Transcripts For CNBC Squawk Box 20171023

Another one. The s p 500 had its first per week in nearly 20 years. A per week is when you close with a record high every day all five days. Thats the first time its done that since march of 1998 been a big year for the dow, too. It had a per week last year. Its not the first time its done that this year. Both the s p 500 and dow are coming off of executive consecutive weekly gains hat tip because i didnt figure out these numbers, he did. S p futures up by another 3. 5. Nasdaq up by almost 14 overnight in asia, heres another place where weve seen record after record. Nikkei once again closing at another record high. Up another 1. 1 . Gain of almost 240 points to 21,696 this is the highest level theyve seen in 20 years hang seng down. 6 percent and shanghai up by. 1 of a percent early trading in europe, most of the markets are trading higher dax up by. 6 cac is up a little bit higher. Ftse up a little bit and italy up a little bit. Crude oil prices and you will see that at least this morning things are well, theyre relatively flat. Up by 1 brent be is down by 17 cents look at the ten year . Thats like murphys law the one i wanted to see. Did not come up no. Thats always the way it is. Almost 240 picking up yields again. We havent seen it. 2. 395. When we get above 240 its usually short lived. You can see that one of these days. One of these days im going to cut you into little pieces. What . Freud. Hannibal lecter. One of these days thats going to get above 250, 260. One of these days. Unless you listen to somebody like mark grant who thinks we could be facing lower yields yet again. Were going to get this week the first read on Third Quarter gdp. Maybe that will do it. Its going to be affected by hurricanes, right . Right also you know what else were going to get jobless claims on thursday last week it was the lowest in 33 years. Yes. I thought it was even longer than that. Kyle making his move. Steady cam really a good shot there, kyle really thats heavy, isnt it how do we get a shot of you aiming that thing when youre the one getting the shot thats impossible. He can take it from that camera. Like measuring yourself. See, camera one its like heisenberg. Need mirrors. Breaking bad. Bang up job. Youre on, man. Youre on. Were cooking early. Busy week as i was just talking about, heres some of the things im going to mention we already talked about. Durable goods and new home sales on wednesday then the jobless claims number that i was talking about, that comes on thursday. Then on friday we get the first report on Third Quarter gdp. Then you get the second report on the first and the third report on the second it gets complicated. First report Third Quarter weve had two back to back threes chbl threes. Whos on first . In the First Quarter we didnt have a good three solid three in the second. The hurricanes maybe put a crump in the works for the Second Straight Quarter ahead of that, atlanta fed lets see earnings could be the busiest week yet. 170 of the s p 500 will report this week. Theres the list of some of them name a few, 3m caterpill caterpillar, gm, mcdonalds, cocacola, boeing. Amp ma zon dow components. Whos who of American Business perhaps the greatest of all companies there, comcast. On thursday. Is going to report on thursday as well in the eye of the beholder obviously. Maybe some people might argue its not the greatest but given all the numbers weve heard, wall street will be watching people will be looking very closely at comcast. Comcast was one of the first to say anything about some of the hurricanes hurting the video. The bigger question has been cord cutting. Well see nfl stuff, too, in comcast. Some analysts which one did they cut, cbs . Based on cbs has a bigger number of days looking at some of those. Based on advertising, whether that comes back. Did you see a couple of stadiums i did i dont know if those are stadiums that are perennially problematic. Chicago yeah. I mean, you theres the bears. The bears there were more seats. It looked like there were more seats empty than seats with people in there. Yeah, i questioned the same thing when they actually took those shots. Over the weekend the spanish Prime Minister announcing plans to dissolve the Catalan Parliament and impose direct rule on the region willem marx joins us from barcelona. Willem, this is something we kept thinking might tamp down. Not the case. Reporter definitely. We were hoping the best Case Scenario hoping for a fresh government thats pushed them on to president as well as 13 members of his own cabinet theyre going to be taking over the local police force, local tv and trying to find a way to take over all of the local government executive branches essentially from madrid. Massive changes coming here. We saw protests over the course of the weekend more than 400,000 people out on the streets in barcelona protesting these proposals what will happen next is that these will be discussed by the senate and then ratified by the Spanish Senate later this week down in madrid at which point they will be enacted. Whats not clear right now is how the catalan leadership will react. Whether they encourage Civil Servants to walk out of their jobs nobody is clear. Willem, one of the things weve been looking at is this whole idea that the wealthier areas, both in spain be and now in italy where weve seen it, too, the wealthier Northern Areas are tired of picking up some of the bills for some of the southern areas i was looking at some information over the weekend talking about how the catalan region is 20 of spains gdp and on its own it would rival some of the country that youre not surprised to see how much of that is playing a role in what youre seeing in catalan and northern regions of italy . Yeah, historically this is a big argument about fiscal independence and that really hit hard here in spain the catalans asked the question, why are we sending so much money to the center and getting so much less back in terms of spending they ask for a lot more fiscal autonomy and that was rebuffed by rajoy he was the lead man trying to crush their effort thats led us back. That was part of a region that historically wanted to secede from italy it was done under the auspices of the italian constitution. Whats happened here, of course, is something the Spanish Government deems unconstitutional thats why theyre taking the actions weve seen over the last few weeks and imagine what it continues to see in the next few weeks. Willem, thank you very much well check back in very soon. Willem marx. In other global news, japans nikkei rising for the 15th straight session. Yen hitting threemonth lows against the dollar cnbcs akiko fujita joins us from tokyo i was reading the piece to understand what parts of the constitution would be potentially changed just so i understand it a little bit better maybe you can help me, akiko reporter yeah. This is something that Prime Minister abe has pushed for for some time. Were talking about a clause in the constitution called article 9 which essentially says japan cant maintain armed forces in order to prevent japan from wagging war. The reality is japan has had a selfdefense force in place. The Prime Minister has essentially said we should call it as we see it and japan should have an additional clause in place to say that japan should have at least the right to possess a military one of many issues debated in this election. Now looking at the results of the election this certainly puts the Prime Minister in the drivers seat to seek a third term as japanese leader which would make him the longest serving japanese leader in history, but when you look at the numbers despite the party securing the 2 3 of aib himself. The voter turnout was the lowest in post war history. When you look at the public polled, most than half say they didnt support abe himself this is more of result of a divided opposition now the Prime Minister did frame this election as a referendum on his economic policies as well as his handling of north korea and today he vowed to press on with pressure on pyongyang working very closely with washington take a listen. Translator now with support from people extended to us, we will conduct strong diplomacy as tension over north korea is increasing on the fifth of next month President Trump is scheduled to visit japan. He called me by phone and when he visits japan we will spend time and aim to confirm our close alliance reporter and in that phone call the Prime Minister reportedly agreeing to play golf with President Trump here in japan as well. The Prime Minister also talking about pushing forward with his economic policies, specifically a 2 trillion yen stimulus package would be used to talk about education as well. He faces a massive debt here in japan. He hasnt addressed the budget with the debt more than 250 of gdp. Back to you. We understand that number that is a big number akika, thank you now to political news here at home, President Trump is calling on the house to adopt the senates budget this week and then push forward with tax reform trump made the comments on a house gop Conference Call just yesterday. Of course, when it gets to tax reform, its the details that really get sticky were starting to hear more and more of those details. House republicans are reportedly considering a sharp cut in 401k contribution limits. This would reduce the amount of money americans can sav in tax deferred retirement accounts its considering as low as 2,400 for 401k accounts right now its 18,000 for under age 50 and 24,000 for over age 50 they are looking for pay fors, right . You have find places for pay fors as we go along. Its not like we feel that everybody in the country is ready for retirement. Right at a time when pensions are disappearing. Right. Most workers dont have those. Youre told to save on your own. By the way, were going to strip away the tax incentives for doing that thats going to be tricky. We dont know about some people saying the thirtynine five stays out over a million now. Right right. So 39. 5 for the top. Take away state deductions. Those people will be paying more. Keep it 5939. 5. Thats a big tax increase. Some of the people seeing the overall number, top half of a percent . The top 20 pay 80 i dont know where a million is. Pay 70 but i dont know where that falls . I dont know either. There are a lot of people where taxes will go up. Right thats going to be that goes against the if you talk to heritage, aei, anyone, that goes against the idea of across the board tax cuts and broadening the base. If you listen to the president hell have a tough time like state and local tax cuts. Not as many people that itemize. The only people that theyre item miedsing. That could be somebody whos making 250,000 in new jersey. With the higher cost of living there, 250,000 does not put you on easy street. You should pay more for the ability to live in new jersey particularly if you live by newark airport. The department of Homeland Security and the fbi are issuing a cyber threat nuclear firms, Aviation Industry i mean, this is some pretty scary stuff. Yeah. A little bit alarming, becky the warning went out late friday by email from the fbi and department of Homeland Security. It is being called a rather public warning by those groups the attacks are by a sophisticated set of actors, not clear exactly whos behind this, and they began in may. Heres what we know about which specific sectors are being targeted as you say, its a very long list here starting with nuclear, energy, aviation, water and critical manufacturing all being targeted by this mysterious Hacking Group that the government says has been active for several months and has penetrated some of those networks what do we know about who is behind this . Not much definitively but the sign berp Security Firm crowdstrike says this could be an entity called be sebeserk be. Agrees sieve activity but no destruction is still ongoing it looks like what you have here is an elaborate probe operation going into the Sensitive Industries in which the hackers are determined to figure out how the Industry Networks work and maintain a permanent presence in them to what end is unclear is this sort of a just in case kind of preparation for total war that intelligence agencies go tluf all the time or is this a prekersor, more subtle attack in the future. Not clear where this is going. The u. S. Government wants people in those industries to know this is happening and to take steps to stop it. Eamon, the question becomes if you look at it from a potential question of war down the road, the question is do we have similar situations set up in their Key Industries like this can you count on detante or mutual mutually assured destruction you can technology doesnt have the same as nuclear with cyber, its not very clear. Ive covered thisfor a number of years they talk about in Cyber Security, a cyber 9 11 what would nap we saw a cyber attack that came through russia. It targeted our election none of the people in the Cyber Security industry were prepared for that social engineering attack everyone was concerned about what happened if they got to a dam. What they got to was ourselves, our emotions and our fellow americans. Thats what was being ma niche pew lated. Cyber can be very, very subtle it doesnt have the mutually assured destruction piece that we are used to. This report in particular talking about aviation, water, energy, nuclear, that is pretty terrifying thats like end of days type of things if you play out some of those scenarios. It absolutely is. Presumably the u. S. Has similar capabilities offensively they dont talk about it the problem is the United States is one of the first societies to put all of this infrastructure online going back 20 years now we are in a weird way although were more sophisticated, more vulnerable to Cyber Security attacks. We have more of our system set up that makes us disproportionately weak and its a field day for foreign intelligence services. Eamon, thank you. You bet. Lets get back to the stock market broader markets. Darryl