Transcripts For CNBC Squawk Box 20140123

Famous, then you were born ten years later and thats where goldie. I knew her well from all shoo hes on it since then. Im not going to bring up laugh in considering the Hawn Foundation is doing brain and meditation reseven. Shes come a long way. Her son. Oliver. Havent met the daughter. I know the son you probably wish you knew the daughter. Ive known you long enough. Before we get to all of that we have a roundup of this mornings top stories. Chinas lenovo is buying the low end service for 2. 3 billion. Ebay is pushing back at carl icahn, the activist investor has taken a stake in the company and proposing a spinoff of its paypal division. But ebay rebuffed the overture arguing that the unit would lose synergies with the overall ecommerce business. Ebay reported Quarterly Results yesterday with earnings beating the street by a penny. Shares of netflix soaring after the Company Announced it added more than 2. 3 million u. S. Customers in the Fourth Quarter. Netflix says it is testing different pricing plans for its monthly tv and movie streaming service. Things got interesting on the netflix Earnings Call an analyst asked Reed Hastings what he thought about the sharing pat passwords saying he doesnt mind when people hair their hbo passwords. Here is the answer. I guess the ceo of hbo doesnt mind me sharing his account information so its plouffeler at hbo. Com. Really . Wow. Okay. Thats interesting. Lets check on yesterday we gave someones email, gary. It was gy water. Org. People wanted matt lauers email. Asked for marty sorensons, too. Supposedly its going to snow today. Looks beautiful out today. Do they have not have the Weather Channel over here . We have the Weather Channel here. Right here. Does it look like snow to you . This looks beautiful, 13. 8, thats celsius, right . Yes. Can you do the fahrenheit conversion . No. I could xwguess, i figure its about 25. Check on the markets, i cant forecast markets but i can forecast, i dont think it said snow do you . Theres not a cloud in sight. There are the futures again today, are the markets sad were not back there or something . Yesterday it was a little uneven, today down about 45 points or so. Thats manageable though. Well see what happens. I dont think the earnings at this point are, intel and ibm, is it going to live up. The banks that did well. Bank of america. Revenue at ibm people dont like that. The deal with lenovo gets the low end server business off their books, that will help them longterm. Were supposed to be finished with cost cutting and productivity gains so the revenue needs to take over in 2014 and and justify where the market is at this point. Lets look at the rest of the markets, you saw the dollar, i didnt see, there it is. Thats right, looking athe crude 96 a barrel at this point. Lets look at the tenyear which every day sort of validates. Reinforces. Like cicero im not going to bring up about the tenyear, andrew. There you go. To the interview of the morning i sat down with jamie dimon yesterday, jpmorgan irchaman and ceo to talk about his company, the economy and much, much more, the first time hes spoken in a long time since some of the companys troubles. We began with the companys legal issues and recent settlements and i asked him what the public should think about the firm now and his leadership. I want the public to know im proud of jpmorgan, we operate in 100 countries, did 2 trillion of lending and credit recovery, high customer scores and middle market Consumer Credit card. We try to do great stuff for communities. We were there in 08, 09, 2010, for cities, schools, states, hospitals when lots of others werent. We have a series of problems. The problems dont detract from what the great stuff our people do but a lot of the problem were 08 and prior. Theres no one at this company who is responsible for 80 and i would say we shouldnt pay 80 but thats neither here nor there. Companies have problems. The press has problems. The military has problems, the government has problems. That does not necessarily between cnbc is bad if you have one bad reporter so you got to be careful how you judge a whole company because something went wrong so you look at these big numbers and they are big numbers and so the public looks at them and theyre trying to grasp and understand what to make of it. Do you think ultimately it was fair . No. I this i a lot of the numbers are unfair but im not going to go into details. It all relates mostly to stuff that happened from 1990, 2000 up to 2008 so this wasnt like a oneyear number, this is litigation that built up over time, you know, and was settled and paid in big numbers this year and im grateful to have it behind us and because the most important thing for a company is you do your job, serving clients and communities around the world and this was a huge negative for the company, huge distraction of management time, board time, when we should be really helping our clients which includes cities and schools so we just want to get back and do what were good at and supposed to be doing. On the stuff that you think was wrong, do you think you fully remedied it . I guess at one point it doesnt matter whether you think its wrong or right. We can debate whether they should have paid all the bad mortgages or bear stearns but youre caught between two bad choices. We made the one better for the company. I have moved on, that was last year. Im looking foord to 2014. One more question on that, was there a moment or what was the moment for you when you said to yourself, okay, pay it. I want to put this behind me and was there something that happened . Was it a conversation with the board, was it a conversation with eric holder, what was that moment for you . First of all the board was involved every step of the way, unprecedented multiple regulators and u. S. Attorneys and former justice and it was just thinking is through, looking at our options and realizing there are two really bad options and the wrong thing to do is to complain, fight and then you could have said why not go to court. If you were my board you would have said why would you do that and subject your company to three or four more years and the outcomes could be worse, they wont necessarily be better. Lot of people said if you think youre right, fight, banks have a tough time doing that. It would really hurt this company and that would have been criminal for me to subject our company to that those kind of issues. Chris christie compared himself to you over the weekend suggesting when you won a big state in his case or a big company he said its impossible to really understand everything thats going on. As a ceo do you feel that way . I have enormous respect for chris and i dont know what the words were used, i think its true and important for the press when you talk about the military, we have the best military in the planet, the skills and capabilities of our people are exceptional. That does not mean that bad things dont happen and the worst thing you can do is im going to destroy everything good because something bad happen. The way you judge a company do they admit bad things. In the mull tear they have cold blooded an little cat what you did, why it worked, what didnt, what went wrong but its not to punish people but make you better. Right through there is now ther punishment. Its impossible to know every single thing people are doing. Thats why you have controls and good people. Even good companies, god governments are going to make mistakes. If. You said you have a lot of good people at jpmorgan. One of the critiques of the government in this whole sort of prosecuting of wall street is that theyve gone after the companies and shareholders and not held the individuals who actually made these decisions accountable. What do you think of that . I think thats a legitimate complaint. If people broke the law, they should be punished. In the old days if someone come in and broke a law the person would be punished and the Company Found very broad systemic on the company all the way to the top but the company pun ushed. Thats a legitimate thing. The lawyers and the courts will figure out where the balance is and it seems to be chakd but i consider anyone who says where should it be and if individuals wrote the law why arent they being punished. Shareshoeld hoholders say weg for somebody in the bowels of this Organization Made a decision, right or wrong and the governments decided its wrong. Thats totally true and a lot of things totally true and you pay twice. So my Shareholders Benefit from the good things we do and get punished from the bad things we do and the government, too. Ill let it to the professionals and the courts can sort that out. Two years ago we were in davos you said you were barely a democrat. Are you still a democrat . I am still a democrat, yes. Despite all of this . Hasnt changed your view . Ive said to you before there are social reasons im a democrat, more fiscally conservative. I wish the democrats on the left would celebrate private ebt prize and success a little bit more. Were brothers we shyou lift everybody up. I believe in progressive taxation. I want more equitable society. Why is it, how did it get there, what we should do about it and clb rate taken and fix it. In terms of risks legal or otherwise that you this i about, theres