Transcripts For CNBC Closing Bell 20171212

Good buy into early end and maybe beyond. But lets start with todays rally. Joining our exchange today is jim kahn, sarge gilfoy, and Rick Santelli at the cme. Rick, im going to start with you if i may ahead of the fed meeting tomorrow weve got a bit of a stealth rally in the pound the pound. The dollar over the last week or so including a little bit today how many rate hikes over the next 13 months are priced in you know, i dont know that much of the dollar activity that were seeing today is necessarily predicated on what investors think about 2018 whether its two, three, some are saying four. I really think its more of a function of the u. S. Market kind of bucking the trends of europe, the spreads of our treasuries especially the long end is distancing itself from the yields of the long end of europe and as that occurs, if you were to put that on a chart, the differential at 210 basis points seems to be one of the factors that could be dragging the dollar up a bit. More in a yearend event and remember, theres a lot of dynamics of europe in particular and central banking in general that would be changing a good deal in 2018 especially the Balance Sheets of europe i think the dollar is tuned into that a bit just being the counter putter of the euro trade sarge, when you look at the markets, the dow is up right now. The ppi was hotter than expected, what do you think is moving us around here today . Its not the ppi. Well wait on the cpi before we do anything based on that. Youve got a bit of a chase for performance here youve seen a little bit of a rotation we saw last week. Out of tech meaning right to answer that, the only stocks we bought were tech stocks i think basically right now with the stock market, youre setting up 2018 like rick said i think itll be a good year i think youll see earnings expansion. I think you need to plow into this by the end of the year but youre going to see this little swoon here things have to get right im not as hot on health care as the rest is. Im still hot on energy. I think im going to go there and i like techno matter what people do with it. Im going to disagree with him on the ppi number. I thought that was pretty important. Weve been talking about inflation for the last ten years and we havent seen it finally were starting to see some of all that money that got printed move its way from the banks into the real economy. When that happens, well see a shakeup of whos leading in the market and whos lagging in the market so ppi the headline was up 3 on the year. 3. 1 . Thank you, rick tomorrow the cpi either will confirm that or it wont and if it does, then we can talk about inflation. But what if it doesnt even if it doesnt, the cost of making goods and services is rising it leads to price increases for consumers which we think will come so well see cpi move up even if its not tomorrow, well see it move up later in the year or 2018. Well see margins compress either way well see impacts on global equities. You wont be able to see unless inflation is 4 to the downside and participation pressure to the upside yeah. Guys, stay right there earlier today i did speak with Stan Druckenmiller who is fired up ahead of the fed and tomorrows decision. Take a listen. I think the 2 inflation target needs to go if i was running the fed, thank god to the world im not running the fed. It would probably not be in my top ten criteria the 2 inflation target has sort of become a religion initiated by the professors and its this target an interesting story on the front page of the wall street journal today how amazon is making the feds job more complicated. This belief that 2 is appropriate for all seasons at all times to me is pretty absurd you take the last Great Innovation period which is the late 1800s, we he diad deflatior 10 or 15 years in the 50s, it was lower for that part of the decade. Fed funds were 4 . We had rapid growth. That should be considered normal and fine and they could have Interest Rates up at 4 what im really saying, im not a fan of rigidity given our economic circumstances would be 4 were at 1 . In europe, it would be 2 . Theyre at minus 40 that doesnt even count the bond buying were talking but this is all in the name of th this. If theyre keeping rates barely above zero in some countries, in others under, what are the consequences of that the consequences are huge were causing all sorts of what i would call misallocation of resources. Like bitcoin . Or is is that unrelated . No, its not unrelated at all. Bitcoin, art, wine, equities, credit, you name it. Everything is one way up and there are huge distortions taking place and its all in the name of this 2 inflation target. When you get a misallocation of resources, it really hinders growth over the longer term. Let me give you an example last week there was a Company Called steinhoff thats the Parent Company of Mattress Firm in the u. S. Now. This is a South African firm. I was lucky enough to be to short the stock because someone explained to me that these guys might be crooks. There was fraud at best when you look another what was going on and they buy this Mattress Company in the u. S. For 100 over where it was trading. Theyre borrowing money, big rollout, big credit. And guess why theyre able to issue all this debt. Because the ecb is buying it when the street knew it was a fraud and going brupt. We lost 160 million on these bonds. It comes out in the wash the point isnt whether the ecb is making money. The point is whether they are keeping crooks and Zombie Companies alive. This is exactly what japan did for 20 years it hinders longterm growth. Companies like this should not be Walking Around borrowing money. Thats kind of where we are today. You see whats going on in bitcoin. Do you own any cryptocurrencies i dont own any obviously as a trader i should have but i only trade what i know what i do know is it takes the same amount of energy to do one bitcoin transaction that it takes to power nine homes in the u. S. By 2019 itll take up half the energy in the United States to run the bitcoin network. Sounds like the Utility Companies are going to buy i found it interest most people in bitcoin are climate people theyre west coast people. I dont quite get the connection weve got this rogue currency that were all going to support that is destroying the climate in some extent, but whatever so youre not going to take a position on whether bitcoin is going to go up to 100,000 or a million or whatever if were talking about bubbles it must look like some of the greatest weve experienced. I dont know whether its the greatest weve ever experienced. Look bitcoin is like anything else. Its worth what people are willing to pay for it. And right now people are willing to pay i havent looked in the last five minutes so it could have varied. But lets say theyre willing to pay 17,000. Thats what its worth gold is what its worth. But what i do know about bitcoin is the concept that it could ever be a medium of exchange has been eliminated because you cant do transactions, particularly retail transactions with something with this kind of volatility but if people think bitcoin is worth 17,000, thats what its worth today. Last thing on this before you move on. There are people that want to hold bitcoin because theyre as critical as the fed and Central Banks as you are if you think theyre screwing this up, what is a better way to express that than Holding Bitcoin . Thats an excellent question. I think at some point figure out when this is going to end. And then get out or go short by the way, when this ends and it will, im talking about this monetary radicalism were in bitcoin will probably go down with the rest of the stuff how has the year been for you . I would have to say its probably the worst year ive had relative to the set of opportunities out there. I can never recall i mean, for me, 1997 was close but that was an Asian Financial crisis that was pretty good opportunity. I have done very well in stocks. Ive really, really mistraded macro. Its going to be if it was up to macro, id have my first down year but stocks have bailed me out. So barring a miracle, thats not going to happen. But youre not up 30 im not up anywhere near 30 . Im not up double digits you know, im having, again, relative the opportunity a terrible year, barring a miracle its going to be my first down year in currencies ever. I pointed out repeatedly the fact the u. S. Dollar is so weak. Would that be one example or other things me just overtrading and being cold at the wrong time and since its been my bread and butter for years, i tell you overallocating exposure there relative to equities somebody on your network said a week ago all you had to do this year was roll out of bed and youre going to be up 20 or 30 . Apparently i got out of the wrong side of the bed. Wow a big admission from him there on the performance front selfdeprecating. Always a pleasure to hear from mr. Druckenmiller. Of course to get his view on these things amazing stuff and weve got more of that to come over the next couple of hours. Lets delve into that particular part rick, i want to start with something we heard at the top of that we heard its absurd that the 2 target is appropriate for all seasons at all times in terms of inflation targets. Whats your view on that well, i think aplus or in lou of olympics, a ten i couldnt agree more. Ive been saying the same things for years, as has ira harrison and many of my sources it makes no sense. The world isnt calibrated the same between europe, japan, the u. S. To think there are such high correlations as to what Central Banks bogey is for inflation its so arbitrary. And when you listen to janet yellen talk about verizon or as he brought up which i used in my exchange today, the article about amazon and people shopping, listen, Milton Freeman would be rolling in iz had