kronk is at Wells Fargo Investment Institute hes president there we had discussions last week about where we were in the stages, psychological stages of a long bull market, whether were at the stage where youre finally a believer or whether youre at the stage where theres actually some euphoria and some froth are we merely at the believing stage . Which leaves a couple of years, joe, or are we at the euphoria i think were moving to it. Were not in the our for yeah or the believer stage is that true the return structures are seeing euphoria. Industrial metals are up 25 youre not seeing the flow of capital come in from the Retail Investor that the euphoric last stages. Thats what you see people arent believing it, that seems like an earlier stage. Thats where youre climbing a wall of worry. Money going into assets but no one understands it or believes it that would seem youre saying were not at the euphoria stage. Were not quite at the euphoria stage i will tell you, i was looking at that this weekend quietly equity positioning is rolling up there as well so its starting to get higher and higher the issue here between now and year end, i think, joe, is you have two things happening. One, theres a dirth of sellers. Number two because because of the tax potential for tax reform . Tax reform is going to be difficult to happen in 2017. Most of the estimates are we can get something done in q1 of 18 and q2 now or never for tax reform. Quietly, companies are putting more money into under funded pensions if you can deduct a contribution in your pension plan at 35 instead of 20 or 23, thats a big return all of that money is grinding its way into markets you said the market can go as far as earnings take it. And, you know, that does make sense. Earnings will go up if tax reform does. Last week i thought we saw a clear message between what congress was doing and the market there seemed to be a linkage between tax reform and better markets. Is that still happening . If we do get some sort of tax reform or something on the other side, which would be some kind of stimulus, thats going to be infrastructure in. Infrastructure. It can be a massive accelerant earnings dont need taxes for Infrastructure Spending in order to move higher from here its not just earnings in the United States, its earnings all around the world this is a late cycle environment. Thats when you typically start to see this coordinated growth you also will start to typically see Inflationary Pressure and things like that all of that is very, very good for equities in this eighth inning in the bull market, the last two innings could be, you know they could absolutely be elongated in baseball terms, innings are not time dependent they could be shorter and longer this could go on for quite a long time. The main spoint investors are still krachg their heads over how the markets go higher. Our answer is, just look at profits. Were in the sixth or seventh quarter of this profits repla reflati reflation. This week well see continued acceleration this is an environment to be bullish. So the inflation that you talked about is like Wage Inflation which if it doesnt get out of hand, that can actually be positive because it doesnt flee through the economy . Even though were the economy is 60 consumption driven which means its going to turn into consumers buying more things. All right thank you. Is 2that part of it yet . We havent adopted that. You are double your money under management ill telling you. Because you sound so much better. Pay it back to you. He just takes it and, you know, which i think he thought he thought of it which he definitely did not. No. We have an exclusive look inside the nerve center of saudi aramco theyre going to likely become the largest country in the world. We took cameras where theyre not allowed before andrew has an exclusive interview right here next on squawk box. Alternatives or municipal strategies. What people really invest in is what they hope to get out of life. But helping them get there means you cant approach investing from just one point of view. Because its only when you collaborate and crosspollinate many points of view that Something Wonderful can happen. Those people might just get what they want out of life. Or they could get even more. Becareally want to be there, but you cant. At cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready, because were helping leading companies see it and see it throughwith digital. Andrew ross sorkin is in saudi arabia this week he caught up with the ceo of saudi aramco in the operations control room they kicked off their conversation with how aramco, the crown jewel of the saudi economy, plays a role in the countrys plan to try to transform the countrys economy by the year 2030. Where do you see aramco within the context of that transformation i think aramco is at the heart of the 2030 transformation because talking about accomplishing certain percentage of saudi aramco in the market and were looking forward to participating in that and supporting 2030 and being included in that and hopefully participating through saudi aramco efforts in different sectors in defining in terms of upstream, in terms of petro chemicals, down the value chain, creating industries. A lot of contribution will be coming through saudi aramco. In addition, i think the listing will alleviate our International Visibility Decision Making strategies and also our governments and all of these will be held. How do you think the culture of the company is going to change once its public . Well, aramco i can say aramco has always been run like publicly traded companies. If you look at our governments, we have independent board members. Everything that is being done in the Company Similar to any International Oil company in terms of the way we do business. Only exception is that our shares are owned by the u. N. Entity which is the government but in reality, we always thought for ourselves, we have a lot of similarity to publicly traded companies. One of the remarkable things about this company is how long term oriented it has been historically and how focused it has been on the long term in terms of the types of inve investments. In a world dominated by the stock market, do you worry theres going to be pressures put upon you that are different than they are today . You know, at saudi aramco you are absolutely right everything is based on the long term the long term our strategy is based on the long term you need a lot of benefits for the company. Our results today in terms of costs, in terms of safety performance, in terms of environment, in terms of local content, technology and Talent Development is based on our longterm strategy we are where we are today is based on the strategy. I think my prediction that it will be easy to explain to the investors later on that these strategies and our track record in developing and delivering results and performance and achievements and success through the history of saudi aramco will make the investors better understand how is this Long Term Strategy helped the company to achieve all of these things and they will understand. Do you ever worry about a conflict between public shareholders and the kingdom i think what im looking for results, be looking for a better performance. I dont see any issues between our shareholder and the public that well be participating when listed because ultimately we need to develop better to deliver better results and thats what the public wants currently our shareholders are looking for. So i think it is aligned in terms of what is we are expected to benefit. The two also talked about the companys ipo which nassir says is on track. Plus, andrew will join us live at 7 00 a. M. Eastern with a special interview, one hour with prince alwaleed. Chairman and founder and well hear about his investments in citigroup, lyft and much more. Heres a look at last weeks s p 500s winners and losers es to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Welcome back to squawk box. Good morning, u. S. Equity futures at this hour in the green again after five Straight Records last week in the dow for another 23 indicated were somewhere between 23,000 and 24,000 now after getting above 23,000 on the dow for the First Time Ever and more gains indicated this morning. Republicans cleared a hurdle on the road to tax reform, but time is running out on the race to try to get a bill passed before the end of the year joining us is oklahoma senator James Langford thanks for being here today. Glad to be with you. We know it was a big hurdle to get the budget passed now the house has to pick that up and go ahead and run with it. Where do you think we stand on the likelihood of getting something passed we included a lot of the requests in our budget of the house and senate if the house passes it this week, that allows the next week for the ways and Means Committee to pick it up. By constitutional requirement the senate cannot take up a tax bill until the house has passed it as soon as the house passes it, it goes to the senate. The finance committee, thats happening. Once the house gets it there goes the committee, then it comes to us and then we move on it. There have been a lot of republicans who sound like they are presenting a united front when it comes to getting tax reform passed. The devil is always in the details. Some of the details have people saying wait a second, is this going to work. A lot of the details coming out are peoples guesses on the details. The smoke filled room is still smoke filled people are still going through the process of it. Thats the nature of it now. Within the next ten days people will be able to see the initial burst from the house and all the details in it. Its not done. Its a work in progress. One of the things that came out is there will be a limit on 401k 2400 versus the 18,000 that people under 50 can do wall street can complain about that and moan, most americans dont have pensions. Theyve been asked and most of us are not in great shape. Does that concern you . That is a trial balloon lets go through the process would you poke a hole in that trial balloon . That is the type of idea that i go back so om basic principles we want americans to say thats an important part of it. We dont want to count on Social Security Social Security was always designed to be a supplement in case your other retirement ran out. We want people to have their own Retirement Funds thats exceptionally important there will be an argument about that as a principle thats got to be there for business expensing and simplification for the individual side. Democrats dont like anything about this im looking at a piece by jason farmington my first question is does it matter whether democrats dont like it . Theyre never going to like it. At the end of this, this is going to be a experience you guys thought about obamacare. The criticism from the left and then whether it works on the media or wherever it works caused a lot of republicans, i wont mention names, after eight years, 50 repeals, they didnt have the fortitude because of pressure from the left theres going to be pressure from the left. So you do want to answer it or should we to, i can go ahead and answer. Jason furman says there is no benefit really for the middle class. He says because the lowest bracket goes from 10 to 12 and a larger standard deduction and Child Tax Credit would be offset by the elimination of personal exemptions. When you double the standard deduction, then youre not going to be able to take the mortgage deduction if youre at the lowest end the reality for the taxpayer, its the same. Fewer people have to itemize. Wheres the tax cut the tax cut goes into lowering the rates hes looking at it as well which is still in conversation on that thats not a done deal that goes from 10 to 12. The zero rate gets bigger thats correct. Is he dissembling there. I think hes making some assumptions that he hasnt seen the details on yet and no one has. Thats the problem. Nobody has seen the details. Its hard to argue the back and forth until we have a set of details. That is correct were talking less than 10 days. He takes issue that cutting the Corporate Tax rate would benefit paychecks for people for workers and i love this. In the last ten years there havent been any Good Research papers that say more money in the private sector would actually help. I need an academic to write a paper on this for me to think about it and he also says its going to increase the deficit, that youre not taking into account that that will reduce Capital Formation and longterm growth youre going to hurt Economic Growth by increasing the deficit. I do not agree with that. The last decade weve been at 1. 9 growth. There hasnt been a decade like that in america. Every single decade that weve had in the last century at least one year weve hit 3 growth our economy is stuck were in the old turntable system at this point and its stuck in a groove and it needs a bump. Is it my fault because the baby boomers wont too many of them or no. Not having enough kids . None of that. Im not productive. I leave at 9 00 every day . I think the two big issues are going to be Regulatory Reform if you incentive advise Economic Activity and the movement of money to get the develop logs city back out, that will have a deficit built into it. If you cant grow the ee con more more than. 4 growth, thin its a break even. Everything increases revenue you have 49 other people that agree with you ask me that in a month. Theyre going to tell you trickle down doesnt work. You drove the car into the ditch in 2007. Whats kind of irritating is that if you leave the high bracket and take away leave the 39. 5 and then you take away state and local, youre raising taxes on wealthy whose idea people dont pay rich folks you used to say that. I do. People have to pay more is that hes gone. All of these things need to come down. Every bracket needs to come down especially on the individual side you have to offset it with different pieces. I was going to say, the way we keep getting back to this and some people paying more, you need to have pay fors for this the senate is the chamber demanding that more than the house, correct we are. I cant speak for the house and what theyre trying to ask for were expecting a 1. 