Transcripts For CNBC Squawk Alley 20171109

Down for the week. Interesting intraday movements here, mike, what do you think is going on theres been this undertow of weakness, small cap stocks underperforming. Average stock made no progress, also a lot of focus on high yield debt the credit markets have been a leader, theyve been weakening for days seems its caught up to the headline indexes not sure if theres much more to it than that, other than pentup selling in september and october when were normally weak and skated higher through it i wonder if it has to do with anything thats been happening in the bond market weve been looking for clues weve been seeing a lot of buying in treasuries yields have come down from last week, almost around 250 and now people are looking at high yield and some of the selloff were seeing there that pinched yield curve got more anxiety, another excuse to do more selling. Doesnt take much to get peoples attention these days. Media is the big story at t and time warner, that merger facing potential push back after reports at t may be required to sell cnn a chief responded to reports saying he has no intention of selling cnn. Well hear more from stephenson in a couple of hours from the deal book conference, but in the meantime, lets bring in mike white, former directv ceo, who i imagine, mike, has been watching the last 24 hours of coverage with interest. What do you suspect is going on . Good morning, carl. Listen, i work carefully with randall and the at t legal and Government Relations team. These guys are meticulous in the preparation they do for this kind of a transaction. You know, i think clearly the government is uncomfortable about some aspects of it, but ultimately i think at t was very smart in the way they designed the transaction. It doesnt go through the federal Communications Commission as it were the department of justice would have to go to the courts and this is a country of laws. I still expect it would that the Justice Department would not be successful in litigating it, because youve got a precedent out there, which is the comcast deal, and at t, directv combined are not much larger than comcast. So where does directv fit into this equation . For instance, would this deal make sense for Randall Stephenson and at t if directv wasnt part of the equation, or is it the key here in terms of what they are planning to do in terms of distributing all that content . No, sara, the bigger issue is they are looking for significant synergies from Programmatic Advertising and leverage that across all of their businesses and leveraging big data. I think when you start to pull pieces out, you know, whether its cnn, which i dont think would ever get pulled out individually or a directv, you start to kind of dilute the synergies. So i think clearly from the governments perspective youve got a large purchaser of content in directv and youve got a large provider of content. Its a vertical merger, which has always been looked at legally as benefiting consumers and not removing competitors from the market, so i still dont see the legal basis for a successful challenge in court, but, you know, this is a negotiation, and i have no doubt that it will take its own course and both sides undoubtedly will be fully prepared. Mike, even if it does seem as if at t is in a good position legally here, it does raise the prospect of just what cost and time makes it worth while to pursue it that way, i guess, if you have the government trying to make the case that, look, the world has changed, at t has got 150 million subscribers with their phones and its a different type of distribution than weve been used to before and try to propose that, in fact, the industry terrain is different now and, therefore, were going to make it harder for you, do you think theres a point for at t where it becomes not worth it well, i notice the breakup fee isnt that hard, i think its 500 million. Its a lot of money, but in the grand scheme of things for the deal this size its not that huge, but, you know, my sense is at t is very committed to this transaction, very strategic from their perspective. And usually, by the way, the litigation when youre dealing with this kind of a situation doesnt get dragged out, you know, for years. It tends to be months. And so my guess is they get an expedited hearing and it would, you know, if it does go to court, you know, its not a matter ofyears, its a matter of months. And so i still think its pretty efficient process from a legal standpoint compared to other things we are happy to rely on your expertise in this specific situation, mike, because youve been through it before well talk maybe some disney fox next time. What a week its been for media. Well, you know, i think thats a more interesting case, carl, and there, by the way, you need to look at how do you create an alternative netflix, particularly to international subscribers, because thats where netflix has its strength indeed. Thanks again, michael white, former directv ceo speaking of media, roku shares higher after its first report as a public company, thanks to strong sales, despite the fact that roku is not trying to get in on the content