Transcripts For CNBC Squawk Box 20150122 : vimarsana.com

Eastern time and mario draghi will hold a News Conference at 8 30 eastern time. The euro we saw 1. 5 yesterday. It bounced higher at 1162 and european stocks at least at this early hour they are relatively flat at this point the dow futures are up by 35 points. Nasdaq up by 3. The ecb is the talk of the down here in davos. Larry summers, and Goldman Sacks gary cowen all sitting on stage together. Expectations of a Bond Buying Program in europe already had an effect. She points to currency and where the euro is now countries around the world are already engaged in a currency war in an effort to boost growth. Press andrew is supposed to give a press conference later today about the sex scandal hes involved in. This is what people are really talking about here. We were 100 billion a month qe. At one point, yeah. Theyre doing 50 billion euros. That was money at one time. What was that . Probably 63 or something . Yeah among the biggest questions in europe right now is the fate of greece lots of talk about a potential exit from the euro zone. Now a snap election could put the countrys bailout whats todays date . The 2 isnt it the 25th . 22nd. Todays the 22nd. I thought it was saturday. I think its the 25th . Michelle knows. Thats why our International Correspondent has made her way to athens today in the same general area. She looks warm. She does. Im in europe just like you. Exactly. Its much warmer here than where you guys are. Right now the polls show that the radical leftest leader selfdescribed radical leader of the leftest party is going to win. He leads in the polls and he can very well be the next Prime Minister of this country. The only question is will he win enough seats to control the building you see behind me. The parliament. You cant just outright win your party. You have to be able to control parliament and convince everybody that you can get votes to go the way theyre supposed to or the government collapses. You have to do it all over again. Hes close to having an absolute majority. Why is everybody worried about him . Because when he gets into office hes going to start trying to renegotiate the bailout. They lent more than 200 billion to greece as part of their Bailout Program as they try to restructure their economy. He doesnt like the terms. He thinks theyre too strict and the countrys debt is too high. They wants the ecb to renegotiate the money, the loans they have given to greece. So thats why people are worried about whether or not theres going to be it. During the show down is he willing to walk . Are the europeans going to say stuff it . Thats why we have seen yields rise so sharply. We should say this. He has toned down his rhetoric draw matly from two years ago. Even said yesterday he was going to balance the budget. He told private sector bond holders so hedge funds, Pension Funds and told the old greek bonds theyre not going to get a hair cut. Theyre going to get paid back. Still his Economic Team i met virtually all of them. Theyre socialists. Still they insists they do not want to leave the euro. I said well you are telling the ecb you want to redo the loans. They said we dont want to refund your banks. A guest that weve had on cnbc several times, says he doesnt think its ever going to come to that. Its not going to happen because the door will be open for the next country to exit. Theyre going to evaluate and exit a risk for italy, for spain, for portugal and other countries. This is going to create disaster. So we are not going to have it. Evaluate risk. What he means is those countries yields would start to rise. Right now they dont differentiate much from italy, spain, germany. But their yields are low. If you started to think that italy could leave because greece has done so then you would start to see the Interest Rates rise. So we have to wait and see guys. The big event is on sunday. We have to see how the yields react to what the ecb does. Maybe you got the better end of the deal. Isnt it nice right now. It is. Then this happened. We blanket the world. Much more on the ecb still ahead this morning. Lets get up to date on top stories to watch. American express posted better than expected Quarterly Results and also reported higher quarterly expenses though and provision for bad loans. And sandisk shares getting hurt badly this morning. The Current Quarter and full year shares will miss wall street estimates. Xilinx also under pressure. Missed the mark. Hurt by weak sales to brad cast and communications customers. They forecast a weaker than expected Current Quarter or revenue. Our lineup starts off with two power players. Representing combined total assets of over 45 billion to give to their causes. Joining us is judith roden. The president of the Rockefeller Foundation and board member of comcast and citi group and the ceo of the bill and Melinda Gates foundation and board member of facebook and procter gamble. Thank you for joining us. Thanks for having us. Obviously you two do a lot of work both with governments and private companies and that is what brings you to davos. And unless we engage with markets and work with the private sector private investment or public and private companies were not going to find the Sustainable Solutions to the issues that we care so deeply about. If your previous life you were in charge of Product Development there and a doctor that spend time traveling all over the place too. I guess youre in a different position now where youre going back to these Drug Companies and trying to workout deals to make sure that poor people in the world still get access to medicines. Thats right. Im trying to make advantage of the outcome i have to think about solutions where the companies can meet the expectations of their shareholders and do good things for the poor. We have come up with a number of different ideas. Some of them traditional like volume guarantees, tiered pricing. Please take at least this much and well guarantee if you dont sell it well back you up on that . Thats right. We can use our Balance Sheet and if that Company Meets the target product profile the specifications we put out that include price because we need a low price well backstop them to make sure they can recoop their investment and make money. What are the new developments . Some of the things were excited about are novel remedies for ebola. We worked with a number of partners and we hope that others that have leaned in to help us with ebola will be able to come up with a vaccine so thats something that we have worked on but were also working with partners on polio, malaria, i have been busy here. He likes to say things that make you think and that are some what controversial but one thing he was saying was dont count on advances and science for medicine. I think maybe it has something to do with he thinks maybe quality of life is more porn than length of life and extend the life of someone 85 years old. Whether thats really dollars well spent but it got me to thinking if theres children that dont get vaccinated and die should we bring the rest of the world up to our standard of treatment that developed nations have first before we try to get even more treatment for our developed nations . If davos that might be put forth as the more correct thing to do. Its an and. Not an or. At the Gates Foundation we have a strong belief in childrens lives. My cochairs bill and Melinda Gates put out our annual letter today but one of the goals is to improve outcomes in under five mortalities. One in ten children died in 1990. This year thats 1 in 20 and our expectation is 1 in 40 by 2040. Thats going to take affordable vaccines more maternal and child health. Were committed to that and invested in that and i remain into innovation. So im definitely not negative about innovation. I was optimistic in knowing where molecular was right now. I thought there might be a quantum leap knowing how to design rationally drugs. I thought we were on the cusp of a golden period and he told me were not. I want to live beyond 75 for the record. Me too. So i think we are in a golden age of inknowizationnovation and one of the great things about the Gates Foundation is we can tap into those innovations for poor countries. I have a money question for you. You guys were involved with jp morgan about a year and a half ago where you financed do you know what im talking about, where you financed the losses or protected on the losses a lot of banks are now trying to get into this space of social impact bonds. Do you see that as a big area . And do you see yourself being more involved with that or less . So were interested in any mechanism that gets people who are talented and want to make money included in the bonds, guarantees and loans. Because once they get started if people can make a business thats a great sustain blt model. We want private industry to care about our causes so youll see more of that investments in using a number of different financial tools because we can use our Balance Sheet because increasingly we want the innovators to say we can make money and make a living. At the same time theres more companies trying to create accountability around fill lan throw philantropies based on how it is spent. The question is should a charity be run like a business . I think that looking at metrics and outcomes is essential whether youre a charity or a business. We want to deliver impact on the ground and one way that you know that is by measuring it. In the social impact bond market we help to create the structure of social impact bonds. The idea is not only to have capital guarantee it but to bring private investors, Family Wealth funds, individuals that really want to have a social and financial return and you cant do that unless you pressure the social return as aggressively as you measure the financial return. I know one of the focuses is urban centers. We have seen a lot of chaos recently with paris and other places. What does that mean to you . Our two strategicals are to build better resilience and to help develop more inclusive economies and cities around the world are ground zero. Its where the growth will be in population. The Economic Centers of every country so we launched a challenge. We have chosen 70 of the 100 cities and were working with them to develop Resilient Strategies were hoping to pay for. Each city get ace chief resilience officer and working with private sector and private markets we created a multibillion platform of goods and services the cities will have access to from the Data Analytics to Cyber Security Risk Analytics to new forms of metropolitan katzcatastrophe insurance. Its a way to create the volume that sue talked about in the health area but using the capital as the initial pilot capital and leverage. You work 6 days a week. Its boards and i was thinking if youre going to be on a foundation i think i might be rockefeller or gates, right . Those are two pretty good one. Theyre amazing jobs. We both ran universities before this. I applied there and i didnt get in. Sorry. Its not your fault. Think of all the donations you would have been making to that school. Youre busy every day. We are and we can really look at big problems and actually work with a variety of factors and work toward solving them so were moving from the theoretical to the practical in leading these foundations and we can really see results on the ground that are pretty extraordinary. Thats the biggest change. You talk about accountability and one of the things im excited about because i like to make things happen in bio tech or at the university, were seeing real change so this increase in accountability and new approaches things are Getting Better. Yeah. And more quickly, sue, dont you think . Absolutely. Longterm solutions and we need to invest in them but things are happening more quickly as a result of this kind of partnership and frame work. Well judith and susan, thank you both for being here today. We really appreciate your time. Thanks. Okay. All right. Still to come later this hour u. S. Commerce secretary is going to join us and the president of Lenovo Jerry Smith and sams Club President will be with us. Great conversations on business and the Global Economy still ahead. Plus part of our coverage of the World Economic forum were teaming up with facebook to bring you face to face with influential thinkers. And covering everything from smartphones to tesla. You can watch the full interview on cnbc. Davos. Com and head to our Facebook Page where you can get in on the action as well. Later well sit down with Sheryl Sandberg and Melinda Gates. Submit some questions. Were back in a moment. Welcome back to showdown im jerry rice here discussing the big race between the tortoise and the hare. My guest is stephanie branton. Jerry, im going bunny. Shocker. Not really. You see, the hares thoracic limbs allow for greater extension and elongated strides. Look for the hare to leverage this advantage. Ok. Vote on twitter for your chance to win a mercedesbenz big race viewing party. The u. S. And cuba are launching talks today on restoring diplomatic relations. A lot remains about this era for these countries. Our next guest will be there. Penny pritzker joins us now. I bet this is a big topic. Not just in our country but around the world. We all remember in 40 or 50 years. Its a huge topic. This is the biggest change in cuban policy in the last 50 years and its been well received whether its among latin American Country leaders. In fact i was with the vice premiere of china and he turned to me and said great, bold move. Really exciting. So a lot of positive feedback but a lot of work to be done. Well we were stuck in the mud kind of i think and i think even people that their entire life said we shouldnt do this probably said you know what we werent getting anywhere. Maybe we need to try that. Didnt get a taste of what life can be like. Maybe we slowly see things for other people in cuba. The president really felt strongly that our policy wasnt working and hadnt worked and therefore we had to make a change, a direction. In doing so really theres some big opportunity particularly in the areas of telecommunications and agriculture and think about it only 5 of cubans today have access to broadband and about 2 million out of 11. 