the investigation into the chinese. I would tell you that some of these things are beginning, some companies did worse than others like in libor. Let the court figure it out. I just want to continue to build jpmorgan and sort those out in due course and if we find people did something wrong we will independently take action. One of the things that happened in the past week, you got out recently of a chemical company, po because you had employed the daughter, in part. Is that something well be hearing more and more about in terms of you deciding i dont want to touch that . By the way that company was not a government controlled company. I understand that. I think were, look i dont know the circumstances exactly but i think were trying to make decisions to make it as pure as possible, trying to do the right thing and i think evans going to look back at the rules. Not just banks. People hire exgovernment officials, hire sons and daughters of companies and give them proper jobs and dont violate the american fair practices act. We have to create a safe harbor for that. Is there anything in this whole thing that you read that made you uncomfortable . Like i said i dont want to go into that anymore. Lets talk in the economy in davos, a lot of people talk about what the next year looks like. Last year you were positive, everybody was positive and it was right in terms of the Economic Growth and more importantly the stock market. Is the stock market out overet skis relative to where we are in the true economy in. I dont look at the stock market telling you about the future but times it does. Lot of smart people buying and selling and the prospect of 5,000, 8,000 individual companies and say i feel good about that. The American Economy and look i dont know, no one predicts the future but i believe the sun and the moon and the stars are lining up and look how the table is set. Corporate america is in excellent shape, profit margins, a lot of cash and cap you always point out, middle Market Companies are in excellent shape, Small Business back to where it was, not formation but credit, the access to credit, housing has turned the corner, 6 million more americans are working, americans are healthier in their homes, their 401 k s, and government is doing no damage. I am so dwratful we didnt have, that we have a budget, ill be grateful to get through the debt ceiling crisis and i think those will line up its possible well start to strengthen as a company that investors will be looking for opportunities, companies, remember Companies Want to expand. Ive never seen a ceo who says my goal is so shrink. The the switch is set to grow. We need immigration reform, tax reform. Do you think well get those things . No but im thinking well grow despite them. Capital overseas is a bad idea for america. When you think about europe, china, the rest of asia, where are you . If we were sitting here a year ago about a year ago the chatter about can europe grow at all . Its tough sledding so i dont expect it to boom but if it could grow a little bit its a plus. Japan is doing better, china, people worry they wouldnt grow at 7 . Theyve been growing at 7. 5 they reported yesterday and i believe china has the wherewhereal to keep their growth in their targets for the next couple years in spite of the fact they may have banking problems they have enough to meet the targets so theyll probably meet them. If you have china, japan, europe, and the United States possibly all doing better thats 75 of their global gdp. Banking business what do we think of not just the last earnings reports but the trend which is to say overall revenues have not gone up, theyve gone down to the extent profits have gone up its been a lot of cost cutting and perhaps you could argue some of the loan loss reserves which will come back to actually make the profits look better. Its a tale of two cities here. If. You look at banks and i think a lot of the banks youll see some loan growth, some deposit growth and you see it broadly. Thats the real underlying business. That doesnt always reflect itself in revenue growth. You have management margin spreads, higher expenses from a whole bunch of different things. Jpmorgan had deposits up 10 , assets under manage up 515 , commercial real estate loans up 15 , the bond markets are open, the Capital Markets open so you see a lot of positive signs, they will eventually lead to profits but spreads are going against you, costs are going against you and that will change. That will change and the mortgage thing i know people made a lot of big deal about mortgages. When rates went up we told everyone refi will go down. Theyve gone down a lot. We know thats going to happen. That is the business, luke a pizza shop when its storming jo upt side will have less business. You should look at it necessarily as a bad thing. There are positive effects to rates going up and other positive effects. Lot of things you deal with in a business and with he shouldnt overreact to mortgages. I also asked jamie about jpmorgan overtaking bitcoin and whether he thinks bitcoin will ever be a real currency. Well have the answer in the next half hour. Did you think he was defensive, apologetic. I didnt think he was apologetic. At the beginning i thought he was a little fired up about things but then it seemed like look hes probably trying to keep lay a little low and stay out of the spotlight. We talked, i know how he feels about certain things. In you were in jamie dimons position i would not be as conciliatory after the same questions hes fielded over and over and i know the bottom line is you cannot fight city hall. They had over 20 billion set aside, that allows regulators to say this is what we want. You got 20, if the 20 is there i want the 20. Its better for shareholders to do that but i dont think hes admitting anything. Do you think the attention is off jpmorgan or will it continue . I wonder whether the government if you believe the government has squeezed that firm whether theyre going to the next or hes still in the vices. I think they go to the next firm, my guess. Government should not be vindictive but depending how he acts from here on out i could see them either not or i could see hem continuing or not continuing based on if he behaves or not. You could pay 23 billion and thats the companys earnings, shareholders oddly, i dont want to say theyre happening. They knew this was the overhang and want it to be removed. We come from a different perspective. Here is the media universe and its opinion of jpmorgan. I think its an essential part of our economy. I have heard it called an International Crime syndicate that violates International Law on a daily basis and pillages and plunders. Ive heard people that write things and arent sued for libel. Well have a lot more from jamie throughout the program. From mother jones or matt whats his name, and the guy that came on closing bell slate or salon or one of them. Coming up were still a couple hours away from the opening bell on wall street. Up next nyse duncan, they have so assets at the New York Stock Exchange. Well be back and it isnt going to snow. [ male announcer ] we dont just certify our preowned vehicles. We inspect, analyze, and recondition each one, until its nothing short of a genuine certified preowned mercedesbenz for the next new owner. [ car alarm chirps ] hurry in to your authorized mercedesbenz dealer for 1. 99 financing during our certified preowned sales event through february 28th. Auto. Our next guest was recently honored at the museum of American Finance for his distinguished Public Service and financial leadership, duncan is ceo of the euro next which runs the New York Stock Exchange. Were glad youre here. We brought some good weather. You did, if you think about it, this is the first time in seven years ive been here where its colder in new york than it is here and more snow on the ground in new york than there is here so good chance to get some work done. You live right and good things happen to you and squawk box, i dont know, there is such a thing as its got to be you. A halo effect of us. Im demented, arent i . It happens. Im just saying. Im just saying. So getting right to what it you can gauge and that is what 2014 will be like in terms of the ipo environment, thats like a pulse of things and the pulse is getting better. I think the pulse was really, really good in 2013 if you think about it, nearly 250 ipos in the u. S. From all sectors, all geographies, didnt feel the slightest bit like a bubble, coincident with the cooperative market that seems poised to continue throughout 2014. We have a little less visibility into the forward because so many people are using the jobs act to file confidentially but the companies were aware of that have filed and the companies that we can see in the pipeline, 14 looks really good, too. It was coincident with a better market but what was the market coincident with, a better economy or can you see the money coming in, or can you so he where bernanke signed the checks for the money coming in or the economy . It feels that way to everybody. We get asked all the too imwhy isnt the economy doing better if the market is doing so well and you know because you cover the market every day the markets are a function of how theyre doing and Corporate America is doing great, the multinationals