wars by creating original programming. We asked anthony wood about that a few moments ago. When a company like disney, you know, if they do launch a channel thats an over the top channel, we are the leading ott Distribution Company in the u. S. , and so those companies naturally come to roku for distribution of their content, and were just a great partner for them weve built a lot of features in our platform to help them reach audience, monetize their content. Not often you see a name like this move this much. Yeah, obviously, on a tough reception after the ipo, so the skepticism was, hey, this is a transitional technology, we cant see them being at the center of things very long, but these results show me, look, maybe streaming is a fast enough growing part of the world they can do interesting things for a long enough period of time i think its an accelerated version of what tivo did, which was hardware into software tivo still exists and is a partner of roku, but thats where i see it coming around although the bear case is, yes, it was a first mover, but this is an overly crowded space with amazon, google, facebook. They are all getting in on the game apple. As big competitors who can afford to lose a lot more. Market cap on roku still about 2. 5 billion, so keep that in mind. When we come back, shares of square hitting a snag this morning. Well talk to sarah friar exclusively. By the way, shes the executive that has jim cramers big endorsement. Take a listen to that. Square is good. I remember sarah friar, whos a fabulous cfo jack dorsey should declare victory. Plus, retailers dominating earnings agenda. Insight from the ceo of elf is coming up. And mark cuban on the record well hear from the billionaire investor live at the New York Times dealbook conference when squawk alley comes back. Shares of square climbing through the morning, now in the green on those better than expected earnings. Lets get to deirdre bosa with square cfo sarah friar in san francisco. Thats right, we have sarah friar here right beside me, and i know you guys were down a little after the earnings, but i also want to pull up a 12year chart and show square shares have nearly tripled in the last year, so this quarter another great one. Bigger merchants making up a larger portion of shares, business, nearly half of the payments volume. Youre actively recording them, too, came up a Square Register to better serve them what is the strategy here, how big are you looking . Sure, ultimately we want to grow with our sellers and there isnt a cap to them. As you pointed out, we brought together all the best parts of square, hardware, software, managed payments we think that does open the door to really large merchants coming on the platform. We talked about one where we think they can bring 100 venues on to the platform, so a big part of our growth, 64 year over year this quarter what im getting is, how big could we see it, could we ever see another starbucksized deal that was a long time ago when your market cap was a fraction of what it is now. You guys are in a different position are you ready to partner with big chains again like a starbucks . I think what we learned is we dont want to customize our product. We want a product thats there for a merchant of any size we absolutely added pieces like vertical point of sales, so we launched a retail point of sale in q1, understanding retailers have complex back end environments, lots of skus to manage, they need to be built to manage their supply chain, and were trying to do that, so where we can add in machine learning, maybe a. I. In the future into those products, we think it will be a platform for a merchant of any size not ruling it out not ruling it out lets get to the bank charter, you applied for one early this year. Why did square apply for a bank charter . What is squares approach to banking, traditional banking, and its longterm goal for us its about the underserved. As weve done with payments, how do we bring folks on to a system thats discriminated against them with Square Capital weve been lending down into Small Businesses that traditional banks havent gotten to. With the ilc, thats a way to get closer to the regulators we think with that we can move faster, be more innovative with the product, but ultimately its how do we serve the underserved. I get youre serving the underserved, but why shouldnt they be worried youd move into more financial services, especially jack last night on the call was talking about square cash, a spending device and youre offering more and more services. We are. Were looking for where can we bring utility to our customers sometimes thats our sellers, as weve done with you talked about the register platform, Square Capital, crm products, but were seeing it now on the buyer side. With square cash, the product has been doing phenomenally well regularly were the number one finance app in the app store and google play and thats seeing ourselves a top 20 app, its all about utility. We see buyers want to do p to p, use a spending card, you know, and over time they want to keep a balance in that account. I know we have to go, but quickly, respond to that clip of cramer saying