5 million cubans have a cell phone. And the ability to get access to cell phones and television creating that is going to have a huge impact. The criticism comes from certain sectors where you would expect it to come but it has to do with not really being sure we can trust the things or that theyre saying look this is what were doing. Were going to continue to further i guess the leaders are going to have to constantly say were not going to abandon our principals but in terms of things we could have extracted, are we holding their feet to the fire to get something out of this in return . Well absolutely. Look, first of all were not abandoning our values and were certainly not abandoning our commitment to human rights. Thats why obviously diplomatic relations are so important. We can open that dialogue up and begin to address these issues but also it gives us greater access to the cuban people and to go correctly and be able to provide things like telecommunications telecommunications. What we know is from commercial diplomacy can come good things and change. Is this a path way to democracy . We have to look at this as a long process. I dont think this is about overnight change. This is about first steps. Lets have diplomatic relations. Theres areas that we can do more commercial engagement and the process will continue but we have to remember the United States is not abandoning its values at all in this move. We i think it was larry that tweeted not a word about Corporate Tax reform and some of the things we heard before the election and then there was an election and hearing the same thing. Not a word. It wont happen will it in the next two years . I disagree. The president is very committed to trying to get Business Tax Reform and has been looking for, as you heard secretary lou say yesterday were looking for where is the overlap in policy so we can get something accomplished and i think given the new congress and their commitment theres a real tun. Why do you think he didnt mention that . I think that he was focused on whats happening to our economy and trying to tell a story to the American People about whats the state of the u. S. Economy and whats to come for the average american and that you heard, you look at the focus of the speech. What about the biggest impact, changes income taxes, estate tax and some of the issues he talked about or changes the Corporate Tax . We have to have an all of the above strategy because what the president pointed out is look our economy is growing. We created more jobs in this past year than in the 1990s. We have record exports. The deficit is falling. The United States and particularly compared to a lot of other parts of the rest of the world is in a really good position. Were the number one place to invest second time you know second year in a row. So hes trying to explain to the American People things are Getting Better but for the average person in the News Conference<\/a> at 8 30 eastern time. The euro we saw 1. 5 yesterday. It bounced higher at 1162 and european stocks at least at this early hour they are relatively flat at this point the dow futures are up by 35 points. Nasdaq up by 3. The ecb is the talk of the down here in davos. Larry summers, and Goldman Sacks<\/a> gary cowen all sitting on stage together. Expectations of a Bond Buying Program<\/a> in europe already had an effect. She points to currency and where the euro is now countries around the world are already engaged in a currency war in an effort to boost growth. Press andrew is supposed to give a press conference later today about the sex scandal hes involved in. This is what people are really talking about here. We were 100 billion a month qe. At one point, yeah. Theyre doing 50 billion euros. That was money at one time. What was that . Probably 63 or something . Yeah among the biggest questions in europe right now is the fate of greece lots of talk about a potential exit from the euro zone. Now a snap election could put the countrys bailout whats todays date . The 2 isnt it the 25th . 22nd. Todays the 22nd. I thought it was saturday. I think its the 25th . Michelle knows. Thats why our International Correspondent<\/a> has made her way to athens today in the same general area. She looks warm. She does. Im in europe just like you. Exactly. Its much warmer here than where you guys are. Right now the polls show that the radical leftest leader selfdescribed radical leader of the leftest party is going to win. He leads in the polls and he can very well be the next Prime Minister<\/a> of this country. The only question is will he win enough seats to control the building you see behind me. The parliament. You cant just outright win your party. You have to be able to control parliament and convince everybody that you can get votes to go the way theyre supposed to or the government collapses. You have to do it all over again. Hes close to having an absolute majority. Why is everybody worried about him . Because when he gets into office hes going to start trying to renegotiate the bailout. They lent more than 200 billion to greece as part of their Bailout Program<\/a> as they try to restructure their economy. He doesnt like the terms. He thinks theyre too strict and the countrys debt is too high. They wants the ecb to renegotiate the money, the loans they have given to greece. So thats why people are worried about whether or not theres going to be it. During the show down is he willing to walk . Are the europeans going to say stuff it . Thats why we have seen yields rise so sharply. We should say this. He has toned down his rhetoric draw matly from two years ago. Even said yesterday he was going to balance the budget. He told private sector bond holders so hedge funds, Pension Funds<\/a> and told the old greek bonds theyre not going to get a hair cut. Theyre going to get paid back. Still his Economic Team<\/a> i met virtually all of them. Theyre socialists. Still they insists they do not want to leave the euro. I said well you are telling the ecb you want to redo the loans. They said we dont want to refund your banks. A guest that weve had on cnbc several times, says he doesnt think its ever going to come to that. Its not going to happen because the door will be open for the next country to exit. Theyre going to evaluate and exit a risk for italy, for spain, for portugal and other countries. This is going to create disaster. So we are not going to have it. Evaluate risk. What he means is those countries yields would start to rise. Right now they dont differentiate much from italy, spain, germany. But their yields are low. If you started to think that italy could leave because greece has done so then you would start to see the Interest Rates<\/a> rise. So we have to wait and see guys. The big event is on sunday. We have to see how the yields react to what the ecb does. Maybe you got the better end of the deal. Isnt it nice right now. It is. Then this happened. We blanket the world. Much more on the ecb still ahead this morning. Lets get up to date on top stories to watch. American express posted better than expected Quarterly Results<\/a> and also reported higher quarterly expenses though and provision for bad loans. And sandisk shares getting hurt badly this morning. The Current Quarter<\/a> and full year shares will miss wall street estimates. Xilinx also under pressure. Missed the mark. Hurt by weak sales to brad cast and communications customers. They forecast a weaker than expected Current Quarter<\/a> or revenue. Our lineup starts off with two power players. Representing combined total assets of over 45 billion to give to their causes. Joining us is judith roden. The president of the Rockefeller Foundation<\/a> and board member of comcast and citi group and the ceo of the bill and Melinda Gates<\/a> foundation and board member of facebook and procter gamble. Thank you for joining us. Thanks for having us. Obviously you two do a lot of work both with governments and private companies and that is what brings you to davos. And unless we engage with markets and work with the private sector private investment or public and private companies were not going to find the Sustainable Solutions<\/a> to the issues that we care so deeply about. If your previous life you were in charge of Product Development<\/a> there and a doctor that spend time traveling all over the place too. I guess youre in a different position now where youre going back to these Drug Companies<\/a> and trying to workout deals to make sure that poor people in the world still get access to medicines. Thats right. Im trying to make advantage of the outcome i have to think about solutions where the companies can meet the expectations of their shareholders and do good things for the poor. We have come up with a number of different ideas. Some of them traditional like volume guarantees, tiered pricing. Please take at least this much and well guarantee if you dont sell it well back you up on that . Thats right. We can use our Balance Sheet<\/a> and if that Company Meets<\/a> the target product profile the specifications we put out that include price because we need a low price well backstop them to make sure they can recoop their investment and make money. What are the new developments . Some of the things were excited about are novel remedies for ebola. We worked with a number of partners and we hope that others that have leaned in to help us with ebola will be able to come up with a vaccine so thats something that we have worked on but were also working with partners on polio, malaria, i have been busy here. He likes to say things that make you think and that are some what controversial but one thing he was saying was dont count on advances and science for medicine. I think maybe it has something to do with he thinks maybe quality of life is more porn than length of life and extend the life of someone 85 years old. Whether thats really dollars well spent but it got me to thinking if theres children that dont get vaccinated and die should we bring the rest of the world up to our standard of treatment that developed nations have first before we try to get even more treatment for our developed nations . If davos that might be put forth as the more correct thing to do. Its an and. Not an or. At the Gates Foundation<\/a> we have a strong belief in childrens lives. My cochairs bill and Melinda Gates<\/a> put out our annual letter today but one of the goals is to improve outcomes in under five mortalities. One in ten children died in 1990. This year thats 1 in 20 and our expectation is 1 in 40 by 2040. Thats going to take affordable vaccines more maternal and child health. Were committed to that and invested in that and i remain into innovation. So im definitely not negative about innovation. I was optimistic in knowing where molecular was right now. I thought there might be a quantum leap knowing how to design rationally drugs. I thought we were on the cusp of a golden period and he told me were not. I want to live beyond 75 for the record. Me too. So i think we are in a golden age of inknowizationnovation and one of the great things about the Gates Foundation<\/a> is we can tap into those innovations for poor countries. I have a money question for you. You guys were involved with jp morgan about a year and a half ago where you financed do you know what im talking about, where you financed the losses or protected on the losses a lot of banks are now trying to get into this space of social impact bonds. Do you see that as a big area . And do you see yourself being more involved with that or less . So were interested in any mechanism that gets people who are talented and want to make money included in the bonds, guarantees and loans. Because once they get started if people can make a business thats a great sustain blt model. We want private industry to care about our causes so youll see more of that investments in using a number of different financial tools because we can use our Balance Sheet<\/a> because increasingly we want the innovators to say we can make money and make a living. At the same time theres more companies trying to create accountability around fill lan throw philantropies based on how it is spent. The question is should a charity be run like a business . I think that looking at metrics and outcomes is essential whether youre a charity or a business. We want to deliver impact on the ground and one way that you know that is by measuring it. In the social impact bond market we help to create the structure of social impact bonds. The idea is not only to have capital guarantee it but to bring private investors, Family Wealth<\/a> funds, individuals that really want to have a social and financial return and you cant do that unless you pressure the social return as aggressively as you measure the financial return. I know one of the focuses is urban centers. We have seen a lot of chaos recently with paris and other places. What does that mean to you . Our two strategicals are to build better resilience and to help develop more inclusive economies and cities around the world are ground zero. Its where the growth will be in population. The Economic Centers<\/a> of every country so we launched a challenge. We have chosen 70 of the 100 cities and were working with them to develop Resilient Strategies<\/a> were hoping to pay for. Each city get ace chief resilience officer and working with private sector and private markets we created a multibillion platform of goods and services the cities will have access to from the Data Analytics<\/a> to Cyber Security<\/a> Risk Analytics<\/a> to new forms of metropolitan katzcatastrophe insurance. Its a way to create the volume that sue talked about in the health area but using the capital as the initial pilot capital and leverage. You work 6 days a week. Its boards and i was thinking if youre going to be on a foundation i think i might be rockefeller or gates, right . Those are two pretty good one. Theyre amazing jobs. We both ran universities before this. I applied there and i didnt get in. Sorry. Its not your fault. Think of all the donations you would have been making to that school. Youre busy every day. We are and we can really look at big problems and actually work with a variety of factors and work toward solving them so were moving from the theoretical to the practical in leading these foundations and we can really see results on the ground that are pretty extraordinary. Thats the biggest change. You talk about accountability and one of the things im excited about because i like to make things happen in bio tech or at the university, were seeing real change so this increase in accountability and new approaches things are Getting Better<\/a>. Yeah. And more quickly, sue, dont you think . Absolutely. Longterm solutions and we need to invest in them but things are happening more quickly as a result of this kind of partnership and frame work. Well judith and susan, thank you both for being here today. We really appreciate your time. Thanks. Okay. All right. Still to come later this hour u. S. Commerce secretary is going to join us and the president of Lenovo Jerry Smith<\/a> and sams Club President<\/a> will be with us. Great conversations on business and the Global Economy<\/a> still ahead. Plus part of our coverage of the World Economic<\/a> forum were teaming up with facebook to bring you face to face with influential thinkers. And covering everything from smartphones to tesla. You can watch the full interview on cnbc. Davos. Com and head to our Facebook Page<\/a> where you can get in on the action as well. Later well sit down with Sheryl Sandberg<\/a> and Melinda Gates<\/a>. Submit some questions. Were back in a moment. Welcome back to showdown im jerry rice here discussing the big race between the tortoise and the hare. My guest is stephanie branton. Jerry, im going bunny. Shocker. Not really. You see, the hares thoracic limbs allow for greater extension and elongated strides. Look for the hare to leverage this advantage. Ok. Vote on twitter for your chance to win a mercedesbenz big race viewing party. The u. S. And cuba are launching talks today on restoring diplomatic relations. A lot remains about this era for these countries. Our next guest will be there. Penny pritzker joins us now. I bet this is a big topic. Not just in our country but around the world. We all remember in 40 or 50 years. Its a huge topic. This is the biggest change in cuban policy in the last 50 years and its been well received whether its among latin American Country<\/a> leaders. In fact i was with the vice premiere of china and he turned to me and said great, bold move. Really exciting. So a lot of positive feedback but a lot of work to be done. Well we were stuck in the mud kind of i think and i think even people that their entire life said we shouldnt do this probably said you know what we werent getting anywhere. Maybe we need to try that. Didnt get a taste of what life can be like. Maybe we slowly see things for other people in cuba. The president really felt strongly that our policy wasnt working and hadnt worked and therefore we had to make a change, a direction. In doing so really theres some big opportunity particularly in the areas of telecommunications and agriculture and think about it only 5 of cubans today have access to broadband and about 2 million out of 11. 