5 trillion offset thats what you have to have in Economic Activity increase if you have that economic increase which i believe you will, then you offset that completely. There are people like senator corker who say they are very worried. They want to see the rates come down and dont want to bust the budget. Senator corker is not wrong in that. Senator corker is not wrong if you have that every single year for the next ten years, thats not reasonable. If you dont have the border adjustment tax, if you dont have the state and local Tax Deductions taken away, thats some pretty heavy lifting. That would be a very heavy lift the border adjustment state and local is still in the mix. Thats what i mean. You have these big issues very unpopular are a Certain Group of people really state and local tax affects california, new york. And new jersey and connecticut. What do you have to do for those republicans in the blue states with that how do you make it how do you give them some type of concession or do you well, i think you will have to balance that out. I think its going to be kevin bradys responsibility so by the time it hits the committee its back behind the scenes back to the smoke filled room lets get it worked out. Theres been smoke in the back of the building is anyone vaping or anything . That ive seen. Vaping . Vaping with a patch lets talk very quickly about iran the president has said we will not recertify the iran deal which leaves it on the shoulders of you all what happens now right the responsibility comes back to the house and senate, especially the senate how do we negotiate the deal were not going to get a p 5 plus one were not going to add to the cpoa this has to be a set of sanctions that comes down on iran based on the missile activity. Youre in favor absolutely. So what its doing is saying were abiding by the nuclear side of it but were continuing to test ballisticmissiles, continuing to destabilize yemen, prop up assad in syria, theyre propping up hezbollah. That was part of the original plan that was there. That was i think that was the main point that many of us made. So controversial. Thats why it was so controversial in the beginning however, iran has already gotten what they wanted which was to get other countries around the world to drop those sanctions. If we took those sanctions on, the rest of the world doesnt follow along with us, there are some people who say youre giving iran the best of both worlds they will be able to say, fine, we can go ahead with our Nuclear Strategy because you all have dropped the deal by the way, we already have trade open with the other countries. What iran really needed to finish the Nuclear Program was time and money what the agreement gave them was time and money their expansion to syria is very serious. A lot of peoples focus is on isis and syria rightfully so you need to focus on assad if assad stays in power, iran is the one that is propping them up iran runs syria, they run lebanon, all the way across iraq and iran thats a pretty wide swath and that changes the middle east dramatically. Senator, quickly, secretary mnuchin pointed out how difficult it is to cut taxes without having some of the people that pay taxes right. Have lower taxes when its all said and done, do you think lets say the cutoff is 1 million here, thats what theyre saying those people when its all said and done, theyll have the same tax rate theyll pay more or theyll get some type of tax cut when its all said and done . Thats what what would trump go for a vast majority of americans have a tax cut. Some people take some will have more im not saying what bracket that will be. I have a friend of mine that said during the ragan tax cut for two years as soon as the tax cut happened in 86 his taxes actually went up he was furious about it. Three years later he was making more money. Maybe its okay for people thats whats used for the Corporate Tax cut and then it lifts all boats and everyones maybe thats okay. Then rich people need to believe in your dynamic scoring, too. Everybody has to see that this actually increases Economic Activity and turns around the economy. They have to put their money where their mouth is. One way to find out. Senator, thank you. Thank you. Coming up coming up, another newsmaker. Hes sitting right here. Right here. This isnt the only one. We just had one. But another one. Saudi prince alwaleed will join us to talk about his biggest investments. Geopolitical hot spots and more. Hes our guest host for an hour. 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It tops 6,000 for the first time over the weekend, and theres another split in bitcoin thats coming. This is known as a fork. It will be creating a new cryptocurrency called bit coin gold what holders of bitcoin will get some bitcoin gold when says it is issued it is also getting a boost from rumors that china could reverse its ban on bitcoin exchanges wow. At your peril there, folks when we come back, we are just a few minutes away from our exclusive interview with saudi prince alwaleed. He will join us for an hour at 7 00 a. M eastern time. Stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. This is not a cloud. 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The kohler walkin bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. Everything is installed in as little as a day by a kohlercertified installer. And its made by kohler americas leading plumbing brand. We need this bath. Yes. Yes you do. A kohler walkin bath provides independence with peace of mind. For a free kohler nightlight toilet seat with consultation or visit kohlerwalkinbath. Com for more info. When we come back, we a special guest for the next hour. Prince alawaleed will joining us from andrew. Well be talking about his big investments, including citigroup, twitter, news corp. , and lyft its an interview you cant afford to miss, and it starts after this quick commercial break. The governor has declared a Winter Weather emergency. Extreme risk of burst pipes and water damage. Soon, Insurance Companies wont pay for damages. That is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. Get ready, because were helping leading companies see it and see it throughwith digital. Right in the heart of the was in his financial crisis, and saw his portfolio drop by double digits. It really scared him out of the markets. His advisor ran the numbers and showed that he wouldnt be able to retire until he was 68. The client realized, i need to get back into the markets i need to get back on track with my plan. The Financial Advisor was able to work with this client. Hes now on track to retire when hes 65. Having someone coach you through it is really the value of a Financial Advisor. Zbliefrmt an exclusive interview with saudi prince alawaleed is just minutes away. He speaks out about high profile investments in Companies Like citigroup, twitter, and lyft plus, well get the billionaires take on the global economy. Oil prices and tensions in the middle east. A special hour of squawk box live from saudi arabia begins right now. Well never be royal live from the most powerful city in the world, new york. This is squawk box. Good morning, everybody welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in times square. Im becky quick along with joe kernan andrew is live in saudi arabia he has a big interview coming up this hour with prince alawaleed. Thats coming up in just a few minutes. In the meantime, lets get a check on the markets this morning. It created a perfect week for each of them its the first time its happened in over 20 years for the s p. You can see this morning that the gains look like they are continuing at this point the dow futures are indicated up by 28 points. S p futures indicated up by just over three, and the nasdaq indicated up by just over 13 in europe weve seen green arrows there as well stocks up by a quarter of a percentage point spain down by onethird of the percentage point, and the tenyear note yields have been picking up a bit you will see the tenyear is yielding 2. 386 . Heres whats happening at this hour. A record win streak for japan and the nikkei it was up 1. 1 overnight, and gained for the 15th day in a row. Wow and this is after Prime Minister abes weekend election victory, and it closed at another 21year high Automaker Tesla has reached an agreement to set up its own factory in shanghai. Thats according to the wall street journal, which says that the two sides are still working out the timing of the announcement tesla would be the first foreign automaker to set up factory in china without a local partner. That is significant. Cisco mz is close to a deal to buy telecom socht wear maker broad soft the price is said to be in the 2 billion range, and that deal could be announced as early as today. A couple of other stocks to watch today, including poplatch, which is near an alltime stock deal to buy a smaller rival dealt ic deltic timber its at a market cap of 3. 3 billion. Mitsubishi heavy have agreed to cut the production of wing production of the 787, the dreamliner the companies will also Work Together on advanced technology for future commercial aircraft the Third Quarter profit fell 15 on a slight decline in sales, but the Electronics Maker is backing its full year guidance phillips ceo says despite global uncertainties, the capital is on track for sales growth of 4 to 6 no skr artis. In other corporate news, apples chief operating officer will reportedly meet with fox cons chairman later this month. The nikkei reports that they are expected to discuss ways to try and deal with the manufacturing bottleneck for the new iphone 10 analysts have said that apples suppliers are struggling with the camera and 3d facial Recognition Technology on that device in the meantime, toshiba is rejecting a net loss of 1 billion this year. Thats because of taxes related to the sale of its memory chip unit toshibas forecast doesnt include the expected gains from the 17 billion sale as it has yet to be approved by regulators United Airlines is in talks with jp morgan to try to renegotiate the terms of their cobranded Card Partnership the wall street journal reports that analysts say that move could impact the banks revenue. Jp morgan has been issuing United Credit cards for 30 years. I think i have one of those jeez what are they going to do . I dont know. My one pass miles that are now really not good for anything anyway, Andrew Ross Sorkin is in saudi arabia. He sat down exclusively with the ceo of oil giant saudi aramco. Theres been lots of speculation about whether youll list in new york or london or whether theres better investors in new york but more regulations or whether london how do you just think about it . Whats the framework with which youre thinking about this process . There is a lot of speculation, you are absolutely right. You only see yesterday and today only a small piece of saudi aramco saudi aramco in terms of size, in terms of refining capacity, five million barrels, and talking about huge capacity between in terms of size and facilities we have international operation. Many countries from the u. S. To china to japan, so aramco in terms of size and capacity we did a lot of analysis of all of these markets we have always said that we will be listing in 2018, and to be more specific, in the second half of 2018 however, i think journalists and writers, they are expecting more and more information, and we are governed by certain rules with regard to talking about it what we have seen from the beginning that we will be listing in 2018, the ibo is on track, and the listing venue, we will be discussed and shared can i ask, are you talking to them about this . Saudi aramco, as i say to the chinese and others, saudi aramco, as they say, we are we did prepare our books and streamlined all the necessary work that is not necessary for listing. We evaluated and analyzed different venues, stock market in Different Countries with so many of them all of that analysis is being reviewed in detail to make a decision at a certain stage, and were not going to be pushed by a journalist saying this needs to be talked about if a stake was sold to another sovereign like china, would that change the outcome of the plan to pursue an ipo . Theres been speculation that if one piece was sold, perhaps that could delay or even put it off for many years you are speculating now yes as i say, things are on track, and as expected in terms of as we planned. Lets get over to andrew in saudi arabia he joins us right now with another very special guest andrew hey, becky. We are live this morning we are in riyadh, and we are very happy to have with us prince alawaleed thank you for having us. We are overlooking riyadh this morning with you, and youre going to be with us for the hour thank you. Pleasure to be with you so much to talk about glichb in large part that saudi is undergoing a remarkable transformation, this 2030 vision we are here in larnl part because throughout the week there will be a major conference with Business Leaders coming from all over. Lets just talk about this vision, the transformation of saudi. Do you support it . You havent spoken publicly about it yet yeah. Pleasure to be with you on cnbc. Yes, in full support of whats going on because a few years ago before king solomon took over i went public with many of my requests and requirements to safeguard saudi arabia as you know, the economy is devein of any country, and the country of saudi arabia in 1314 and in the beginning of 15 was not doing very good because we were so much dependent on oil. 92 of our budget was depending on oil as publicly that this is dangerous, so you have to have diversification. You have to have a sovereign wealth fund, and you have to have less depend on oil. When king solomon took over and the prince who was appointed recently as the conference took the initiative of initiating the 