that youre the public face, you run the day to day. How do you respond to that sure, absolutely. Judge us on our numbers, i think our team is amazing at square. Starts with jack, amazing visionary. I think he doesnt get enough credit for how much hes driving our business, and you judge him by our results, right, 45 year over year growth this quarter, accelerating, and look at our whole team i think weve constructed an Amazing Group of people that bring a lot to the whole company, and again, you see it in our results got you, sarah, thank you very much for coming to talk to us appreciate it throw it back to you in new york deirdre, thank you very much. As we see the shares turn positive there as we head to break, taking a look at the retailers reported earnings today, sort of a mixed bag. Macys missed on comps it was a beat the stock up 7 . Adidas under pressure. E. L. F. Beauty, well talk to the ceo of that one, es,ye lips, face, moving in opposite directions here. Squawk alley will be right back hey, you every talk to anybody about your money . Yeah, i got some Financial Guidance a while ago. Howd that go . He kept spelling my name with an i but its bryan with a y. yeah, since birth. That drives me crazy. Yes. Its on all your email. Yes. They should know this . Yeah. The guy was my brotherinlaw. Thats ridiculous. Well, i happen to know some people. Do they listen . What . Theyre amazing listeners. Nice. Guidance from professionals who take their time to get to know you. Another earnings mover on a big morning, e. L. F. Beauty posting earnings that beat analysts estimates, and joining us now is e. L. F. Ceo, welcome back nice to see you. Thanks, its great to be back so, 28 sales growth, not bad, but there are some questions from analysts about the timing of holiday shipments being pulled forward and what that ultimately means for guidance can you clarify what youre seeing ahead sure. We guided that we will do approximately 270 million in sales, about 18 higher than a year ago for the fiscal year, and so the holiday, i mean, every year we have holiday shipments for the season in some years the retailers take that inventory in the Third Quarter, some in the fourth quarter, so thats not really the big news the big news is how strong our growth is and how well positioned we are in the marketplace. We continue to grow strongly and the brand resinates with our core enthusiasts are you surprised to see the weakness of the stock given the fact you are showing double digit growth continually yeah, you know, we dont really Pay Attention to it on a shortterm basis this is a longterm growth story, you know, were really proud that in our almost 15year history weve grown every single year, regardless of the Economic Cycle or where the category has been its really been by executing against our mission of making luxurious beauty accessible for all, so i think all it does is gives a great opportunity for somebody to buy, but were in this for the long run. Is the category of makeup slowing . And if so, which a lot of analysts have pointed to in some of the data, is this a permanent shift or something temporary no, you know, ive worked a number of consumer categories over my career, and one of the things i love about Color Cosmetics is, its a category if you look back decades has exhibited pretty strong growth over a long period of time, and part of it is how important it is to consumers and how resilient it is. So we have seen in other times, i think back in 2014 we saw a few quarters where it was soft, then came roaring back, so we dont consider any kind of category softness as a long term thing. We see it as a temporal kind of move again, the core consumer fundamentals of women love this category we dont see changing. Tarang, you mention you continue to take share, even at the revenue number youre projecting next year, which is certainly a product of fast expected growth, youre not big in absolute size relative to some of the brands of the Larger Companies and i wonder if you see them fighting harder in other words, do they have the means to essentially make the economics tougher for you and make more demands on the retailers and the rest of it are you seeing any kind of squeeze there . Yeah, no, we havent. If you think about our business, we started as an Ecommerce Company and have an incredible direct to consumer kind of business we went into National Retailers about eight years ago. One of our largest customers is target so some of the larger players have seen us at target for eight years and, you know, were now the number one unit share brand at target. I think were the number three dollar share brand at target and, you know, we really resinate with their guests so its really tough for others to kind of compete against us, given how great our products are and extraordinary value. So if they did now, its still more expensive than what e. L. F. Is, our quality is great, we often have preference over prestige, and just the way we really engage with our consumers is quite differentiated. So we dont really worry about big legacy competitors obviously, you can see both within our growth, as well as kind of our share position, you know, we have