended consequence where states are going to get a huge windfall in 2017 and think, oh, were doing great. Then theyre going to budget off that, and then were going to get a cliff next year. No question were going to be short money. You are supposed to pay all your property taxes too if you live in a high salt state. Andrew, you are trying to reform it. I think on the salt tacks, you ought to be able to deduct a percentage of what you owe in other words, not 10,000. That impacts big states very differently. Yeah, but they dont care about helping the wealthiest people they want to make sure that theyre theyre trying to be fa irto states my argument is salt is that you should get all of your deductions no. If you would like to eliminate salt, do it over a fiveyear period you just took my idea i just i said that already. I can vouch that was her idea first. I agree. I agree. You had a great idea, and that was increase taxes on Capital Gains. Snoo that would offset the Corporate Tax more than taxing the individuals. All right i was saying i do think salt should be phased in over five or ten years. Theyre all going to mover to florida, and we are going to see that yeah, we will lets get were going to fauk more with our guest host. I promised your predictions for the huge dire one. I have three predictions. First one, theyre painful that is the yankees win the world series thats the worst one. Thats difficult. Trufrm will get health care reform, and we wont be repeeling, but well get reform. Thirdly, without question, the dow finishes next year at not 61. 60 now about 7 . Is that what you did . Yeah. I mean, at the year end i dont know what the year end is is that your work so you use 7 and add thad on i did one other thing, joe. I want you to think about this positively a year from today you are going to feel a lot better about ge than now flannery is doing some good stuff. He is being more transparent and simplifying the company and bringing people in with the same vision and energy that he has. He is going to be selling businesses that have no future profit potential in 2019 the company will be operating with a lot more vigor and the cash flow will be an indication of that, and i think this is a powerful company which is on its back now, but it will its coming back god, after all i thought it was getting transformed langone got thrown off the board. You were never on the board for ge only for seven years. Who you . Yeah. When . When i was a vice chairman. How long ago . 84 and 91 do you know anything . Do you have any questions to the board this last board for the way things were i would certainly ask the question of where they were. One of the other things theyre going to do, you know, is drop the board from 18 to 12. Theyre going to remove nine directors. I dont know which ones go and which ones stay, but certainly the board has to be held accountable for the regime that just concluded nothing has come from the its a small point, but the jet thing, nothing has come from that i think youll see lots of points how do you like the asset mix thats left there . Do you like power . Do you like power is a good business. Its going to go through another tough year because of both the industry theyre in and the acquisition that was not what they had hoped it would be that wasnt either. Nowhere. Why not well, you know, its the reason did as always, you dont get as much business as you thought you were going to get, and the french are not known to be low cost. The Aviation Business is great the medical business is great. Medical business is still good he read the medical business flannery, and he just came off, and i think its a single digit grower its a good space to be in, and they have a good position in that space all right well have a few more minutes to talk before 9 00 when we return, forget bitcoin surge. What about regulatory the Regulatory Environment were going to talk to the dojs first crypto currency coordinator asked to prosecute bitcoin in 2012 . One of our viewers had an idea tweeting us a few minutes ago. New drinking game. Do a shot every time cnbc says bitcoin. Make that a shot of coffee. I was going to say since its the morning. Ea yh. Maybe a little expresso squawk box returns in a moment is the monolithic view of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Right in the heart of the was in his financial crisis, and saw his portfolio drop by double digits. It really scared him out of the markets. His advisor ran the numbers and showed that he wouldnt be able to retire until he was 68. The client realized, i need to get back into the markets i need to get back on track with my plan. The Financial Advisor was able to work with this client. Hes now on track to retire when hes 65. Having someone coach you through it is really the value of a Financial Advisor. Bit down is like anything else its worth what people are willing to pay for it. Lets say people are willing to pay 17,000. Thats what its worth i think at some point figure out when this is going to end, and then either get out or go short because, by the way, when this ends and it will, im talking about this