2030 vision. Clearly all those requirements were fulfilled full support of it frankly speaking, saudi arabia is in the midst of a Major Overhaul and change on all fronts, economic, financial, social, entertainment it, and even political really we always heard about the socalled arab spring in certain arab countries, so this is our version, our saudi version of arab spring, our peaceful arab spring whats happening is not an evolution. Frankly speaking, this evolution is happening now, but a peaceful one in saudi arabia. Im in full support of it, yes one major component is diversifying away from oil i did an interview yesterday with the ceo of aramco the expected ipo of aramco and being able to use those proceeds to invest elsewhere. Take us inside this ipo. What do you know this is the government, is the company speaking with the chinese . Is this is this ipo going to happen as planned . Well, you know, when at the conference announced that the that the results are resistance people did not understand the arationale and reasoning behind it i think right now with the indication that took place of the public and the investment arena and even internationally people began absorbing it. Really i fought for this i call it the Nuclear Weapon this is safety for saudi arabia. Saudi arabia right now is living on oil and investing some of the money coming from oil and by going down from reserves thats very important. This is 5 of the public because this will get the government sometimes depending on the evil waugs sometime between 7,500. Its important to jumpstart the process again. As the conference said that to be part of it invested locally to get even more growth and jobs in the market. This is very good idea no one talks about this idea that if you go 5 , theres nothing obviously from another 5 next year, and 5 the third year and fourth year and so forth. Depending on the situation, now, i know this os treasure, and we have to keep it, but that treasure also needs to support the country because all the initiatives that have been taken by the government, you know, the taxes, the direct taxes, indirect taxes, and the fees, and the organization that have been taken like the projects in riyadh and the sovereign wealth income this will take years to come we need in three, four, five years we expect all those all things to be in the budget of saudi arabia meanwhile, we need to be sure to have a safety valve of having an amount between 1 billion. That means that aramco has to be worth 2 trillion this evaluation is being talked about right now 2 trillion. Now, clearly if you go public with 5 , thats going to be 800 billion. If its less than that, no matter what it is, its going to be the highest and biggest ipo the biggest one was albauba at 25 billion. That was ipo im full support of that, and in full support of the ipo of aramco its another safety valve that the money could be used as needed do you think or do you know that the ceo said that the chinese are not or at least that he is not talking to the chinese. Is it possible that the chinese could be talking to the government well, you know, im not a member of the government, but i read these reports, and i would not be surprised if china would be looking at this opportunity because china depends on oil, and we depend on oil for a long time to come saudi arabia is an anchor exporter of oil to china if this thing happened, it would be very much welcome ive heard discussion in the western media that if china comes and buys x percent of saudi aramco, this may hinder and delay the pronled ipo of aramco this is not the case Oil Companies in the world aramco is a company, by the way. They can have an anchor investor before ipo actually, if Chinese Company if another investor comes and invests in ipo, that should confirm and expedite the process of having them go public because this will never stand the price that aram the owners of aramco of the saudi government is seeking when you think about, though, the price of oil right now and the need for this ipo and the valuation required, how much influence do you think saudi arabia has over the price of oil and how much do you think they are doing to prop up the price of oil between 50 and 60 a barrel well, i think that not only saudi arabia all opec members have an interest in having price stabilize, and clearly, its a big cooperation right now between opec members, saudi arabia, and russia, and a few other countries outside the vicinity and arena of opec having price stabilized around 50 to 60, which is like hovering around right now, or this wti or brent, it is a good thing for the consumer also. Remember, also, shared Oil Production also depends also on where the price falls. Clearly, the lower it goes, the less opportunity for shares to continue the investment is for both sides. Those in america are happy with the 50 to 60 range, its feasible also. Do you worry that this transformation is going to be create conflict here in saudi in the reason i ask is taxes invariably are going to go up. It is leelk that oil, which is subsidized here, of course, the cost of that is going to go up, and that much of the money that may get raised from saudi aramco ipo is being used or at least initially being used for investments in this new blackstone fund, which may get invested in in parts of america. Soft bank, which will be invested elsewhere all of which may create great returns, but what is it going to do for people here in terms of jobs and employment . Well, prince hamid, the conference, named nbs and the western media, has publicly announced that well be balanced, and the pif now that they have right now is very much roi, return of investment and r its moving that direction right now. Whether the investments internationally or locally, its important to diversify if you look at the soft bank analysts, its really preferred shares, you know, with 8 guaranteed interest. The 45 billion is 28 to 17 more towards turn for saudi arabia. 600 billion real. We are very much exposed to the saudi market just before we arrived in saudi arabia, a lot of announced in the energy industry, infrastructure, in the creation, in the tourism projects. A lot of there is a lot of balance between international and National Investments speak to the cultural transformation you tweeted out over a year ago you said stop the debate, time for women to drive just several weeks ago that has now happened how is that going to change this country . Well, look, i always joke in my tweets and my to my friends and say that saudi arabia is moving from the 12th century to the 21st century, and frankly speaking, it is it doesnt make sense at all for saudi arabia being the only country in the world, you know, that had women not driving thats it doesnt make any sense. Its irrationale what i said in my tweet is that there was social, economical, financial ramifications for woman driving because women driving, guess what, this will happen and will help the economy. Why . Because have less pressure on the economy, by having potentially based on the mckenzie study one million drivers could leave saudi arabia, which means what it means the economy will have less pressure by this one million. Less pressure on hospitals less pressure on schools less pressure on roads less pressure on airports, et cetera thats very important for the economy. Financially its good for the families a lot of taxes are going to be imposed. Back taxes and, et cetera. Its going to impact the families although this is a Citizens Fund that will help those poor people still, if you have those families have their expected driver leave and have the woman drive, youre going to save somewhere between 1,500. Thats sometimes 45 of their f income all the taxes that will be imposed will be recouped by that gesture. This thing of woman driving, its economical, financial, and social thank god that registry right now and politically this was taken, and guess what, the community and the culture of saudi arabia accepted it with no whatsoever disturbance at all. At all it was its done well, and perfectly engineered, and perfectly publicized to the public guess what, even the men and those conservative men accepted the idea our own president , President Trump, is a prolific twitterer as well. I want to get your thoughts about our president and the politics taking place in the u. S. And, frankly, around the world. President trump came here. It was his initial stop as president. You and him had a little bit back and forth before that given some of his comments about islam. Well, you know, when he was a candidate, there was a skirmish or a small clash between him and islam. I think this matter has completely disappeared, and actually, i congratulated him when he was elected. This issue of islam now is behind us right now. Actually trumps first visit to my country im very proud of he met with 55 heads of nation, heads of state of arab muslim countries. Really mr. Trumps visit to saudi arabia really helped strengthen the relationship further between saudis and the United States and saudi arabia and the islamic board. Were seeing right now with the less dependence of the western oil, saudi arabia is increasing this proves conclusively all those people said that saudi arabia is in relation, and that state is exclusively or yebted and thats obviously not true. Saudi arabia is the van garde of the islamic and when trump made his first visit to saudi arabia, he visited saudi arabia, 150 million people, and the muslim world of 1. 35 billion muslims. Saudi arabia is the leader of the arab world and islamic world and the relationship between saudi arabia and the United States and trump and the they are almost in if weekly communication basis. What do you make of his presidency thus far . Well, look, trump is unique president. President trump has his own way of governing i know some people dont absorb this issue you have to be accepting that. After all, President Trump was elected by people in the United States we have to expect and accept that trump speaking about policies, they are pretty good, and you know, not to quote President Trump personally, he is right. 5. 3 trillion dollars of wealth is being created clearly this was created because health care will be finalized, and the tax reform more importantly will be finalized also theres a lot of good policies by trump now, clearly, its not being helped a lot by, you know, the skirmish thats happening in his administration, because he is a unique president , and its very difficult for some people working around him right now that come from very structured, organized background to work with a president who is really, you know, very much unique and what they say, i give the examples when you said that puerto rico is bankrupt. Will never pay his debt. Youre right he will never pay his debt just like greece nobody pays debt we all know this when he says, for example, that you should stand for National Anthem, is he wrong . He is right. You have to respect your National Anthem and stand up for your National Anthem you know, he speaks of his mind very openly and freely, and this is for example, he says America First. He is saying something wrong you expectto say america is number two just like i expect mr. Macron of france would say france should be number one or the chancellor in germany, merkel, to say we should be number one also or mr. Putin in china to say were number one or mr. Xi jingping. You dont expect them to say were number two the public is not used to this openness and this if i can use the term, the bluntness of trump. Frankly speaking, i he is a unie president , and i hope he is successful in his presidency you are a major investor if in a number of Large Companies in the United States many multinationals, of course. You played the stock market. You think about the stock market a lot. You talked about how the stock market has risen since his presidency i know you follow tax reform in the United States and the Health Care Situation what do you think is going to happen well, as you know, the health care did not move ahead because of one vote, but i think as mr. Trump said in his latest interview, i think just yesterday with your competitor, fox news, fox business news, that it will happen, but more importantly right now is the tax reforms, and you have seen that the first step was initiated by the senate if the tax reform takes place, i think its going to be important for the stock market to keep from going up, and we have to keep an eye on the bunl deficit and the debt of the United States i dont see a lot of people talking about that as an investor and defender of the United States, as my country being we like United States to be in the use tomorrowian idea situation clearly, tax reform are good for the actually, my company, Kingdom Holding, did benefit a lot from mr. Trumps policies, but at the end we need to keep an eye on bunl deficit and on the debt whats your take on the tax plan well, the tax plan, you know, will go from 35 to 20. Thats the bottom line that mr. Trump is talking about right now. Its good for the u. S. Economy you have to find a way whats it going to do for the debt piece that you are talking about . Well, its very important i hear that some that the house of representatives right now is talking about having a revenue neutral situation. Well come back and talk about your world as an investor. I wanted to ask you about twitter because i mentioned earlier you spend a lot of time on twitter are you still bullish on this company . Well, you know, our investment on twitter is part and parcel of a plan whereby Kingdom Holding is moving from the old investments that you had into the new investments like china, like twitter, lyft, and its another driving in the middle east. Obviously twitter will not be easy because theyre facing difficulties right now its on the break even point. Any good news from jack dorsey and his team at twitter, i think its very much reflected on twitter. How do you think about twitter relative to facebook, google, amazon, the others evan spiegel from snap was recently here. Well, obviously, clearly, google