Good wednesday morning welcome to squawk alley. Big tech feeling the heat today, executives from facebook, youtube, twitter are testifying on capitol hill. The hearing looking into whether or not social Media Companies are doing enough to battle extremist content. Separately, nbc nightly news featured Silicon Valley insiders, exgoogle employee, calling facebook a living, breathing crime scene for what happened in the 2016 election and doesnt stop there page one of the wall street journal, an argument for why todays tech giants may need one day to be broken up. Joining us, columnist from new york times, and larry hippo good to have you here on a day theres so much. Does it add up to one narrative, eric, or not are these disparate stories . I think the Common Thread is lack of transparency on the part of Tech Companies, they say they do no harm and are good for society, people are realizing products are somewhat addictive, there are some things about the product they dont understand, strange algorithms, secret technology all of it needs to come to light. Theres the issue of whether or not this was all engineered, created intentionally or whether it is something that is out of their control and even their efforts to remedy may fall short. I mean, i think the Common Thread is really that these are advertising based companies and their incentive is to grow essentially at all costs over the past decade, google and facebook faced no real regulatory threat, no real hurdle to their growing at all costs, so thats what they did they had incentives to expand every part of their business so you see them ramping up technologies that may be addictive, sort of not putting a lot of controls on the ad buying stuff which led to Foreign Government influence in the election sort of all of this stuff is the result of their primary incentive which is to keep growing the ad business. Eric, what happens now to Silicon Valleys sort of libertarian view of technology as a force for good that will level playing fields, enhance meritocrisy. It seems it threw a Monkey Wrench in it is there something that can naturally or healthily take its place . Doing good for society and technology a force for change will bring better Economic Life is all very good, but they need to include users, they need to include us using the technology as partners. Right now, were just being treated as pawns the algorithm, news feed on facebook is incomprehensible, we dont know why some content appears and doesnt. Why cant i as user have some degree of control over what i see, whether it is facebook or any other platform at what point do regulators step in and if they do, what does it do to the Business Model for these Companies Moving forward . I dont think they see any immediate threat of regulation in the United States there was some effort to have regulations on advertising, honest ads act seems to be stalled from what i can tell i dont think theyre scared of regulation as much as this overall brand image changing and then in the long run that could lead to regulation but just more skepticism of them and their businesses i think what we are seeing is that they are, many of them pushing quickly to change their philosophy the question is whether their professed philosophical change can alter the underlying business they still face the same incentives to grow hard to tell if they can fight their economic interest even if they may want to change. On the facebook front we had a discussion earlier this week whether or not this was a repeat of past efforts to clean up the feed or whether it is truly revolutionary relationship theyre going to build, in this case with publishers. My view is facebook decided they cant combat fake news by throwing people at it. They have 10,000 people or maybe more, it is not working given the scale. I dont understand why they dont just go to a simple solution which is to verify the source cnbc, buzz feed, the wall street journal, credible sources of information, whether you believe the news orn not, fact is these are reputable organizations. Why cant facebook say we will only allow content from organizations, could be a wide number of organizations that we have verified, that we know theyre credible. You talk blue check mark mark equivalent . If you dont have it, youre not on at all. You have to prove to facebook youre a legitimate source. Thats what i wonder. Theres this libertarian attitude in Silicon Valley and tekin general about information and media, let the market sort it out that has proven not to work at least in the way the tech giants wanted is there a different philosophy . Facebook and others resist taking a journalistic stand, they fall back to something algorithmic. Is there anyone pushing back on that and presenting a different philosophy there are some, tristan harris, who has become one of the leadinge ethicists Mark Zuckerberg is trying to they end up giving more power to the company themselves if they white list certain news companies, they become more powerful in the News Business than less powerful they get to decide who gets the bulk of facebook traffic versus who doesnt and pick winners and losers maybe a lot of people might object to that in the long run too. I think one of the problems is that every time you come up with a solution, it end up giving power to one of the companies over another and in the long run ends up being a lot of power as weve seen over time guys, dont go anywhere. Want to check in with Julia Boorstin monitoring capitol hill good morning to you, carl thats right executives from facebook, twitter and youtube are speaking right now on capitol hill in this hearing, talking about how theyre all working together, and want to work with the government to help address issues of terrorism and how they are using technology as well