monetary radicalism period were in, bitcoin will probably go down with the rest of the stuff that was legendary investor Stan Druckenmiller speaking out on bitcoin he says he does not own any crypto currencies. Next guest is crypto regulation might help the boom instead of hurting it catherine hahn, the First Digital coordinator to the department of justice. She held significant roles in several high profile crypto currency investigations and will be teaching the first Digital Currency courses at Stanford Business school this spring. Also a board member at coin base, the largest crypto currency exchange. Good morning to you. Is there a way to regulate bitcoin in a way that its not one of the biggest issues is the ability for people effective will i to steal keys and there to be no real record although we all think about this ledger as being one of the great records of the world shire the Treasury Departments Financial Crimes Enforcement Network made that clear as early as 2013, and large exchanges like coin base and others have been operating under those regulations since that time. Its already regulated in that way. Regulateed in that way except for the fact that its still used for all sorts of Money Laundering and is much its much harder to track snoo i testified before the senate a week ago on this exact point, and i was asked, is it really that hard to track . Sf i can tell you that i prosecuted some cases where had other mechanisms of payment been used we would not have caught those actors because of the exactly of the traceability of an asset like bitcoin using the block chain, and i have personal experience bringing those cases forward. Actually, a lot of the early days people thought, including criminals, oh, bitcoin is totally anonymous, but, in fact, the reverse is true. It is traceable, and its not a great use case for criminals you have to be long bitcoin and long crypto currency writ large, but the biggest overhang a kwoefr all of this is whether the government will allow these things to continue a pace, and clearly, youre on the side of wanting it to continue the pace, but in the conversations you are having with regulators, what are you hearing . Well, i think there are a lot of regulators who want it to continue apace, but who want it to continue apace responsibly. Thats something that a company like coin base shares, and thats something that the government shares. Scale and get more main stream adaption responsibly regulators themselves, whether at the state revel or federal level, are doing pilot programs. Not only with bitcoin, but with the Underlying Technology block chain. I think thats pretty powerful what do you think, catherine . Is it likely to be held as a currency going forward, or is there a chance its going to be classified as a security well, i think it really depends on what the underlying asset class youre talking about. If you were talking about bitcoin or etherium or light coin, for example, those things right now when you look at them, they are being used as commodities, digital gold. Early days, crypto, a lot of people who are very excited about the potential for bitcoin to become a payment mechanism. Of course, in order to become payment neck nichl, what you need is you need people to be spending the bitcoin with 1,500 appreciation in bitcoin this year alone, were seeing people want to hold on to their bitcoin as an investment that could change over time, but right now im certainly viewing it as more of a digital gold investment, but thats, again, right now. We know that the space changes, skps it changes raptdly. We noticed that david marcus at facebook joined the board of coin base just yesterday i think that underscores the point rhyme making of this mainstream adoption that were really seeing starting to happen when you have someone like david marcus join and when you have market participants, including Traditional Market participants start getting involved with Something Like bitcoin i think david brings tremendous experience he was also the president of pay pal, and he led their acquisition of brain tree. I wouldnt read anything too much into what that foretells for bitcoin or for coin base i think were all just tremendously excited to have davids experience as we continue to scale this company a lot of speculation about what you are going to bring on to coin base a lot of people talk about z cash and different can you give us any insight as to how you even think about that . I certainly cant tell you what assets that coin base is looking at, if any, if were even looking at adding any i capital comment on that approximate publicly i can tell you a couple of weeks ago coin base published a framework as to how it thinks about going about adding new assets or tokens thats publicly available. We published that through gdax which is our institutional brokerage, and z dash is the exchange in that framework we talk about a number of different factors that the company will look to. We look at the quality of the engineering teams, the expected volume, regulatory considerations and a whole host of other considerations. Are you policies that preclude employees and also Board Members from acting on nonpublic information. Kathryn, thank you, appreciate it. Thank you so much very smart, thank you when we come back, jim cramer will join us live from the new york stock exchange. Well get his take on todays top stories. Check out the futures this morning. A look so far. Green arrows across the board. Dow futures up by 51 s p up by 5. 