grave. Listen those arent monetary phenomenons. What Central Banks are doing with this arbitrary 2 i think is horrible. I think we should get that pillar and destroy it completely and the notion of lower prices, view it like Peter Boockvar does these are cost of living adjustments. Maybe we should think of a bigger swath of the public with regard to pricing versus the fat cats ahead of all these buildings and big assets where the deflationary asset hits hardest. Whats interesting as well is he didnt have a great year trading the macro. So this trade has been going against him, so to speak he was quite candid about that whether its that or bitcoin, timing is everything, right . What choices do investors have if it comes down to kind of, okay, either im going to justify the stock market valuations differently or where do i go . Well, you mentioned stock market valuations. I believe that we will be enjoying liquidity from the marketplace Going Forward. The fed rolloff of the Balance Sheet will probably be negative some time around april the ecb and the boj are finally going to have to move toward a tightening stance. The fed to go against rick and mr. Druckenmiller, didnt really respect that 2 target theyve been moving the fed funds rate higher now for two years. I hate to defend the fed because im not usually their ally, but they have realized that 2 wasnt really the target its only a target in, hey, were going to go 160 this year if youre Bill Belichick its not a realistic target and they reacted accordingingly i dont think thats really something to trade off and i think valuations for stocks will probably move from 19. 5 down to 16 or 17 is that because earnings expand, they pass tax reform were looking at 11 Earnings Growth next year without tax reform you give me tax reform and the same conditions, we would have an explosive number which they probably dont want to allow do you think one of the reasons bitcoin has been going up is qe and when rates go up is that genuinely a big risk, 13 something that does have structural factors going on too . With qe we printed all this money. We stimulate the real economy, all weve done is stimulated assets saying all these assets have become expensive but wages havent gone up. The costs of, you know, goods and services you get from walmart and amazon havent gone up so were not actually seeing that money make it into the real economy. I think that what were starting to see youll see a decline in our prices, equity prices, and bitcoin. But i think ultimately what happens is through the wealth effect, through that money getting into the economy, were going to see that wage push inflation and see prices go up at walmart, at the supermarkets. Thats whats going to bring this party to an end just quick on european credit because theres an interesting comment in there we have the german 10year back president spread is incredibly tight between government bonds and credit in europe it looks like a great way to carry trade in the u. S if im a european investor, i think going stronger over the next 12 to 24 months based on the way the economy is growing and based on theyre going to have that in what people dont see coming so i think it probably is a bubble in that sense youll see pressure on the euro and some pressure on European Assets generally. I dont think that the rate divergence between the u. S. And europe is going to be allowed to last much longer all right, guys thank you. Appreciate all your time this afternoon. Jim, sarge, and rick coming up, we have more from Stan Druckenmiller and a few other stocks hes betting on. Still ahead, well head to alabama where the outcome of todays special Senate Election could have major implications for the future of the gop agenda up next, elon musk has another customer for his future ll lluck. 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Zblmp welcome back shares of tesla up today as they get their biggest order yet for semitrucks this is a sizable preorder from pepsico it has ordered 100 tesla electric semis and pepsi joins a growing list of corporations that have said, look, well take a as few as a hundred of the tesla semis those are more of the notable orders out there when you look at the tesla electric semi, keep in mind that the companys not saying how much it received for the reservations nor is pepsi saying how much it paid for those reservations the list price according to tesla is 20,000 for a reservation per truck. But i should tell you that ive talked to the people in the Trucking Industry and everybody says the same thing. We never get money for reservations so im skeptical that teslas getting 20,000 per reservation. There are almost 10,000 trucks in the pepsi fleet this order from 100 when ultimately delivered whether its 2020, 2021, its only going to be a small part of the pepsi fleet. If you look at shares, this wasnt doing much two, three, four weeks ago but it has risen since it unveiled the tesla semi in midnovember and really the last week and a half is when weve seen an axcceleration in these shares up more than 3 today. The bottom line is this. You will see more investments like this from other companies at least saying were interested in the truck doesnt mean theyre going to take delivery in 2020 or 2021. But there is also a halo effect here a company can say, yeah, we believe in electric trucks in the future thats why they will announce that they have reserved or preordered a tesla electric semi phil, does this whether they get a big amount of money or not, does this just increase pressure once again on teslas ability to meet orders and deliver on time . And is that still the big outstanding question for this stock price . Yes yes. 100 now, in the near term, the question is what happens with model 3 production whether it ramps up as the Company Promises in the First Quarter. We know that the fourth quarter, theyre still trying to get things straightened out. They should be up to, they say, about a thousand model 3s per week by the end of december. Well see if thats the case when they report numbers in january. But near term, wolf, youre l k looking at getting into 2021, yes it comes down to whether or not they can a deliver the truck on time and meet the demand that might be out there for it i think tesla is glad for the capital however they can get it. Thank you very much. With just 38 minutes to go before the bell, weve got the dow up around 150 points its near the highs of the day again having pulled back in the middle of the day. The s p up a third of 1 and nasdaq is laggard down 0. 1 . Up next, republican candidate roy moore arriving on horseback today to cast his ballot in alabamas Controversial Senate race. The question now is whether his supporters will turn out in force as well. What it could mean for the gop agenda plus more from my interview with stanley dckmierruenll what is the power of pacific . Its Life Insurance and Retirement Solutions to help you reach your goals. Its having the confidence to create the future thats most meaningful to you. Its protection for generations of families, and 150 years of strength and stability. And when youre able to harness all of that, thats the power of pacific. Ask a Financial Advisor about pacific life. [ mouse clicks, keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Talk to one today and see why were bullish on the future. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Welcome back to the closing bell. Verizon upgraded to buy. Saying the tax reform should boost its earnings the whole sector is really outperforming today. Comcast up on news its out of the bidding for fox assets and telco is leading the charge today. Lets get over to sue herrera. Heres whats happening at this hour, everyone. President trump repeating his call to overhaul the nations immigration system in the aftermath of the subway attack in new york city his comments coming during a signing ceremony for National Defense authorization act for fiscal year 2018 there have now been two terrorist attacks in new york city in recent weeks the first attacker came through the visa lottery and the second through chain igration were going to end both of them. Congress must get involved immediately. The nfl network has suspended three onair analysts. Mahrshall faulk, heath evans, ad ike taylor after a former employee filed a complaint and also Donovan Mcnabb and eric davis have been suspended by espn travelers at tokyos Haneda Airport were suspected by robots the airport will test the robots until february pretty cool. Kind of looks like a luggage version of the roomba. Kind of cool but they look a bit out of date, if im honest that one but look at that one that ones huge. Ukt get smaller, sleeker, faster i think thats the security one. Maybe hes supposed to be intimidating im not sure sue, thank you very much. Thanks, guys. It is decision day in alabama as voters head to the polls in the states special senate race which has been riddled with controversy, of course john harwood joins us with more from birmingham. Wilfred, as important and as sensational as this has been, we have no idea first of all youve got doug jones who voted here at there this morning he is hoping to become the first democrat in 25 years to win a senate race in alabama his opponent is roy moore, a republican in line with the states hard core conservatism but he stands accused of molesting a 14yearold when he was in his 30s and pursuing for dating purposes other teenagers at that time here are the key variables when you take into account everything we know about this case. One is defections among republican sub bourban identities like here that is critical for democrats there are so many others in this state. They need to get them. Secondly, potential enthusiasm gap. The democrats are hoping their party has Greater Energy to get to the polls while some of those republicans are discouraged