plenty of room to grow ten seconds, hottest product for the holiday this year . Last year i think it was lashes. What was this year yeah, this year, you know, we have these wonderful holiday kits they are perfect for gifting and, you know, all sorts of different price points from 5 on up, so just go on e. L. F. Cosmetics. Com and stock up for your family and friends. All right, tarang, thank you very much. The ceo of e. L. F. Beauty oliver chen at cowen says the contour bubble popped and thats why the category is slowing. I beg to differ as someone who contours every day little color for you there, literally. Lets get to dominic for the european close moments away from the european close and the color of the day is red you can see red across the board from all the major sectors in europe all sectors closed with declines, the banking index saw stocks rise. Check out whats happening with germanys Commerce Bank hosting a net profit as the focused overhaul other earnings, reporting an increase in net profits and it saw higher profits and sales from a year ago. The ceo also telling cnbc its set to conclude preparations to sell its Health Care Business by the end of march of next year. And luxury brand burr berry getting hit hard after the company outlined costs of store refurbishments, it spooked investors, so a lot of red overall. Back to you. Thank you very much for that. Lets go across the room and get a news update this morning with Contessa Brewer heres whats happening right now. At nato talks in brussels, jim mattis says his colleagues will discussed the threat from north korea and russias attempts to interfere in the democratic process. Recognize that european capitals are closer, in fact, to pyongyang than washington, d. C. , and europe is keenly aware from our discussions it was obvious that europe is keenly aware of this threat, and we are all aligned in terms of characterizing the threat and in solving this sobering issue. The neighbor accused of assaulting senator rand paul pled not guilty in court this morning. He requested a pretrial conference, which was scheduled for november 30th. Kevin spacey is being cut out of his newest movie its already shot. People close to the production of all the money in the world say actor Christopher Plummer will replace spacey in the film. Director ridley scott intends to keep the films original december 22nd release date thats our update this hour, back to squawk alley. Sara contessa, thank you coming up, back live to the New York Times dealbook conference for a conversation with mark cuban. Plus, Kayla Tausche sitting down with Goldman Sachs ceo when squawk alley returns among the earnings movers today, adidas Third Quarter sales up 9 , helped by strong sales in north america and china, but with new players like amazon entering the sportswear market, is adidas concerned . Amazons of this world will continue to be more and more dominant in the u. S. Marketplace and development in other parts of the world thats where the transformation for us as a company is so fundamental for our future success. We have in the u. S. Not been impacted by any retail in the u. S. Because we were underdistributed so we didnt get the way up, so when sales picked up because we were never in the stores, so were not impacted at this stage on the Stores Coming down amazon friend or foe at this point . Sporting goods market is more than 100 billion and i think theres room for more players. I believe the consumer wants the right products and brand, so its up to us that our brand and products we bring to market are competitive and that is with or without an amazon. And, guys, i asked that question because amazon is quietly been rolling out its own brand of private label sportswear brands on amazon. Peak velocity is one it rolled out in october, for instance, so it raises the question with nike warming up to amazon, something we talked about with mark parker a few weeks ago, they were launching this Pilot Program to sell directly. Adidas doing that and under armour are they competing or are they going to be important as the Growth Continues to be online and ecommerce or both perhaps definition of frenemy, absolutely as we go to break, look at shares of priceline, stocks still down after disappointing results earlier in the week. The ceo sat down with r emousea mody well have some of that conversation with squawk alley comes right back ng the constitution by taking money from foreign governments and threatening to shut down news organizations that report the truth. If that isnt a case for impeaching and removing a dangerous president , then what has our government become . Im tom steyer, and like you, im a citizen who knows its up to us to do something. Its why im funding this effort to raise our voices together and demand that elected officials take a stand on impeachment. A Republican Congress once impeached a president for far less. Yet today people in congress and his own administration know that this president is a clear and present danger whos mentally unstable and armed with nuclear weapons. And they do nothing. Join us and tell your member of congress that they have a moral responsibility to stop doing whats