as humans to help monitor and crackdown on spread of terrorism on their platforms youre seeing that happening now live, carl julia, we saw this report and i know you have been reporting on this today as well that Googles Youtube is looking to potentially hire more humans to view some of the premium content on its premium channels. Whats involved with that and what are we talking about in terms of hiring and what theyre looking at were hearing a lot now in this hearing about how it is not just about Artificial Intelligence and technology. All of these companies are increasingly using humans to make sure theres no offensive or violent or in the case of the hearing today on terrorism extremist content spread on their platforms. Google announced back in december they would be hiring 10,000 people. Just yesterday they explained what those people are doing. For preferred channels, the channels with advertising on them, theyre going to have every video reviewed by a human. So just imagine the volume of videos that are going to be examined so all of those videos will be reviewed, and thats so no ads are put up on a channel or video that might have an offensive or extremist video on that. Thats what google announced this is part of a big push to make sure branlds, advertisers feel comfortable with the platform no advertiser wants their brand next to some video supporting isis thats sort of the whole conversation here. This is of course after a year where there are questions on brand safety on google and Facebook Facebook in the hearing now noted that they have 7500 human reviewers of their content theyre also doubling efforts and ramping up the number of people who are involved reviewing videos and content on the platform a big acknowledgment that it is not just about Artificial Intelligence, you need people and working together to crackdown on the issue. Julia, thank you for that eric, we heard that before you just given the scale and volume and to the point of bias, 10,000, 50,000 people, you include their biases not saying you shouldnt have people to do ultimate review, but we need to go back to who is credible as a source it can be very broad all this is because the silicon companies, Silicon Valley companies dont want to be Media Companies, last thing they want to be is a media executive. But they want media all over their platform they want to win Golden Globes and oscars, et cetera it is remarkable to me as much long term planning and envisioning the future as Silicon Valley and venture capitalists seem to do, they still seem to be behind the ball on this one when it comes to youtube. Now they say they have people reviewing con tetent after it gs up, after the logan paul incident how come just now theyre getting to that. Why arent they ahead of the next thing why do they seem to be back on their heels with the media stuff like it is just coming up the first time. One of the most surprising things to me about the Tech Companies, youtube, google, facebook, is how they themselves sort of underestimate the worst possibilities of their own platforms. When they put out these products, they seemed to be stuck in this bubble of imagining the best stuff that will happen with their technologies and usually not pausing to think of the worst stuff. Thats why theyre behind the curve. It is sort of failure of imagination at the start, failed to imagine the terrible things that can happen and try to limit it at the start of the platform. After they grow and get out of control, they have to go back and try to fix them then, and usually at that point it is too late, too expensive, too entrenched in society to do anything about it. One last question your column is about apple, whether it is time for them to build as the headline reads a less addictive iphone. I remember a time where you, i dont know if you threatened to leave twitter entirely, but you took a break, then you came back have you done anything in your own life as a tech correspondent to curtail use are you going to delete your facebook account i have been using, since the new year i have been using twitter less the way i am doing it is by putting kindle app on my home screen every time i have this to look at twitter mindlessly, i click on kindle and read a book. It is helpful. There are small tricks i hope apple will build this into the os, give you more feedback, remind you how you use your phone a lot of us mindlessly get lost in it. If you dont think about what youre doing on the phone and zone out, i think the phone can help on that level apple is in perfect position to fix that perhaps we need to follow the president s doctors advice, get more exercise, step away from twitt twitter. I agree. Good discussion one well have again thanks shares of bank of america and goldman below 250 for a moment under pressure after earnings wilfred frost watching that, has more on whats weighing them down. Both goldman, sachs and bank of america sold off due to comments made on earnings calls. For goldman, sachs, it related to the tax bill. The cfo says the 2018 effective tax rate would be 24 , higher than forecast and higher than some rivals like jpmorgan and bank of america at 20 chavez said the write down of 4. 