by what theyve heard about roy moore and stay home. Finally, theres the question of irons. Mounted a late multimillion dollar efforts to try to motivate africanamericans. But special elections are very difficult to tell whos going to turn out because they come at a regular time so the polling weve seen, fox news poll showed doug jones ten points ahead. And month moth university showed it tied. Were all going to be waiting to see what happens tonight if doug jones wins this race, that republican majority which is needed to push through the agent on tax reform will push it to narrow margin for error. That ma gin or error we dont expect should hurt tax reform but could affect the agenda for 2018 thats right. You know, the republicans are hoping to push it through before christmas. A new senator will probably be sworn in just after christmas. It could be pushed back beyond that beyond that, it affects the whole range of things from president ial nominations to infrastructure to the welfare reform and entitlement reform that republicans say they want to pursue. All of that gets more difficult if they lose this seat and it would put democrats in range given the small number of vulnerable republican seats theyre targeting. It would put them in closer range to win the senate back in 2018 thats why democrats are investing so much right now. John, did you arrive this morning by hoshs as well it was dark so maybe you didnt arrive by horse. You couldnt see the horse i was riding because of the way the camera angle was it was dark and i actually im good at calming horses so he didnt move while i was on it. Thank you couldnt resist im sorry the horse part i think is by the way, you were good on birmingham but then you said controversy. I literally cannot win. Literally turning to tech. Earlier today i sat downdrucken. Heres what he had to say about tech and the socalled fang stocks i really, really like those names longterm. And those filings dont show what i have against them and itll be what do you mean you have against them well, theyre called shorts. Are they just hedges . In other words, are you just hedging your exposure or shorts in social Media Companies . I dont really like hedging to me if something needs to be hedged, you shouldnt have a position in it but theres plenty of opportunities to find on the other side like ibm which youve traditionally shorted . I dont know whether ibm stock is a short right now, but thats the kind of company which to me has been underinvesting buying back stock, paying dividends while their competitors are basically eating their lunch in cloud and in ai and in Everything Else that is competitively mispositioned. Or like retailers, old dying retailers. Im sure you know this we have 24 square foot per person in the United States of retail space china has 3, germany has 2 i would call that being overstored. So are you shorting sort of a kbas basket of retail names i have been short retail throughout the year and depending on the time period sometimes larger, sometimes smaller. I would expect that theme to continue so youre hanging onto amazon even after the run that its been on. I love amazon this company which everyone keeps quoting the multiple is selling for less than three times sales. Well, who knows. I havent checked it in the last few months but the s p is selling for over two times sales. Theyre dramatically underearning i dont think looking at the price earnings ratio is the right move here. You have to look at the longterm earnings power of the company. And they are intentionally underearning i think bezos is incredible. Do you like the Chinese Consumer companies for the same reason baidu, tencent i really like tencent and i really like their position you know, theyre in payments. Theyve got their own version of netflix. Theyve got their own version of cloud. Wechat is probably the best platform on the entire planet for all of it. If you look at amazon, aws is basically funding all the investments theyre making in the other areas. With tencent, their games are funding Everything Else. You own tencent, right . Yes like amazon, tencent is intentionally underearning and just the longterm growth looks incredible i think its 40 times earnings and theyre going to grow at least 40 . So its one times growth rate. I still like it. This is a little bit different, but what about tesla and elon musk . Do you see analogies between what hes doing and amazon and bezos . Or is that actually for you a problematic valuation story . Have you ever owned it no. Ill tell you a funny story about tesla. I had a guy who managed some money for me come in when the stock was 82. And i think i was 62. So i had given myself a tesla for my 60th birthday he had this incredibly effective analysis like 20 pages of financials about why tesla was a short. After this presentation, i said have you ever driven the car and he said no and i sent him his redemption notice the next week so you didnt short it . I did not short it. And i dont know why it never occurred to me at the end of that conversation to buy it. But i dont put tesla in the amazon category. They have not proved to me that as a Financial Model and economic model its going to work but no, i also dont like to short great products thats not my deal fantastic stuff again, kel. I cant wait for more of this. But some of those statistics in terms of retail. 24 square foot per person in the usa. Germany two, china three and he could not have been more positive on amazon yes after the kind of run its been on, the thing is not is amazon a Strong Company its is amazon worth where its trading right now. As far as hes concerned i love you know, i love when people dont have to have the data last time i checked the sales price it was a couple months ago. So i imagine it would have to be substantially above for him to change his mind of it being overvalued of course loves it says bezos is incredible he likes tencent as well people can be very positive on alibaba. But its not as clear a play theres more competition between a couple of them and he pointed to that with tencents cash flow coming from game revenue i should emphasize this as well in china there is some concern about the relationship between, for example, ma of alibaba and jack ma and the Chinese Government in the u. S. , you could also say theres concerned about whether regulators are going to be for tough on the fang giants one of the things he said is instead of trying to protect our steel and Coal Industries should be trying to protect our big tech platforms because its one of the most essential things we can kind of, you know, one of the Services Required for the that the rest of the world requires so at a time when theres a lot of antitrust sentiment devel developing in washington, he would take the other side saying we ought to encourage them to do more business overseas and he doesnt like hedging i like that. Great stuff. More of that to come in the next hour of closing bell. Still to come in this half, mattel warning of weak holiday sales. And hasbro looking to cash in on star wars fever. Well tell you about hasbros strategy and which are banking on a skywalker boost with your two resident star wars experts kelly and i. Were back in a couple minutes win an uncertain world . K predictable income pgim sees alpha in real assets. Like agriculture to feed the world. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over 120 billion dollars in real assets. Partner with pgim. The Global Investment management businesses of prudential. Ronoh really . Gs going on at schwab. Thank you clients . Well jd power did just rank them highest in Investor Satisfaction with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to Wealth Management. When trying to save for the big things in life. We tend to start small. Less of this. Cut back on that. But if it feels like a lot of effort for a little gain. Change that. Start with something that makes a big difference. Your student loans. Refinancing with sofi saves over 22,000 on average. Its an easier way to reach your life goals sooner. Weve helped over 195,000 people. We want to help you too. Find out how much you can save in just two minutes at sofi. Com save just under 20 minutes to go before the bell. The dow is leading the charge up 0. 6 . 140 points or so just off the highs with 160 points or so the nasdaq the laggard down 15 basis points telcos and banks the winners meanwhile, disneys the last jedi is expected to bring in Big Box Office sales but thats not all they could cash in on up next well look at the star wars merchandise coming to a galaxy near you. And later Stanley Druckenmiller explains why he is not investing in apple despite s ve for the other fang names. When we come back. Working as an emt in a small town usually means hospitals arent very close by. When you have a really traumatic injury, we have a short amount of time to get our patient to the hospital with good results. We call that the golden hour. Theres nothing worse than when were responding to the hospital, and the hospital doesnt have the right specialist. Evaluating patients remotely, by an expert, is where i think we have a potential to make a difference. Robots can do a lot in medicine these days, but they cant think. Theyre still machines. For nuanced decision making, we still need humans. We would save a lot of lives if we could bring the doctor to the patient. Verizon is racing to build the first and most powerful 5g network that will enable Breakthrough Innovations to take place. As we get faster and faster wireless connections, itll be possible to bring those capabilities to more remote sites, and be able to operate on a patient in a way that was just not possible before. When you think about underserved areas, you tend to think of remote locations. But the reality is, an underserved area is anywhere where the person that you need, who has the expertise for the problem that you have, is nowhere near you. Low latency is crucial for things like surgery, because the Response Time has to be immediate, it has to be real. I could put on vr goggles like these, and when i move my hand, the robot on the other side will mimic the movement, with almost no delay. Who knew a scalpel could work thousands of miles away . dr. Vasquez its going to be lifechanging, and lifesaving. Disneys newest star wars installment is hitting theaters later this week and the lineup of toys are expected to drive major sales this holiday season. Julia boorstin has all the details for us hey, wilf star wars has a big advantage. It has the broadest appeal of any toy brand because kids their parents who grew up as collectors are all buying the toys expected to drive 1. 