are doing great and i think the fundamentals are borne out by the market performing. One thing that stresses me a little bit when you look at the stats as im sure you guys do, i feel like retail has missed this run a lot. I think we scared them all out of the market. I understand why they left. The industry didnt acquit itself very well. Im not sure theyve all come back. The average individual is underinvested visavis where wed like them to be. You think thats generation ol are a couple years out, do you think in a year or two if the market continues i have to get on board. Thats not a good sign. I feel thats starting to happen now. I talk to my friends on the buy side the impact is stock so theyve caught the end of the rally but were a long way from 2008, most people sat out from that. You being older i remember how people felt after 1974 almost similar, took years to people thought maybe i wont get burned again and it starts 1982, at 800 and next thing you know were at 14,000. It can move but theyre not back yet. I dont think theyre back yet but the other thing thats driving them is the retirement math doesnt work when your savings account pays you zero either. At some point i feel like the feds been trying to get everyone to do, move out on the risk curve a little bit and remind everybody if youre going to be that conservative were not going to reward you for being conservative. You have to take some opportunities whether it be in real estate or equities and well see what happens. Buy and hold got to be where it was people were 100 sure that it would work. It got to be were at zee rao but buy and hold does not work. How long before we get, and People Retirement have to buy and hold equities. Im with andrew, i think it probably takes another year or two and its just a shame because i think the rallys been missed. You said this didnt feel like a bubble with the ipos that were out and everything that happened. How do you measure that . If you look back to ten years ago and roughly the same number of ipos, it was in one or two sectors. This was not the case this year. If you look at it across the board, sure were there 50 or 55 tech ipos out of the 240 that happened in the u. S. . Sure. That percentage was much higher going back to 2000ish and we saw companies around the world come into the market, private equity deals, Companies Taking private six, seven years ago came back to market so this was not an emerging Growth Company bubble by any stretch of the imagination and the 2014 calendar looks similar. A twitter ipo question. We talked about the facebook ipo which looked like a disaster except they got a lot of cash, go the to keep the cash and high price and now the stock is back a year later. Which is more successful ipo, putting aside what happened at the nasdaq with the complete mess that happened in the days that it occurred. If you really think what happened to facebook, it just cost them a year but its a good company, theyve been running the company well and if. Were in it for the longterm that will end up being an unfortunate experience that they went through but theyve recovered nicely from that. I think the twitter ipo to me worked the way that it should work and needed to work because you never had to dispense with the first year to recover. You potentially left money on the table . I think its possible they did, sure. You can always look back. Their stock is valued i dont know how to price it out. You never know but trying to have aa win win and my wlaef always is youd rather be less greedy especially floating a small percentage of the company then everybodys a winner and we felt our responsibility that day was to be transparent. You saw what we ask, we brought you right intoers living room that day, and our view as joe said we wanted everyone to go home that day feeling like they participated, like no one was let out. You didnt really instigate, and have they thrown in the towel there, given up . They cant compete. Greinfeld didnt even show. Where are you on that . Im pruty sure hes here but i dont know. Are they still plugging away . Im kidding. Trying to instigate. One of the things youre such abinstigator. One of the things im proud of working at the nyse, a linkedin and yelp and pandora and twitter those companies i dont think would have picked the nyse to be their Exchange Partner five to six years ago and now they all do and im sure our competitor attributes a lot of twitter and the success weve had in the Technology Space to the problems that they had with facebook. Our competitors you cant even say the name. My children arent allowed to say it either. But our point is a lot of those companies chose us before facebook so we already had a nice tailwind, worked really, really hard. I think the Companies Realize what we can do for them as their partner and its working. Duncan, thank you. Thank you for going here and bringing the good weather. Appreciate it. When we come back well talk to the cochair of the World Economic forums annual meeting, judith rodin and what does allie dimob think about bitcoin, his exclusive answer next when squawk box in davos returns. Mine was earned in korea in 1953. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Good morning and welcome back to squawk box here on cnbc. Really its glorious, is it not . Its glorious. We are in davos, switzerland no less. But the weather i see and you hear. This is unusual. This is unusual. I do remember us on the air maybe five years ago with sunglasses on so its not that itter in happened before. What were you then, you were like a contributor. I was a contributor. Arianna huffington and tina brown wearing sunglasses. They were wearing fur not like this, but big furs. Im joe kernen along with becky quick and Andrew Ross Sorkin. We are at the World Economic forum in davos, switzerland. Number of economic reports on today but were going global now, these are things in the United States well mention them briefly but we have a bigger perspective at this point. 8 30, weekly jobless claims, 10 00 xesing home sales, leading Economic Indicators and ernlgz mcdonalds is the headline name before the bell, should be interesting to see because innovation has kept them ahead of the curve, gets harder and harder to innovate and this afternoon fellow dow component microsoft which with everything thats happened there should be interesting. Other headlines treasury secretary jack lew who is here. Hes here, going to be on our broadcast. The governments going to exhaust its borrowing power by late february without action by congress. Do we just leave this in the it he he witeleprompter. October they agreed to suspend the debt ceiling until february 7th and secretary lew will join us at the top of the 7 00 hour. Jamie dimon is in davos. We talked about the settlements, the economy and the banking businesses and i asked him if the banking giant would ever accept bitcoin. This is what he had to say. The question is do we even participate in people who facilitate bitcoin. Its a terrible store of value. It could be replicated over and over. It doesnt have the standing of a government and honestly, a lot of it what ive read from you guys a lot of it is being used for elicit purposes. People who will get upset with it is governments. Governments put a huge amount of pressure on banks, know who your client is, did you do real reviews of that. Obviously its almost impossible to do with something leak that. They will eventually be made as a Payment System to follow the same standards as the other paemt systems and that will be probably be the end of them. Were going to have much more of the jamie dimon interview at 7 00 a. M. Eastern time. From the importance of getting younger, generations into the labor market to the meth of women having it all we have a lot to talk about with our next guest, judith rodin, president of the Rockefeller Foundation and cochair of the World Economic forums annual meeting and on the boards of both comcast and citigroup and judith thank you for joeng us. Joining us. Thanks, i love being here. One of the theemmes of davoss treeg to figure out unemployment. You have focused on youth unemployment. Definitely youth unemployment is such a significant challenge, in most countries in the world its at least twice the percentage of the overall Unemployment Rate but more importantly the data show that if a young person is unemployed for more than a year, it affectser that trajectory over their life course so it really makes them less resilient, it gives them less capacity to get other jobs and therefore its setting them really on a horrible trajectory that weve got to reverse. And how do we go about doing that . What solutions have you heard . Actually there have been a lot of interesting discussions. Weve been involved at rockefeller in 100 million neshinesh i initiative in africa to train about 350,000 to affect 1 million lives training the youths to enter the digital economy. Theres enormous potential for job creation across northern and Subsaharan Africa and interestingly, the youth population in africa in the next 30 years is going to grow from 2 mun million to 400 million, thats a recipe for Economic Opportunity or for real social unrest and weve got to get ahead of it. You see situations loo ek that happening in europe, you look at spain, 40 youth unemployment because