5 million cubans have a cell phone. And the ability to get access to cell phones and television creating that is going to have a huge impact. The criticism comes from certain sectors where you would expect it to come but it has to do with not really being sure we can trust the things or that theyre saying look this is what were doing. Were going to continue to further i guess the leaders are going to have to constantly say were not going to abandon our principals but in terms of things we could have extracted, are we holding their feet to the fire to get something out of this in return . Well absolutely. Look, first of all were not abandoning our values and were certainly not abandoning our commitment to human rights. Thats why obviously diplomatic relations are so important. We can open that dialogue up and begin to address these issues but also it gives us greater access to the cuban people and to go correctly and be able to provide things like telecommunications telecommunications. What we know is from commercial diplomacy can come good things and change. Is this a path way to democracy . We have to look at this as a long process. I dont think this is about overnight change. This is about first steps. Lets have diplomatic relations. Theres areas that we can do more commercial engagement and the process will continue but we have to remember the United States<\/a> is not abandoning its values at all in this move. We i think it was larry that tweeted not a word about Corporate Tax<\/a> reform and some of the things we heard before the election and then there was an election and hearing the same thing. Not a word. It wont happen will it in the next two years . I disagree. The president is very committed to trying to get Business Tax Reform<\/a> and has been looking for, as you heard secretary lou say yesterday were looking for where is the overlap in policy so we can get something accomplished and i think given the new congress and their commitment theres a real tun. Why do you think he didnt mention that . I think that he was focused on whats happening to our economy and trying to tell a story to the American People<\/a> about whats the state of the u. S. Economy and whats to come for the average american and that you heard, you look at the focus of the speech. What about the biggest impact, changes income taxes, estate tax and some of the issues he talked about or changes the Corporate Tax<\/a> . We have to have an all of the above strategy because what the president pointed out is look our economy is growing. We created more jobs in this past year than in the 1990s. We have record exports. The deficit is falling. The United States<\/a> and particularly compared to a lot of other parts of the rest of the world is in a really good position. Were the number one place to invest second time you know second year in a row. So hes trying to explain to the American People<\/a> things are Getting Better<\/a> but for the average person in the United States<\/a> their wages have not been going up. Their real wages have not been going up and hes saying what will we do to address that. Will you be one of the point persons for fast track . Absolutely. Were not just bog to oppose this. Were going to fight this tooth and nail. Theres democrats that the president doesnt have in his camp. I have been talking to dozens of our Democratic Leaders<\/a> both in the house and the senate who have an open mind and understand the reason that we need fast track and trade agreements is to get Market Access<\/a> for our businesses to continue to be able to export into all of these countries to be able and this is about american leadership. If we dont set the rules for trade in the 21st century, our competitors are. One other question. How disappointed were you that Antonio Weiss<\/a> was forced to pull back and become part of the treasury in a different way, if you will . You know what i think antonio is a terrific executive and the fact that we can get him in as soon as possible i think is a real win for the administration. And a win for our economy. Very i figured i should ask what the administration thinks. Thank you. Madame secretary. Thank you very much. Always good to see you guys. You too. Thank you. When we come back this morning, a Top Executive<\/a> on the future of the pc. When squawk box returns from the mountains of davos switzerland, stick around. Well be right back. [woman] can it make a dentist appointment when my teeth are ready . [girl] can it tell the doctor how long i have to wear this thing . [man] can it tell the Flight Attendant<\/a> to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Welcome back to squawk box live from davos switzerland this morning. 2015 is the year of the pc come back while others argue its a dying breed. Jerry smith is the president of the americas and hell join us with a phone were going to talk about. Everybody says pc is dead. You say its not. Absolutely not. Its a 200 billion market. The last five or six years everyone said the pc is dead. Theres real keys to that. Number one were driving innovation. Sales numbers have shown overall pcs are declining business. That was seen as a success. In the near future well continue to see flat to positive growth. The tablet market was supposed to be in the pc. As earlier it was an f book but tablet sales have slowed down. At what point do they truly converge . You run windows operating system. They created a system where you can have the tablet turn into a pc and et cetera. Its usage models as well. People will use phones and tablets for consent viewing and pcs for content creation. I can see more and more people going back to pcs as a main device and using their phone as the other primary. As a growth driver for your company specifically you see it as a pc business or think its the phone business. Were excited because we have three growth engines now. We have the mobility business so 1. 4 Million Units<\/a> on a worldwide basis and we also bought the x86 business this year from our per perspective. We think its an opportunity for us. So were excited they did because we think with the motorolo brand the scale of both our businesses we have ip protection we didnt have before and we think mobility is a huge future for us. Some people think that android, because its so split up broken theres a motorola version, samsung has a version, everybody has a different take on it that it will never be able to excel beyond what apple has done since everybody is on the same level Playing Field<\/a> in terms of that operating system. One of the reasons we bought the motorola system we thought they had the best Android System<\/a> out there. Coming from google we think well have an advantage position going forward. The only candidate in my opinion, google will be the winner in the long run. Look at market share. Dominant market share already. Over a period of time across future sets people will go to a function and help customizations that we have. Is google your friend or frenimey . And we hear samsung might buy blackberry because they want the operating system. Were a hardware device company. So we dont have a software piece so theyre a clear friend and partner going forward. We have three growth engines. Servers, pcs, and phones and in 2004 you announced the deal. We have grown from 3 billion to 40 billion and went from 46 to 41. 220 better. So we think we see this as repeat in the play book twice again. So we think we can do the exact same thing across all three growth pillars. What about the idea that youre a Chinese Company<\/a> . Chinese roots and we heard from u. S. Companies that sometimes they have trouble when they go around the world. People are concerned that look youre a u. S. Company and you might be spying on us. The same holds true for a chinese based company. We have seven of our top ten executives are from Different Countries<\/a> across the world. Were number one in the pc industry. We have 20 market share. We have sold safe secure pcs across customers worldwide. So yes its a threat to some people but we believe we demonstrated that were a safe sincere partner, whether its phones or servers or pcs and were open and transparent across the supply chain as well. Heres a question. We had the cfo of ibm on the show yesterday. A piece of your business is ibm. Do you have a take on whats happened . They have a future as a partner with us and were excited we were able to purchase the server business from them and well do the same thing we did on servers. Do you have you sell phones, right . Did you show anyone your phone . So i fell today. His phone is shattered. It was a 6 plus. Very embarrassing. I think they even have a shot of it. You fell . Do we have that on camera. Theres a picture of the phone. Of the phone. Put music to it and everything. It was right in the middle of the street. Are you okay . Im okay. The phone is not. Wed love to convert you to the motorola phone. If you have a loaner. I was holding it and i think i went down on the cement with it. You saved yourself. I saved myself with my phone. Here it is. Aw. Yeah. Look at the difference. I dont know if they can see. Can they see whats going on here . Can you get in on how bad it is. Its really bad. You can see my kids right there. Slivers. Well theres the kids. There it is. Better shot. The dangers of davos. Thank you for coming in. When we come back today its time to slip in a quick break. More than two hours of news makers still ahead including a snapshot of the consumer curtesy of the sams club ceo and we have a packed squawk box coming up live from the World Economic<\/a> forum in davos switzerland. Stick around. Squawk box will be right back. That means the consumers are benefitting and going out and spending money which is good for the broad economy. He was commenting on the benefits of low oil prices. Are consumers cashing in at the pump . Well find out with rozsalyn brewer. Thank you for being here today. If sams club were broken out it would be the 8th largest retailer in the United States<\/a>. Are they turning around and spending that money theyre saving at the pump immediately or are they saving it . Were benefitting from the fuel prices right now. Its been great for us. Fuel is a great traffic driver and we do everything we can to deliver the great prices on fuel as our goods and Everything Else<\/a>. Its great for us right now. How big of a positive boom . It adds to our traffic. We look at it in terms of our traffic. Our traffic is doing well for us right now. When did you see the turn . Just before the holiday. We saw the Oil Prices Moving<\/a> and gas prices at the same time. We saw traffic tick up and its part of some of the benefits and pleasures of the holiday. Was it an instant term with lower gas prices or is it something that you kind of see building more and more every week . Its building week over week. Weve seen it move so fast that we saw it move week over week and improve week over week for us. You have a slightly differ customer than the traditional walmart customer because you are a club based company and competing with costco. Who is your customer . Our customer is really interesting because you pay to shop with us so our Household Income<\/a> ranges from 80,000 a year and up. We have a little bit of an elevation in terms of who shops us versus who shops our traditional Walmart Store<\/a>s. So youll see goods in our stores that are more branded goods than you might see in a Walmart Store<\/a> and we enjoy that and our member expects that from us. Because we listen to them a lotmentlot. This transition were making from boomers to millennials and this mind set is very important. Thats our next customer. We had a gentleman on. In the lowest paid hourly wage at etna is 15 an hour. We worked it all out with him 16 an hour. To get to 16 an hour 10 million or 14 million in benefits. I would think at sams club if you went to 16 an hour it would be a much larger number. Would it be doable without hurting the results of the company and hurting your Competitive Position<\/a> . You know, one thing you have to really think about at sams and walmart is we build careers. So when you think about whats a starting rate at our facilities you have to think about we dont want you to just be a cashier for the rest of your life. We want you to grow a career. So folks that run our stores and our clubs they make six figure salaries so we want to grow them to that. Are you paying people minimum wage or how much of your work force is that. Very very very few of our folks are at minimum wage. Less than 6,000. Of how many . We have around the world we have 2. 2 million employees around the world so thats pretty small for us. That makes sense to me and ive had people that are in some of the fast food restaurants say instead of having everyone immediately paid as a team leader or something, people earn their success and they come up and they get there quickly if theyre the people you want to keep and you cant do that. But that message is not getting out. Its not getting out. In davos its definitely not getting out. Its not and when you think about where in the world could you go and work right now and get training and development that does get you there and makes you feel good about the work that you do. And earning your success. And earning your success and we pride ourselves on even if you leave the company and go somewhere else we invested in that person and made them better. I have a Membership Club<\/a> question. Do you think of amazon prime as a Membership Club<\/a> . I do. We are redefining our Competitive Landscape<\/a> and there are some Online Membership<\/a> concepts that you wouldnt think were competitors. I do view amazon prime as a competitor. Do you think youll ever really get in the same space . I do. What were doing is combining both digital and physical space and for sams we want to be there quicker than anyone else. We think we can do that. We have been talking about it here and engaging our associates and transformation around everything that we do our future sites will have Access Points<\/a> that will allow us to do that better than anyone else. Margin better or worse online versus brick and mortar. Well have to look at that. Were thinking about that. Look at that smile. That politics smile. Costco is a competitor. People look at what they have done as kind of an amazing feat. What do you do to differentiate ourself and to be in the same space . I understand when you say they started the space but were 32 years old. We roughly started about the same time. Theyre a great competitor. They make us better but i will tell you that the advancements were making in the Digital Space<\/a> we hope will out pace them. Some of the things that differentiates us from them is were growing as fast as we can to become better merchants in our company. Were excited about the work happening there and then the services that we provide. When you come into a sams club you know that youre getting well taken care of and that membership fee that you paid youre getting every bit of that in the values and the brands and the service with the people in front of the members. Well we want to thank you for your time today. Thank you for having me. Really appreciate it. Cold isnt it . Shes ready. Now its getting cold. How are you feeling . Im good. You got that nice getup. If you knew how many layers i had on. To achieve mountain sheik and if i add this blanket into all of my other layers look at this im like nauseous. Look great. Thank you. Coming up, to say our next guest has worn a lot of hats would be an understatement and he was a world heavy weight boxing champ, a leader of a Ukrainian Political Party<\/a> and main guy in a lot of the protests you saw and hes the mayor of kiev. Vitali klitschko will join us to discuss his homeland. His brother is married to hayden and they have a new baby. Anyway. Well be right back. 