Finance committee in about an hour. Well bring it to you live. Plus netflix boom ten years after launching its u. S. Streaming service. Netflix crushes earnings expectations. Not just its largest quarterly subscriber gain in history. And ecb leaving rates unchanged. Nasdaq futures pointing to a mostly flat open but dow on pace to drop for a fifth session in a row. First up, more trump cabinet picks heading to the hill for more confirmation hearings including Steven Mnuchin, president elects choice for secretary treasury to appear before Senate Finance in about an hour. Expected to be grilled on his role overseeing foreclosures while running one west which was indymac, also expected to be asked whether he agrees with weaker dollar policy, a lot to get to today. Look, i was involved with in indy mac, which he bought, people are willing to leave their homes before they leave their cars and it was the most reckless there was and they reamed me on it. And this guy went and bought indy mac and were doing revisionist history. It was indeed the worst bank in the country, i think. You can argue maybe there were some smaller ones, but this guy i think the narrative is going to turn out to be better than people realize. I think people who want to try to take him down people in the wall street journal today about what he did with indy mac, but i was very close with that situation. Mnuchin was the savior, not the enemy. We could write a new chapter, but it would be wrong. Politico has some of his prepared remarks. In the press its been said i ran a foreclosure machine. This is not true. On the contrary i was committed to Loan Modifications intended to stop foreclosures, i ran a loan modification machine. Look, so did wells fargo, if you go look and see what they did. Golden west. Hard to modify where theres 100 to loan value. Which is what they were doing at indy. They were reckless, horrible. They probably still come after me. They never quit. It is interesting how were revisiting the crisis in a lot of ways. We will this morning in that testimony and those hearings, but also moodies agrees, final settlements in terms of the mortgage fraud or Mortgage Securities fraud that was alleged and been more or less admitted to by so many of the firms that did it that we reported on in its fullness of course back in 08 and 09. When it comes to mnuchin this morning i think on the wall street front people are going to be listening for any tidbits they can get in terms of the outlines of tax reform, what the administration is going to back or not back. The only words weve heard from mnuchin were on our air and theyve been parched so many times where he talked about high end earners not necessarily having as much of a tax break perhaps as some had thought, this is individual, and also potential privatization of fannie and freddie that helped to send those shares up. Wall street is looking for anything they can get on tax reform. Yesterday paul ryan was in town. He talked about the border, but it was a wall. Made no mention of tax reform. I got reports from a bunch of wall street guys who were there hoping thered be something. So theyll be listening closely today to mnuchin again to see are we going to hear anything that gives us a better sense as to where things are going. Whos the point person going to be from the administration when it comes to negotiating all of that . This is the most important of the hearings. I think its more important than tillerson. Tillerson in the end acquitted himself as a way saying listen no one has made as many Foreign Policy deals as i have. Mnuchin theres a lot of bad press. Theres a lot of belief this guy really gamed things. I have to tell you if he gamed things, what did j. P. Morgan do . If he gamed things, what did wells do . This is what they did. This is when they got all their market share. Right. He wasnt leading Financial Institution that was knowingly packaging securities and saying they were one thing when they were another. Right. He was potentially foreclosing as a result of the fact that they were one of the larger servers out there. You have to do. Look, no one knew i think people also forget until that era we did not have mass foreclosures on homes. They went back to the 30s and did the stress test and the stress test turned out all wrong and that portfolio was uniquely 9 , 10 . Foreclosures were happening so quickly by the week. So i dont regard him as being a goad about that. What i think they you know, he flipped it to c. I. T. In the Previous Administration i think we would have said he made too much money. There would have been kind of this rap. I think the republicans are okay with someone making a lot of money this way, but i think we are going to have to find out what is the policy. Because we dont know the policy. No, we dont. We have to figure who is going to negotiate these things. Right. Mnuchin is not a tweeter. No, hes not. Although he did reportedly get some blowback for appearing on squawk. Yes, he did. When that nomination was made public as david said. Heres what he said on squawk on november 30th of last year. I think we can absolutely get to sustain 3 to 4 gdp. And that is absolutely critical for the country. Were going to cut corporate taxes which will bring huge amounts of jobs back to the United States. What do you think you can get to on that . Were going to get to 15 and bring a lot of cash back into the u. S. I mean nobodys talking about 15 . No. Except in that interview. Yes. That was about it. And then the tax neutral for the wealthy. Yeah. A lot of people thought a lot of wealthy people said, hey, this guy at least gives you a big tax cut. I know. Where things are right now in terms of at least talk about the border tax adjustment and whether we have it or not, if you dont get it or get it at a much smaller amount, youre going to have to make it up on the revenue side. People are more talking now about 25 . Sure. Which would not be that competitive. No. You got to get to 20 if youre really going to be serious about competing with the rest of the world. How about repatriation . What are you hearing in terms of same. That i havent heard much about. My take is when i say most important versus tillerson, im not saying in terms of stature of president elect, im saying for stocks this could impact stocks. Understood. Because earlier you were using tillerson as a proxy for gop leadership trump relations. Right. Tillerson i think acquitted himself very well. And i think people were a little surprised the fire power of that man, the statesmanship. I think with mnuchin theyre going to be saying, wait a second, how about dividend taxation. How about long term cap . Right. Deductibility of interest, theres so so many things were going to be dealing with. Starts off 11. 