and facebook made it. They were able to jumple to where they are right now, and i this i that twitter and snapchat may be in similar situations whereby it was not very fast and swift, but i believe that the future of twitter and snapchat is almost i think its still going through a learning curve whereby they are able to monotize more their model. Loots more to come with this. This is an exclusive conversation with prince alawaleed. We have more in two minutes time stay tuned u wahi ua b ox here on cnbc nah. Not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] mmm. The kohler walkin bath features an extrawide opening and a low stepin at three inches, which is 25 to 60 lower than some leading competitors. The bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. Kohler is an expert in bathing, so you can count on a deep soaking experience. Are you seeing this . The kohler walkin bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. Everything is installed in as little as a day by a kohlercertified installer. And its made by kohler americas leading plumbing brand. We need this bath. Yes. Yes you do. A kohler walkin bath provides independence with peace of mind. For a free kohler nightlight toilet seat with consultation or visit kohlerwalkinbath. Com for more info. We are live in riyadh, saudi arabia, this morning with prince alawaleed, and we are so pleased to have him here weve been talking we got through so much stuff just in the last half hour one of the things before we get into some of your investments i wanted to ask you about we were talking about oil and the price of oil and where thats going. How do you think about electric cars how do you think about tesla and the future of Petrol Chemicals across the board well, tesla the fact is also that all other companies are going into tesla path of electric cars and Autonomous Cars clearly, the conception of oil, more than 70 of it is linked to the consumption of cars. Clearly the direction is moving that way you fully accepted thats whats going to happen its a fact actually, not only that, but you remember that just last year a plane took off from abu dhabi and flew all the way around the world above egypt and through saudi arabia, and that plane was flying with no fuel at all now, thats an indication of how much the world is moving to being less dependent on oil. Saudi arabia has moved to its depending on oil and smart. He would like to celebrate the last day we export the last barrel of oil. Saudi arabia is doing the same thing. We like to celebrate when we export the last drop of oil. I believe those big Car Manufacturers waited to experiment with tesla and waited until the world depends more on that, and well go for production inevitably when you think of the valuation of tesla, being the investor that you are . I look at this like other companies, and i would rather not comment on that because maybe some people believe the value is right, but its not for me to enter that price, obviously. Its too exuberant for me right now, obviously you have invested in the car ride sharing business in lyft. Its been a great investment for you. Its up about 200 since you bought it. Explain why you bought lyft and not uber i think that you were looking at both at the time craw. You know. What are some of the regulatory challenges that uber is facing now, for example, in london and elsewhere do you think that could affect all of these guys . Well, you know, i mean, now we have a new ceo there just appointed, and i think shes given the time to really to get the company back on track. He is going to be here this week i think so auto, yes. Im not sure who is going to come, but i may see him if he comes. Uber will make it for sure i think all thats happening right now in england and some of the countries, i think it would be they will cross that bridge for sure. I want to ask you about some of the other investments, one of which is the four seasons. We are your office and your home, your apartment is above the four seasons where we are right this minute. Theres an article in the wall street journal recently that suggested that your relationship with bill gates and cascade, your partner in this project, is, well, more than a little complicated was the suggestion of that article. Is that right . Oh, for sure. My relationship with bill gates goes beyond four seasons our fiphilanthropy, our alliance in the Energy Project that he has, in the vaccination. We have so many projects charity. Actually, the philanthropy that i head is in almost daily communication with the bill and Melinda Gates foundation actually, what happened is there was a ceo over there ceo of the four seasons old ceo of four seasons, who just had discussion about when she should leave just a matter of months. You have an investment with 21st century fox is that an investment in Rupert Murdoch or the murdock family . What is that about we put out news corp. We were not invested in news corp. Right now. Clearly, my investment and alliance with fox is really based on my relationship with him and mr. James murdock. Yes, we have a very Great Alliance and friendship together its a blend of investment the fox channel clear clearly, he did disagree with them eventually, and he was forced to leave. Really mr. Murdock, whether rupert or james murdock, at the right time they might be excited to have him depart, and he left. They had him signed off after he gra heed on this settlement of the matter of riyadh clearly, bow heem at Companies Like google, amazon, facebook, apple, microsoft, these are giants the combined market cap is ab e above see whats happening on facebook and twitter these are bohemath companies each one is they are very much you believe theyre monopolies clearly who is going to enter in and compete with google and who is going to get into Online Shopping against amazon . Who is going to get who is going to go against these two giants they had a Good Business model that proved to be successful in the market policy question if theyre a monopoly, should they be broken up . I dont believe in that weve seen that in the 1990s and the early 2000s how they were trying to break up microsoft you know, this just failed completely i think its a free market it should be free competition. If the company was able to reach this high valuations because of their Good Business model, i this think this should be an incentive for others to come and compete and try to gain markets on them rather than breaking the socalled monopolies you have been a longtime investments for citigroup, and theres a long history in that, but you have remained an investor in citigroup. How do you think about the banking world in the United States today have you ever thought i want to make an investment in Goldman Sachs or jp morgan instead you have seen that after the election of prurp how the stock market related to those approximate Banking Industry its only 50 decrease in less than one year. Its going to be the main ingredient of having the income go up, but also the less circulation is also helping the banks also less circulations, more controls by the banks learn the lessons of the last decade all these events are really helping the share price for the Companies Going up im happy with citibank because now even with the big jump right now, theyre still below local value right now. Theres still plenty of room for citigroup to go 100 and above. One of the great parlor games may have a huge impact on all of these banks. Do you have a choice have you been following the situation . Mr. Trump said he has two men, and existing lady also thats a candidate i think at the end of the theres a lot more votes over there. With inflation being so low for so long. Right now the United States economy is doing pretty well were going to continue this conversation im going to send it back to joe for now, and were going to come on back in just a minute joe. This is classic he is so they must have really good newspapers over there that cover all of our stuff because he is so uptodate on everything you know what, andrew, ill bet you knows out of that 5 trillion, i bet he knows what Kingdom Holdings take it on the last year. Can you maybe ask that question . Exactly how much portfolio is up since i would be interested to hear. Can you hear joe . Were still live right now we havent gone to commercial yet. Do you know how much Kingdom Holdings is up in the last year since the election well, i mean Southeast Group went up 50 . Many of our companies in the United States, so really quite a bit. Stefrl billion dollars, yes. We will continue this conversation with your heiness thank you he just seems like he is in a really good mood if that makes sense. Weve been having a great time this morning. All right great. A lot still ahead from andrew in saudi arabia check out the futures at this hour a couple billion much more than my portfolio. Like a lot more. Anyway, dow jones up 24 and change s upusunp 11 p jt der three. Well be right back. And the wolf huffed and puffed. Like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. You should tell your doctor if you have a heart condition or high Blood Pressure before taking it. Symbicort could mean a day with better breathing. Watch out, piggies child giggles symbicort. Breathe better starting within 5 minutes. Get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. We are still looking for details on what to expect in this tax reform plan, but we are getting answers this morning from President Trump himself the kpgmen were considering getting rid of that capper, at least reducing what you could be setting aside in tax deferred spending for these plans, putting it from 18,000 down to 2,4 2,400. The president weighing in and saying thats not going to happen lets get back to riyadh Andrew Ross Sorkin live with prince alawaleed andrew thank you, becky. We are do you say to yourself is this going to continue do you think theres going to be a hiccup along the way as an investor, how are you thinking about it right now . He just said that if theres no tax reform, the market will tank will tank he said that. Im just quoting is that what you believe . Theres a bet on tax reform reduced tax from 35 to 20 on the Corporate Tax going down also inevitably companies go up, and the valuation could go up also i think theres a big bet on that, but clearly theres a lot of optimism in the United States weve seen how the north korean affair is not afting much more market you believe the tax reform is baked in right now yes, its baked in. For sure if we get tax reform, is there still more to go i never look at the market in general. I just look im very much companyspisk. We look at certain companies, the valuation, and the future expectations, the cash flow, and the value, et cetera certainly the market clearly plays a role because inevitably theres a buoyance we always go companyspecific in our investments. Seemed to be pressing saudi on trying to fix the situation with qatar. How do you think thats going to manifest itself . Well, you know, i think he met with the king yesterday privately, and they met with the Prime Minister of iraq saudi arabia is playing a very big role in having iraq be neutralized and not being in the arms of iran this shows how saudi arabia is important to the United States were playing a very big role in extracting iraq with at least neutralizing in internal affairs. Yesterday the king met personally with we established the first meeting that took place between saudi arabia and iraq related to the economic and business and business fronts. Go back forward how concerned are you about iran well, iran is playing a very nasty role they are in syria and then iraq they are with hezbollah in lebanon. They are with even used to be with hamas in palestine, in gaza, and, you know and morocco. Let alone whats happening in yemen. They are playing a very active role by exporting their socalled revolutionary mentality. Clearly, saudi arabia stood against them, and i think the war in yemen right now is to stand against iran and their dominance and control of arab countries. If you were President Trump right now, if you were the United States, you would do what in relation to iran i think its in the right direction right now. I think that iran should be faced very aggressively. A couple other quick questions. Weve talked about we havent really had a conversation about currencies, and one of the conversations in the United States all the time these days is about not the currencies we know really, but new currencies like bitcoin, and there seems to be a raging debate about it. Where do you land on it . Jamie dimon says it is a fraud yet, Goldman Sachs may be pursuing working with the currency. I dont believe in this bit cone thing i think its going to implode. I think its enron in the making really . Enron in making . I dont believe in it because its not under control. Its not im in agreement with jp morgan. Where is that all going you have a whole new host of projects that you are working on with them. You know, we began with five hotels and now that with 20 million. Its the fourth Biggest Hotel company in the world it was with more than 4,000 hotels and 6,000 we said this will not merge with anyone because its a unique project. We have hundreds of hotels plus, and were growing very fast to redouble the hotel numbers in next two, three years. Really, the p. E. Ratio is in the 40s, and its if we leak them to any other the issue will be pulled down from the 40s plus to the 20s before we leave you, lets talk about philanthropy. You have announced, a, you are part of the giving pledge, but you have announced 32 billion in philanthropy. What is that about tell us about how you got to that place in my case, im a muslim, and im very much a practicing muslim philanthropy is one of the five pillars of muslim. On day one when i began my work in january 1980. Philanthropy goes parallel to my work i announced all my wealth a few years ago, and i joined my two dear friends mr. Buffett and mr. Gates to join the giving pledge, and i signed that with bill gates just recently whats the Top Initiative for you in terms of philanthropy thank you for a wonderful hour i cant believe how much we went through. We talked that we might try to go longer than an hour, but, boy, do you talk fast. Thank you. Appreciate this very, very much. Im going to send it back to becky, and i know everyone back in new york. Thank you, becky , thank you, your heiness, and thank you, becky thank you to you and to the prince joe and i were listening to all of that. Where he thinks valuations should be for citi sometimes i do think were surrounded by so much. We are looking through the trees and cant see the forest he says, what do you expect macron to say were number two, were number two or merkel here if they people will say to trump, what do you mean you are saying America First what are you saying . A lot of stuff. 