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Ill tell you with what happens in the oil markets, we were trying to figure out if this em boldens putin or if it makes him maybe not quite as adventurous. But people have pointed out in the ukraine certain laws on the energy makes it impossible for Foreign Investment<\/a> which makes you have to curry favor with putin. What happened . Why the 70 or 60 taxes on energy and oil and gas . Actually we lead longterm with low price. Its not secret. To using energy its not so. We use five times more energy than european union. Right now we implement new Safety Technology<\/a> in ukraine. We try to be modern to make reform in ukraine. And also energy direction. And to be independent. From russia from energy resources. Its very important point for our country. Might not be the way to do that. It sort of curbs investment doesnt it to some extent . We build good climate right now for ukraine. Its our main goal to make reform to good climate for investment. Right now its very difficult as we have people who are very interested off who is very afraid from success of ukraine. But our main goal to implement reform and to be successful but more democratic. Our main goal is i know better than anyone were fighting for our region for our dream. Ukraine modern european democratic. What do you think about the support that youve received from the your friends in the west, from europe and from the americans at this point . We appreciate the support. We really appreciate for sanction. We understand as this conflict we can stop and we need from Russian Federation<\/a> to stop to take out the military forces from ukraine territory and stop to deliver weapons to terrorists. Well we i hope we come back next year and hope to see you again. I hope things are moving in the way youd like them to. Mayor klitschko, thank you. When we come back talking Global Market<\/a> with Glenn Hutchins<\/a>. Stick around. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions<\/a> and a thousand other things. So you call pwc. The right people to get the extraordinary done. Good morning. After weeks of qe speculation, the ecbs big day is finally here. With mario draghi live up to expectations . Some of the most powerful people on the planet are all here. Were going to take you behind closed doors and get all kinds of opinions on what needs to be done to jump start the eurozone economy. And well be joined by news makers and news breakers. Including famed deal maker Glenn Hutchins<\/a> and linkedin founder reed hoffman. The second hour of squawk box begins right now. Welcome back to squawk box right here on cnbc first in business worldwide. Were in davos, switzerland. Im Andrew Ross Sorkin<\/a> along with joe kernen and becky quick. The bank expected to announce a Bond Buying Program<\/a> for 50 euros per month. And well have that news for you when it breaks. The ecb is by far the biggest topic of conversation today. But plenty of other discussions going on as well including critical market topics such as plunging energy prices. This morning i spoke with indias finance mins per. The declining oil prices help us in many areas. They help us in cutting down subsidyies subsidies. They help us to knock down our deficits. And of course they help us in bringing down inflation. Well be continuing to bring you some of the big headlines coming out of the Panel Discussions<\/a> here at the forum. In our headlines this morning, it is a big day for corporate earnings. Well be bringing you the number as they hit the tape. Verizon just out. Revenue slightly above consensus. Check out family dollar. Shareholders will be voting today on the proposal to be bought by dollar tree for 8. 5 billion. They are expected to approve it though a competing offer from Dollar General<\/a> is still on the table. And plenty of news from ebay. The company will be exploring a sale or ipo of its business. That will cut 2400 jobs and its latest earnings was a little on the light side. They put up the chart, the camera came back to me. Directors trick. At 8 30 eastern were going to hear from mario draghi on exactly what he plans to do about the flagging eurozone economy. Speculation that the eu is going to finally we call it please the markets. I use the word appease because it rhymes with please. The market wants something. If its not good enough well see. Lets get to our first news maker this morning. Glenn hutchins is chairman of north island and vice chairman of the Brookings Institution<\/a> and we go back and we talk about a lot of things. We have very frank discussions. You are an incredible capitalist. Im not taking that as a compliment. How can it be taken as anything else . So you know how entrepreneurs work and youve seen companies from the ground up become successful and do wonderful things to create wealth and employ a lot of people. Yet there is an income inequality that is front and center everywhere we go here in davos, that issue. You sat on a panel with larry summers. And came up with some terminations, the panel did. And im going to mention a couple. Then you can explain it to me. Raise the minimum wage. Embolden and empower trade unions. Make a more progressive personal income tax. Close corporate loopholes. I see how all of these things in fact, they go back and say the centrist. Is that what you talked about in this panel and say i dont agree with all this . Youre talking about the inclusive prosperity mission. Then two people wrote the report and i signed on as one of the commissioners. I did not sign on to all of the elements. Is larry one of the larry was one the coauthors. One of the things i did sign on is minimum wage. If you take the minimum wage as a number multiply it by 2,000 which is roughly fulltime hours per year you see what were paying people. People cant live on 15,000. They cant live on 17,000 either. I understand that. But the primary thing i focused on in those discussions was what i called the changing nature of work. And how as a result in the changing nature of work which is a combination of things coming out of the sharing economy, increasing a number of independent contractors, people working parttime and wanting to work fulltime and the longterm unemployed. We need a set of policies to address those just as we had a set to address womens needs in the workforce. So youre not excluding things that what i saw was close corporate loopholes but nothing about lowering the rate. Its almost as if youre saying we tried growth in the private sector and it didnt work. So theres going to be nothing progrowth for the job creators to try to help the income inequality . Seriously . Im not here to defend everything in a report that someone else wrote, just so you know. I think post the state of the union of the United States<\/a> right now, a lot of rhetoric. But it sounds like weve got an opportunity to get trade deals done and get after Corporate Tax<\/a> reform. And i think both of those things would be highly growth you think theres a chance the president does sign on Corporate Tax<\/a> reform when he said not one word in the state of the union. It was like it never happened. As i talk to people who are working i cant assess it because im not that close to it. But it sounds like the sides arent that far apart on when these things get done. If you talk to the business round table types, they say thats the most important thing to get the economy growing. By the way, we might be the worlds tallest midget but in the developed world, were everybodys envy at this point. And i think thats the most important thing we can do to help the people who are disadvantage ed disadvantaged and i think you and i agree on that. Different people have different descriptions for doing that. The way id approach is tax reform. Yeah. Maybe it was the piece that said it was a reasonable conclusion that summers because it didnt employ the wealth tax. It didnt go that far to just sock people with were taking 30 of what you got. And it didnt go as high as 70 on marginal rates for individuals. That was the two positive things about im personally more in the Simpson Bowles<\/a> tax approach which is get the rates down then you dont have to have the difference in Capital Gains<\/a> because theyre all relatively low. I was going to go to technology. I was too. You have been somebody who has seen creative talents early on. Can we talk about your investments . Were not going to talk about individual investments, i never do that. Shoot. At least not on the air. You have to keep in mind things like significantly reducing the size and capability of semiconductors which drive what we do. Combined with Massive Software<\/a> advances. As a result of which, these devices that we use are smaller and smaller, cheaper and cheaper, and more capable. Thats happened all of our lives. Every year i could come on here and say theres another iter iteration of that. Its about all the things to be embedded, its all about what you wear its all about semiconductors and processors being attached to smaller the i thinks. Thats really exciting. This mobile internet if you take what they talked about an ad to broad Band Technology<\/a> around the world is the biggest investment trend of our lifetime and will continue for years to come. Thats why im really excited about the world in which we live. I see the pace of acceleration. Let me ask you one other question. You disagree with me on this. Do you worry at all that the transition cost on technology and what it does to unemployment . Whether its this time its different in we are going to set ourselves in a very difficult way because the technology will take it down. Everyone out of work. Of course i worry about that but i think its a problem we can solve. Theres a difference between it its been predicted before. And as i say were in a place where work is going to go less industrial aged where you punch a clock and more that you have projects that you work on and objects like you own that you share where you gather income. The original luddites didnt want a weaving machine. I want all the new technology. Im just anxious about what it does. Im trying to figure what you do about it. We should recall. You take a global perspective on this, the trend in the last decade has been a massive increase in middle class lifestyles around the world. We have a longterm theyre not going up at the speed they were before. But thats a much bigger trend than the technology trend. We had the intel guy on. It was assumed the 2028 well hit the wall. And it read it and it was so there was so much science involved, but we pushed it past 2028. Theres a new material theyre doing it that overcomes whatever the worry was in 2028 that we were worried about. If you invested 1 in this pace 50 years ago roughly when it was youd be worth 4. 5 billion. So you did that. You actually did do that. Ive been fortunate, but not that much. Thanks for telling us by the way. Happy to be here. Thank you for being here. Great to see you. Still to come this hour we have veteran banker bob diamond who will be joining us. Linkedin cofounder reid hoffman as well. Also as part of our coverage, were teaming up with facebook to bring you facetoface with influential leaders and thinkers. I sat down with Richard Branson<\/a> and will. I. Am to cover everything from smartphones to tesla. Catch the full interview on davos. Cnbc. Com. Then check our Facebook Page<\/a>. And later this morning well sit down with Sheryl Sandberg<\/a> and Melinda Gates<\/a>. The lightest or nothing. The smartest or nothing. The quietest or nothing. The sleekest. Sexiest. Baddest. Safest,. Tightest,. Quickest. Harshest. Or nothing. At mercedesbenz, we do things one way or we dont do them at all. Introducing the allnew cclass. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. Welcome back to squawk box. Look at the futures. Were going to get the ecb statement in just a little bit. Well see what that does. But right now dow up higher 39 points. S p 500 looking up as well by 4 points. Headlines for you. Travelers expecting better than expected revenues this morning. Shares trading slightly higher as well. Lets take a closer look at the state of the banking industry. And who better to ask than our next news maker. Bob diamond is the former ceo of barclays. Good to have you on set today. Good to be here. A little later this morning well get more information from mario draghi. Expectations in the market is that were going to see some sort of Bond Buying Program<\/a>. The number ranges up to 500 billion. I think draghi has consistently delivered the message. Hell do whats necessary. But he hasnt had to do it yet. And so the expectations of 50 million a month for a year or two i think in the range of what we should expect. Its interesting in the longer term objective for europe which is really about jobs and economy is going to take more than what governor draghi can do in terms of bond buying. I think a focus on the real structural issues around labor reform, bank reform and Capital Markets<\/a> reform. Because 80 of the lending to corporates in europe are still on the Balance Sheet<\/a>s of the banks. And in the u. S. Its about 20 . And thats a big difference in terms of flexibility. Even if he was to come up with something that said 50 billion a month for the next year or so you wonder what that would do for europes economy particularly when youre looking at interstateest rates. Is it successful . You mentioned there are other things that need to come along. But if this is the only thing we get, what happens . I think one of the things were doing. Between though u. S. Economy and its outperformance in the european economy and its underperformance. I think governor draghi has done a lot. I think from 2011 and 2012 with a longterm repo operation and kind of taking the issues of solvency off the table were very positive but the structural issues i think are critical to get the economy going. People have come on and said draghi has been phenomenal incredible. And then i also read that the euros have waited so long to do this and were almost a case study of how to do it. In terms of shock and awe. Do it quickly. I guess what people are saying is draghi couldnt have done that. So i guess hes steering his way through all these other parties to get it done. But how come hes got this great rep of having it and it may be too late to work. Why does it en work now . First of all, governor draghi deserves a strong reputation. I think there are issues outside of Monetary Policy<\/a>. Because theres a big, deep rich Capital Market<\/a> that has developed in the u. S. That gave more tools to the fed. Here it looks its primarily limited to sovereign bonds. And