people arent moving out of jobs. Definitely one of my davos cochairs the ceo of totalle said at the Opening Press conference the cochairs held we ought to be thinking of europe as a developing World Economy now because the issues of unemployment and lack of growth, lack of opportunity is so severe that it really is setting them back for completely different paradigm in the next ten years. Where are you on the minimum wage debate in the United States and europe. I think the evidence shows that companies dont do less well when they raise the minimum wage. Thats certainly the evidence in the United States from prior times when states or the federal government have set a particular level, and i think the data also show that its not a zero sum gain that we create jobs when we have more growth generally. Muktar kent in an oped yesterday said one percentage increase in growth in Youth Employment theres a stimulus effect toward 78 billion in the economy. I dont know where those data come from, but i think thats a very important message. I was just thinking about i think about youth unemployment in the United States daunting and you throw in spain and its like oh my god and then you throw in africa and where do you start, almost here we are at the global Economic Forum and look at that as a macro issue you need to tackle it town by town, municipality its almost all politics is local. The idea of the World Economic forum figuring out something for the globe versus just the United States or africa. Joe thats exactly right. Yesterday at the International Business Council Global Business Leaders i was privileged to be invited to join them had several mayors from around the world and that was exactly the point. Businesses need to define what their local needs are and mayors and other leaders need to work with training, Community Colleges or Vocational Training to match the skills that are being trained for to what that local Business Needs even if its a global business, they have different local needs depending where they are around the world. Im skaecaring myself, collectivist thinking could work bottoms up. Stimulating the demand, the skills xwap and the Training Needs necessary and thats critical. I heard the conversation yesterday amongst so many of the Global Leaders that they need to be transparent in a more effective way about what specific needs they have in place and then work with the trainers. For example, one suggestion yesterday was adopt a teacher, so bring a teacher into your business so that those who are developing the training really do get to understand what your Business Needs are in a very direct way rather than this disconnect that everybodys complaining about. You think we can count on enough resources to satisfy all the worlds needs . I think we can through innovation but innovation and science and technology has to keep pace with population growth for jobs and for everything else. Do you think it will, are we optimistic . I think were optimistic. First of all the Macro Economic situation is better, the Balance Sheets are restored for so many of the companies, the stock prices are soaring, all the things you talk about. So theyre feeling more able to have this kind of conversation and to commit these kinds of resources, and then as i think we talked about the last time as i was on squawk theres a lot of private sector money coming in that wants to have social impact as well as some financial return, andrew youve been writing about it and as we get more of that mooeindset well more resources flowing to these issues. In terms of health care you think about what were doing now smrt smart phones and wearable devices. Seems like well live longer, more healthy hopefully. People are worried were past the point of being able to satisfy the needs of a population thats growing so much. Are we . Were not. I think well be okay. I was in a slum in wabangladh and saw in three minutes a mobile device a barely literate health kaer worker take the Blood Pressure of a pregnant woman, have the text message back saying give her the pink pill and treat her for hypertension. If we can do that kind of thing in a slum in dhaka, we can lower our Health Care Costs in the you state. I wanted to ask you about the Rockefeller Foundation initiative is 00 100 resilient cities. New york has been chosen. We have applicants from around the world and working with each city to create the resilience dividend, how do they build physical infrastructure, the Economic Diversity that creates resilience and the social infrastructure that allows them to rebound more quickly from shocks and stresses, whether hurricanes or earthquakes or tornadoes or economic failure. Bolder was on theboulder was christchurch and meateen and ramallah. They have to address social issues in order to have the growth and society that will allow them to be a real 21st century city. We have a platform of services these cities are getting from Big Data Analytics that palantere is providing to the capacity bonds developed so tremendous innovation around technology and Financial Instruments that these cities are going to have access to. So many other things i wanted to talk to you about including higher education. We dont have time now but hope you come back and join us again. Great, id love to. From rock star ceos, i thought it was going to stay rock stars, we have one of those, too. Tomorrow. No, not really. Oh. And ceos to titans of global finance, u. S. Secretary of the treasury jack lew coming up in a few minutes, his latest comments on the debt ceiling and 8 00 a. M. Hour former treasury secretary Larry Summers, they are squawking in davos and were coming right back. [ man 1 ] were now in the approach phase. Everything looking good. Velocity 1,200 feet per second. [ man 2 ] your looking great to us, eagle. 2,000 feet. Still looking very good. 1,400 feet. [ male announcer ] funny thing happens when you shoot for the moon. Ahh, thats affirmative. [ male announcer ] you get there. Youre a go for landing, over. [ male announcer ] the all new cadillac cts, the 2014 motor trend car of the year. Welcome back to squawk box everybody. Lets look at the u. S. Equity futures at this hour and get an idea of how we might open up with trade, when we do the s p looks as if it might be a little bit neglect testify as does the dow and the nasdaq. Nokia among the companies out with earnings this morning, announced the sale of its handset operations Beat Estimates with Fourth Quarter numbers. Nokia says the companys priority is finding future direction. The ceo of American Eagle outfitters is leaving in a surprise move, coming as teen apparel are trying to attract shoppers. And sandisk gives revenue falling short of expectations. Memory chip prices will fall more than 2013 so those are some of the stories were with a chi watching this muthursday mornin. Back out to beck ye in davos. Jack lew says the government will run out of money by late february if congress doesnt act. Weve heard this story before but well talk about this next with jack lew, the treasury secretary, joining us live from right here in davos. Squawk box will be right back. Announcer tomorrow, squawk box wraps up a big week of interviews from davos, majority leader eric cantor, glen hutchins, plus cnbc first 25 contenders, eric schmidt and Goldman Sachs chairman and ceo lloyd flablankfein, conquer the morning, conquer the day. I have low testosterone. There, i said it. See, i knew testosterone could affect sex drive, but not energy or even my mood. Thats when i talked with my doctor. He gave me some blood tests. Showed it was low t. Thats it. It was a number. [ male announcer ] today, men with low t have androgel 1. 62 testosterone gel. The 1 prescribed topical testosterone replacement therapy increases testosterone when used daily. 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Change your number. Turn it up. Androgel 1. 62 . Of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment this magic moment that its given me time toabout reflect on some of lifeseen biggest questions. Like, if you could save hundreds on Car Insurance by making one simple call, why wouldnt you make that call . See, the only thing i can think of is that you cant get any. Bars. Ah, thats better. Its a beautiful view. I wonder if i can see mt. Rushmore from here. Geico. Fifteen minutes could save you fifteen percent or more on Car Insurance. Coming up from davos, switzerland, treasury secretary jack lew is going to join us, hell talk about the economy and his call on congress to raise the debt ceiling. Plus, a squawking on davos exclusive. We have jpmorgan chases chairman and ceo jamie dimon. Hell talk to us about the settlements and moving on and his positive outlook for the economy. We have interviews coming up with Larry Summers, Steve Schwarzman and, yes, goldie hawn. Were back in a moment. In the face of danger, and under the most demanding circumstances. Experience builds character. Experience builds confidence. And experience. Has built this. Introducing the 2014 glk. The engineering and the experience of mercedesbenz. See your authorized dealer for exceptional offers through mercedesbenz financial services. Welcome back to a very special edition of squawk box live from davos, switzerland. This hour we have much more from our exclusive interview with jpmorgans jamie dimon. The American Economy, i believe, the sun, the moon and stars will line up. Plus, u. S. Congress secretary Penny Pritzker will join us. And Academy Award winner goldie hawn will join us on set. The second hour of squawk box begins right now. Good morning, everybody. Welcome back to squawk box here on cnbc. Im becky quick along with joe kernen and Andrew Ross Sorkin. We are coming to you live from the World Economic forum in davos, switzerland. Well have more of the exclusive jamie dimon interview coming up in a few minutes. His thoughts on the economy, asia, europe and the banking business. Weve been watching the futures. It seems like weve seen red arrows this morning with those futures. The dow futures are down by about 60 points below fair value, the s p futures off by 7 1 2 and the nasdaq is down by 4 notes. The tenyear note, the yield is at 2. 