5 trillion. I think it has something to do with trumps policy. Its up 5 trillion. I dont know, things right in front of it seems very that was interesting that was great coming up on squawk box setohei ddcp nar idhieiamis her. Whoo woman class, lets turn to page 136, recessive traits skip generations. molly i reprogrammed the robots to do the inspection. Its running much faster now. See . Its amazing, molly. Thank you. thank you. Not rebalancing your portfolio. Focused on what you love, not how your money will last through retirement. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. Thank you so much. Thank you so were a go . Yes we got a yes what does that mean for purchasing . Purchase. Lets do this. Got it. Book the flights hai si si ya ya ya what does that mean for us . We can get stuff. Whats it mean for shipping . Ship the goods. Youre a go you got the green light. That means go oh, yeah. Start saying yes to your companys best ideas. Were gonna hit our launch date scream thank you goodbye let us help with money and knowhow, so you can get business done. American express open. So you can get business done. The strikingly designed impolexus nx turbore. And hybrid. Lease the 2017 nx turbo for 299 a month for 36 months. Experience amazing at your lexus dealer. Stocks rising to record highs as we get ready for the busiest week of earnings season. Quack is in session our guest host this hour, senator Heidi Heidcamp well get her take on tax reform, health care, and much more plus, a cnbc exclusive andrew reporting live from saudi arabia with the ceo of aramco and prince alawaleed the final hour of squawk box against right now. Live from the most powerful city in the world, new york. This is squawk box. Good morning. Theres going to be more of them real good you bet. Welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square im joe kernan along with you really are bad at this, joe. Really bad at this senator Heidi Heidcamp is here from fargo. The tv series. Its great to see you. Never gets old, does it . Well, it does for listeners especially for you here with becky quick Andrew Ross Sorkin is live from saudi arabia well have the highlights from his interview with prince alawaleed throughout the hour, but our guest host this morning is senator heidi hidecamp. Well hear from her in a bit we hear theyre a rare theyve got these decisions to make that are not as easy as Chuck Schumer in a blue state or Something Like that, and we just wonder how you sort of walk that narrow line. Were going to get to that okay. Because it takes a lot of thinking ahead, does it not . It takes believing that if you do the right thing, you are doing the right thing, and you just keep walking. Yes and bringing your sensibility to the decisions you are making. Right one of the things that i always like to remind people, i used to be the tax commissioner. I dont know where the next divergence might be. Probably right now the biggest thing for me has been reg reform, and you had james on earlier, and weve done a lot of Work Together on Regulatory Reform he mentioned that he said to bring that up with you. He spoke positively about you in your i know. He does thats a good thing we can get a lot done actually our committee has been very, very active on Regulatory Reform he said ginger and red heads are superior my mother is a red head first, lets get a check on the markets. Right now the futures are indicated higher up. Again, up 25 points now on the dow. The nasdaq indicated up 9. 5. The s p indicated up 2. 25. Among this mornings other top stories, our chick blankenship will be taking that role and sitting on the board. He is a 24year veteran of general electric, spending most of that time in the aviation and jet engine businesses. That keel would be the first of its kind for a foreign automaker. It is official cisco is buying Telecom Software maker broad soft for 55 a share. This is ciscos second major acquisition this year. It bought apt dynamics back in march. You can see both of the stocks are higher broad soft up by almost 17 , and cisco up by half a percent andrew is far in a land far, far away. He is in saudi arabia this week. He sat down with the ceo of oil giant saudi aramco at the companys headquarters and got some clarity on ipo plans as well as involvement there of sovereign investors. The ibo is on track, and the listing venue, we will be discussed and shared saab ji aramco, not talking to the chinese or others. We did prepare streamlined all necessary work we evaluated and analyzed the different venues we heard this morning from prince alawaleed he had some other thoughts about china in saudi aramco. Do you think or do you know that the ceo said that the chinese are not or at least that he is not talking to the chinese . Is it possible that the says chinese could be talking to the government well, you know, im not a member of the government, but i read these reports saudi arabia is an anchor exporter of china. I heard a lot of discussion in the western media that if china comes and buys x percent of saudi aramco this may delay the projected ipo of aramco. Oil companies in the world aramco, by the way, they can have an anchor investor for ipo. If chinese come another investor comes and invests in ipo, that should confirm and expedite the process of having them go public this will rubber stamp that the owners of aramco is seeking. Senator heidi heitkamtp were right in the middle of tax reform, conjecture on all sides. We just saw the president pretty funny we had just had a conversation about in terms of retirement thats one thing we think is important for a lot of americans to prepare for, and its been getting harder with the defined contribution versus defined benefit and pension plans, and the 401k seems like something that maybe we ought to do. We want to make retirement comfortable and productive for those that have earned it. This has been in and this has been out i think theyre sending up trial balloons because they realize that theres a lot of spending thats going to go on with and dech sit spending thats going to go on with this tax package. Theyre trying to figure out how they can broaden the base. Very early on we met with gary cohen and the Banking Committee members did, and just said, you know, retirement, and everybody kind of got their back up and said no. Sths going to devastate American Families if we dont give them a way to save. I think it is absolutely the wrong direction. If were looking at longterm stability for American Families, we have got to deal with this retirement insecurity. Whats the income tax in north dakota its very low do you think we need to stick it to this blue states on all everybody else is towing the line theyre spending all this money, and they get to write it off dont you think this is the time to stick it to them good joe, you know, the one thing that i remark when people talk about this is i say why dont you look at which states benefit from investment by the federal government and to what proportion if we Start Playing that game about were going to stick it to you because you have a high tax, then all of a sudden those high tax states are going to say, look, we send a lot of money to the federal government its also because the cost of living is much higher in these states, and so if you are its Something Like 100,000 that goes a long way in north dakota and it does not go here, youre not youre middle income if you are earning some of the bigger figures. You are itemizing your deductions, which meansure well off anyway if you are looking for middle class tax cut, that may not be the worst thing in the world i dont think its fair to say only high earners itemize their Tax Deductions you know, i do a few. Do they want you to vote no with schumer i think my constituents, first off, want a sound fiscal plan they want fiscal responsibility, and thats one of the big challenges that we have. They want tax cuts . Well, for the middle class they sure do i have been focused on the pass through portion we have to figure out what the economics of this is and weve got to figure out what the plan is you know, people say are you going to vote for tax reform i say tell me what it is i dont know when it comes down to it, and lets say the republicans dont think theyre going to need anyone at this point, so lets say that they got it, and you know beforehand before they do the vote when its all said and done may not be that far off. If i believe that tax plan is going to grow productivity and the economy and give middle class tax breaks, im all in, and i think that the effective rate is lower than what people want to talk about, but obviously the nominal rate is very high. I think we need to adjust the nominal rate to be more competitive. One of the listening to you, trying to wade through what would be deal breakers for you, and it sounds like when you say you want fiscal responsibility, you sound like bob corker or somebody that says i wanted to do this, but without ballooning the deficit. You want pay fors or you want the rate to be not quite as low. I dont want to blow up the debt and deficit if we make an investment were going to make 1. 5 trillion investment, lets look at how were investing those tax dollars. If those tax dollars are going to benefit only the top 1 , i dont think were going to see a lot of Economic Growth out of that if we really i had an amendment during the budget process. Not one middle tax income payer should have their taxes go up, and i put the rate at or the earning at 250,000. Thats pretty high a lot of people say, well, you are really advantaging the 1 . What im saying is that the super rich thats why you see paul ryan coming back to now yet another bracket that would, in fact, apply to older or to wealthier americans. When you lower the tax the upper tax rate from 39 to 35 and you take away the alternative minimum tax, of course, this is going to spin to the rich. Its going to spin to the rich if you said, look when the secretary, secretary mnuchin said theres no way you can give a tax break to the middle class without advantaging the richl, thats not sure. I could do a tax credit to just those earners. Do you think theres a tax increase going through to the wealthiest americans in order to pay for a tax break dpor the middle class i wouldnt be i think that if were going to make an investment, we need to figure out how were going to get the money into the hands of the american worker. You know, i have said this before here. In the United States of america if you go to work, lets say at the bobcat factory, you pay a higher rate than people who live off a trust fund that just is not so you dont think rates should go up on the highest what im saying is we need to make sure that when we look at this tax proposal, that the bulk of if not all of the tax investment on the individual side goes to the middle class right because its hard if you do across the board cuts, and youve got people that is the top 10 pay 70 of the taxes and you cut rates across the board, just in terms of dollars, thats going to be where most of the dollars are set. Its hard to cut taxes on people that dont pay taxes yeah. You know whats really hard is the other thing my constituents want a simpler tax code when people talk about, were going to make this simple by compressing the rate schedule. The rates arent where the complexity comes in. The complexity comes in in the deaf next of taxable income. For a lot of farmers, ive had farmers in my office say, look, i think its complex i think its difficult to deal with what i know is what i know dont mess with what i know. At this point i feel like i have a pretty good handle its a steep learning curve if you start changing and jiggering with some of the Little Things in between and think if you make it retroactive at 17, what difficulty thats going to be. When you look at theres been a long argument, which now the administration, you know, has told me they dont intend to do, which is to take depreciation basically go to 100 expensing and pay for it by eliminating the Interest Deduction that makes perfect sense when you are scoring it a lot of assets are deappreciated within the tenyear cycle of scoring, but the interest the elimination of the Interest Deduction is the gift that keeps on giving in terms of revenue right and so when you are a small business, you already have expensing through 179. You have to look at who gets the advantage when were moving forward with this. When what did you do with the tax you were a tax person what did you do . I was the north dakota state tax commissioner from 1986 to 1992 oh, okay. Yeah. Did you used to audit people and strike fear . You never came to inneded nh dakota if you step foot there, you you didnt work with lois lerner you werent earmark people where. No, i didnt. I probably should have if i had known you were coming. You do some pheasant hunting, ill figure out how to tax you can i make a point about the Corporate Income Tax Deduction individual what hasnt been talked about is almost every state has a starting point of federal taxable income if you broaden the base, theres going to be a windwall in terms of revenue to the states if they dont lower their rates. Think about that is there snow yet no. There could have been there is