political and start doing whats right. Our country depends on it. The market. Redict but through good times and bad. At t. Rowe price. Weve helped our investors stay confident for over 75 years. Call us or your advisor. T. Rowe price. Invest with confidence. Shares of priceline rising a bit, still after disappointing results this week. Seema mody caught up with the ceo and joins us now with some of the highlights. Good morning, seema. Hey, sara priceline ceo glenn fogle addressing what was a challenging quarter, rifle rivals like air bnb and a drop in the stock were up year to date in our stock about 13 , so thats still growing, still good. Yes, there was a little bit of a setback, but when we look at what were trying to do in terms of putting investments for the future, its the right thing for us to do expedia, air bnb, google, somewhat of a crowded market who would you say is your biggest competition . Youre right, this is a competitive business and its been competitive all the time ive been in it, and weve done a very good job over the last more than a decade and a half weve been growing this business from when i started how tiny it was and now we are by far the leader in the space, so, yes, we have lots of competition, but weve dealt with it very successfully shares of priceline down over 12 just this week glenn fogle saying that investing in brand advertising to sustain growth will be a key part of pricelines strategy and guys, that could pressure margins going forward, although he does continue to see growth in china, its stake in sea trip, which it continues to build. Also i asked about acquisitions and he said acquisitions will continue to be a part of pricelines tool box keep in mind one of the biggest acquisitions was open table and continues to wait to see the growth in that space the restaurant space guys, back to you. Our seema mody, thank you so much for that. Senate republicans are set to introduce their own tax plan this morning and this is what we know so far. The Senate Version is expected to completely eliminate the deduction for state and local taxes. Its expected to have more tax brackets than the houses, four, and reportedly addresses some concerns about the 20 tax on multinational corporations Washington Post is now saying it will delay the Corporate Tax cut until 2019 our john harwood sat down with the National Economic director, gary cohn, to discuss the tax plan take a listen. Generally, if you look at what were doing for middle class taxpayers, the reality is kind of simple the Median Income family in the united states, the family that earns about 60,000 in the united states, the speaker talked about them getting an 1,182 tax cut that family is now paying a marginal tax rate of less than 1 they are paying less than 500 of total taxes in the system so a 60,000 earner family of four is paying less than 500. We have cut their taxes significantly. You cant go much further in the tax system unless you want to start going negative tax rates and go into the negative world, so when people score this youre scoring against the bound of zero. [ inaudible question ] our john harwood joins us this morning to talk about the interview, which is getting a lot of attention this morning, john, and a lot of headlines most of them centered around the benefits cohn argues to a large number of people from tax cuts that affect a smaller number of people well, thats exactly right. In fact, theres a former Bush Administration economist who runs the penn warton model at the university of pennsylvania just this morning came out with a study that says by 2027 the top 1 will get 53 of the tax benefits in this bill and the bottom 80 will get 14 of the benefits that is a very difficult equation to sustain politically. Gary cohn tried to do so and he told me our biggest supporters are the big ceos and the business round table, and his argument, much disputed by other economists, is that even if Companies Take additional profits as dividends or share buybacks, it is ultimately going to get invested in a way that trickles down to workers he said trickle down economics is good for the economy. I read that as a whole supply side economics defense my favorite quote from your interview, john, was the most Excited Group out there are big ceos about our tax plan. I wonder if that quote is going to come back to bite him well, look, our nbc wall street journal poll showed 25 , only 25 of the american people, begin this debate believing this tax bill is a good idea and theyve since been hearing stories about the share of middle class people who will get a tax increase in the bill so it is a big challenge for republicans and after that Virginia Election the other day youve got conflicting arguments. Some saying, whoa, better stand back from this agenda or were going to get hammered. The other says we better do something or were going to get hammered how they sift those arguments will determine what happens in the house and the senate john, given the fact that, as you say, it begins as a tough sell, what about the chance of a Corporate Tax cut being moved to 2019 almost like youre deferring the main central driving force behind this effort and