3 and yeah. Thats 1. 23 million which is really good. Are they on fire or they getting back to the 1. 5 they should be . But if he says, listen, we dont have the mortgage deduction, youre buying housing stocks off toll brothers, sold, sold, sold. How about this one if youre from new york or california, you want to ask about the deductibility of state and local incomes taxes . Are you going to include that or not . That would crush new york state and california. And me. And you, well, yeah, youd leave. Id go to florida like tapper. Yeah. I love tapper, i love everybody. The president elect trump is a new yorker. Mnuchin certainly was a new yorker. Hes from california, but they dont they didnt get a lot of voters in those states. But theyre entrenched interests that have fought all these things. Thats another one we havent mentioned, deductibility state and local taxes you know, were working on a mandate. And weve been on mandates. Yes. Weve heard this. Lets turn to netflix up sharply in the premarket. Poised to open record high again. Company beats expectations as more than 7 million subs in the q4 including 5. 1 outside the u. S. This is Reed Hastings on last nights earnings call. International expansion which has been remarkably steady, again, if you dont look at it by the quarter but by the year what we see in latin america is steady growth, europe as a whole has been really picking up on that tune for us and in asia were just getting started. As he went onto say were going to lather, rinse, repeat again and again. International even going to contribute to operating in q1. This was a joyous note to shareholders. And then a fabulous arc of an interview that he does with the q and a. I urge anyone who owns netflix and owns it because they think its terrific, read his note. Hes very entertaining guy. Hes brilliant. Hes like if you like breaking bad and you like scar face kwtsz, you will love narcos. Luke cage, if you havent watched, i got to question your judgment, pena is back, pena being many of our heroes in narcos. He will be narcos 3. He says people like subtitles, people are willing to watch foreign movies, interchangeable, this was the most exciting set of stats ive seen in maybe a couple years. From them. Oh, my its the best quarter ever for them in subs. Everyone in the countrys going to have netflix. By the way on amazon because man in high castle is so good, loves it, more the merrier. Whatever happened to cash burn, market saturation . Ever heard of amazon . Apple should have bought it. They did have negative 639 million in free cash. Nitpicker. Thats you. You find things wrong no matter what. Im just saying Fourth Quarter tax flow negative have you seen Stranger Things . I have. Actually, i did watch that. A little too scary. It made no sense. Still made no sense. You probably think the valuation of netflix makes no sense, but ill tell you Stranger Things did very well. So well. Couple analysts actually stepped out in front of the print, namely jpm and deutsche with upgrades, although today fun any wedbush keeps a sell and targets 68 from 60. Yeah, see, now that guy right now i mean, i dont want to point cast dispersions on that fella, but thats a tough main sell there. Im looking at Deutsche Bank from october where they initiated sell with a 90 price target. I want to talk about that tonight on the show. Give me that. I kept that in the file. No, this is the file. I cant part with this. Can you give it to me at 9 59 . Yeah, yeah, theyre saying look out in ten years or eight years and see what this looks like and discount back and only have a 7 return annually if you value it at the same level as time warner whatever they were doing was wrong. He obviously has never heard of luke cage. No, i hadnt either until you mentioned it. Well, let me tell you carl lucas, it doesnt matter, that is some show. When i say these things, im not being facetious. I had Reed Hastings on in a rare interview where he said, jim, its not rocket science. Did you like breaking bad . Yes. Did you like scar face . Absolutely. Oh, my god, narcos. Hes a machine learner. Hes a machine. Hes an algorithm posing as a man. Thats what he is. I dont believe that. Yes, he is. Hes got a lot of humanity. Hes a regular person who happens to be a superhero. Not unlike Jessica Jones, i also love jeff bewkes never heard of, Jessica Jones is an alcoholic superhero. When do you watch all this stuff . That was my question, carl. When do you see all this stuff . During the day . I went to bed at 11 30 last night, thanks to murph, had a big birthday party. Im half as busy as you are and cant watch half the stuff. I cant sleep. When i cant sleep, you know what i watch, netflix. When you cant sleep netflix is your best friend. Hes like pena. Even looks like pena. I dont know who that is. This morning Pacific Crest tries to argue theres a fly wheel effect now in place in which new entrants and other Traditional Media Companies have an even harder time of breaking into what netflix has tapped into. You agree . That sure is what reeds saying. Reeds talking about revolution of internet tv. That fella may have a view, but im going