in canada it is absolutely stunningly beautiful. I love those scenes from fall i love the scenes of the you are so horrible its beautiful. Dont you have an eye for that i do. Every season in north dakota is stunningly beautiful well get you an ice pick, and you can bury your fortune. You think senator heitkam is staying with us for the hour we think Andrew Ross Sorkin is live from saudi arabia we have the highlights of his interview with prince alawaleed. Former ambassador to saudi arabia, robert jordan, will join us with his reaction to the princes comments. Stay tuned ren bce up awaying squawk box he ocn my ambition . Helping people get what they want, understanding were not in this alone, and teaching my kids that no ambitions out of reach. Ambitions live everywhere. Synchrony financial helps make them happen with data, insights, financing and technologies. Synchrony financial. What are you working forward to . Welcome back to squawk box. Lets head over to riyadh, and back to andrew andrew, good morning again, or even evening hey, becky. Great to see you. It is the afternoon here in riyadh we just visited with king alawaleed. An amazing hour of conversation about just so many Different Things that made headlines across the board one of which its been picked up on twitter just in the past couple of minutes here where his comments on bitcoin. We want to show you them and then talk about it in just a moment here they are. I just dont believe in bitcoin. I think this is just going to implode one day. I think this is enron in the making this is enron in the making because it doesnt make sense. This thing is not under control. Its not krurnd the supervision of any federal any United States Federal Reserve or any other central bank i dont believe in this at all im in agreement with the jp morgan he also made two other big pieces of news one was really about his take on the stock market after President Trump became the president since the election what its done and perhaps where its going he does believe that tax reform is baked into the cake and like treasury secretary Steve Mnuchin said, he thinks that the market could drop he is just as much of a quarter if, in fact, tax reform did not take place thought if it did take place there was a little bit of room to run, and the other big news thats making a lot of news here employ around the world. We interviewed the aramco ceo just yesterday he said it was on track. Didnt get into a conversation, though, about whether investors, other investors, like the chinese might come in or not, suggested basically they werent talking to them. It wouldnt proclued an ipo. It immediate create a valuation of sorts for the ipo going forward. Were going to continue to watch this we have a lot coming to you throughout the week. Were going to bring you a lot more from that aramco interview with the ceo later this week, and then we have a number of biggests, including Steven Schwartzman and others who will be here. Larry fink will be here. We mentioned travis calanic is going to be here its a whos who richard branson, who was in town with us last week, he is making his way out here Big Questions about perhaps maybe the saudis who will be the first to do hyperloop, and we have virgin hyper loop one we have more coming from riyadh. Back to you, guys. Just to clarify, correct me if im wrong, the prince thought that i thought what he was saying was that maybe as much as a quarter of the gains that weve seen were due to taxable yes, thats fair. If you were to give back, you wouldnt be giving back a quarter of the market. You would be giving back a quarter of the gains yes yeah, a quarter of the market, that would be a lot worse than a quarter of the gains. That would be a lot okay. Quarter of a gains would be enough given the past two years. Or year and a half yeah. I thought that was interesting, andrew, some of the other stuff about he is very frank. He is blunt. He is blunt. So frank. He is blunt he is blunt yeah, bankrupt. What do you think . Greece, bankrupt yeah, theyre not paying us back obviously, it was a mans opinion. Should we show that joe, do we have tape of that i think we have tape of the puerto rico comment, and if you watch it, its sort of fascinating to listen to im told we dont have it. I thought we had it. Nonetheless doesnt mean we cant get it, and we still have time just some of the other stuff was funny too. I thought i like your reaction to it just the America First and he was funny about that he is, like, he almost pretended to be someone from another country going, like, yeah, were number two we dont really care about it. Maybe its not so crazy to the rest of the world when someone says Something Like that here we think, oh, my god, what are we saying. Its so nationalistic. I will say, by the way thats been the feeling here you know, weve been here all weekend now, and when you ask people and we talk to it is ceo of aramco too. Internally in the u. S. , we have lots of conflicted views here in saudi, they are very, very, very supportive of the president. Of course, the president has been very supportive of this country as well. Right but they are they are not as concerned perhaps as many on the other side of the aisle in the u. S. Are right now well, you have the whole interplay with iran and who, you know, asserts themselves in the middle east and that were going with iran. There is a lot of moving parts, andrew, but we understand anyway thank you. Thank you see you guys joining us right now is robert jordan. He is former u. S. Ambassador to saudi arabia during the george w. Bush administration he is also the author of desert diplomat inside saudi arabia following 9 11 ambassador jordan, thank you for being here today what do you think of prince alawaleed . Youve met with him before he is a piece of work i met with him in april in his office in riyadh i went there to give him a copy of my book desert diplomat, and he is on the cover of it, and we already have a copy on his desk. He is one step ahead of the rest of us in many ways he can multitask. He would sit there with four or five computer monitors on talking with us, looking at his cell phone he had squawk box on, by the way, when i was there. He is a he is a multitasker. He is a brilliant thinker in many, many ways. As you can tell from his portfol portfolio, he is very heavily invested in the United States. Right we got to hear a lot about his investments this morning also heard some about the plan for 2030 for saudi arabia and how everything thats happening with sad saudi aramco is at the center of that what are the plans for saudi arabia right now focussing first on the aramco ipo, theres a lot that has been unsaid here that i think needs to be understood the disclosure issues are enormous they got to talk about what their reserve ip strumts are they got to be much more transpatient about their governance they have to be more transparent about their social funds thats number one number two, i think prince alawaleed put his finger on something early in the interview, which is the Rapid Transformation going on in saudi arabia this vision 2030 plan that the crowned prince is spearheading is really only a part of a kingdomwide change in focus its becoming a much more youthfocused culture. Over half the country is under the age of 30, so this is a nation of kids right now coming up they are desperate for jobs. Theyre desperate for building their nonoil economy. This is i think a transformational process well, i have a question this is senator heitkamp from north dakota obviously, we watch very closely whats happening with opec and whats happening with oil prices right given that were now the second largest oil producer. What do you think generally is the attitude of the increased production we now opened up the markets to exports. How concerned are the saudis about the United States as a major competitive threat i think they are concerned that it has an impact on the price of oil, and theyve got to figure out ways to manage their production, and at the same time keeping an eye on you are production because it greatly concerns them. King solomon was just in russia meeting with putin im certain that they discussed production limitations both of them are closely watching u. S. Production ambassador, that brings us to the idea of potential investors in saudi aramco, and whether they would always have the same needs as the kingdom, and that was a question that andrew put to the ceo of saudi aramco in the tape we heard earlier today. He didnt think there would be conflict between the two of them, but if im a shareholder, i may not want you to be pumping or holding off on pumping and be worried about the price of oil versus what the company should or shouldnt be doing . Thats an important point the geopolitical policies of the kingdom may be different from the interests of individual shareholders in an aramco publically held company. We can recall the year of oil embargo in in the 1970s when the arabs, especially the saudis, decided to punish the United States for supporting israel ambassador, thank you for your time today. Thank you all right nick adams and jake barnes later. You know, robert jord aan is a famous i would like the protagonist. I always talk about that do you think thats really his name i think its really his name. It is it is im going to be jake barnes, i think. The holy grail you got an expensive watch for us the most expensive watch. It better do some really fancy stuff. It does other than tell time . Does it . It does the holy grail for watch collectors is up for sale. Its paul newmans rolex you wont its paul newmans rolex. Do you have it here . We do oh, many i god. You wont believe how much it could fetch at auction robert frank joins us now with more yeah. This could actually become one of the most if not the most expensive watch ever sold at auction. Its paul newmans rolex cosmograph daytona, which he wore every day between 1969 and 1984 he used it to keep lap times when he was racing cars. Its coming up for sale this week watch collectors say it could fetch between 5 million and 10 million. Maybe even more. It will hit the Auction Block thursday at the winning icons auction held by phillips in association with box and russo joining us is orell, the cofounder of box and russo. Thank you for joining us its the middle watch that you have in that tray that is the paul newman watch. What makes this watch, of all the famous people who have all the great watches, what makes that watch the watch to have. The paul newman rolex isnt just a rolex owned by a famous person an actor, politician its a watch that has created an entire market. The rolex sports watch market from which all the sports markets derive from collecting, and this is a watch that i would consider the adam and eve of an entire movement. When you say adam and eve, sir, are you saying that the whole watch collection industry, the whole vintage watch world sort of started with that. Not quite i mean, people collected clocks and pocket watches throughout the 20th century then, of course, the first wristwatch is collect in the late 1970s or 1980s and were a stainless steel sports watch was not considered precious enough its just an entire new approach to collecting, and that watch, seen on paul newmans wrist for 50 years has inspired a new generation of collectors why did he stop wearing it in 1984 its awe beautiful story. In 1984 he offered this watch to james cox, the consignor now, who then was nel newmans, pauls daughter. He wasnt wearing a watch, james, and one day he said do you know what time it is he said no, paul, i dont wear a watch. He said you need to have one just wind it every morning theres a watch. Paul newman gave his rolex to his daughters boyfriend absolutely. They were a great couple eventually didnt end up marrying, but remained absolutely best friends to today. He is the guy who is selling it yes and he and nell together will share the proceeds oh, he is giving okay, for the kids the foundation for the kids . For organic food for well, nell has a charity, which is separate from paul newmans own charity, but she has her own charity. Tell us about you have some other watches there youre selling. Whats the sort of collectible watch market like right now . Does it basically follow the art market, or is it its own inning, and whats happening with values right now . The watch market for vintage collectors wrist watches is in great shape today. Scholarship is at its best literature the community is growing there are many parallels art, jewelry, wine. It doesnt always go in parallel we see the moment the watch is catching up. Contemporary art if you bought a vazquez 30 years ago, you would be much better off than having bought watches, but now were really catching up where. The last time you were here, you brought that patek philippe, which we showed on this show, and it became the most expensive watch ever sold at 11 million were your good luck charm thank you the auction is, what, thursday at 6 00 p. M. At the phillips headquarters in park avenue. The viewing is open today, tuesday, wednesday ten until 6 00 on thursday until 2 00 dont miss it. Thank you thank you thanks. Coming up, trpumonomics. Jason furman at 8 40 eastern time well be right back. People dont invest in stocks and bonds. They dont invest in alternatives or municipal strategies. What people really invest in is what they hope to get out of life. But helping them get there means you cant approach investing from just one point of view. Because its only when you collaborate and crosspollinate many points of view that Something Wonderful can happen. Those people might just get what they want out of life. Or they could get even more. What they want out of life. But we should be seeing ymore range of motion. , im fine. Okay, well lets see you get up from the couch. Im sorry, what . Grandpa come. At cognizant, were uniting doctors, insurers and patients on a collaborative care platform, making it easier to do whats best for everyones health, every step of the way. You may need more physical therapy. Ugh. Am i covered for that . Yep. Look. Grandpa catch grandpa duck woah ha there you go grandpa. Keep doing that. Get ready, because were helping leading companies see it and see it throughwith digital. Coming up in todays top stories, including what you may have missed from our newsmaking interview with principles alawaleed. First, as we head to break, take u look at u. S. Equity futures. 