then taking the pain up front well, i think theres a chance they will delay it. On the other hand, when i talked to economists, they all agree that the most powerful part of this legislation is the immediate full expensing it only lasts for five years, but that is likely to result in more Economic Growth than the rate cut itself. Finally, john, chairman of the house judiciary says today hes not going to run for reelection. Yesterday orrin hatch said virginia and new jersey races add urgency to the tax debate. How much are these things connected . Well, i think the Republican Party and the house is under a tremendous amount of pressure right now, because they look at those down ballot races in virginia, where democrats are on the brink of taking over the house of delegates and saying, if you represent a suburban district, youre in big trouble. Democrats arent going to win the district, its a very republican district, but theres a whole lot of pressure weighing on these members as they try to move ahead well see what the duelling proposals show on facts between the senate and the house john, thank you very much. Great interview. Watch it on cnbc. Com coming up, mark cuban on the record well hear from the billionaire investor live from the New York Times dealbook conference. His take on everything from quk lepoti wn cshe sawaly returns honking beeping were on to you, diabetes. Times up, insufficient prenatal care. And administrative paperwork, your days of drowning people are numbered. Same goes for you, budget overruns. And rising costs, wipe that smile off your face. Were coming for you too. At optum, were partnering across the Health System to tackle its biggest challenges. With us for the hour today, how long does he think the bull market will last plus, mr. Gabelli owns many of the biggest media names. Which deals he think will happen and which wont. And our call of the day is a stunning one on snap from the lead underwriter on that companys ipo. Plus, youll ask mario were taking questions through twitter. All noon eastern sara, see you in just a bit. All right, scott, thank you Kayla Tausche sitting down with Goldman Sachs Ceo Lloyd Blankfein in china she joins us now from beijing with more from that exclusive interview. Kayla . Hey, good morning, sara you just heard gary cohn say that ceos are the target audience for that Corporate Tax cut. Well, Lloyd Blankfein doesnt think the market needs a stimulus right now and hes not been shy to criticize the administration when he feels his views have Strong Enough and he wants to share them, so i asked why hes become an advocate for the administration on this particular trip in beijing thats where well pick off in my interview with him today. Youve used your twitter feed, though, to air some grumblings about this administration, whether it was trolling infrastructure week, or talking about an implication that the president was casting a shadow over the country did you have hesitations about carrying the flag in this trade mission . You know, carrying the flag, you mean the sense of being an american in a Bilateral Trade Mission . Throwing your weight behind the administration that you have had issues with in the past. Let me tell you, nobodys on all fours with anybody theres things that i disagree with on the administration, but let me just tell you what i agree with i think this is a pro business administration, not for the heck of enriching businessmen at the expense of theres kind of a narrative that this is a competitive interest between business interests on the one hand and working people on the other or the middle class on the other. I think i think if you support business and growth, that inures immediately to the benefit of every american. Thats what we really need when you think about the concept or the concepts, plural, that the administration has conceived, a lot of it has been generated by Goldman Sachs alums. Were a decade away from the coining of the government sachs moniker, but where is the influence on the white house and by extension the economy in some ways i wish i had a lot more access if there werent as many Goldman Sachs people there and people didnt feel so awkward about engaging i wish that turns out to be a bit of an overhang listen, let me say im proud of the people after Goldman Sachs, im proud of the people we get im proud of what they learn when they are at Goldman Sachs, and im proud they are highly sought after when they leave Goldman Sachs. But when they leave Goldman Sachs, they leave Goldman Sachs. People have talked about the revolving door between government and industry. I would say, its not a revolving door at Goldman Sachs. Were not taking a lot of people out of government. The government is taking people out of Goldman Sachs, and those people arent returning to Goldman Sachs when they get out. He followed up that comment by listing a long line of luminaries among them hank paulson, treasu treasury secretary, onetime ceo of goldman, who was known for his extensive deals he did in china. So, obviously, blankfein is owning the fact goldman is a Training Ground for people to go and serve there country and he said it right there on the record, it