5. The nasdaq up by 27 and squawk box will be right back. Cannot live without it. So if you cant live without it. Why arent you using this guy . It makes your wifi awesomely fast. No. Still nope. Now were talking it gets you wifi here, here, and here. It even lets you take a time out. No no yes yes, indeed. Amazing speed, coverage and control. All with an xfi gateway. Find your awesome, and change the way you wifi. I know you follow honey well and larry is here. They had some comments earlier larry earlier said that he set the company up for all this in a position like years ago that its finally coming to fruition. Do we buy into that . And you call cody a minor player. Cody is a major player. I think the leadership of honey well has been strong ever since larry and its a rather Amazing Company straight through. I like darius a lot too. What i feel like is that if this stock is down, just go buy the darn thing theyre going to break the company into two theyre creating huge value. This is a continuation of what larry put in place which is a Great American industrial that is dominant in everything its in how can you beat that . You cant. Right, larry its dominant in every single division. Youre gracious to say so though jim. Well look, you put it on a path who wouldnt want to be there, who wouldnt want to work there . This is one of those companies located about 20 minutes from me if i had to be in corporate america, id work for honey well. Larry put a buy out on General Electric and the state of florida as well today, jim. Well, i looked at a house in san abell the other day, kind of interesting. My wife says what are we doing here thats just because its cold. Ge, i dont know the jurys out. Thanks, jim well see you in a couple minutes. Hows san abell its nice im on the other sies. Larrys final call on the markets. If you like oreos we have a story for you. New flavors are coming your way. Some of the choices might be a surprise like tuna oreos ldot keha wel be right back. Whats the value of capital . Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley directv has been rated number one in Customer Satisfaction over cable for 17 years running. But some people still like cable. Just like some people like wet grocery bags. Getting a bad haircut. Overcrowded trains. Turnstiles that dont turn. And spilling coffee on themselves. But for everyone else, theres directv. For 1 rated Customer Satisfaction over cable, switch to directv. And for a limited time get a 100 reward card. Call 1800directv wow record time. S. At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. The fed is expected to announce a rate hike on wednesday after previous increases, utilities gain 1 while financials dropped 1. 5 . Welcome back oreo brand introducing three more flavors next year cherry cola, kettle corn and pina colada. This is aftrter nairinrrowing dn thousands of entries marshmallow peeps. Those ive tried. Im just a basic double stuffed. I suggested clam on a half shell and they didnt even answer no response. You say put two things you like separately and see if that will work. But it doesnt. If you do cheetos flavored oreos thats disgusting. I like clams on a half shell. Not with sweets. Youve tried tuna ice cream no. Lobster ice cream ive tried thats awful larry, some final thoughts on what youre thinking in terms of the markets and tax reform and what we should be expecting in 2018. Economically going into 2018 we couldnt be better off for reasons weve talked about in the program and the rest of the world is improving as well i do worry about all the cynicism in the news about this country. In other words, theres always a story that seems to be spoken about thats ugly. The truth is, when you look at the charity of this country, boy, i raise the American Flag i think its the best place in the world to live and while we certainly are not perfect, we do a lot of things which would argue that were more sensitive, more caring and more supportive than any country in the world. Im glad im here. Me too. I cant think of a better place id rather be. Me neither. I want to thank you very much for being here its always a pleasure. Thank you the olympics are coming up we havent talked about that these are interesting olympics this year. I know. Im looking at you. I know you are. Well talk more about that as we get closer. Its going to be cold. It is it may be worse than cold. Its cold in here today anyway, join us tomorrow squawk on the street is coming up right now good wednesday morning welcome to squawk on the street. The future is up as the dow and s p come off four days of gains and a record close it is fed day. Yellens last press conference doug jones wins in alabama europe is tilting red. Benchmark yields have come