On squawk street, and this is squawk alley live. Good Tuesday Morning and welcome to squawk alley. Kayla tausche and me at post nine with jon fortt and jason calcaneus joining us as well. And now, our best ever day in china, and we have details with susan at hq. Yes, lets go to hung cho, china where the alibaba is projkting to grow 30 this year, which is some different from the projections of the and analysts. There was an overarching event of the company, and to him, alibaba is no longer a marketplace to sell goods according to the ceo jack ma. We want to have the collective datas are from the consumers and the datas are from the business. Yes, so data is very important to him, and, yeah, basically he is developing the cloud likem amazon and break out in the future, and you know the four major areas for alibaba, the cloud, marketplace, and what they are calling the mobile media and entertainment, and innovations technology, and the big topic that people wanted more clarity on is what he made headlines with last night. The problem is that the Fake Products today, they make better quality, better price than the real product, the real names. Yes, so better than the real goods. Ma goes on the say that they are more confident than fixing the fake issue, and addressing the inv investor issues of movies and sports and going back to the opportunities in china for health and leisure, and as you have heard there, carl, he is a big ambitions for jack ma, but he said that he has had the big ambitions for 17 years, and people continue to call him crazy. Thank you, susan li back at hq. And jason e over to you first, and big ambitions as susan said, but a long time horizon, and what do you do with some of the projections . Well, u this they nobody has any real clarity on what is going on in china. Remember, this is not a democracy and you have a company hanging out there and growing in a large way that the s. E. C. Is trying the figure out what is going on, and for any of us to try to pretend what is going on in china and their economy which has many thumbs on the scale, and the ton of corruption, and then trying to understand what is going on in the high growth internet company, very hard to have any kind of transparency or insight into the company, because it is kind of a black box, china, and so i would be very careful owning the stocks like these, and that being said, they have a tremendous business, and you know, they are moving towards operating like an American Company which a lot more transparency, and the s. E. C. Is going to force them, so it is an interesting test case, i think. And jason, there is obviously, a cultural barrier, an lan and a language barrier and currency barrier for new york and other u. S. Investors burk with that guidance of 48 Revenue Growth year over year in 2017, and more transparency about the company, and that enough to make you feel confident or at least comfortable . Yeah, i would not be comfortable owning anything in china in a place where the government can round up the press and put them in jail for what they say. So no, i would not be feeling comfortable owning the stock or own i owning anything in china, because it is highrisk, and you have to be and highrisk investor and i would own it under a small, small, small percentage of the overall diversified portfolio. And the question is who is going to stop them . Amazon has not done well in china, and you have domesticle competitors like jd. Com, and we have a growing middleclass of ch china emphasizing the consumption, and they dont want to be just exporters, but they want the economy to be selfperpetuating and is alibaba a play on that . Well shgs s well, it is hard for me to construct the scenarios where as long as they dont implode as well, they dont do reasonably well. You know, even if they face competitions from the likes of j. D. , and as long as j. D. Doesnt kill them which they believe is going to the happen, they have a nice wind at their back. All right. Sorry, i was waiting for jason jasons response, but we can move on. Go ahead. Well, it is very tough for any analyst to understand what is going on in china, and the big fear unloading in every boardroom is what is happening in investing in china, and is the shoe going to drop, and when we can ask people what their number one concern is, it is the chinese economy, and that is why you will get the resonance because we just dont know. And now, you called a move on power, and do you want to comment on that one . Yes, i believe they are changing the approach where all of the great ideas have to be inside of the building and not on any other platform, and if you look at what na tlt deldell done in buying apps and other operating systems, and so to buy linkedin which is a company with a massive amount of the data on the enterprises, it means to take things like skype and y yammer and integrate them into the graph, the enterprise graph at linkedin. And what does enterprise graph mean . It means who works at the company, and how long they have been there, and what skills they have and what they do for that company, and with one button, you can have everybody who is an engineer at a company through linkedin in a chat room. So there is a many different ways in which this could add a ton of value. It does speakle volumes that maybe the team at Linkedin Feld they were bouncing along the ceiling and they could not break out. Sometimes when you cant breakout, the gains come when you are part of a Bigger Company like youtube did with google. And now it is a juggernaut. That is important with google and youtube, and that is unlike facebook and instagram, and unlike facebook and wassup that is what po powered. And so it is important to see how the Online Identities are going to be cooperating or integrate. You have the live i. D. , and then the linkedin i. D. , and merge them together