is not a revolving door, it is a door that closes after they leave goldman guys, back to you. Interesting that we just heard from gary cohn with john and lloyd with you, as it appears at least Corporate America really trying to push the benefits of the tax package as we know it right now. Great stuff, kayla on your ongoing trip through asia with the president. Dows down 165, which may have something to do with some of these headlines regarding the Senate Version of the tax bill, but who knows . Were back in monta me no matter how the markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. Stocks moving lower through the session, but were close to the session lows right now, dows down 153 art made his way to post 9 to talk about what may be driving this seemed like this last tick coincided with the Washington Post headline that the senate would push for a 2019 start on Corporate Tax cuts that was, i think, what gave us this new leg down some of this nervousness, i think, started offshore. You had a big trading glitch in japan. They seemed to recover from that they seemed to recover from that but when europe began trading, things started to come apart there and its fallen in our futures. So a lot of Different Things tugging around here. Theres also some speculation in washington circles that when the president finishes his trip and comes back, there may be some more legal troubles for members of the cabinet and things like that so it doesnt sound like clear sailing going all the way through. So, you know, weve run the record highs on somewhat negative breath. So the market was a bit vulnerable it just all came together this morning. The credit market is the other thing people had been point to for several days and it seems like the headline indexes are taking account of all of that in one bite today. Yeah, i think thats right. The junk bond index has been down for i think seven days in a row. So weve had these little check engine lights go on all around i think its suddenly come together but, you know, i think carl was spot on with the idea that when the headline came out about postponing the tax thing, everybody got a little further concerned. So as far as how the market is trading off of the headlines out of washington in terms of taxes, whats the key, just when those Corporate Tax cuts are implemented . Yeah, i think the concern is that it might be drifting further and further out. Of course if they wait to do it into next year, its highly unlikely they could make it retroactive enough to impact this year. So that is a bit of a concern. Theyre looking for some real action here and they want to see stuff nailed down. Secondarily from the standpoint of the republicans, the longer it takes to implement this thing, the less impact it could possibly have on the 2018 election. Larry kudlow has joined us at the desk i can see hes chomping at the bit. You heard tax reform. How much would this delay matter ive had this story for a little bit the Corporate Tax cult is going to be delayed in the senate. This is just the chairmans marks, its not a final vote, to january 1, 2019. But the immediate expensing of cap capex will be implemented january 1, 2018. Its not good. Its not the worth thing in the world and i have a feeling its not going to hold. Capex is good, thats pro growth however, delaying the decline from 35 to 20, you know, it will take out some growth it raises doubts, which is what art is suggesting. It also will continue the avoidance and the sheltering i mean, look, a lot of these big corporations are offshore for a reason we know that and have talked a lot about that but in terms of repatriation, if theyre staring at a 35 tax rate, thats a whole different ball game. Thats much higher than they expected, they will keep offshore if they can foreign firms that might want to come here because we have such a favorable tax climate, theyre going to hold off for another year and see if it actually happens. But the tax avoidance issue is an issue back in the envelope, it could cost them 200 billion thats the weird ironic thing about that and in washington, they dont know how to model tax avoidance and tax sheltering, they just dont. Theres two things they dont know how to do, international flows is not in their models and tax sheltering and avoidance not in their models. The other things weve heard, full elimination of s. A. L. T. Deductions. Thats right. More brackets. Thats right. No full repeal of the estate tax. Thats right. So does this point to real problems reconciling, or no . You know, thats a great if i had a clear crystal ball. But look, there are bumps in the road remember, what youre going to get today in some way we used to call the chairmans mark i dont know if thats wholly. But then it has to get through the committee and come to the floor of the senate. The administration will not be happy with this. The president made it very clear that he wants it immediately the president is right in terms of growth and revenues and every darn thing possible. I will say this, though. I was republicans, senate, invited me to their breakfast on tuesday, i guess yeah they were determined to get it done now, it may not be the