837 . And in our headlines today, carl icahn is at it again, just a few hours after he was told he was increasing his stake in apple, icahn revealed a new stake in ebay. Separately, ebay reported Fourth Quarter profits slightly above expectations. Ibm is selling lenovo. It has been widely reported that the two sides were in talk. The deal will help lenovo defe s diversify. Ibm wants out. Is it a good price . Ibm will take what they can get. I think its fair for everybody. It sets ibm up, hopefully, to get out from where theyve been the past couple quarters. Is it all part of the plan . You were afraid to say that, werent you . If we had someone from the administration, we could ask them. Netflix reported above expectations. Investors encouraged by the news that netflix added more than 2. 3 million subscribers during the quarter. Jamie dimon sitting down with us for an exclusive interview. Among the topics, i asked him if the stock market is out over its skis relative to where we are on the real economy. Sometimes the stock market tells you about the future. A lot of smart people buying and selling something. Looking into 5,000 or 8,000 individual companies saying i feel good about that. That is a reflection sometimes on the American Economy and what people think. The American Economy, no one predicts the future. But i believe the sun, the moon and the stars are inlooing up. Look how the table is set. Corporate america is in excellent shape. You have profit margins, cash and cap which you point out. Middle Market Companies are in excellent shape. Small businesses are back to where it was. Not Small Business formation but credit, the access to credit, housing has turned the corner, 6 million more americans are working. Americans are wealthier in their homes, 401 k s and government is doing no damage. I am so grateful we didnt have that we have a budget. Right. Ill be grateful to get through the debt ceiling crisis. I think those things will line up, it is possible well start to strengthen as a company, investors will be looking for opportunities. Companies want to expand. Ive never seen a ceo who says my goal is to shrink. The switch is always set to grow. You may see people be more aggressive. We need immigration reform, tax reform. You think well get those things. No but i think we can grow in spite of them. We are now driving at the margin, capital overseas and brains overseas. Its a bad idea for america. When you think about europe, when you think about china, the rest of asia, where are you. About a year ago, there was chatter about can europe grow at all . Europe has grown a little bit. Its tough sledding. I dont expect it to boom but if it could grow a little bit, thats a plus. Japan is doing a little better. China has been growing at 7. 5 or 7 . They just reported yesterday. I think china has the wherewithal to keep their growth within their targets the next few years. If you have china, japan, europe, the United States possibly all doing better, thats a powerful thing. Thats 75 of the global gdp right there. Banking business, what are we supposed to think not just the last earnings reports but even the trend which is to say overall revenues have not gone up, theyve gone down, to the extent profits have gone up, its a lot of cost cutting and perhaps you could argue some of the loan lost reserve which have come back to make those profits look better. Its the tale of two cities here. If you look at banks, i think a lot of the banks youll see some loan growth, some deposit growth. You see it broadly. Thats the real underlying business. That doesnt always reflect itself on revenue growth. Net interest margins, higher expenses from different things. You have good signs. Jpmorgan had deposits up 10 , assets under management up 15 . Commercial real estate loans up 15 . The bond markets are open, the Capital Markets are open. Spreads are going against you, costs are going against you. That will change. That will change. The mortgage thing, people made a big deal about mortgages. When rates went up, we told everyone refis will go down. Theyve gone down a lot. We know thats going to happen. That is the business. Thats like a pizza shop when its storming outside, we have less business. Its not necessarily a bad thing. There are positive aspects in my opinion to rates going up. There will be other positive aspects. Theres a lot of things you have to deal with in a business. Right. We shouldnt overreact to businesses. Janet yellen will start her job in a week. What do you think the difference will be between her and ben bernanke . I dont know. I think shes been part of those policies. I have enormous respect for her as does every Single Person i meet. Did you know her before. I met her before, yes. Shell have to pave her own way and, i personally think qe the tapering thing is a good thing. I saw a headline, someone said tapering, Strong Economy bad because it means well start tapering. I thought the purpose of it was a Strong Economy. I think we have a Strong Economy, it makes it easier to taper. Normalization of Interest Rates and fed policy is a good thing as long as the economy is growing. I dont think youll see the fed completely do very tough tightening things or dramatic tightening if the economy starts to weaken. Its almost predicated upon having jobs at 200,000 a month, you might have a tapering thing which is a good thing. You start having 4 growth, you wont care by having an extra 20 million a month. The u. S. Economy is worth 100 trillion, all stocks, all bonds, all real estate, all private companies. Thats money isnt going to be the end all, be all. Whats the thing you worry most about . I would like to see more collaboration between government and business. I like to see less things which are disruptive. I dont want to blame the democrats, republicans. We all talk about income equality, lets get jobs growing. We want kids go back to work, lets get jobs growing. Job growth will pay for education. It will reduce the budget deficit, make it easier to come up with ideas that can improve the lives of everybody. I think what we should focus on is getting the job engine growing, the economy. Thats the number one thing. Lets not do things to distort it. If youre a republican or democrat, if you do something to distort that, for a smallminded reason, shame on you. Later, jamie dimons thoughts on credit card security and protecting consumer interest. We have a big interview right now. We do. The office of the u. S. Treasury and congress are not on the same page when it comes to the timetable for raising the nations debt ceiling. Joining us first is u. S. Treasury secretary jack lew. Mr. Secretary, thank you so much for being here today. Good to be with you today. Here we go again. I cant believe, joe asked earlier were we reading the same story in the prompter from a few months ago . Were right back to the debt ceiling. What happened . Congress acted to extend the debt limit to february 7th. There are steps we can take before we run out of Borrowing Authority. One of my responsibilities is to make sure congress is fully informed of when that flexibility ends. I wrote to congress to let them know, extent with past communications that we thought that it was most likely the end of february that wed run out of our ability to use what are called extraordinary measures to continue borrowing. Which Means Congress needs to act. They should act as soon as possible. They shouldnt wait till the last minute. Theres no reason for there to be any more selfinflicted wounds. Congress should get it done without a lot of stress to the u. S. Or the World Economy. And my letter yesterday was to keep them up to date so they know what i know. Is it what you thing congress will do . From my conversations with leaders of both parties, i think they know what they have to do. They know it was not a good thing to create the kind of economic anxiety that was created just a few months ago. Were doing pretty well in the u. S. Economy right now. We have tail winds. Were seeing the year ending strong, beginning strong. We have to make sure there are no more selfinflicted wounds. We get the job creation thats so important to middleclass americans, to all americans, can precede a pace. I think the private sector is ready to take a step up, its the governments responsibility to do its job. Congress has a responsibility. Theyve already incurred the obligations. Just this past week they passed a spending bill. That sets in motion the policies