4 billion relating to the tax bill would impact and lower buy backs in 2018 and investors should expect 5 to 6 billion in buy backs this year. Within earnings, goldman, sachs trading performance was down 34 , but chavez was in fact optimistic on the call about the fact that trading could turn around structurally as they gain more corporate clients and cyclically most definitely very early and ten days into the quarter so i would not extrapolate anything but i would say Market Conditions can change and turn rapidly and they have. And it has been a strong start to the year. Definitely if you ask me this time last year, this time this year, i take this time this year all day. Bank of america results were solid, strong trading relative to bids. Good expense management and improving loan growth. On the call, the ceo says Net Interest Income may not be as positive as analysts expect, citing the half billion dollar boost in 2017 from sale of the uk car business that would not be repeated. Unlike goldman, moynihan was optimistic dividends would be boosted thanks to shares trading lower. Busy day. When we come back, johns exclusive with the ceo of visa, why he says the company is not accepting bitcoin. Speaking of bitcoin, 30 million ou0 lln pe 3biiowid t. Stay with us nings season once again. Yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. The visa ceo alfred kelly sitting down with me i asked about the company increasing the company match, his take on bitcoin, and the importance of visa payment platform and all kinds of transactions take a listen. I wanted to do something that was sustaining and long term and i felt that kind of a one time bonus felt gimmicky to be honest with you i looked at the data, we have high participation in the 401 k program, so that signalled to me clearly that employees valued it this has been kind of on my wish list and when tax reform came through, i talked to other folks on the executive team and said this is one you come immediately off the wish list and become reality because we have the opportunity to do it we are spending a lot of time thinking about what to do with benefits of tax reform in terms of investing in growth in business and in our employees. This felt like a good start to the year you have been at visa more than a year now, it has been an incredible period not just of stock growth but Economic Activity overall, how does the Global Economy look to you. Visa has a very unique look into how transactions are happening across the globe we really do. And the last year has been a terrific growth period in terms of economies around the world, and almost every big economy around the world looked quite good brazil had an issue throughout 2017, but looked better towards the back end of the year the reality is that more and more people are becoming global citizens, theres more travel and that obviously helps, and then ecommerce has been a boom as people can buy anywhere, anytime, from any place, and thats generated a lot of positive momentum. But in general if you look at job creation, it has been quite positive around the world, and it certainly appears that Consumer Sentiment is good a long period of good economic times. When youre in a job like mine, one of the things i get paid to do is be paranoid, so looking at making sure we take advantage of this period of economic soundness, but keep our eye out for what could happen downstream. One of the questions i get when they find out i work for cnbc is bitcoin and crip tow ku currency should i buy bitcoin, is it a threat to visa i think it is evolving, i think bitcoin is much more today a commodity that somebody could invest in and a speculative commodity. Depending when you got into the crazy cycle of whats happened with bitcoin in three months and whether you got out at the right time, you could have made a bunch of money i dont view it, john, as a Payment System player. In fact, we at visa wont process transactions that are crypto currency based. How much do you care whether somebody pays with one of these or a card. Or a fit bit or a garmin. We dont over time, we want to talk more about payment credentials which could be real, real form factor or be numbers in a digital world. Bits and bytes in the digital world. We want to talk about places and things people can use or pay, so the Word Merchant location or businesses is also going to become obsolete. Things emerge, you see more connected homes and cars and offices, you may end up with four, five, six, eight places in the home you can buy from. You could buy from the refrigerator, buy from your washing machine, you could buy from your television we at visa are trying to be sure we work with manufacturers around the world to create an on ramp to facilitate payments from any of those locations regardless to what form factor is used. Were a set of rails that operates in over 200 countries, another 50 territories we could settle on 160 currencies we want our rails which are as global as they are are as secure as they can be, and we dont care how a transaction enters into the rails, it can come in any form factor and be used anywhere we just want to be in the middle of that. All your transactions belong to us. It is interesting. We talked at the show about these credit cards i just got one, getting used to the chip now contactless is coming. This is one you wave in front of the terminal like a phone and do the transaction that way i want to note about 401 k , some visa employees pointed out about two and a half, three years ago they cut the pension entirely so boosting up the 401 k gets them closer to even on that. We talked about how kelly was at American Express 23 years before getting to visa. He interviewed with ken shenault before he retired. Catch all of that on the podcast, for tt knox, right now, enjoy my conversation with damon john. Always a good interview thats a definitive answer on bitcoin from a payment standpoint, definitive as weve heard. It is interesting, detailing why they dont accept that in transactions now that gap between when you make the transaction and use the service, bitcoin does what it did today and moves 13 , exactly when did the transaction take place . What does the retailer expect, what does the user expect. Im not sure i have a problem with the way payments are happening digitally as far as my ability to have record of them, the speed of them. To what degree will