best and most optimal thing but the spirit is very high and very strong they are very kind to me the whole leadership was there, among many others. I made the case that phaseins are not a good idea, so sometimes i win a few and sometimes i dont. This is not over until its over art made a great point in terms of the gops situation, if you will, what they have to do is get a very good Corporate Tax cut through. You know, the rest of the package. Hope that it does grow the economy. Were running at least for the moment around 3 plus. And that gives them a great economic narrative for 2018 midterms and you saw what happened tuesday night in virginia and so forth. So they need that. And the good news is they know that they get that. You know, very senior republican senator said to me we are going to get this done and we will reconcile it with the house. Dow down 180, larry, just looking around i dont think youre helping the matter very much youve also got this report from the cbo and joint committee on taxation says the house version adds 1. 77 trillion to the deficit which means it wouldnt qualify for reconciliation what about the deficit hawks in the Republican Party oh, i dont know. Thats not going theyre just going to be cool with it . Thats not going to be a big issue. Jim langford has made some issues from oklahoma ive said it all along and still say it, they should have built in a dynamic 3 growth rate. They went from the cbo which is 1. 9. They went to 2. 6 that was part of the toomey from tennessee corker agreement i looked at it and looked at the numbers and they really, to get what they want, they should have built in 3 . Which is what the Administration Steve mnuchin and everybody has been saying for a long time, what ive been saying for a long time, and they didnt so now theyre like hus tinge and trying to put square pegs in round holes. Mark cuban is saying he is considering running for president. Lets take a listen. And i think that people are looking for an independent voice, a real independent voice that at least as an inkling of what theyre talking about let me tell you what maureen wrote. Trump and cuban are testosterone twins in some ways both savor poking elites and flouting convention. Wait, he owned a sports team for about six minutes. But the government has conspired against him. Trump and the deep state cuban when he fended off trading charges by the s. E. C tell me do you think we have moved to a completely different place in politics in america businessmen, bob iger of disney as a possibility, have we moved to a different place the next elected candidates of all stripes not going to be people who spent time in politics historically but maybe people like you . Yes i think i tell you a quick story. Ive known don, a lot of people have i even supported him briefly and then got to know him and i was talking i was talking to a friend in dallas, a red state, and i was explaining what i knew about him and why i was going not going to support him any longer and i said why would you vote for this man after all ive just said he said, mark, let me just tell you something. This guy is in his 50s that ive known forever. He said ive been voting for politicians my entire adult life and they have done nothing for me and i have not seen any results. You know the definition of insanity there you go and when you go around the country and you talk to people and you ask, you know, why did you go this way . Why did you vote this way . People are tired of politicians and the things that politicians do and whether its me, bob iger, Howard Schultz or somebody else, i think theres a door thats wide open and i think somebody who doesnt have a deep affiliation with either party or with politicians has an even greater opportunity. It was reported that, quote, steve bannon had identified cuban has the number one threat for 2020 because he could appeal to republicans and independents. You met with steve bannon at some point. Ive known steve bannon for 20 years and it was just to tell stories about donald and what happened nothing look, im somebody i met with michael cohen, his lawyer, this morning to talk to him about his book i met with 15 no, it ended up being eight Democratic Senators yesterday in d. C. To talk about health care to try to get a better understanding i talk to others about Artificial Intelligence and the impact on the workforce. I met with republicans i met with jeff flake yesterday. So ill talk to everybody. To me you cant absorb enough knowledge and you cant connect with people enough and so i dont want to just limit myself to one silo i dont want to be in a bubble i want to get feedback from everybody. So you say youre considering it what would put you in the ring or out of the ring the reason why im considering and havent committed is because ive got three kids what caring, loving parent would put an 8, 11 and 14yearold child through this what does your wife say she asked me if i want to stay married do you think that youd be able to persuade her i dont know. But i think i have a year to find out i think you know, just look at whats happened in the past year theres plenty of time to find out. And so i dont have to rush