or try to make them Work Together really well . Enable you have to be able to work on the Office Documents easily from within linkedin and then encourage you the sign up for a paid office 365 account, and figure out how to encourage the enterprises to do it with the linkedin, and that is what the ceo was hinting at that Revenue Growth would be her first project, and to create ancillary benefits. And it is a great part of the namesake, because the graph when you login to the facebook, and linkedin has ta service, too, and so if you have a linkedin account, you can log into other accounts, and this is going to produce a ton of data, and if every single had linkedin account and got free storage and outlook and skype account to go to the skype director, and everybody in linkedin is there, and you go to the skype, and you is search for the cfo it is right there and incredibly powerful. The other thing that you mentioned about the Youtube Google analogy, youtube had out of control spending and they really had a hard time scaling the service on a global basis, and looking at linkedin it is going to be youtube so effectively, and linkedin cost structure is high, and you will have all of the efficiency with the cloud computing, and this is a bold move with microsoft, and it is going to push a lot of companies to make a big acquisition, and certainly, i think that twitter is in play. Finally, jason, everybody n wondering what your take is on the warriors today d and falling to the cavs in game five, and lebron with 41 and you were not kind to lebron on this show a couple of weeks ago and lets hear that tape. Yeah. I dont think that lebron james will ever win another title, and he wont win another title. If they can keep this team together, the warriors are the greatest game in the history of basketball. A viewer writes in, hey, carl, ask that golden state loud mouth where his gold en state gear is. Very good. I have been meeting with microsoft after this, and that is why i didnt have the shirt on. And listen, number one, they took out draymond, and lebron being the cry baby that he is complained to the league, and the National Lebron association he is doubling down. Suspended draymond and we would have won last night if we had draymond, and the man in the middle with andrew bogt who went down, and our thoughts with him, and he is a true warrior, every sense of the word, and yeah, when we have the guys back wx e e will demolish them in game six, and lebron is 25 in the final five appearances, and his legacy is winning one less title than dwyane wade. And six or seven . It is six. They are going to be winning it in cleveland and lebron is going to cry for every call. Jason, thank you. Jason calicanis, thank you. Meanwhile, the investors are going to the cry over the boards, and the german bundes going negative, and the vix here in the u. S. Did surprise to the upshare. And also, a rallying stock of yahoo is the top p performer on the s p 500 up 2 . And when we come back, the st stocks are slipping as brexit fears rise. Plus, microsofts linkedin looking atop come ppetitors. And the revamped siri, and one of the big apple conference reveals, and does it have any impact on the price . We will talk about that when squawk alley comes back. The cloudbased Development Platform thats industrialstrength strength today, the cnbc fed survey takes a closer look at which candidate wall street thinks is best for the u. S. Economy. Steve liesman is back at hq with that and who is it . Well, it is a split decision. 45 ps of the 41 respondents from are the street think that donald trump is best, and 30 say clinton and 25 say dont know, and kind of a big of number who is skewed republican, but when it comes which candidate is best for the stock market, clinton beats trump, and 38 say, hey sh, they just dont know. However, what they do think they know, 80 say that clinton will win the election, and 15 say trump, and 58 say that the whole campaign is negative for the economic outlook, and this is the comment there from john roberts. The high levels of negative campaigns are not positive for t the market. And diane swonk says, the push to inhibit trade, close borders and regulation ip crease across a broad swat swath of industries are all a threat to growth in 2017. You can read more about it on cnbc. Com. And now, can the brexit concern concerns contribute to the concerns mounting . Thanking y you for stepping off talk to us. Thank you. The instinct is to run given the trajectory of the polls in the last few days. Is there anything wrong with that . Well, the markets hate uncertainty, and of course, uncertainty the rises now that it looks like it is too close to call for the brexit vote, and with the rising uncertainty, of course, the markets are under pressure, and once the vote happens, a certain measure of unse uncertainty is on, and it is more likely than not that we will see a pop in the markets no matter which way it plays out. And how much of a difference in the pop between a leave vote and remain vote . That is something that i wouldnt have any strong view on. I think that the fearmongering on the remain side is a little bit over the top. Rolling the clock forward ten years is europe still going to be trading with the uk . Of course they will. Will it be materially different from today . Of course not. So the only real issue is how nasty is that intervening two the three years while they sort out the logistics and the details. Well, rob, now reuters is reporting that the ecb would backstop the markets if in fact they voted to leave the European Union, and how material is that . What size of program is need and how long would that last . Well, firstly, i would hate to know how large a backstop would be needed. Imt not sure that a backstop would be needed. I am not sure of the impact of the markets all that dramatic, but secondly, and