with reed. We dont talk about reed enough. This guy figured it out. Look, i got behind netflix because my kids went to college. And i said, all right, send me the cable bill and they were like, dad, cable bill . Were on netflix. I said, but no dad, your egos that big, aye got to watch you, dad, im never watching you. And theyve kept their promise. When we come back what Morgan Stanleys james gorman said this morning about the economy as we go into the trump era. Well check in with sara eisen live at the World Economic forum in davos. Another look at the premarket. Dow and s p on track now for three out of four weeks down. But the nasdaq is up nine of eleven. More squawk on the street in a minute. News making interviews continuing in davos, switzerland. Lets get back to sara at the World Economic forum. Good morning, sara. Good stuff today. Good morning, carl. Good to see you. All the top anchors are here in davos, and this year theyre coming from a very different position as you know fresh off of Solid Earnings reports, double digit gains in their stock since the election and rising interest rates, the ceo optimism is palpable. We talked this morning to Morgan Stanleys james gorman. Heres what he said about the economy. I think its unlikely. I mean 4 would be a massive move. This economys a 17, 18 trillion economy. China which is the second largest economy in the world is a 10 trillion economy and probably growing at 6 . And obviously that percent increase is shrinking. So 4 is unlikely. But if were at solid 3 growth, i think thats a really good outlook for the u. S. And that was actually a little tempered compared to jamie dimon of j. P. Morgan who told us yesterday that 3 to 4 growth is possible with the right policies. Gorman doesnt see the risks being priced into the market accurately including the rise of populism which everyone is talking about here and geopolitical uncertainties. We talked deal making with Goldman SachsDavid Solomon newly named he says confidence is returning to the board rooms but he also says theres some big uncertainties when it comes to deals like tax reform and the Regulatory Environment. Weve had a tougher Regulatory Environment with respect to deals. If you listen to the tone and rhetoric right now, you might expect that theres going to be a little bit of easing in terms of that, but well have to wait and watch and see. A little bit of easing, specifically in reference to a question on a friendlier antitrust environment when it comes to deal making than the Obama Administration. And top anchors will be meeting here today in davos with the british prime minister, theresa may, who arrived and spoke this morning. These bankers are trying to figure out plans for a postbrexit Financial System in london. Gorman telling us hundreds of jobs could possibly be moving from london. Actually, that was better than the thousands that some had reported. And in the next hour, carl, ill be back with you with a conversation with michael dell to talk about big tech in the trump era. For now ill send it back to you. All right. Good stuff all week, sara. Thank you so much. It sure is. Ive got to tell you, i felt that both james and solomon were muted. And i think thats what happened initially there was this burst of on friday when we had citi, bank of america im sorry, bank of america, wells and j. P. Morgan, they were very e fusive and its almost like everyones kind of walked it back since then. A lot of people felt gorman did not talk positively enough from morgan stanley. I think thats nonsense. I think they all just got a bit more, wait a second, the stocks, theyve had a big run, Goldman Sachs dont forget the partner window opens to sell, so i really do not like the idea that you should take your cue from the comments. They have been less i think when we get a new president the last thing they want to do is say, yeah, man, were going to make a fortune on dereg. Because it doesnt look good. Theyre both statesmen, that stock is a great buy if it can come back a little bit. So youre not frustrated at this narrow range weve been in since mid december despite the better Bank Earnings . I see rails, banks and airlines all have had this phenomenal move, okay, away from the industrials. And theyre all consolidating. Now, look what happened with the rails. You get one guy saying were going to cover the rails obviously, but a little catalyst going and then, boom, i just think the banks they need to see something dereg, they need to see something, a rate hike, but boy the money they make on a rate hike. Look what theyre paying you in your checking account. Im getting 0. 008 on money. Jamie is getting a lot of money from me. Jamie dimon, listen to me, okay, youre making a lot of money off me. Are we going to hear from our buddy . Joe . Usually do. Yeah, usually i get an email saying, no, were not making a lot of money and its our time. Theyre very theyre on it. They do. Even from davos. Well get yellen again tonight at 8 00 p. M. Raise rate, raise rates. Well count down to the opening bell, take another look at the premarket. Squawk on the street back in just a moment. Elel 2s ineveron. It is time for a mad dash on this thursday as we head you toward the opening bell, which is about six minutes away. The rails once again may be a place for some activism, you want to talk csx. No, i want to talk sanity. Because im not sure. I need a reality check. A soso quarter, last night Hunter Harrison retired from cp. Hes not that young. Did pass up 118 million because of separation agreement. I know. 72 years old. Right. What does he want to do . Apparently he wants to team up with started a fund whos raised some money may now be going after csx, which is up dramatically after being down yesterday because numbers were not that good. They were not that good in particular because coal they lost the contract. Union pacific by the way is much better coal. Right. So whats up . Csx, Norfolk Southern, Union Pacific. I