4 billion in Star Wars Toy sales this year. Now, star wars is the biggest franchise over the past year and the biggest of any movie franchise ever hasbro benefits with licenses for more than half of Star Wars Toys and for disney, itll also benefit because it gets a cut of the 3 billion ttpm projects in retail sales of all the star wars Branded Products that includes games, apps, and clothing and this years lineup aims to expand the star wars appeal. There are more tech toys than ever including droidbuilding kits, drones that look like fighters, and a 200 lenovo augmented reality headset which includes a light saber rag bone has a fashion item. Most items are sold out including 700 boots and while fans dont want to spend that much, they can find more mainstream apparel that biz knees partnering with gap, kohls, and other retailers. Dole is licensing characters for star wars products and also for its healthy galaxy game on the dole app all these products arent just creating licensing revenue for disney, theyre also arguably marketing. You cant even go to a Grocery Store without seeing a reminder you might want to go see the film back over to you julie, when it comes to merchandises, which is the biggest grossing of all these scifi films or potter star wars is the bilkest of all time if you go back to the first star wars, they were starting to produce toys then so historically over the lifetime of the star wars franchise, it is bigger than anyone else. Also if you look back over the past ten years star wars has generated over a billion dollars in retail sales. Each of the past ten years so it beats harry potter, all of the others they dont need us, wim wilf. Its going to be fine. Even if were not buying the toys, theyll do well. Are you going to see the movie . Ill see the movie. I wont rush it the first night or first week crowds but some point julia, thank you. Its going to be a big one maybe even despite i dont know if the reviews matter variety says its the least essential chapter in the series. Youve seen none of the chapters ive seen the original. Like way back. I saw those. Health care has been a strong performer this year and we have started to see some consolidation in the space weve got a debate on whether there are good buys there when we come back later, Stanley Druckenmiller tells us whether he likes the tax reform bill onap citol hill and whether it will give more fuel to the fire his answer may surprise you. There he is. Your new brotherinlaw. You like him. Hes one of those guys who always smells good. His 5 oclock shadow is always at 5 oclock. You like him. Your mom says hes done really well for himself. He has stocks and bonds. Your dad wants to go fishing with him. Your dad doesnt even like fishing. You like your brotherinlaw. But youd like him better if you made more money than he does. Dont get mad at your brotherinlaw. Get e trade. Let out your inner child at the lexus december to remember sales event. Lease the 2018 nx 300 for 319 a month for 36 months. Experience amazing at your lexus dealer. Welcome back consolidation in the Health Care Sector does continue it was just over a week ago we saw cvs was looking into purchasing aetna now hospital operators are in deal talks to create the biggest u. S. Hospital operator is the shakeup in the space the tron get bullish joining us now to discuss it, elan gupta is a believer in the space. But another is cautious here ana, let me start here with you about the consolidation were seeing is that consolidation driven by the threat of amazon and if it is, is that a reason we should be cautious opposed to optimistic its in part driven by amazon at least the cvs aetna merger is both the front store sales have been under pressure. Then weve been hearing all of this in the Prescription Drug markets. I think cvs is in a better position with aetna than it is without aetna. Aetna i think had alternatives, you know, beyond merging with cvs. We have very Strong Player United Health that has remained independent. You know, done smaller deals most recently with da vvita andi just killing it if you ask me. So i dont think necessarily consolidation is the answer for everyone but drugstores, the drug supply chain are under threat now. Les, why are you more cautious on the space . We own united have done very well this year. But im concerned that the fundamentals wont get that much better and that, i believe, that we are in for some sticker shock and political backlash this year i dont think people have realized the magnitude of the increases yet. And i think thatll create a lot of noise i will add, though, im a little bit of an amazon skeptic i dont see amazon making any radical moves at least in the near term. Ana, if we talk about the hospital space, more consolidation there, is that a threat to hca . Or is that one to own in that space . You know, both of these companies are i think responding more to the threat payers. Like United Health and aetna and so on who are moving procedures and emergency room visits outside of the hospital is the setting into the ambulatory care setting. Sop if they i merge, they are stronger from the stronger point of view of scale and they potentially could get better pricing or rates you know, contractual rates from the payers hca has already been reengaging in creative consolidation. Theyve done small deals from Community Health and tenet and so on. I dont see asession and st. Josephs necessarily a threat to hca and their dominance here les, finally here because you mentioned you own and like United Health, is that others are acquiring a threat to their Strong Performance along with the fact theyre going up . I dont think just yet. Im a little more bearish on the hospitals. I think the hospitals may continue to see decline because of outpatient movement and pressure from payers but maybe towards the end of 2018 might be time to revisit hospitals again when theyve bought them. But im staying far away for the time being of hospitals. All right guys, thank you. Les and ana, appreciate your thoughts thanks. Up next, were coming right back with the closing countdown. After the bell ill have more of my exclusive interview with Stanley Druckenmiller. Theres one part of the tax reform bill that has him outraged youre watching cnbc, first in business worldwide [vo] when it comes 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. Your new brotherinlaw. You like him. Hes one of those guys who always smells good. His 5 oclock shadow is always at 5 oclock. You like him. Your mom says hes done really well for himself. He has stocks and bonds. Your dad wants to go fishing with him. Your dad doesnt even like fishing. You like your brotherinlaw. But youd like him better if you made more money than he does. Dont get mad at your brotherinlaw. Get e trade. Welcome back to the closing bell. Two minutes to go until the close. Were just off the highs now up about 129 points on the dow. The high today was closer to 160. The nasdaq is down 0. 2 . A couple of the pullbacks there. Telco the best performing sector on the s p all names up 2 to 3 . Verizon got an upgrade comcast athed the bidding for fox assets also quick look at the banks over one week. Theyre also up nicely today second best chart second best sector today and had a strong week last week as well thats largely on tax reform its a twoday chart bob joins me bob, main things youre looking at take a look at the russell 2000 they were higher a little earlier. The russell 2000 has essentially moved into negative territory late in the day. Heading south just when rand was making comments. He doesnt like the deficits hes sending messages he wants to do something. That makes the whole thing a little more shaky. Banks doin weg well theres a few of them at historic highs finally just on the Bitcoin Futures, down again today a little bit but the volume is much lighter than it was yesterday. And a lot of people are interested in these alternative cryptocurrencies so light coin, for example is up dramatically today i think a lot of people have made money in boit coitcoin ande switching to others hoping they will rise as well. So light coin is up today. The 10year hitting 2. 4 today. Whether thats tax reform or the fed meeting tomorrow but thats it. The bells going as you can hear New York Stock Exchange being rung thats it for the first hour of closing bell. Kellys got the second thank you, wilf. Welcome to the closing bell, everybody. Im kelly evans. Were finishing with the dow up 121 points there was a lot of sell orders about a billion dollars worth. That pushed up a little bit off the highs there. But we still closed up about 9 119. The s p up decent. About 0. 1 today but the dow is by far the performer. 