for the next year. The debt limit Borrowing Authority is really just the act you take at the end to reconcile the other decisions youve made. Its not new policy. The actions that you can take, extraordinary actions, started me thinking this morning. Is one of those actions slowing down the paying back of refunds to customers on their taxes . We have historically used a number of extraordinary measures that do not include slowing down any payments. Thats something we have not done. There are things like transfers between government funds, deposits into Retirement Funds for government workers, things you can true up at the end. We ought not to be doing things that interfere with the ability of the government of the United States to meet all of its obligations on a timely basis. I agree with you. Since 1789 its been the gold standard. The u. S. Government pays its bills. That cant change. We often say it cant change and shouldnt change but also one of the arguments is that the system technically makes it impossible. Do you think we should change the system so it makes it easier for you to decide who to pay in the future . Just throwing it out there. I think what should change in the system is the debt limit. The notion that you make decisions on how much to spend and what to do in revenue in one place and then at the end after all the decisions are made you act like its a decision whether or not to raise the Borrowing Authority. It is a conclusion of all the other decisions made. I think there ought to be real thought given to not have these on again, off again, unnecessary crises. I dont think there should be me question the u. S. Government pays all its bills. Any commitment we make we need to keep. Were in a global forum now. Im getting acclimated. You got the bug. The narrative coming here was that the u. S. Has to convince the world that tapering will be okay. We saw what an initial the thought of tapering did to developing countries, the currencies, 10 billion. Were the dog, we move a little bit. In the whole world, the world seems to shake. Can you allay fears, given the recent jobs report, that its time now, will we be able to do this . We dont comment on monetary policy. Im not going to change that tradition. Can we pass i think the issue thats essential is whats happening in the economy. Is the economy in a good recovery . Are the Economic Indicators strong . And i think they are very strong. I think we did have one jobs report that is kind of an outlier. If you look at the last three to six months weve seen a consistent series of economic reports that show the u. S. Economy is doing quite a bit better. You know, the projections for growth are consistently rising in forecast. The confidence measures are rising. Were seeing across sectors in manufacturing and services, even in construction, good recovery. In places where theres recovery has been slow coming out of this financial crisis, take construction, theres still more potential for improvement. We havent seen the kind of turbo charge that comes to the economy when you have really increased activity and construction. I think everything is cued up for the u. S. Economy to continue to do well in 2014 and beyond. Let me ask you one question on the economy. You see the tax receipts that are coming in from businesses and consumers. What do they show you so far this year . Its very early this year, tax Filing Season is just about to begin. I think what were seeing in all the Economic Indicators is that, you know, there is the trajectory of growth is rising. And that should reflect in more income and more income means more revenue because the system is growing. I havent seen the data yet to support that. Certainly projections, you know, suggest that. Mr. Secretary ask the state department question. I have a couple questions. One is an nsa related question. Several have wrote letters and are trying to push the u. S. Government to be more transparent about what theyre doing in part because they worry that they are going to struggle doing business here in europe, in asia and other places because those countries arent going to want to do business with us. Is that a wellfounded fear . The president spoke clearly last week on the question of what well be dong in this area. And ill leave it to others to go into more detail on that. I think as a business matter, u. S. Technology firms are competitive because they have the best products and the best services. I think theyll remain competitive and were certainly you think whatever were doing on the government side could impede that . I think that we need to have fair and open Trading Systems where they can compete openly. I think that the concerns that people have about privacy are shared across boundaries. I think that, you know, its not just u. S. Companies that have to answer questions on that. Its all technology companies. So i have confidence in the u. S. Technology sector. Okay. And i think its going to continue to be a growth sector, both for domestic and international Economic Growth. Geopolitical question. The president of iran is here and this morning said he believes that that country, a can become one of the top ten economies in the world and can become friends with the United States. Do you see a path to that at all . I think were starting from a place where weve had decades of hostility and mu tell distrust on both sides. Weve seen an important agreement reached. The joint plan of action which in many ways rolls back irans program of a nuclear development, puts in place modest sanctions and leaves in place the oil and financial sanctions that have been crippling irans economy. Let me be very clear, those sanctions remain in place, unless and until there is an agreement that really resolves this nuclear question in a more permanent way, we are going to continue to be enforcing the sanctions that have been in place for the last number of years, slowing down and really hurting irans economy. How can you say that . I think iran came to the table on the joint plan of action because sanctions have worked. Sanctions have gotten their attention. I think we have to now clearheadedly go through the negotiations, the substance at the end has to be real. It cant be something that doesnt actually do what we need to do, which is to make sure iran does not have nuclear weapons. But if thats successful, they can get the relief that would be appropriate. Theres a long way to go. You know, the joint plan of action is a first step. We have a lot of hard work ahead. There should be no misunderstanding. Im talking to ceos here and other places. Companies should understand that theres not an open for business sign in terms of going back into iran. If you violate banking sanctions, if you violate oil sanctions, theyre still in place and still going to be enforced. Mr. Secretary, one last question for you. The u. S. Financial stability oversight council, theres a report out it was looking at Berkshire Hathaway as a company that would be labeled systemically important and open it up to more regulation. Can you tell me if thats true . Youre the head of that committee. We never comment on companies being reviewed. Its an analytical process. Weve prided ourselves in going through the designation of a number of firms and keeping the whole process confidential, and part of that is not acknowledging whether a company is or isnt being looked at. Can i ask one other thing . In what does the government think of bitcoin . I think bitcoin is a phenomenon we need more time to discuss. I talked to jamie dimon about it. We share thoughts on that. We have to make sure it does not become an avenue to funding illegal avenues or avenues that have terrorist purposes. Its an anonymous form of transaction. It offers places for people to hide. Weve made it clear through Enforcement Actions we will look at these forms of transaction and we will enforce all of the rules we have on illegal money activity. Okay. Mr. Secretary, we want to thank you for your time today. Good to be with you. Again, jack lew. Still to come, the ceo of drug giant novartis. Plus, goldie hawn will have a starring role on squawk, coming up in the next half hour. Stick around. Well be right back. All right. Coming up next, how big pharma is reinventing the world of medicine. The ceo of novartis facing challenges of his own. Hell be our special guest right after a quick break. Time now for todays aflac trivia question. How many hours does an average American Sleep per night . The answer when cnbc squawk box continues. 