so there are so many ways where reform of Capital Markets<\/a> would be really really positive. The development of hedge funds, private equity capital, the development of highyield bond markets or securitized mortgages. There are so many ways to get more of the benefits that i think the u. S. Financial markets had postthe crisis. Because they have a deep rich Capital Market<\/a>. Do you worry about a do you think that if the swiss franc gets unhinged if this market doesnt fall apart, do the folks in germany say you know what . Larry fink was saying yesterday. Do you see this all breaking up . I dont see it in the near term breaking up. I dont think thats on the agenda of any of the governments. Im a bit of a broken record for five years. On the importance of reforming the banks and Capital Markets<\/a>. Its the Capital Markets<\/a>. And getting more liquidity, more depth, more substance and how important it is. With the destruction of the euro in 1999 there was such incredible promise for european government market that could compete with the u. S. Treasury market. And i remember almost immediately being part of the team that issued 30 year euro telecoms. And that kind of promise is not delivered as much on the depth of the Capital Markets<\/a>. And ill come back to the same point which is if 80 of the lending to corporates are on the Balance Sheet<\/a> of the banks and an oil crisis led by lower prices come and so some of the companies that have been lent to are weaker credits as a result of that and all of those loans are on the Balance Sheet<\/a> of the banks, then the banks are going to stop lending, take provisions, and its going to have a negative impact on the economy and jobs. You have said that when you look around the financials you see some of the best opportunities youve seen in 20 to 30 years. This is a buying opportunity as far as yourself concerned . I think it will be for investing and nationals. If you look at the last decade in the stock markets, not just since the crisis but in the last decade, the s ps up 60 . Financials are down 20 . Banks are down 30 . And just this year banks are down 15 . Although theres been some reasons. Theyve had regulatory issues. And some for very very good reasons. But starting to invest now where many of the eurozone banks as an example but not just the eurozone, i dont mean to stick on that, but its kind of the subject. So many of the eurozone banks are pulling trade finance from africa and asia because of the need to comply with higher capital ratios. But theyre also focusing on businesses on a domestic market where they have scale and where they have competitive advantage. So they are selling their noncore businesses. And the eurozone banks have announced 1. 4 trillion of noncore businesses for sale. These arent assets. These are businesses. And theyre doing it at a time when the traditional buyer of bank assets for the last 20 or 30 years was the big banks. And the big banks are not buyers now. So the opportunity to buy operating companyings, operating Financial Companies<\/a> has never been better. We want to thank you for your time. We hope to see you again soon. Hope to see you very soon. Coming up in the meantime, the big question of the morning. Will mario draghi do a policy announcement . And well hear straight from the ecb president , a little more in about an hour later. And then another first. Top news maker here. Linkedin cofounder reid hoffman will join us when we return in a moment. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Market<\/a>s and drive forward with broader possibilities. Cme group how the world advances. Coming up its about being seen. Where government officials are trying to make connections here in davos. Its also the business idea of our next guest reid hoffman. Hell join us when squawk box returns from the World Economic<\/a> forum. Where are we . Davos. Davos, switzerland. Welcome back to squawk box where we are live from davos, switzerland. Heres whats in our headlines this morning. A deal in the banking industry. Royal bank of canada bying City National<\/a>. That works out to 93. 80 a share. Thats nearly a 26 premium for City National<\/a> shareholders. Were just an hour away from the labor departments release on initial jobless claims. Thats right. Its thursday. That means jobless claims. They are expected to drop to the 300,000 level from the 317,000 level we saw last week. And google is preparing to sell mobile phones. Our next guest has been a legendary investor in some of silicon valleys biggest ideas. Hes with us today. Reid hoffman, cofounder of linkedin and author of the startup of you. And youre my guru of all things tech. I want to hear about what you think is the next big thing and the impact of technology on the economy. But i want to start with a topic which i talk about and ask everybody about. Which is bitcoin. I constantly ask everyone about it. We had jamie dimon on who said its going nowhere fast. And buffett said hes not thinking of it as a future currency. Yet you have been a big fan. But the price has dropped materially. The least interesting thing is what its current price is. Whether its 200 or 1,000. The interesting thing is about how its a trustless system that preserves trust without any central note and the fact you can do any issuance off there. The platform is the most interesting thing. And so where are we now to the term you think bitcoin is the next big thing which inning are we in . I think were in inning one. And i think the fact that the price is going up and down on speculation is literally not at all a predictor did sh. Are you invested in bitcoin itself . I own bitcoin and im invested in two companies. Zappo is a wallet. If you want to buy bitcoin and hold it there. And then blockstream creates bitcoin into a platform. If you were a viewer and thinking of buying bitcoins would you . As an investment . I like a currency. Well currency investment slightly different. And so the advice i give my friends is dont buy any bitcoin that you wouldnt be comfortable losing. Rather like a seed investment in a technology wait a second. I wouldnt feel comfortable losing any of it. Then dont by bitcoin. I give similar investment in angel investing. If youre going to put money in a startup company, only put in enough money youre comfortable losing. So its like vegas. Its not like youre just rolling the dice on whether you get a six, seven, eight is the outcome. But its the fact its a risky adventure which might end up being does this displace American Express<\/a> or mastercard or visa or paypal or what have you . I think the possibilities are for example, one is it can bank the unbanked in a lot o the markets where the Banking System<\/a> is too expensive. Second thing is you can create machine to machine commerce which could do all kinds of Different Things<\/a> in terms of enabling services. But the simplest one would be is you think of your car becoming a software vehicle. You could automatically handle parking, bridge tolls, all of the rest of it if it had a machine to machine currency. I just mentioned paypal and it inspired me to think of Something Else<\/a> which is carl icahn. Ebay recently decided it was going to split paypal. Carl icahn had wanted to do that. You came out aggressively against carl icahns thought. Then of course nine months later, ebay does it anyway. Who is right . So well, my the thesis i advanced is the way you do these is you back a Management Team<\/a> with a plan. So the thing i was opposing in icahns view was to say, well the Management Team<\/a> should simply split the companies and we have no plans. Its just a financial transaction. I was like, no no. Youre building longterm value. So we have a plan were splitting them. We know how to create more value with that. But doesnt that mean that carl icahn was right the first time . Well he didnt have a Management Team<\/a> with a plan. But the idea was right. I think the question is look. What i said specifically in my piece is you can go either way. When i wrote the first piece, i said you could go either way if you have a Strategic Plan<\/a> of what youre doing. At the time the ceo was saying i have more of a plan together. Now, i think also he had already been thinking about how he could create more value splitting them apart but wanted to do so as part of a strategic action. Different question. Sharing an economy and impact on the real economy which is to say youre involved with airbnb. All of these different jobs are getting split up in different ways. Longterm, better or worse for society . I think much better for society in terms of a question of choice distribution of labor. Now, if you say does this shrink the number of dollars in a system . Thats part of how an economy grows. If less go to this they can go to other things. So it may ultimately reduce the amount expended on staying at overnight hotels. Thats okay. Thats part of what progress is. On the flipside for lei boar its created a freelance economy. Is that a good thing . Given that participation is voluntary, given that for example, the question of do i want to rent a room or want to rent my apartment, i have a choice to do that. That may be something where i can pay my mortgage and gives me additional income that supplements the other things im doing. Those things are very valuable. Andrew wants to know whether machines are going to take over the world and there are jobs not left for people. Id say just news anchors. Thats been done has a Single Person<\/a> said youre right . Everyone says its tom friedman has come on and said that im right. I think. Another journalist. I have one person in my pocket on this. Okay. You dont think so. Disruptive technology has been around for awhile all economic progress comes through technology. Sure there are no buggy manufacturers or horse carriages. And its incredibly disrupter for the buggy owners and their families. But that is progress. Thats what ive read in the past nap we do it as an american institute. We need to manage it for the people affected at the time but there will be success for generations much better off because of it. Exactly. I have a Venture Capital<\/a> question for you. Look at a company like google theyre doing interesting things. Some people think theyre doing too much on rnd. Do you think the model should be if youre a good company like that to let people like you do what you do and pick off and buy them. Or do you think Big Companies<\/a> should be spending big money . Actually google i think is a test case of doing some very good rnd. Android, they bought a Small Company<\/a> but they invested hundreds of millions of dollars in doing it. And android creates an explosion of the smartphone system. Selfdriving cars. Were not making as much progress in it if there wasnt one saying i know how to solve this problem. They spend hundreds of millions of dollars on some of these projects. Does it pay off as a shareholder . Is that what you want . The company being a creative sort of funder or would you prefer the Venture Capital<\/a> dollars to be going into so Venture Capital<\/a> dollars work well if you start at five to ten, get some success. Go to 20 to 30 have some success. Like the first iphone would never have been funded by a Venture Capital<\/a>ist. Its just too much beyond the pail. Then you have projects that have Strategic Synergies<\/a> with the company. Thats a good one to do with the Company Versus<\/a> Something Else<\/a>. That being said you dont want to spend money everywhere. Some of the ones at google make sense. The others seem like theyre high in the sky. This is just a fun project. But on the other hand, part of venture is sometimes it doesnt work. Taking a risk you say we want to be innovators and risk takers. That means sometimes it doesnt work. Thats actually a good thing. Airbnb when does it go public . Dont know. I recently youre an observer on the board. You must have a sense of what the thinking is. There are no discussions. There are no discussions, okay. You look at elon musk an old friend of yours you worked with. Yes. What do you think of tesla . And what do you think of the value of tesla right now . So i think the thing most that think about tesla is how software transforms a car. One of the pieces of advice i give people is drive one to see how software works. So i can walk into my tesla one morning and all of a sudden i have calendar integration. It says thats where youre going and it drives there. That platform on top of a car is whats going to make tesla interesting. I asked in the beginning what inning we were in for bitcoin. What inning are we in in terms of Venture Capital<\/a> . People think were moving more and more towards a bubble of some sort. Sort of where are we . Well its clearly frothy. The valuations are very high. The problem is what does it look like retrospectively . A lot of times you sit out of investment because i think thats too high. And then it actually goes higher. So you try to play intelligently. I think theres still Good Investments<\/a> to be made. Weve made a couple this year. But you have to be more careful with frothy investments. Eighth inning . That presumes theres an end. At worse theres a cycle. Thank you. Thank you. Appreciate it very much. Reid hoffman knows a lot more about technology than i do. You just figured that out . And you. More than all of us. Thats why we invited him on. I didnt know it was this much more. Didnt know what you didnt know. Thank you. You sit around thinking a lot, dont you . I talk to people. You talk to people. Yes. I talked to you and still dont know what you said. I like when you said you want me to get more in the weeds with bitcoins. I was already lost with the platform versus the currency and the goal. And you said do you want me to get complicated. I realized i was going out on a plank. Yeah. Please dont. Okay. Among the headlines this morning, Kinder Morgan<\/a> is entering the bakken shale. Announcing a line founded by Continental Resources<\/a> head. Barclays ceo firing back at an interview here in davos. Says his bank is cooperating with an investigation into socalled dark pools. Its an ongoing case. As you know theres very little i can say about it but our position is always to cooperate with the agencies. We believe we having cooperating. As you know weve robustly responded to the allegations that were made against us. Thats going through the courts and this is the next pace. For more on the interview, go to davos. Cnbc. Com. That is the right address. That is the correct address. All right. Up next breaking news from the European Central<\/a> bank. The decision on Interest Rates<\/a> and instant reaction is next. As we head to break its sunny now. Im squinting. I have my sunglasses but i dont know that can we wear those . No. Youre not allowed to. Heres Jpmorgan Ceo Jamie Dimon<\/a> on how draghi is doing. Squawk box will be right back. I think mario draghi has done a great job and i hope it works. I think they should probably do something. It shouldnt mask the fact that they need structural reform. They really need structural reform in europe. [woman] can it make a dentist appointment when my teeth are ready . [girl] can it tell the doctor how long i have to wear this thing . [man] can it tell the Flight Attendant<\/a> to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Why do we do it . Why do we spend every waking moment, thinking about people . Why are we so committed to keeping you connected . Why combine performance with efficiency . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The xc60 crossover. From volvo. Lease the wellequipped volvo xc60 today. Visit your local volvo showroom for details. I. Welcome back to squawk box. Breaking news. The European Central<\/a> bank leaving Interest Rates<\/a> unchanged. Let me tell you what those are. They are. 03 on the margin lending facility. 05 on the main financing. And negative minus. 2 . Of course this is not the big announcement were waiting ffr. That big announcement is expected to come at 8 30 eastern time. And they are saying it will come to 8 30 according to to our breaking news expert there. Let me tell you what were looking for right now. The keys will be how big it is. Were looking for about 50 billion euro or 58 billion a month to last for about a year. The ecb has said it wants to bring its Balance Sheet<\/a> up by a trillion euros. How long will it last . Supposed to be about a year. Some speculating it could be two years. What is bought . Do they buy all of the sovereign bonds of European Central<\/a> bank members or for example do they leave out nonInvestment Grade<\/a> and how the risk is shared . Does the risk reside at the European Central<\/a> bank . I do want to give a nice comment here from Morgan Stanley<\/a> in their leadup to this thing. Theyre saying the most accurate description of what the markets view is quote, they will act, it will not be enough and the macropicture will not materially change. Not a lot expected here from the market. Although the ecb does have to meet those expectations i believe. Joe, back to you. All right, steve. Stick around. Steph Steve Sedgwick<\/a> joins us here in davos with reaction and our chief International Correspondent<\/a> michelle carusocabrera. It always says t carusocabrera. Like she added another name. Youve got three already. Shes in greece this morning. Youre over here. Can you weve got to get those rates below 40 basis points to stimulate things. I just checked. Heres the thing. Im going to go back two years, two and a half years. July 2012. Mansion house speech in the United Kingdom<\/a> draghi said within our mandate well do whatever it takes. And for two and a half years the europeans had them right down yields. Let me remind everyone. In ireland were 40 yields at the high. Irish paper now trading at 1. 27. The spanish were trading at 7. 6. Theyre at 1. 5 now. The italians two year paper italy it was trading 6. 5 . What are they paying now . Theyre paying 1. 77 . The euro it was around 1. 58. Were now trading around 1. 16 as well. We have had the bang for the buck nap is the point. Weve had had everything since 2012 when draghi said he would do this. Hes relied on credit for two and a half years. Now hes finally doing what he said he would do potentially. Why does he have to do it when it worked already . I guess people will turn around saying whatever it takes. Youve done absolutely nothing. Yes there are two programs in which is that as well. Theyre in their infancy. And thats one caveat in terms of quantitative easing. Lets say as steve was saying we get 600 billion euros a year. That takes us up to what is it 2. 6 trillion euros. And that is still smaller than it was in 2012. I just got one more technical point as well. As steve was saying what are this going to buy, if they do it on how much central bank has put into the European Central<\/a> bank theyll be buying bunds. Theyll be buying o ingbuying. How low does it have to get to stimulate demand . Theres a lot of skepticism as well because the lower rates go it doesnt matter if your economy is fundamentally broken. We spent the last two days here to figure out if greece has done any of the recommended structural reforms. A lot of complaints here about austerity. Yes theyve cut budgets and salaries, but with they done anything to make the economy grow . Came in and went through greek legislation and said do these 300 or 400 things and youll improve your economy. What have they done . Very little of those recommendations. The pharmacy sector here to own a pharmacy you must be a pharmacist. Youre only allowed to own one. Your Profit Margins<\/a> are set by the government. What youre allowed to sell is set by the government. When youre allowed to be open or closed set by the government. They said get rid of all that. They refuse. Now theyre allowed to be open when they wanted. That was the big reform that they did. But the ability to buy advil, tylenol anywhere else but a pharmacy, impossible. Its really there are things in this economy that would be unfathomable to an American Business<\/a> person and they havent fixed them here yet. Michelle why would this far left guy i mean why would he be the one to do all these pro had free market reforms . Youre absolutely right. He said he wants to renegotiate the debt and he wants to raise the minimum wage. He says raising the minimum wage, youre going to get more money in peoples pockets. What you need to do is push down Profit Margins<\/a> in other ways. You need technology to move productivity. I mean i dont think keep in mind, hes thrown out an olive brank branch in the last day. His prescription for making this economy grow many would say its not a prescription for it. Leisman, correct something for me. E with keep saying its an alltime low on the euro. Wasnt it below par for awhile . Yeah. It was 99 98. I was just looking that up. I want to back to what Steve Sedgwick<\/a> was saying. Why do it if rates are so low . And i want to tell you how a central banker might think about this. Theyre not looking strictly speaking at rates. But one of the things theyre really targeting here is inflation and Inflation Expectations<\/a>. They have a 2 mandate. Theyre projected to miss that mandate for many years to come. So they have to act here because thats their mandate. They have to act to infect what we call Inflation Expectations<\/a>. And if they didnt act, the fear would be Inflation Expectations<\/a> would continue to essentially free fall. So theyre targeting low Interest Rates<\/a> in order to help inflation. But the real goal here is to target inflation but they believe that is primarily influenced on what people expect inflation to be. And if they didnt act, you might ask yourself what the world looked like over there. Beck y i . Y becky . All right. Thank you, all. When we come back this morning, a facetoface with sir Richard Branson<\/a> and will. I. Am right here in davos. While they have different day jobs, they are on the same page in one thing. And that is the importance of team. Hear what they have to say after the break. Also at the top of the hour james gorman will be joining us. Well talk ecb with him, financials, and the president s plans to increase taxes on wall street. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions<\/a> and a thousand other things. So you call pwc. The right people to get the extraordinary done. As part of our coverage of the World Economic<\/a> forum, we are teaming up with facebook to bring to facetoface with influential leaders and thinkers. Yesterday we brought Richard Branson<\/a> and will. I. Am together and they had interesting things to say. What do you think so far . Its like a business version of sundance. Wrote in if you were given a chance to turn back time what is it youd do differently . I dont think im change very much. I think both of us have been blessed with the lives weve led. It hasnt always gone according to plan but thats made life that much more interesting when it works out. Id love to fly. Id love to be peter pan. But you cant have everything you want in life. But youre flying. If i was to turn back time i wish i would have been able to take my grandma to the inauguration in 2008. Kelly says richard are you still going up in space and could i tag along with you . Well i want to ask that too. You can go to our Facebook Page<\/a> for more. Up next we have the ceo of Morgan Stanley<\/a>. Plus look at the futures. Well be monitoring all of this as we get close tore the announcement from Mario Draghis<\/a> News Conference<\/a>. The dow up 100 points. Squawk box will be right back. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Market<\/a>s and drive forward with broader possibilities. Cme group how the world advances. Europe front and center. Investors awaiting Mario Draghis<\/a> comments on the ecbs Rate Decision<\/a> as they attempt to beat back deflation and spur the regions economy. We have full coverage just ahead. Leaders of the Biggest Companies<\/a> and World Leaders<\/a> discusses matters close to your money. The ceo of novartis on the future of medicine in the pharma sector. Plus michael dells take on the pc business one year after going private. The final hour of squawk box from davos, switzerland, begins right now. Clouds rolling in and clouds bring wind. Anyway, thats our problem. Not yours. Welcome back to squawk box here on cnbc first in business worldwide. Im joe kernen along with becky quick and Andrew Ross Sorkin<\/a>. Were about 30 minutes away from what could be the biggest News Conference<\/a> of Mario Draghis<\/a> career as president of the ecb. In the last half hour they announced a decision to keep rates the same again. It seems every time we wait for ecb decision. Its out, its out. Unchanged. Promising to announce further measures when draghi speaks we will bring you his comments when they happen. Here are the futures in this country at this hour which have been picking up as the morning went on. Now up 102, triple digits. That has to do with when anyone eases anywhere whether its japan or europe we like it. Because more money. All of our crack addict traders that still want free money, they bid up the futures. Nothings been announced yet. No nothing. So theyre bidding it up on the expectation of what were going to hear at 8 30 eastern. Which to me can only mean disappointment. But maybe not. We will see. Back in the United States<\/a> a number of big corporate stories to tell you about this morning. Royal bank of canada buying City National<\/a> for 98 per share in cash or stock. Its a nearly 26 premium for shareholders. Thap noise in the background a helicopter probably bringing somebody here or there. Also travelers trading slightly higher. And verizon, the company hit by a pension and severance cost revenue slightly light. This week weve heard from financial titans including larry fink, Brian Moynihan<\/a> on the state of Global Market<\/a>s. Joining us now is james gorman, Morgan Stanley<\/a> ceo. Weve been watching the job youve been doing for five years. Things get going and its almost three steps forward, a half step back maybe. This was a tough quarter and it wasnt just Morgan Stanley<\/a>. Describe what all the banks really got hit with. It was trading. Tough trading, low Interest Rates<\/a> . Somebody asked me on the way over here what i thought about the quarter. I said goodish. Which i think is fair. We had first thing, we had a number of unusual things that occurred in the quarter. Some positive some negative. All positive in terms of getting them behind us and further distance from the crisis. Separate from that the trading environment was tough. Back half of december very tough. Came through it okay. Good news is the core businesses that are nontrading did very well in this environment. You know people say Morgan Stanley<\/a>, Goldman Sachs<\/a>. Theres still the perception that just in terms of pure operating results you still have some work to do to get to that level with goldman to get to 10 return on ek with ity. Others say the stock has moved as if youre there. So when youre not there, maybe the stock is ahead of itself. I think you asked me this question last year. Listen, goldmans a great competitor, great company. We run our business based on our business model. We have some strategic choices which are very clear. And we made them over the last several years. Theyve changed our model, changed our profile. And it will take a couple of years to get to our full performance level, but were confident. And obviously the market and how the stock has performed for the last two years, number one in our sector. Let me ask a question ive also asked you before. Should we be comparing Morgan Stanley<\/a> and Goldman Sachs<\/a> given the undertaking you have . Oh sure. Every bank has parts to it. If its the universals that also have the swiss banks with investment banking. We and goldman overlap in many businesses and several we dont. Was Wealth Management<\/a> something youve pointed to thats been a bright spot were the results mixed there as well this time . Thats because of the environment as well . Or were you very pleased . Actually results were terrific. There were three things you really want to look at in Wealth Management<\/a>. One is the total revenues. And we had a record i think in our history. The second was the flows. And we had tremendous flows which is clients bring more money to the franchise. The third of course is pretext margin. That was off because we took the judge relating to the compensation deferrals. So no its very happy with those results. Let me ask you, with the trading revenue itself for the fixed incomes, currencies, and commodities, we talk to people all the time saying i would love to have volatility back. Is it a great thing unless you have them moving in crazy directions when it comes to Interest Rates<\/a> and oil . Yeah. I mean volatility is a good thing in trading business but also you dont want so much volatility that clients arent active. So theres a tension and a balance. Listen, the fiked income markets and commodities were very tough. We had oil the last six months thats dropped 15 of its value. Obviously the markets were tough. But equities are just fine. So we have very strong world leadings leadings equity sales. Were going to hear from mario draghi in about 20 minutes. What do you expect him to do . What do you want him to do . What i want him to do is to show a little leg. Ipg i think its time we move forward with the qe program. Weve seen it in the yiet i believe successfully. Were seeing it in japan. Confronting deflation in europe. Its not the be all and end all, but its a necessary step. And if the rumors are right of what theyre proposing which looks like about 50 billion euro a month, unclear if its open ended or not or shared risk to the sovereigns or not, but if the rumors are right at that kind of level, i think the market will respond well to it. I mean, its obvious the different places the u. S. Is and europe is right . Its glaringly obvious as were trying to figure whether the fed raises rates and these guys are finally just coming to the party. Will in your view is it morgans view that they move in june in the United States<\/a> . Or its not a given . If you look at the u. S. And ive said this for awhile i think the risk of return in the u. S. Is strong relative to any other developed economy in the world. Large economies thats been in maybe 30 or 40 years. The u. S. Is doing terrifically. Problem is we have so much scar tissue from the crisis we just dont like admitting it. If you look at unemployment under 6 . You look at the strength in the dollar. You look at the return of the housing markets. You look at the appreciation 401 k plans, cheap energy. The list goes on and on and on. The one problem is where the minimum wanlges are. And thats starting to be addressed. Im very confident about the u. S. Outlook growing 3 to 4 . Would you raise in june . I would definitely raise in june. Do you think they will . I think they will but what do we know . Its up to the board of governors. I hope they do. Joe, its a sign of strength. Right. Its a sign of confidence. Its recognition the u. S. Is back on track. If the u. S. Is hurting, why not leave it low . Because you run the risk of a bubble. Quick question. Jamie dimon said he felt that banks were under assault by regulators. He walked it back a little bit yesterday. He wasnt as pronounced with that. Did you feel under assault . To be fair to jamie i think i walked it back a lot. Live tv is live tv. Listen. Were not under assault from regulators. Theres obviously been more regulatory change in the last five years than theres been in probably the last 50. And all of us are adjusting our businesses to reflect that. Do you think hes going to have to adjust his business . I cant speak for anybody else. Its tough enough doing my job without worrying about somebody elses job. You were at least under assault by the media and the warrenites. In certain sectors you think hes under assault by the sorkinites. I said warrenite. I dont want to be redundant. In this business you have to have a thick skin. What were all looking for is job growth in this country and were starting to get it. In this business you need to have a thick skin too. Thank you very much. We will see you soon. Coming up the Company Ranks<\/a> as one of the top selling drug makers in the world with sales topping 57 billion. The ceo of novartis to discuss pricing and much more. Then in the next half hour well hear from the ecbs mario draghi. Also michael dell will stop by the desk here in davos as well as scott minerd of guggenheim as squawk box returns. Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Welcome back to squawk box, everybody. We are live in davos, switzerland, at the World Economic<\/a> forum. U. S. Equities have picked up significant significantly. This is in anticipation of what we will likely be hearing from mario draghi in the next 16 1 2 minutes. Right now the s p futures up by 10. 5 points and the nasdaq up by 11. 5. Novartis is one of the worlds leading drug makers and continues to be a leader in vaccines and prescription medicines. The man behind the swissbased companys growth joins us now. Joe jimenez is here. You were minding your own business in the Swiss National<\/a> bank made that move. You must have thought whats that going to do to me. The first thing is it helped in terms of dollars. It did. Expressed in dollars, your stock went up. Yeah. It was quite a surprise. I think the Swiss National<\/a> bank had to make the move. It was generating a pile of euros so they had to delink. The speed with which it happened and the magnitude of the change was pretty disruptive. So were taking a hard look at what it means. The good thing about novartis was that we were very geographically dispersed. We had a cost base all over the world. So were well insulated. You totally restructured what novartis is. The last time you were here we were talking about it. Now you have a year part of the method of your madness is because generics are such an important thing for a Major Pharmaceutical Company<\/a> to get involved. Because its the future of under cost control and Affordable Care<\/a> act and Everything Else<\/a> that we need to do. The whole genesis behind the transformation we made on our portfolio, we announced it in april. The second part of the deal should close in 2015. The whole genesis was to focus on three leading businesses. Our innovative pharmaceutical and generics. Were the only that has both Innovative Pharmaceuticals<\/a> and also low cost generics. So were able to go to Health Systems<\/a> around the world and talk about the fact that were hepping them lower total health care and were able to bring new innovative drugs like our new heart pill. We get around when were over here. Were in demand. People just want to be with us. No but weve had people make the case where we were and its all off the record so we dont mention it. But theres a notion that the pharmaceutical Companies Made<\/a> a deal in terms of medicare. Because medicare the biggest buyer in the world is unable to talk you guys down in prices that somehow the free market is not working and therefore pharmaceutical pricing is out of control, way too high, and one of the biggest thing that adds to the Health Care Costs<\/a> rising too quickly. Ive heard that comment. And that before. But if you go back to what the pharmaceutical industry did when we supported part of the Affordable Care<\/a> act around insuring americans, you know im an american and im running a swiss company. So i see all countries, most developed countries with universal health care. The u. S. Was one of the only countries that does not have universal health care. So we strongly supported that. We did contribute towards it with ihigher medicaid rebates and with fees Affordable Care<\/a> act fees. So we are funding part of the Affordable Care<\/a> act. But when you think about the Health Care Costs<\/a>, particularly in the u. S. We are going to have to lower total Health Care Costs<\/a>. You know, we estimate that about a quarter of all Health Care Spending<\/a> in the u. S. Is wasted because we havent yet really shifted from a transactional approach towards an outcomes based approach. This is the thing. You need patent protection, obviously, because it costs a lot of money to develop drugs. Then theres small markets so you need orphan drugs to help a small group of people. But if at the same time and i understand that. Drugs are expensive to develop. But is it really a good idea that the biggest buyer cant negotiate . Does it make it a free market . Will you see the competition necessary to bring down costs . Obviously the u. S. Is a free pricing market. But medicare is the biggest buyer. And whatever the drug company says you have to pay. There are negotiations that take place. The thing to think about in terms of drug pricing not just drug pricing, but its really total health care cost. We have to shift from a fee for Service System<\/a> towards an outcomes based system where everybody is incented its just too bad youre in the i want to know the distinction between the margin you get on your drugs in the United States<\/a> versus just about everywhere else. How would you break that down . Weve publicly shown or publicly discussed the fact that u. S. Pricing is higher than the rest of the world. How much higher . We havent disclosed that. I dont think anybody wants to go into those details. 20 30 50 higher . No no. Whats wrong is the cost of doing business in the u. S. Is higher. Although you have a higher price for your im talking profit margin. Forgetting about whatever it costs you to market which i recognize could be more expensive, the profit margin of the United States<\/a> versus everywhere else. The profit margin is higher than the rest of the world but not like everybody thinks. Not because it is not its because the cost structure in the u. S. The cost of doing business is to high in the u. S. For your industry that the u. S. Is the only place innovating anymore because when you cap prices everywhere else they dont innovate. And were the only ones still innovating in terms of new drugs. If youre just innovating to get extended release versions to extend patent protection or thats why at novartis were taking both sides. Were saying were going to do new drugs. This Heart Failure<\/a> drug is going to lower well we have proven clinically that we can reduce hospitalization by 20 . Right now Heart Failure<\/a> costs 100 billion a year. Most of that is hospitalization. Were working on the generic side as well. We have to offer low cost but high quality generics. Andrews young. You dont take any pills. Vitamins. Yeah. So you want to cap all the prices. A few weeks ago i took zpack. Generic. Youre not going to be young forever. Youre not. Joe, thank you for joining us. Great to see you. Thank you. When we come back the market event of the morning, week, maybe even the year. Mario draghi promising to announce new measures. Set to begin within minutes. Squawk box will be right back. Take a deeeeep breath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhhahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. See why speed matters, at aflac. Com. So whats going on today . News alert message email calendar update most of us admit to being overwhelmed by information at work. Thats why ibm created verse. It uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. It continuously learns how you work. And helps you prioritize the people and projects you need to focus on. Theres a new way to work and its made with ibm. When we come back this morning, Mario Draghis<\/a> News Conference<\/a> is set to begin. Were monitoring it. Well bring you updates as it happens. Plus michael dell on the future of the pc market life as a private company, and much more. As we head to break look at how the european markets are trading. Slightly higher. Opinions. Theres no shortage in this world. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. So, how do you feel about cash back . I would not say im into it. But lets see where this goes. [ buzzer ] do you like to travel . Im all about free travel, babe. Thats what i do. [ buzzer ] balance transfers you up for that . Well unh. Too soon . [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Search, compare, and apply. [ ice rattles ] from the mumble beginnings of a dorm room at the university of texas, michael dell built an empire that became a household name. Looking to innovate the industry once again and here to talk about this is michael dell. He is the chairman and ceo of dell. Hes also on the Foundation Board<\/a> of the economic forum. Thanks for coming. Thank you for having me. Lets talk about this new revolution. Dell is private. You have taken pcs and stealing market share left and right. So i think your market share growth was better than the top two competitors you go against. I just saw stuff youre planning on rolling out that you were showing off in vegas and i saw it described as sexy, thin, sensuous sensuous. Thats a whole new dell. Weve had eight quarters in a row now gaining share in pcs. We did gain more share than the other top two competitors. Both worldwide and importantly in the United States<\/a> the largest Country Market<\/a> in the world. And the rest of our business is doing well also. Last quarter our Software Business<\/a> grew more than 20 . In services were helping our customers with Digital Transformation<\/a> and moving through the cloud. And in the data center with servers, infrastructure virtualization, cloud containers. Were seeing rapid growth this quarter in the teens. So being a private company is great. Were able to focus on the more medium and longterm and were focused on our customers. All of our energy is focused on our customers and longterm success. Do you think the success youve had has been entirely because youve been a privately held company and you dont have to deal with quarterly issues quarterly numbers, quarterly calls . I wouldnt say entirely but certainly its freed up perhaps 20 of my time. Its created incredible alignment across the company in terms of what were trying to achieve. And weve said longer range or aspirational goals. Weve had some nice upgrades from the rating agencies and strong cash flows. So business is healthy. Are there specific things you would point to in terms of investments in rnd that you think would have been unpalate unpalatable to the investor . When you look back at what was going on when dell was a public company, there was a bit of a debate about should dell go off and acquire all these new customers . Should dell invest in the rnd projects . And, you know we know who won the debate. Were still investing. And its working and thank you very much. So were doing it at a faster pace. And, you know particularly in this whole transformation thats going on to whats talked about here in davos is the Digital Transformation<\/a>. How do i enable my company with these new tools . Cyber is another area. We have our secure works unit. Its helping our customers deal with the cyber threats. We see 80 billion events per day. Were out there in the front lines protecting our customers from the challenges. Michael, i guess, we watch this happen and the landscape is like littered with digital equipments. And there was a time we saw the macs and pads and there was a perception that its over for certain companies. And five years from now, will there be a new dell laptop that is somehow so much better than what we have today that it will take over the marketplace and still be something that can have a Viable Company<\/a> thats three times the size of your company now . Will that continue . I dont understand. I dont understand how the marketplace moves. Let me help you out with math here. There are about 1. 8 billion pcs in the world. And about 35 of them are more than four years old. And what happens is every so often we come out with a new one like the ones that becky just described that are interesting enough compelling enough sensuous enough that the customer says ive got to have that one. Its much better than the one i had four five six, seven years ago. So were seeing waves of replacement. Microsoft is now talking about windows 10. We think that will be a catalyst. I think it will continue. Also the form of the device is changing. We have tablets. We have convertible machines. We have virtual machines. We have ma shoonschines with immersive displays. Certainly if you look at productivity, you have 3. 5 billion people just in china, india india, africa who dont have the devices. Were optimistic. And as you said in the beginning, even in a market thats maybe not growing so much, even shrinking a bit, we think we can keep gaining shares. So wed like to add four more to the eight quarters in a row, make it twelve in a row of gaining shares. Do you consider your fortunes tied to microsoft and windows . Theyre certainly a very important partner. And i would say one of our most if not our most important partner. And, you know i think windows certainly in the Corporate Market<\/a> is doing quite well. Were actually gaining share in both corporate and consumer. And were quite optimistic about windows 10. Have you talked to carl icahn lately . No. Have you had any good like names for him that you have lately that you can tell us here . Our matter with him ive said match i won game over. Okay. Thats good. I like that. I have a different question for you. Now that we can also call you an entrepreneur but a turnaround artist of your own company, theres another company we talk a lot about the past couple days that may be in need of a turnaround which is ibm. Do you think ibm is fixable. They were in the hardware business. Theyre not so much in the hardware business anymore. And, you know we are growing where theyre exiting. And, you know, i think we all have to Pay Attention<\/a> to these lessons of how do companies change and evolve. Right now its kind of stalled. I guess the other thing i was thinking, you know i was always a pc windows person but i never really knew what i was doing. So then i did get some mac stuff and it was so intuitive and so easy that ive got this perception that mac has won in terms of the operating system. Or something. Do you know what their share is of the pc market . Nothing. 