2 24,064 is now the high dropping a quarter president today to 1516. Two higher, two lower. Well have much more as well from my exclusive nterview wit Stanley Druckenmiller. This hour well get his take on apping, tax reform, and jay powell joining me now Michael Santoli along with nancy tangler and courtney gibson. Welcome, everybody the big leader on the dow today by the way was boeing. And the laggard was 3m led the big day on deal news, macerich and while Iron Mountain was down what do you make of the fact we were its a completely different story which market you look at. First of all, the dow 100 of the 120 points was boeing and goldman sachs. That was just two moving on their own. That is where thats an outlier. The average start in the market, kind of flat it was a mild rotation from the big growth into value. This market, what it does on any given single day tends not to be all that impressive. Whats been impressive is over the course of a year, the ability to draw strength for more, it has to. And to kind of keep tilted in an upward direction nancy, what do you make of that we have the industrials and a lot of that was just boeing on some announcement we told you about last night but goes one way nasdaq goes the other. Russell goes the other how would you be reading the way that markets are moving here lately yeah, i mean, hi kelly. Hi, mike i dont think we need to read too much into it we do have tax law selling going on were doing it for our clients at the moment. There is a lot of rotation thats shortterm. But in general, things like a 20 Dividend Increase for boeing are really important for future view of what management thinks the company can continue to sustain from a Free Cash Flow basis. So we own it, we like it, we are holding it here. And we think that makes a lot of sense. Youve got ash so the pharmas like j j and merck had a nice day today. And youve got people moving defensive. Verizon is another stock we added recently that had a great day. Little upgrade here and there and you get movement i dont think we can read too much into it ash is that hematology conference megs been at we had a lot of news out of courtney, what about you the nasdaq has been weaker is it tax law selling . Should we read that much into it i think there are really good names in the market right now. You can talk about boeing and its a Free Cash Flow story. But theyre in an area they expect to put together a lot of money. They expect to build a lot of planes, more people are traveling. We talked about the Airline Stocks and whats been going on there. Goldman. Goldman has trailed the banks for awhile now i think all year i mean, and candidly, it being up 6 relative to its competitors, this is a day i wish i would have gotten goldman yesterday. I keep saying that over and over again. I think its finally starting to catch up with its peers. And so i think you want to get in or youre maybe a little late speaking of the banks, we had them kind of generally rallying today. Tomorrow we have the fed decision on Interest Rates the biggest mover was goldman. The fed expected to raise rates by a quarter point tomorrow. We have mike welles up 2. 5 , morgan up 2 whats up here first of all, i think theyre very well loved. Whenever theres a sign the longer term yields will nudge higher, it gives clearance for the banked toot pretty well. When you have utilities selling off, it shows the market is oriented toward growth is looking firm the 2year yield has been the best guide strausskahn 23409 about the yield curve. Thats not the game anywhere theyre not sitting there with a warehouse fall of corporate bonds. Or kind of spread lending product that works its about repricing deposits. Its a tremendous piece of it. And the good story of what theyre doing. The banks are doing some incredible things. I mean, if you think tax reform is going to come into play, look at the core business of the goldmans of the world. Theyre doing stock buybacks very similarly to capital. At the end of the day, next year if you actually get this tax bill done which is not priced into all these names, i think you do start to see the banks continue to move ahead and steam ahead candidly at the same time we had a lot of the Big Money Center banks tell us theyre not having a great period for trading how do you feel about who would you be an owner of here . Weve been buying around the edges. You may recall, ive had toe se to sell the super regionals. Weve been adding through blackrock, visa which you can argue is a technology company. But i do think that they are not going to benefit as much from the curve as they are from deregulation were not in there aggressively. That was my way of saying theyre a consensus pick nine of the ten strategists, financials was one of their preferred picks. Which in a way makes their rally more notable yeah. On rotational type tape, theyll have their days. Goldman was out with a new note today but it was talking about Corporate Tax cuts saying if they take effect in 2019, the oneyear delay may seem disappointing, but if you combine that with the physical assets in other words, if you do that in 2018, then you have a supercharged expense next year more so than any prior incentive enacted by congress in the last 15 years goldman is saying i just wonder if that all comes about if people are going to be asking is this what were begging for right now. Said the market is right now for the companies. Thats because its a signal they see high returns Going Forward from their business. If it takes a kind of one year accelerated appreciation from the tax code does that signal anything about that business is it better today or just about lets do it now sfp. And the industrials were at an alltime high yeah. No, absolutely mike, im right there with you, to be honest with you. Is this the economy we should be doing . I mean, im not going to turn it away, but is that money going to be put to work the way it needs to be . Id like to see what happens with infrastructure. Actually we have breaking news here with elan out of washington the republican tax plan appears to be coming together. Two people who have been briefed on this plan tell me that those details include a 21 corporate rate a top individual rate of 37 the mortgage interest eduction that would now go up to loans worth 750,000 and the pass through deduction would go to 20 . Now, there is some debate over when exactly that corporate rate would kick in. Whether it would start in 2018 or in 2019 but my colleague at the white house eamon javers said a white house official does confirm all of those details they call this the current state of play and says that the members of the Conference Committee both of the house and on the senate, theyll be going to the white house for lunch tomorrow so it looks like the details of this tax plan coming together again 21 is one of the major headlines there. I do want to caution, though, we still have a whole night of negotiations ahead of us the final bill has yet to be actually released to the public. But it looks like these are the parameters that lawmakers are agreeing to now. Okay. Four key planks in here. Thank you. Mike, most interestingly because it was unexpected, theyre dropping the highest to 37 . Is that them saying we know s. A. L. T. Is going to be a hit . Much more on the higher income brackets that was the idea of tax reform. We were going to get rid of the deductions and lower the rates this is the first time it goes lower from present right now. If im trying to remember how the house and senate bill differed on the individual top rate but i do think this is lower than both or its closer to the lower of the two and then raising the mortgage Interest Deduction which also is helping higher income people and its funny when we talk about that Corporate Tax rate just bumping up to 21 people said trump wants 15 . Trumps a businessman. You anchor low here were coming in at 21 . One can also come back to this and i know you know this well, the effective tax rate of our u. S. Corporations anyway and whether or not it helps or whatnot. But small caps, we didnt see the russell rallying this should help the small cap names tomorrow nancy, a word on this yeah. I think one of e the things this administration and thiscongres is very aware of is the average individual thinks their taxes is going to go up yet its only about 7 of individuals. So this is important, i believe, to get sort of a rallying cry behind the bill for the Midterm Election so i dont i agree with kourtn kourtney i dont think 21 is a big deal. Ill take 21 over 27 any day as an effective tax rate and 35 at the top we dont need to implement this in 2019 2018 will be fine. We dont need to supercharge capex. It could be look, theres so many of these things that were slipped into the bill you know, you have a lot of these kind of i would say ugly tradeoffs that you had to do as part of the process. A lot of this is to clean some of that up or at least easethe way. Lets talk bitcoin. Those futures did trade for the second full day today. Looks weaker. They didnt sore do you have bitcoin . I do not. I was hoping you wouldnt come to me. Thats why i did its not that i dont get the technology its i dont understand whats driving it so im going to miss things. Like amazon. Where there are no earnings for the most part. I was at i think i mentioned in my talking points i was a a conference this morning where they said the bad guys are no longer using bitcoin theyre moving to other cryptocurrencies thats all i have to add on the subject. Well, thats a good anecdote. Kourtney, anything from you . Its funny. I have a story for you i always talk about when main streets talking about it, i get concerned. Its time to get out of it now i have mainstream and my mother talking about on saturday, honey, someone told me to put money in light coin i was like, light coin you mean bitcoin no, light coin i hope you said yes then i get a text message saying it was up 200 . I said dont get it. Im like if i dont understand it, im not buying it. That would have been a nice run for her. There was a kid in town who traded his bitcoin for a tesla seriously yeah. Apple is one of the mostloved stocks, moving on. But not for Hedge Fund Titan Stan Druckenmiller here is why. What about