more no the point, is that the role of the ecb . Why should the ecb think in terms of buying stock . Good gracious. Well, they are buying the corporate bonds. They sure are, and that is intervening deep into the capital economy. It winds up leading into the risk of major mall injustment. The way that the Central Banks are behaving is as if a handful of wise men and it is mostly men can make decisions on the prices more than a, more sound than millions of consumers, and millions of borrowers and lenders, and come on, lets threat markets sort it out. Spe speaking of that, this eraf of the last two weeks of extremely low, and in some cases negative Interest Rates, and you see it as destructive, and how destructive i do. And give us a short to mediumterm end game. How does this wrap up or at least this chapter in 2016 . The end game, i guess that im not as afraid as druckenmiller is in his prognosis, but i believe it is very destructive to have the Central Banks forcing the Interest Rates to be below the rate of inflation so they have negative cost of capital. It leads to major mall investment instead of the Companies Funding new initiatives and long horizon new ini initiatives that are risky, they use the free money to engage in stock buybacks and that type of thing which is an investment in the future, which is an investment in propping up share price, and si not healthy, and the healththy economy is one that makes its own decisions, and the classic inindividualable hand of the marketplace that adam smith talks about is being tied behind our backs, and it is not allowed to function to allocate capital to worthy long horizon potentially risky new initiatives that have formed the foundation for the long term future growth. Rob, someone has to be buying this debt though for the price s to be spikinging the way they are in the yields to be going as low as they have gone. If it is not just Central Banks, who are the buyers who truly believe that the Global Growth is so bad that those are good inv investments . Well, certainly, investors who have to put their money somewhere, somewhere, and if you are left with the choice of expensive u. S. Stocks for example or zero yielding bonds, thats a problem. It is not a pleasant choice. It does turn out that there are markets that are very cheap right now, and notably emerging markets stocks and bonds, and emerging markets are priced 11 times earnings, and this is g d good. And the emerging markets value as represented by a fundamental index is 6 1 2 times earnings, and the january lows is 5 1 2 times earnings, and if you can buy half the worlds earnings at six times earnings, you can be cheap and afraid and some of the fears are e legitimate and secondly, you buy some, and you recognize that you cant pick the bottom, and if it is cheaper, you buy a little bit more. Rob, appreciate that as always, and bob arnot is joining us for a meeting of the minding. And what the next linkedin deal means for the cloud. Vm, one of the Top Competitors in the cloud is coming up next. And millions of women everywhere decided, i love that shoe. And the companys data center handled the spike in traffic without any drama. Before all of this. Cdw orchestrated a Scalable Software defined Data Center Solution using vmware nsx technology. Scalability by vmware. Orchestration by cdw. And i thought, well, you need to go to the doctor. I was told that is was cancer, and i called Cancer Treatment centers of america. Dr. Nader explained that they can pinpoint the treatment. Once we identified that there was this genetic abnormality in her tumor, we were able to place her on very specific therapy. Our individualized care model gives each lung patient specific Treatment Options with innovative procedures that are changing the way we fight lung cancer. We have Excellent Technology that will allows us to perform very specialized procedures for patients who have lung disease. 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And you have a vote coming up in more than a month on the dell transaction that when we first heard about it, a lot of people thought, no way that this can happen, and no way a that private dell can purchase emc, and now it is a foregone conclusion, and how is the conclusico affecting your conversations with customers and oh my goodness is vm dr vmware going to survive . Yes, and they thought, wow, is this going to allow us to continue, and quickly, people sort of got over to logic of the deal, and back to business, and by the end of the last year, we had a solid q4 and q1 and people got back to work. There is curiosity about it, but the teal is amazingly smoothly, and think thing of a deal of this magnitude, and the shareholder vote, and the debt is raised and it is a fairly, you nknow, the legal and the regulatory approvals, but within the time frame that we laid out. Next quarter. Yes, and it will accelerate vms growth, and i have exchanged the e for the d, and so i now have a new shareholder with dell. And so we want to maintain our independence and ecosystem. Speaking of the consolidation, microsoft going the buy linkedin . Well, i was predicting the consolidation phase of the industry for several years even before the dell emc deal occu d occurred so this is going to fit into the strategic framework, and more major consolidation, but this one, i did not see comi coming. What do you see as the big challenge for microsoft to acquire a property like linkedin . You are probably hoping they will take their eye off of the ball like the mobile Device Management where your air watch competes . Well, like any acquisition, you are look for the strategic fit, and the cultural fit and succeed in the integration. There is an area where vmware has a great reputation, but making it success hfl in the tactic tactics and the details of integration, and that where the su success of the