7 or something. So you can theyre not going to stay number one forever even in my mind right . Well, youve got, you know the other 90 of the market so thats something to consider. This is my own problem is what youre saying. Not necessarily your problem. Its a great big market and certainly its not just those devices. You have the end Device Market<\/a> is changing. You have smartphones, tablets, and the internet of things where you have embedded computing and were getting more involved in that making these small devices and then capturing all this data. Helping our customers internet the data and bring insights from it. So the Device Market<\/a> is you know moving into as the cost indicator comes down you can embed them in anything and you go from 10 billion and up. Will there be a time im using somebody elses tablet . You personally . I cant speak for that. Probably not. Because its got to be pretty simple. Our tablet market is growing. Just to give you and thats an android tablet market. And windows. The difference between a tablet and a notebook is a keyboard. So these are derivative products. You also see a popular product right now are the two in one transformers. Not every person in the world can afford a smartphone a notebook computer and a tablet. So for many tablet and the notebook computer are coming together as one. I broke my phone. Do you have a phone for me yet . No. Are you going to get in into that business . Could we take a break . Were going to take a break. Were going to keep him around. I wouldnt do this if i didnt get paid i dont think. Just to learn things. Every time new smartphones are minted theres a new server. Michael, thank you so much. Thank you. Thank you for going slow with me. Up next Mario Draghis<\/a> News Conference<\/a> is about to begin. Well get his reaction from goougen gooug guggenheims chief Investment Officer<\/a> scott minerd. Hes coming up next. Welcome back to squawk box. Were going to send you right out to the mario draghi press conference. He just welcomed in a new member of the European Central<\/a> bank. Here is mario draghi. Bank governors take turns holding Voting Rights<\/a> on council. The details of this rotation system are available on the ecbs website. We will now report on the outcome of todays meeting of the governing council which was also attended by the Commission Vice<\/a> president. Based on our regular economic and Monetary Analysis<\/a> we conducted a total reassessment of the outlook for price developments and of the monetary stimulus achieved. As a result the governs council took the following decisions. First, it decided to launch an expanded Asset Purchase Program<\/a> encompassing the existing purchase programs for backed securities and bonds. Under this expanded program, the combined monthly purchases of public and private sector securities will amount to 60 billion euros. They are intended to be carried out until end september 2016. And will in any case be conducted until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below but close to 2 over the median term. In march 2015 the euro system will start to purchase euro denominated Investment Grade<\/a> securities issued by agencies and european institutions in the Securities Market<\/a> in the secondary market. The purchases of securities will be based on the euro System National<\/a> Central Banks<\/a> shares in the ecbs capital key. Some additional Eligibility Criteria<\/a> will be applied in the case of countries under an eu imf adjustment program. Second, the governing council decided to change the pricing of the six remaining targeted longer term refinancing operations operations. Accordingly, the Interest Rate<\/a> applicable to future operations will be equal to the rate on the euro system prevailing at the time when each is conducted. Thereby removing the ten basis point spread over the mro rate that applied to the first two tel teltros. Third, in line with our fall guidance, we decided to keep the key ecb Interest Rates<\/a> unchanged. As regards the additional asset purchases, the governing council regains control over all features of the program and ecb will coordinate the purchases. Thereby the singleness of the Monetary Policy<\/a>. The euro system will make use of the centralized implementation to mobilize its resources. With regard to the sharing of hypothetical losses the governing council decided that purchases of securities of european institutions which will be 12 of the additional asset purchases and which will be purchased by the ncbs will be subject to lost sharing. The rest of the ncbs additional asset purchases will not be subject to lost sharing. The ecb will hold 8 of the additional asset purchases. This implies that 20 of the additional asset purchases will be subject to a regime of risk sharing. Separate press releases with more detailed information on the expanded Asset Purchase Program<\/a> and the pricing of the teltros will be published this afternoon at 3 30 p. M. Todays Monetary Policy<\/a> decision on additional asset purchases okay. There you have it. The momentous moment there. European Central Bank Mario Draghi<\/a> i think exceeding Market Expectations<\/a> saying its a 60 billion euro program. It runs through september 2016 but he did leave it open ended saying that it will be in place until basically they get back to their 2 inflation target or feel theyre on their way back. To the question of risk sharing, a portion of the purchases will be done risk will be shared on a portion of those purchases. And finally he did say that for those companies that are in an eu imf adjustment there will be some additional criteria. Well wait to see how the market reacts to this guys. But a little more than had been expected. But i think the key here is the extent to which this is open ended and not really a finite program. Andrew andrew . Thank you, steve. The market moving on that. Youre seeing the dow up. Gone up to 150, come down just a bit. I want to get more reaction and insight into this big decision coming out of the ecb and where this might leave rates in 2015. With us is scott minerd. Hes at guggenheim. Steve sedgwick also joining us as well. Help us with one piece of this. 60 billion, but its inclusive of the previous program. Exactly. So originally we thought 50 billion. What is the real number . We dont know yet. Theyve only got the abs in its infancy. It hasnt revved up to full capacity, so to speak. That is an interesting point. We need to see the Technical Details<\/a>. If it doesnt come out in the press conference we reckon it will be out around 9 30 eastern time. Thats when they put out the details. Couple of other significant things in there as well. Starts march 2015. You saw michelle talking weve got this key election this weekend. And is cypress gets in their gdp is enormous. 240 billion euros of that is at the is with the ecb, basically. The problem there is is the greek paper going to be part of this . And the loss sharing as well. We talked about 20 risk sharing. 80 wont be. The germans did not want any risk sharing at all on this purchasing as well. So im just wondering when we see the Technical Details<\/a> if the germans got what they wanted. Heres my question for scott. You wrote recently any announcement especially if its done in january, were in january, is likely to limit qe to a size smaller than will ultimately be necessary. Was today enough . Well i mean the way dr. Draghi described the program, you could argue both sides. First off, i dont think another trillion dollars in purchases is enough to achieve what ethe ecb is trying to do. But he was careful in his wording to say the program is going to go through 2016 but also, you know based on whether were getting to our 2 target. So i think there was a lot of ambiguity. But the thing i find most interesting is the fact that the bond market both in the u. S. And europe have sold off on this news which is telling us that the market is interpreting this as working and being stimlative and were seeing it in both bonds. We spent a lot more and didnt get the 2 inflation, didnt we . Thats right. Thats why it almost sounds like qe infinity. They might be trying to do this for three years before you get to 2 as dead as it is there. Ill get back to the point i made an hour ago. Its had a massive decline. Its selling off on the back of this statement as well. So the open ended nape of eded nature of this, whether theyre going to take it to 3 trillion euros, theyre going further than that. It goes to september 2016 but potentially unended open ended. I think thats the key feature as well. They will throw as much money at this as well. The euro will continue to fall potentially. Could japan ever engender 2 inflation . And do they really think they can do it or do they just want to prevent deflation . Heres the thing. People have been saying to me the transition is broken in europe. These have been made for capital not to put the economy. Thats been a demand rather. So there is a demand drought, the transition mechanism necessarily working. So it wont create growth. It wont create inflation, but it will send the euro lower. Its interesting kwb joe, what you said. Because i agree with your insight and take on what you said. The transmission mechanism for qe in the United States<\/a> was a lot stronger than the transmission mechanism in europe. And i think its ultimately going to take a lot more than what we did in the United States<\/a> to get this thing going. Do you think the United States<\/a> really is at 2 inflation right now . Maybe we are. I dont know. With oil, its a big wild card all of a sudden too. I think were not going to know that until the oil shocks out of the way. That means were not going to get a clear perspective on this until the second half of this year. Scott, you said you think it will take a lot more. Do you think that is leeway that mario draghi has when hes dealing with the germans . Its interesting because i think we put a deadline of september 2016 on the program, but then said but we may go longer. So that was to germans. Exactly. To keep the market at bay, if possible . Exactly. I i find that dr. Draghi to be politically astute and he will probably have to do a lot of maneuvering, if he really wants to take this concept. If you held government paper, ridiculously low yields which have come from 8 to 2 to 1. 52 what do you want to do with money . You dont want to put it minus 2 . Asset managers have said theyre not going to put that back into the economy. Theyre buy big Blue Chip Companies<\/a> forced into high yielding equities as well how does that boost transmission mechanism . How does that get growth in inflation. In the United States<\/a> transmission mechanism dr. Draghi relied upon was the wealth effect. In europe because fewer individuals own stock, i dont know that youre going to get the same bang for europe. Weve got to leave the conversation there. Scott and steve, thank you. Next well have jim cramer from the New York Stock Exchange<\/a> get his thoughts about all of this. Squawk box live from davos, switzerland. Well be right back. Startupny. Its working for new york state. Already 55 companies are investing over 98 Million Dollars<\/a> and creating over 2100 jobs. From long island to all across upstate new york, more businesses are coming to new york. They are paying no property taxes no Corporate Tax<\/a>es no sales taxes. And with over 300 locations, and 3. 7 million square feet available, theres a place thats right for your business. See if startupny can work for you. Go to startup. Ny. Gov. Lets get down to the New York Stock Exchange<\/a>. Jim cramer joins us. Jim, liesman, no time liesman has something he wants to say. Quick 30second, your take on the 60 billion, whether they ever get to 2 inflation. This is more than i could hope more than anyone could hope for. If this isnt enough in some peoples eyes forget it youre going to be disappointed. The guys giving it all shes got. Really doesnt sound like germanys objecting to this. I like. I like the fact that our Interest Rates<\/a> went up instantly. This is this is the ultimate. This is as big as they can give you. I kind of like it jim. Well go to steve i like it when we dont have to do it. Remember when japan did it we got a couple hundred points on the dow. Now europes doing it. Our markets go up. Its like free. This is malcolm x, by any means necessary. If futures trade down its because no one can ever be satisfied. A lot of good stuff here. Okay. Great. Thanks, see you in a couple of minutes. Well go back to liesman later. Back to steve liesman. Liesman now. Steve right now. Mr. Liesman. Andrew how are you . What are you thinking. The big question is how much the market expected. Take a look at euro. The euro did in fact weaken not to its lowest levels ever obviously but went from and 16 down to 115, bounce off the bottom, you can see that there. You saw u. S. Ten year yield dropped a bit on it u. S. Stocks strengthened markedly and fell off. Wonder what it had to do with remember 60 billion euro includes stuff we already knew about. We dont know what that total was before, the abs and other things. You may want to quiz steve on that whether or not its 60 billion of new money, some portion of this money was already discounted by the market. So unclear what the market considers to be new money here. And a lot of ups and downs in marks were covering all day. Andrew . All right. Thank you for that steve. Other steve saying well be able to learn more about those numbers when 115 on the euro. Here we are in the one country not linked to the euro. One place not linked to the stupid euro. Coming up highlights from another very big packed day of davos newsmakers here on squawk box. Back in a moment. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions<\/a> and a thousand other things. So you call pwc. The right people to get the extraordinary done. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Market<\/a>s and drive forward with broader possibilities. Cme group how the world advances. Push your enterprise and you can move the world. But to get from the old way to the new youll need the right it infrastructure. From a partner who knows how to make your enterprise more agile, borderless and secure. Hp helps business move on all the possibilities of today. And stay ready for everything that is still to come. What we know is is from commercial diplomacy, can come some very good things and change. I dont think this is about overnight change. This is about first steps. Fuel is usually a great traffic drive somewhere we do everything we can to deliver the great prices on fuel and goods and Everything Else<\/a>. Its great for us now. U. S. Is doing terrifically. We have so much scar tissue from the crisis we dont like admitting. U. S. Outlook growing 3 to 4 hrs. Would you raise . I would raise. Great lineup today. Guess what . We have another great lineup for you tomorrow. A lot of fun here. Make sure you join us tomorrow. Right now, its time for squawk on the street. Good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla<\/a> with Jim Cramer David Faber<\/a> at the New York Stock Exchange<\/a>. 60 billion euros a month, how mu the ecb will purchase in assets beginning in march, nearly 2 1 2 years after mario draghi said hed do whatever it takes to stop deflation. More than the markets expected and futures are higher. Oil stable. Tenyear yields above 1. 9. Euro has come down a bit. Road map begin is with beginning of qe. Markets moving on draghis news","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia601605.us.archive.org\/10\/items\/CNBC_20150122_110000_Squawk_Box\/CNBC_20150122_110000_Squawk_Box.thumbs\/CNBC_20150122_110000_Squawk_Box_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240621T12:35:10+00:00"}