apple in that case . Apple i dont find near as exciting as amazon, facebook, or google its a hardware company. I understand they have an appellate form, but do you consider them great products i do think theyre great. I dont see the underearning i see in other companies theyre probably overearning in terms of the margin. All right this of course is a follow on he had talked about tesla earlier, said great product, doesnt own it apple wouldnt i mean, he would kind of say that but he said samsung good too by the standards he set down, are these companies underearning or not if you argue these huge Platform Companies basically can flip the switch and start to earn more money right now whereas apple already has massively high margins. Theyre hit driven every three or four years they have to prove pit. That being said, its a much cheaper stock. How do you feel about apple im big on brands personally i own apple our clients at luk capital definitely own apple that doesnt mean they dont also hold amazon and facebook and the other names. Until amazon gets someone that can actually compete with them, the buzz, the products, and how they stand behind their products, i dont see them ever going away i think as you continue to move and you get kind of generationally this switch in management and whatnot, youll start to see other products continuing to come out of apple. I think its a name as he said hes not shorting it i think you have to hold that name in your portfolio nancy, what about you final word yeah. We still like it weve been selling it all year due to appreciation. But i heard the hardware argument at 89 a share. So that isnt what troubles me were in a big upgrade cycle and i think thats important for the near term. And then maybe this thing itll continue to take a pause here and then well see another reignition of Earnings Growth. So were still holders pretty big, yep. All right im still thinking about your mom asking about light coin, kourtney thank you both up next, more of that rare and exclusive interview with Stanley Druckenmiller. Hes outraged over one part of the tax reform bill. Youll find out which part next. Also a very bullish call on bitcoin. I think this thing is a hundred thousand dollars a coin probably in the next three to four years and i think it is in the next 20 years a Million Dollars a coin million bucks is bitcoin really on that path over the next couple of decades . We will debate that still to come on the closing bell. Well, its earnings season once again. Yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. We thats why at xfinityic. Music plays throughout weve been working hard to simplify your experiences with us. Now with instant text and email updates youll always be up to date. You can easily add premium channels so you dont miss your favorite show. And with just a single word, find all the answers youre looking for. Because getting what you need should be simple, fast, and easy. Download the xfinity my account app or go online today. Breaking news on tax reform. Just moments ago our elan moy reported it features a 21 Corporate Tax rate also a top individual rate of 37 . It would raise the mortgage deduction to loans up to 750,000 here are druckenmillers thoughts on the tax bill on your network the day after the election, i said i was very excite excited about the prospects for deregulation and tax reform. I was particularly excited about the house program, a better way. And i thought it was the First Program i had seen in decades which would address our fundamental problem in the United States. Which we overconsume and underinvest. Literally all they had to do was sign it. But secretary mnuchin had other ideas. And to me its just been a huge missed opportunity do you like do you think the current tax reform plan is sound . No. Having said that, there are some things that are helpful in it that go a little bit of the way a better way went. First of all, theres expensing. Thats obviously proinvestment. Like the better way but again very muted and carved out for some of their buddies theres Interest Deductibility because i think we got too much debt in this country and we dont have enough equity. And the final thing is youve really, really broadened the tax base so a lot of individuals are getting tax cuts. Do you get a tax cut under the plan no. Ill get a 600 base point increase does the state tax repeal help you is that going to be repealed . Or raising the ceiling. Maybe that wont be too much im hoping to end up pretty near zero. Your personal holdings . So i dont really look at the estate tax i dont like the repeal of the estate tax i do like this idea of 10 million or 15 million so somebodys nest egg but repealing 300 million, i dont get it the other thing i should have mentioned is moving the tax system to Territorial Base not as good as the border adjustment tax. You wanted the border adjustment tax i was wildly in favor of the border adjustment tax. To me, again, it was a very elegant solution to the problem we were overconsuming and und underinvesting unfortunately mr. Mnuchin and all their lobbying buddies from Retail Companies which probably are not going to be in business in 10 or 15 years succeeded in killing the thing. Its Pretty Amazing that would it have hurt amazon, too, though, or no i dont really care if it would hurt amazon. I dont think of things in those terms. I dont care i think we need to tax that was sort of a drag which is kind of why it got killed but i really liked it. You know, it obviously got nixed early on by a brutal retail lobby. You think if the tax reform passes and we dont know the final final details yet, what difference will it take to the stock market and the economy right now . I dont think its going to matter to the stock market i think the stock market is base chr chris basically offset by central bank adjusting to that i would say on the economy, it should have very, very stimlative effect in 18 and a few years after that and longer term if anything its a problem let me explain real quickly on 18, you think itll be very stimlative is that because of the expensing . Not only the expensing. Ironically it is going to be more powerful than it appears if the tax cut is delayed a year because if youre a corporation you have a bigger expensing. So i think it supercharges Capital Spending and investment. My problem with this whole thing is and again the house plan was tax reform it was not net net fiscal stimulus here we are eight or nine years into an economic expansion were going to need ammunition desperately down the road and were increasing the deficit depends on how you score by the end of obama. The two of them did their damage together it was 77. This thing takes it to 95. Kelly, if you remember i spent two years of my life going around to colleges talking about entitlement reform which may be next they say they want to maybe do welfare reform next year i see a picture up there, maybe i could sell you the brooklyn bridge. I see it on that picture it would have been so elegant if they had used the fiscal stimulus in this on the corporate side and on the individual side and offset the trillion or trillion and a half stimulus with entitlement reform we have 11,000 people a day turning 65 for the next 20 years. This is a ticking time bomb that has to be dealt with were stealing from our future and we just aggravated the problem. And to me we could have used the stimulus and offset it with reform to medicare and Social Security and we whiffed last two questions then putting that aside or maybe that being part of it, has do you support the president more now than you did back on the campaign trail or, you know, in the past i never supported him on the campaign trail no i think the tax plan, it is what it is. There are some good things and theres some bad things. I didnt get in on all the bad things i am so offended by the carried interest provision the fact theyre keeping it in place so people who well, its outrageous we have doctors and lawyers in blue states, tax rates going up dramatically, professionals. And you have these multi, multibillionaires with carve outs lets be clear carried interest, youre making money on somebody elses capital. Its not on your own if thats not income, i dont know what is i want to repeat that. Youre doing it on other peoples Capital First of all, the billionaires lobbying the congressmen for this ought to be ashamed of themselves because were asking doctors and lawyers and other americans in blue states to take tax increases so we can fund this kind of nonsense as for the economic benefits, half the companies these guys buy, they then strip them and, you know, fire people. So the idea theyre increasing employment is absurd and the politicians listening to them who claimed holier than thou and now were going to get rid of loopholes, its an outrage. Again, that was our interview this morning so weve got a few more details of the tax plan this afternoon nothing that would dramatically change his conclusions certainly did nothing with carried interest nothing with carried interest nothing in a way that changed fundamental incentives across the economy. Really hes talking about this kind of tear it up, theyre going to redirect capital flows. You know, were going to consume all those things are massive projects i dont think theres any appetite to be honest with you in congress. Not sure theres a lot of appetite in the public if you actually set it out that way maybe longterm, on paper it makes tremendous amount of sense. I thought maybe they should have actually just come out and said this. Not just we want to do this border adjustment tax. Just no, we think this country consumes too much. Doesnt invest and save. Its a questionable proposition. Just to get beyond everything. When you think about this is not a country you want to say its going to be export led. Germany you want people