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Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. Now the answer to todays aflac trivia question. How many hours does an average American Sleep per night . The answer, 6 hours and 48 minutes. Aflac. Novartis announced plans to cut around 500 jobs in shutting a u. S. Plant, marking the second reorganization of its operations in a matter of days. Joining now is joe jimenez, ceo of novartis. Lets start with, im feeling very global, i dont know, im a citizen of the world i dare say. In terms of being in davos, what are you trying to get across for health care in the world. Ive been coming to davos for a number of years. Weve had five years of talking about the financial crisis. This is the first year where the conversation is starting to shift towards Economic Growth. Im one of the cochairs of the forum this year. What im doing is elevating health on the agenda in terms of an industry that can generate Economic Growth. You know, if you think about health and health care, healthier populations around the world are critical for Economic Growth. And so its really a good place to bring political figures together with business and other ngos to talk about how to drive Economic Growth. We con stan thely talk where are the jobs going to come from . I remember i always bring that up in the 19th century, people said we dont need a patent office, everything has already been invented. When you think of the jobs, productivity and the economic potential of health care around the world, bringing people up to our standards of health care, they become productive citizens of the world. Then you throw energy in. There are vistas that will dwarf anything weve done to this point. Health care is a growth industry. You have the aging population. You have chronic disease that is not moving into emerging markets. In china there are 80 Million People with diabetes. What . This is more than the population of germany. I had no idea. As the rural population moves to the urban centers and start the incomes go up and start eating differently and they dont have the same level of exercise. Youll see health care as a growth industry well into the future. And you can also speak to, as long as we are these broad topics, a particular novartis drug, unlike the old system of grinding up a scorpions tale, glevec was targeted toward a specific type of cancer and its a window into the future of what will be possible. It really is. It turned a deadly disease, chronic leukemia, into a different type of disease. Weve had People Living on glemex for ten years. We now identify different pathways and how those are linked with different diseases. Thats creating new targets for drugs. Andrew will worry about taking care of the retirement needs for the People Living till 50. The shortterm cost will be less but longterm costs will be more. Things are good. As far as novartis, just a quick question, at set mix you have, you have an Animal Health unit that maybe doesnt fit in long term. Maybe it will go well with merck. We have three big engines, pharmaceutical business, our eye care business, alcon agenerics business. We have three smaller businesses which is Animal Health, overthecounter drugs and vaccines. Theyre number six or seven in their markets. They dont yet have a global scale. Weve started a Strategic Review to look at how we can build those businesses. I want to build leading businesses at novartis. Were looking at a number of different options. How about regulatory issues, in japan or the United States. Anything material that you expect . If you look at this is a highly regulated industry. Whats going to happen over the next few years, as Drug Companies start to create medical breakthroughs, youll see regulatory agencies working with pharmaceutical companies in ways they havent before. The fda is a good example of that. Last year, novartis had three breakthrough therapy designations by the fda. One of them is a regenrative muscle drug that actually helps elderly rebuild muscle. The fda said, okay, this is a breakthrough therapy. Were going to work with you to more quickly bring this drug to market. I think its very optimal. Some of the things happening in new york or japan, anything that worries you long term . No, obviously because we are highly regulated, the question is can we insure that we create an environment that will encourage innovation . We are an industry that invests in highrisk activity. Were discovering in developing new drugs. Right. Im hoping that the regulatory agencies will work with us in ways that will allow us to bring new medical therapies that can help people live longer. Wow. I like the way you answered that for sure. I appreciate it. Thank you. Thanks for joining us. Thank you. When we come back, more star power in davos. Well spend a couple of mindful minutes with goldie hawn. Shell give us her message for the World Economic forum right after this. Tomorrow, two contenders in the running for cnbc first 25, leaders, icons and rebels. Goldman sachs chairman and ceo and googles eric schmidt. Lloyd blankfein and eric schmidt. Thats right after this. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. [ car alarm chirps ] [ male announcer ] we dont just certify our preowned vehicles. We inspect, analyze, and recondition each one, until its nothing short of a genuine certified preowned mercedesbenz for the next new owner. [ car alarm chirps ] hurry in to your authorized mercedesbenz dealer for 1. 99 financing during our certified preowned sales event through february 28th. Welcome back to squawk box, everyone. We are live in davos. Treasury secretary jack lew who just joined us says the we thought most likely it was the end of february that wed run out of our ability of extraordinary measures to continue borrowing. Congress shouldnt wait till the last minute. Theres no reason to be selfinflicted wounds. Congress should get it done without a lot of stress to the u. S. Or the World Economy. And my letter yesterday was to keep them up to date so they know what i know. There has to be complete transparency on that. Nokia among the companies out with earnings this morning. The company which announced the sale of its phone hand set to microsoft back in november Beat Estimates with its Fourth Quarter numbers. Nokia says the companys priority is defining its future direction. The ceo of American Eagle outfitters is leaving in a surprise move. The move comes as teen apparel retailers are struggling to boost sales. It was a rough shopping holiday season. Did you see the news on pimco and allairian . No. What happened. There was a huge disagreement between bill gross and mohammed. About what. That had been simmering. About investment . Strategy and investment. It was in the Financial Times today. They apparently went back and forth. To me its humorous. Its either buy bonds or dont buy bonds. Thats is what the Financial Times is reporting this morning. Bill gross, no one is really following him. That makes sense. You cant have the two of them in the same place if they cant agree. Well try to get mohammed on the snow. Maybe they were peering around corners at pimco. That will help us get him on the show. We both love football teams that are horrible. Lets get back to jamie dimon. We did have an exclusive interview with jpmorgans jamie dimon. He says there needs to be more done to secure consumers personal information in light of the target breach just over a month ago. Smartphones can be invaded, point of sale things can be invaded. It is a very big deal. Were putting enormous efforts to protect our clients, our company and the system. The system, everyone is hooked into each other. Sometimes the weak spot is through something else. Jamie also talked about what can be done to solve the problem. Take a look at what he had to say. We all should be doing emv, thats the chip and tokenization, essentially the same as bitcoin. Instead of using visa, instead of swiping visa, you swipe visa, just with us, we give the retailer a token which lasts for a split second and disappears. It can never be used again, has no personal information whatsoever. Thats doable. And still to come, actor s actress goldie hawn will join us as well as Penny Pritzker. We also have more of the interview with jamie dimon. Well be back to davos in a moment. Tte or au lait . Cozy or cool . Meow or woof . Everything the way you want it. Until boom, its bedtime and your mattress a battleground of thwarted desire. Enter the sleep number bed. Designed to let couples sleep together in individualized comfort. Hes a softy. His sleep number setting is 35. Youre the rock, at 60. And as your needs change over time you can adjust your bed to sleep better together. 48month financing available through february 2 only at your local sleep number store. Find your sleep number setting and know better sleep. Welcome back to squawk box where we are live from davos. Joining us right now is the u. S. Commerce secretary Penny Pritzker. Thank you for joining us. Glad to be here, great to be in davos. Lets start with a conversation about whats happening with commerce in the United States. We just heard from jamie dimon who was talking about the credit card breach at target and what this means, the breaches that seem to keep coming more and more frequently. Right. His take is that we probably need to move to the credit cards that include the chip, like what europe has. Right. I wonder what youve been thinking about all of this. One of the big challenges that we face is we collect so much information and we really need to protect peoples information. I used to be when i was in the private sector, i was chairman of a Company Called transunion. Protecting peoples credit data is one of the most important things we could do. I feel for target with the challenges theyre facing but we have to use all the technology we can to protect peoples data. Are we just doing a bad job of it right now or are the hackers getting that much better . Why are we in this situation . Were on a new frontier in terms of amount of information that weve got and frankly, its hard to put security together to really