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Com for a prospectus containing this information. Read it carefully. Up next former chair jason furman out with an op ed in the wall street journal. It is titled no, the gop plan wont give you a 9,000 raise. He will join us after no, youll get nothing and like it right after this well be right bac we come into this world needing others. Then we are told its braver to go it alone. That independence is the way to accomplish. But there is another way to live. A way that sees the only path to fulfillment is through others. That our time here can be deep beyond measure. No one who chose interdependence ever found despair. Because what the world taught as weakness, is in fact our greatest virtue. Something we all think about as we head into retirement. Its why Brighthouse Financial is committed to help protect what youve earned and ensure it lasts. Introducing shield annuities, a line of products that allow you to take advantage of growth opportunities. While maintaining a level of protection in down markets. So you can head into retirement with confidence. Talk with your advisor about shield annuities from Brighthouse Financial established by metlife. Today, the new new york is sparking innovation. You see it in the Southern Tier with companies that are developing powerful batteries that make everything from cell phones to rail cars more efficient. Which helps improve every aspect of advanced rail technology. All with support from a highlyeducated workforce and vocational job training. Across new york state, were building the new new york. To grow your business with us in new york state, visit esd. Ny. Gov. Sfliechlt joining us now is jason furman he is out with an op ed titled no, the tax plan wont give you a 9,000 raise we spoke earlier to senator blankford, a republican about the op ed earlier. I think we have it cued up check it out jason furman says that there is no bin fit really for the middle class he says its because the lowest bracket goes from 10 to 12, and a larger standard deduction in Child Tax Credit would be offset by the elimination of personal exemptions right what he is really talking about there is if you double the standard deduction on it, then youre not going to be able to take the mortgage Interest Deduction and take the charitable deduction if you are at the lowest he wanted. The reality is for the taxpayer, its exactly the same for them they have a larger standard deduction. Fewer people actually have to itemize. It dramatically simple fews tax. Where is the tax cut . It goes into lowering the rates. He looks at 10 and 12, and thats still in conversation thats not a done deal mosh people in the zero bracket. He is i think he is making some assumptions that he hasnt seen the details on yet, and that no one has. He is just assuming the worst. Thats the what do we need jason, is it details that are missing, or are you disassembling . More people would be in the zero isnt that the way it would work look, look, theres two parts to this tax plan theres the individual side and the corporate side what i said about the individual side, were going to be able to evaluate it we havent seen the fully specified plan what it looks like is there will be small tax cuts for individuals, some small tax increases for individuals. It does look like theres roughly a wash some people will get a tax cut some people are going to get a tax increase, maybe a little more will get a tax cut, a little more will get a tax increase theyll have to wait to see the details. No one debates that. The real debate here is youre not going to get a tax cut from the individual part. Will you benefit from the corporate part thats what i was addressing in my op ed the other thing that i was you werent here, so i was kind of needling you a little i guess i have to do it in person with you here in the past youve said i have heard Larry Sommers say that theres not an economist left around that believes in some of the dynamic stuff and some of the trickle down or supply whatever it is that youre talking about, you are saying then we have, like, kevin hasset and on goes im an economist, and i propose this i dont think its true that no one believes it. Read what i said. No. You said you want papers. You want you want pure reviewed economic papers we should have used dynamic scoring to assess tax cuts, and the thing is when you do use dynamic scoring, it turns out that if you have a really badly designed tax cut, its increasing the debt that has temporary provisions expiring, that has mismatches of depreciation and financial deductions you are going to hurt Economic Growth, hurt wages youre not going to help i saw that. You said if the debt goes up, that at that point that a Capital Formation is hurt. You know, i understand crowding out. I understand all that. You seemed i asked senator heitkamp i said we gave you 10 therele to work with over eight years, and we got 1. 8 growth you werent worried about lack of Capital Investment when you were running up that bill, jason. Now you are worried about 1. 5 trillion and what that might do to growth. Give the republicans 5 trillion they dont even want 10 trillion president obamas first year of the deficit was 10 to gdp. He cut it by three quarters. That would be fine with me thats not what this plan is going to do. The plan is going to add to our debt, and thats a big problem its going to help our economy its going to indirectly raise wages by helping our economy you can only have that bhoel sequence of events you do this and that and that. Wages go up if the plan works, and right now its designed, unfortunately, it doesnt. I dont know how it finally how it finally all plays out, jason its tough to say something. Im not sure that you can say we havent had any Peer Reviewed papers over the past do you really want to rely on academics and paper . Has there been the question is has there been anyone thats defended the proposition that wages will go up between 4,000 and 9,000 i havent seen anyone defend that i saw two op eds in the wall street journal last week. An excellent newspaper, by the way. They were positive on the plan they had numbers that were below 4,000. I havent seen anyone defend those two numbers. In fact, i think the interesting debate is whether the affect is positive or negative, but certainly no one is out there with numbers like that i dont know. You listened to people talk about just the affect on corporate earnings and on stock market and on the wealth effect that the fed has tried to engender over the past seven or eight years. We know that it does work if you do do see a wealth effect sooner or later the underlying economy seemds seems to benefit and catch up with maybe some of the movement in the stock market just philosophically, jason, dont you think that money is better served we should always try to keep more in the private sector where it can be used to try to generate returns and try to increase capital and it just is treated better than when its in the Public Sector isnt that philosophically something we could just assume you know, the only way to keep more money in the private sector is to cut Government Spending youre not cutting Government Spending by the way, president obama had proposals on entitlements, on medicare and on Social Security. President trump has proposals on neither of those, and its taken both of those off the table. If youre not cutting Government Spending, you cant actually cut taxes. This bill isnt this bill is shifting the bill. Is it possible to work on you do what you think, what you think should be done is it possible to work on growth first and try and get back to 3 or 4 , and then address entitlements sure, its possible to get back to 3 or 4 if you could go back in time 30 and 40 years ago, and have people have a lot more children than they actually had 30 or 40 years ago. The problem we have the biggest problem we have with growth is im with you on that. Millennials arent having any kids you either have a time machine or you can immigration,a tell. I think its true. Is it really . And doing what should be done on mmigration. We need more the millennials fault. Its interesting because i look at this the way you would look at it if you were a worker in north dakota. Im getting a 4,000 tax break, theres a way to taylor your Corporate Tax deduction so only those companies that grow their salary and wage deduction could actually get the tax cut so lets put the rubber on the road and say okay, you want guarantee it, not just make it as spirational people go, it doesnt look like its for me. I think thats an important point there. Theres a direct part of the plan which offers basically nothing to the middle class and no one is arguing otherwise and theres this other goldberg, eight Different Things and hope it ends up in higher paychecks, no one out there has validated those numbers you mean the corporate stuff . I dont know. I dont think its voodoo to think if you make corporations here more competent titive aroue world and dont leave the money over there, maybe you do borrow against it and some of it is still here, repatriation and a more level Playing Field with the rest i dont know if i need an academic to write me a paper that shows me xaexactly h thats going to help when it seems like it worked one other time. Joe, no one is saying dont do those things. No one is saying no, hes not, hes saying dont tell us all jason is saying, dont tell us its going to result in a 4,000 increase in someones paycheck, thats what hes saying hes not saying those things might not be important. It will be good but we dont know how good. You dont like the number. How about 3500 im not saying first of all would you take 3300 hes in the negotiating mood today. Well designed business tax reform, that would modestly raise wages over time. My worry is if you do it this way, youre over the medium and long run going to hurt our Economic Growth. Thats what youve seen in a number of countries around the world that did these types of tax changes and wages go down in the wake of them not some magic that will get us to 3 growth thats a lot harder work than people seem to be prepared to do its a lot of people think it will. Thats the weird thing about this we talked to each other but half of the aisle thinks it will work they are sure of it, jason. Then we should take the time and have hearings and analyze it and let the professional scorekeepers in congress do it they are people that know how to assess that. We can figure it out but not on the sort of pace they are on now. Thats what we talk about whether we may never convince you. Weve got a better chance with you than larry summers, i feel like we can work with you a little he means that as a compliment. I do. Thanks, jason smart when we return, much more from senator is the monolithic view of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Pthey dont invest inn stalternativesds. Or municipal strategies. What people really invest in is what they hope to get out of life. But helping them get there means you cant approach investing from just one point of view. Because its only when you collaborate and crosspollinate many points of view that Something Wonderful can happen. Those people might just get what they want out of life. Or they could get even more. Witness katy perry. Witness katy perry become a legal witness. Witness katy perry and left shark. Or a card shark. Grandma . Witness katy perry work. Witness katy perry firework. Witness katy perry swish. Witness katy perry. Aaaaaaw look at that dog katy perry with music videos and behind the scenes footage, xfinity lets you witness all things me. Tonight, jim cramer has an exclusive interview withhe t ceo of hasbro. Stick around, squawk box will be right back. When mother natures done her worst, the only thing that matters to us is keeping the lights on for you. The hard working men and women of the International Brotherhood of electrical workers, dedicated to keeping the power on in communities across the country. Because when bad weather strikes, we know what matters most. The ibew. The power professionals. Your bbut as you get older,ing. It naturally begins to change, causing a lack of sharpness, or even trouble with recall. 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Lets do some card twirling twirling cards e trade. The original place to invest online. You know win control . Be this guy. Check it out selfappendectomy oh, thats really attached. Thats why i rent from national. Where i get the control to choose any car in the aisle i want, not some car they choose for me. Which makes me one smooth operator. Ah still a little tender. vo go national. Go like a pro. Our guest host today, senator Heidi Heitkamp there is a bill in the senate. Does it pass i sure hope it does because it buys us some time to really solve the problems with health care its much more complicated than what anyone has said and if we can pass this, it gets it stabilizes the individual markets, gives us time to actually talk about Health Care Costs and what we need to do to reduce them. Way more complicated than tax reform i think so. And tax reform is not easy. No but doable i think. You think its done by the end of the year . No, but i dont know, im not in charge. Youre running again . I am, yeah. Is it 18 . Yeah. Fun, fun, fun in the sun its great to be here. Whats the most common expression up there in fargo were going to continue this conversation here. Well see you guys tomorrow. Time for squawk on the street. Good monday morning, welcome to squawk on the street. Im Carl Quintanilla along with jim cramer nearly a third of the s p reports this week and europe is up, the president goes to capitol hi t