to save many f more why . Its so they can look after their own financial well being, retirement, rely less on a lot of the entitlement problems he was talking about. Right its if were starting from scratch kind of a proposition as far as i can tell. Thats the problem. We never are anyway, it was always good to talk to Stan Druckenmiller catch much more on the website also the dow rallying 24 this year utngis fdge fund manager is shti hund after he calls unacceptable returns well have those details after this the moment a fish is pulled out from the water, its a race against time. And keeping it in the right conditions is the best way to get that fish to your plate safely. Bacteria can multiply to high enough levels that even cooking it will not destroy all of them. Its definitely the most important thing in my business. How fresh is the fish . Where it comes from . How it gets here. The more i know, the better. Sometimes the product arrives and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. We took our world Class Network and we developed devices to track environmental conditions. This device allows people to understand whats happening not only with the location of that asset, but also if its too hot, if its too cold, if its been dropped. Its completely unique. We ship fish, beef, poultry, vaccines, insulin. This is about monitoring and protecting everything we ship. I catch all this amazing, beautiful fish and then once its out of my hands, i have no control over what happens to it. If you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. Its really all about the network. You are looking at trillions of transactions a year. Not too Many Companies in the world can even scale to that type of volume. Who knew a tiny sensor could help keep the food chain safe . Food has to be fresh. Its that simple. Time now for news updebt, lets get to sue herrera heres whats happening at this hour. United nations secretary general Antonio Guterres speaking a the Paris Climate Summit he says advances in science and Technology Offer hope for the future we are in the war for the existence of life on our planet as we know it, but we have an important ally science and Technology First because what is happening in exactly as science predicted. Second, Technological Progress that responding to Climate Change is a threat to the economy. Jimmy kimmel held his baby son as he returned to his late night show after a week off for the boys heart surgery. He was emotional as he pleaded with congress to restore and improve Childrens Health Care Coverage a secret santa paid off 49,000 of layaway items at the walmart in new jersey. The benefactor wants to remain anonymous. It wasnt the only good deed this week. A secret santa paid off 40,000 in walmart items in pennsylvania a little bit of Holiday Cheer there. Youre up to date. Back to you, kelly thank you very much heres a look at how we finished on wall street. It was did very different dep d depending where you looked the s p 500 up four. The nasdaq down 12 russell down nearly four points today. Lets get to other stories in our rapid recap. I think the tools that have been created today are starting to erode the social fabric of how society works. You can use money to amplify whatever you believe and get people to believe that what is popular is now truthful and what is not popular may not be truthful fox and disney are on a, quote, glide path for an announcement of a transaction for thursday bob iger is doing what you need to do when people dont think that your company has a vision hes given you a vision and hes giving you a narrative and therefore ive always said bank with him this is a substantial vote of confidence from pepsi that when those trucks come, it wants 100 of those tesla electric semitrucks put out a cryptocurrency warning saying if an opportunity seems too good to be true, exercise extreme caution alabama holding a special election today to hold the senate seat left open by jeff sessions. Roy moore demonstrated his extremely Old School Brand of conservatism by riding his horse to his polling place in a rural area northeast of birmingham mike, i thought the comments were pretty interesting. Heres a guy you think would be an evangelist for Silicon Valley and social media and he was the facebook guy. Right. But no and shawn parker, we had sort of this similar interesting mea culpa awhile back. Its like what did we make here obviously i think its really the inference. In that it has created a life of its own. And therefore eyeball hours are kind of almost in an addictive way drawn in that direction. So i dont know what the you know, what the solution is, necessarily. I think it only literally it gets to the point where a quarterly comes out and suddenly facebooks active or monthly daily users dont look like theyre growing. Well, if that were to happen organically, thatd be fine. But will they be under pressure to try to change this reaction loop they have and how they engage look, there have been panics before about too Much Television video games, yes. Comic books for that matter even better. So, you know, you have to be a little bit cautious. Another hedge fund is shuttering and returning capital to investors this time its john burbanks capital. Winning bets against subprime housing. Burbank cited persistent losses in the Passport Global Fund and wrote in a letter to investors despite a track record that im very proud of, the returns over the past two years are unacceptable now, burbank is rethinking what hes investing in. But heres the kicker. If you have a high psychological water mark in order to get back to what is to be even and prove yourself, its hard to find a market thats moving fast enough that seems inefficient enough, i guess, besides cryptocurrencies im not saying that. To understand the dislocations in society that were happening during the financial crisis to almost want to participate in a dislocation now. Well, is it a dislocation or is he just able to see distortions and large trending moves that are going to keep going for a very long time and maybe can get more kind of a Snowball Effect happening . Thats true one on the downside, one of the upside it is interesting when you put it that way. Statements about why he was closing the main fund i think echo what every macro investor is saying. He said he was joking, okay, if you only had to get out of bed to make 20 . I got out on the wrong side of the bed. We have an earnings alert on verifone lets get to Courtney Reagan with those results verifones earnings beating with 44 cents adjusted compared to analyst expectations at 43 cents. However, when you look at their guidance for both the First Quarter and fiscal 2018 for earnings and revenue, that disappointed compared to what the street was expecting so you see shares down more than 6 here in the afterhours and also just an interesting note yesterday verifone sold its taxi business for 30 million in cash theyre going to use that plus extra cash to complete a Stock Buyback Program and also authorizing an additional 100 million in stock repurchase program. Kelly, back over to you. All right interesting shift in capital allocati allocation shares there down 6 thank you. Bitcoin has had an amazing run this year. Chamal said its heading to a million bucks over the next 20 years per coin and also druckenmiller will give us his thoughts on powell still to come on the closing bell. So ive asked chase sapphire reserve cardmembers to find my next vacation. Chile, whats going on . Im at the el tatio geysers. Geezer. Geyser. Geezer. Geyser. Enough. Geezer. Whoaa, wooooo. Dude, be careful. I think you should come camping. Why would i camp in the atacama desert . Oh. 3x points on travel and restaurants on every continent. Sapphire reserve, from chase. Make more of whats yours. We need to be ready for my names Scott Strenfel and r im a meteorologist at pg e. We make sure that our crews as well as our customers are prepared to how weather may impact their energy. So every single day were monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. During storm season we want our customers to be ready and stay safe. Learn how you can be prepared at pge. Com beprepared. Together, were building a better california. Welcome back Bitcoin Futures taking a bit of a break today. Its hard to know what price to quote now. There youve got some for bitcoin. Even ether heres what Chamath Palihapitiya had to say about bitcoin when he was on squawk box. The same way i said in 2013 put 1 of your net worth in bitcoin. Today i think this thing is a 100,000 a coin probably in the next three to four years and in the next 20 years, 1 million a coin a million bucks a bitcoin joining us no nick spanos who is cofounder of snap. Org. Welcome to you both. Nick, ill begin with you because youre our bull here i mean, are you as bullish to say its going to a Million Dollars a bitcoin . Sure, yeah. I mean, there are only 21 million bitcoin and the whole economy is going to be most of the economy is going to be using bitcoins block chain. Right . Block chain, bitcoin is a reward system to hold up this blockchain you know, it clears trades in a few moments compared to three days smart contracts are going to run the economic world pretty soon were going to be headed to the jetsons any moment. What do you have to say in response to is that . Well, i dont know why he didnt say it was worth 10 million or infinity. Its hard to speculate that far into the future. I think there are a lot of challenges along the way there are rules, regulations the s. E. C. Was out today the irs has been out earlier that may present some challenges to the unbridled growth. Also id separate the technology from the use of the Technology Technology is actually pretty interesting. Very cool. A lot of the things nick said, definitely agree with. The use of medium of exchange has other issues associated with it that separation is an important one. Nick, maybe you can try to bridge the connection between bitcoin and the technology you know, as hes talking about here bitcoin is obviously the reward system for maintaining this technology which is going to have widespread in other words is the currency in the adoption of the Technology Running hand in hand or is the price running ahead of it well, the consensus model of bitcoin works out than any other blockchain you cant just throw it on your key and think its secure. All these people, miners wanting the bitcoin create an immutable data base. Hundreds of millions of dollars to try to attempt to change far few moments then would go back to the original blockchain thats where the value of bitcoin is its like having a ferrari and you rip out the engine and stick a gopher on a wheel in there the Blockchain Bitcoin is a reward system for the miners to hold up the blockchain chris, go ahead what were you going to say i was going to say it sounds like something funny happened along the way to the forum the idea things will continue on a Straight Path is very war in new technologies theres often bumps in the road. I think nick brought up a good thing about the technology its easy to do. Its a good point about security i think according to to some data bases, theres close to 2500 coin offerings out there. While bitcoin has a bit of a first mover advantage, the reality is theres a lot of other competitors out there as well so the Technology Like i said earlier i think is the important key. Its just not clear kind of where the winners lie over a 20year horizon. Bitcoin is so yet its all about litecoin now. The reality is bitcoin is the golden goose of the cryptocurrencies because if you own bitcoin, every time it forks you get a new money out of nowhere pretty much. Because, you know, they reward the participants everyone the participants that already own the bitcoin will get the new bitcoin cash or get new bitcoin gold thats why i dont think, you know, the chicago amerimercantie exchange, they pay out in dollars, no one wants the dollars. Because the dollars arent going to give birth to new cryptocurrencies i dont know. The people who are downloading the coinbase app and are staring at what theyre worth in dollars, they care about the dollars. Oh, yeah. They care about the value of pit. But the dollar is not going to give birth to another cryptocurrency every time we fork, theres another cryptocurrency there that ads owner of bitcoin you gt a new cryptocurrency out of the blue so people are missing the point. Theres only 21 million bitcoin that will be released from the blockcha Blockchain Bitcoin is more of a declaration of the peoples monetary independence we control the money pier to pier no banks, no governments i mean, banks you know, theyre going to be, you know, like a Blockbuster Video pretty soon i mean, people are going to laugh but i was there in the past when the internet took over i knew all the businesses that were going to disappear. And same with banks. We got to go, but chris, quick last word in response to that banks will be around a long time fiberoptics were supposed to be everywhere in the 90s, theyre not. The reality is rules and regulations may be part of what we have to assess before these things become viable investments. Last piece, once they get the rules and the regulations in place, bitcoin may be a security, not a currency thats an important distinction because the rules are different. You cant outlaw prime numbers. Right . Bitcoins about math true. All right, gentlemen. Thank you. Nick spanos, chris wolfe joining us to debate bitcoin which that debate will continue two of the worlds biggest mall operators merging whether there is more consolidation ahead. Then on fast money, the man who called bitcoin 10k and 40k will make another big call Mike Novogratz joins the gang at 5 00 i think that shes a very nice girl. You never got the brakes looked at . Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . 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. Directv has been rated number one in Customer Satisfaction over cable for 17 years running. But some people still like cable. Just like some people like wet grocery bags. Getting a bad haircut. Overcrowded trains. Turnstiles that dont turn. And spilling coffee on themselves. But for everyone else, theres directv. For 1 rated Customer Satisfaction over cable, switch to directv. And for a limited time get a 100 reward card. Call 1800directv a European Shopping Center giant buying a major american mall operator. Start of mall mee mania . Thats next. And there are changes coming at the top of the fed. A Hedge Fund Titan has a surprisingly sonopiotrg inn. You cant always predict them, but you can game plan for them. For 150 years, generations of families have chosen pacific life for retirement and Life Insurance solutions to help them reach their goals. Being ready for wherever life leads. Thats the power of pacific. Ask a Financial Advisor about pacific life. [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Westfield, australian operator of malls across the u. S. , is being taken over by a European Company Courtney Reagan has more reporter hi, kelly its not often weve seen mall operators combined recently, that could be changing westfield is being bought for 15. 7 billion in a cash and stock deal the new combined company will have more than a hundred locations across the u. S. , uk, and europe, representing 1. 2 billion visits annually. It should pass regulatory reviews because there are no overlaps in the properties each has. Half of the malls are considered Flagship Properties including the one in los angeles, considered an a plus property, and the World Trade Center that opened last year westfields tenants have substantial food presence and many at century city serve food. High end brands and experiencebased shoppers. As some malls close in the United States, the best properties become more valuable. No one really thinks all stores will disappear, but in the age of amazon, only the strongest will survive, which means theyll find strength in consolidation. This isnt the last deal in this space. I think theres going to be more talks like this that come forward in the coming years, kelly. Courtney, thank you i was going to say, mike, maybe this i mean, its interesting, so the buyer of westfield was down in the session, there are some concerns over the price theyre paying. Yes, im sure the valuations have come down relative to ten years ago. Given the way things are headed, is it possible they could get them cheaper potentially i think they vary company by company. The story line for a long time, a lot of b c malls dont have a great future westfield was different yes its not quantity over quality this seems like its at that part of the market but still seems like i walked through that eataly and oculus relative unique property. That too, and i give them credit, its not cookie cutter and theres a lot of food offerings. President trump picked jay powell to run the fed after janet yellen steps down. Well hear more about Stan Druckenmiller and what powell will mean for fed policy, after this hey yeah . I switched to geico and got more more savings on Car Insurance . They helped with homeowners, too ok plus motorcycle, boat and rv insurance geicos got you covered like a blanket houston . You seeing this . Geico. Expect great savings and a whole lot more. Geico. What we do every night is like something out of a strange dream. Except that the next morning. It all makes sense. Fedex powers Global Commerce with vast, farreaching networks. Deep knowledge of industries. And, yes. Maybe a little magic. Earlier i sat down with Duquesne Family Office ceo Stanley Druckenmiller to get his thoughts on many topics including new incoming fed share jay powell i dont know about powell warsh would have been a great fed chair of this they need to use common sense instead of models with rules and all this stuff. I have an kevin would have been incredible i dont know jay powell. Maybe hell be incredible. I dont know the man so hes keeping an open mind. Yes because he has been so critical of fed and central bank policy, saying they need to normalize much more quickly. Sure. The change in the chair is obviously an opportunity to sort of modulate exactly how much you emphasize certain models or certain targets. Its probably going to happen. Its worth noting that janet yellen keeps saying, maybe there isnt a cyclical element entirely about this sort of thing. Therefore we might as well normalize. What is the Market Pricing in right now for next year . I believe it comes down to one in march, almost certainly, then maybe one more. Thats it at this point the market is still not buying into the three next year theory i hear people on the street saying five. Right at this point who knows what theyre going to say tomorrow in terms of the official expectation for 2018 i still think you have this standoff with the markets. The markets have won each of these bets its true, every time, the famous one was fisher, they said they would do four and they did two or one or whatever if shes right on her view and they see this tax plan falling into place, will they be much more aggressive than everybody thinks right now yes even if you think the traditional model works, youre starting to see leading indicators of inflation happen the cpi would be the most interesting thing tomorrow yes mike, thank you well see you tomorrow that does it for closing bell. Fast money starts right now. Live from the Nasdaq Market site overlooking new york citys times square im melissa lee. Tonight on fast, the crypto trade is on fire or, as the kids say, lit its not just bitcoin, litecoin, and ethereum going parabolic we have every angle covered. It is bitcoin week here on fast money. The biggest crypto ballers will join