protect against it more and more sophistication, on the side of the hacker. Yes. Does it make sense to move to the credit cards that have the Chip Technology . Is that a safer platform . Im not an expert in the specific technologies but what i would say is that companies will have to find more and more ways that theyre confident that someones information is protected. I mean, i hate to use the word regulation. There are some countries in europe that have actually regulated both this chip issue and have regulated the way information is scored. So far in the u. S. , we let the Market Forces work. Maybe theyre now working to actually change things. Do you think theres a role for government in this or not . I think there might be a role for government. I have a lot of confidence that Companies Want to protect their brand, therefore, theyre interested in doing a good job on behalf of their customers. Madam secretary, when i hear criticism about the first four years of the administration, it was no private sector experience. Now when its brought up, they say we have the new commerce secretary. You quickly said when i was in the private sector. Are your shoulders broad, can you take all of our private sector jonesing for a private sector representative, are you up to the task for that . Can we do Corporate Tax reform, do market friendly things with you there . Im counting on you. First of all, my pledge to you is, ill give it my all. I think we can get things done. Immigration reform which has great economic potential for the United States, probably 1. 4 trillion, is what studies show over the next 20 years in terms of help to gdp. Private sector wants that. Absolutely. Ive been all over the United States over the last six months. I have yet to meet a Business Leader who isnt in favor of immigration reform. How about tax reform . Can that become i dont know what burner its on. Its one of the back ones. Well, theres lots to be done. I think Corporate Tax reform is picking up visibility and theres a lot of work to be done on it. Is it something you think as having been in the private sector, is it important . It would be helpful, would it not, to gdp . Absolutely. As the president has said, hes made proposals about lowering the Corporate Tax rate. Who needs the give . Why isnt it moving . Is it the administration, congress, where is it not happening . Ultimately congress has to pass the law. Basically i think that i think the effort for Corporate Tax reform will help make our companies far more globally competitive. Theyre making the argument. Theyre making the argument, have made the argument successfully to the administration and now they have to help make it with us on the hill. Okay. What about trade . This is something that just about every one of the ceos we talked to is very focused on. There are initiatives in canada, in mexico, in china, in the middle east. Can you bray ing us up to date where those stand. You just named four countries, where ive been and working with my counterparts, canada, mexico. Were very focused on trade. Its one of my number one priorities. I went on a listening tour around the country when i first was sworn in. It was the number one thing, whether you were a bicycle manufacturer or fortune 50 company. Business leaders recognize that 95 of customers are outside the United States. Were very focused on it. The department of commerce has a real role to play because we have our export Assistance Centers where we work with companies to help them export and then we have our Foreign Commercial Service which is in country around the world to help you if youre a business find whether its a distributor or a manufacturer or a retail or whatever kind of partners you need locally in country to take your product to market. We in fact help you analyze which market you could be most competitive in. We have a whole set of analysts who do this work. Wow. And so we have a real role to play and a real service to offer to american companies. Its one of the things that i find so exciting about my job. The democrats can be an impediment to this. Is he willing to push back on that part of his base in terms of pushing these trade agreements . The president supports absolutely supports the trade agreements. He has the u. S. Trade representative and me out really promoting the two agreements that are being negotiated. Have you heard from the left we dont want to do this . Theres a whole spectrum of attitudes toward trade agreements. What we need to do first is pass trade promotion authority. Thats where congress can weigh in as to the requirements or the boundaries around which they want to see the terms of the trade grems. What has to happen to get that past . Whats the procedural . A bill has been introduced in both houses and now it needs to go through regular procedure. Thats something that were working very hard on. All right. Madam secretary, i want to thank you so much to are your time today. We really appreciate you joining us. Thank you for having me. I have a couple items when i took this job, i resigned from everything. I cant help you. Im still waiting for my rebate from last year. Its hard to fix your credit ratings. Thats a real issue for a lot of people. Kidding but it is an issue. I dont know. Madam secretary, again, thank you. Thanks very much. When we come back, goldie hawns message to Business Leaders in davos. Plus, reaction to our interview with treasury secretary jack lew. The trajectory of growth is rising and that should reflect in more income and more income means more revenue just because the system is growing. Harvard professor and former treasury secretary Larry Summers will be joining us to talk about that. Then, cocacola chairman and ceo muhtar kent on the state of the Global Economy and where his company is seeing growth. Squawk will be back after the break. Erybody knows that. Did you know there is an oldest trick in the book . What . Trick number one. Lookest over there. Ha ha. Madeest thou look. So endeth the trick. Hey. Yes. Geico. Fifteen minutes could save you. Well, you know. Of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment were trying to talk here with goldie hawn. From Motion Pictures to raising awareness about education, our next guest has done it all. Seriously, she has. I was 10 years old when i first fell in love with goldie hawn. I dont know how old you are. I had to tell my young viewers about look at how well your career has been. Its been amazing. Im totally happy. You started when you were 3 years old. No, i was 21. Shes the founder of the Hawn Foundation. There are so many different ways to go about this. I think you need to start explaining for kids, if you can have a positive mental attitude, it can totally change the path you take in life. We have to figure out how to get that positive attitude. Obviously a happy child learns better, an off tptimisti change absorbs information better. Were dealing with symptoms in the child that were seeing that are untenable, depression and suicide and aggression and bullying and not able to attend a. D. D. Advent of 12 million children i think at this point are on psychotropics. Were looking at these dangerous symptoms. Youre right. Its the tools we give the children to return back to basically a sense of joy and optimism. I dont think that in looking at how to approach this, youre not ruling out anything. It covers all the way from sort of the eastern ideas of meditation, but you know everything is chemically mediated. There are ways to do this with i would imagine with therapeutics as well. Exactly. Our medicine cabinet is right here. We have all of these sort of areas in our brain that actually can function properly with intention and practice. Our brains, theyre mutable, changeable, as we know we learn plasticity. As we look at the symptoms were looking at, lets try to figure out what the problem is, number one. Number two, how are we not changing just fixing the symptom but were actually changing and fixing the disease. Right . So thats basically what mind up does. Were at a point where Brain Science is going to come into its own within the next five, ten years. We are so at a Tipping Point with Brain Science. I did this 12 years ago. The question was why dont our children know more about their brain . Why are we leaving them in the dark when our petri dishes in universities are learning much more. When a child learns how their brain works, they have context to their emotion. What do you mean how their brain works. We teach them simple ideas on the emotional system of the brain and executive function of the brain, which are two different systems. The executive function, the part where were fearful or excited or scared or uncertain, or sad, children come into school with so many psychological challenges. Right . You cant learn when youre like that because your brain is on alert. Our children learn that by breathing and focusing three times a day, we call them brain breaks theyre able to bring themselves back to center. What happens is they put the dog back in the dog house, so the wise old owl with the prefrontal cortex said, im so glad you stopped talking, now i think can think. Our children understand thats how they can gain control. Is this an ageold problem or gotten worse. I think its gotten worse. The advent of it is our environment, which will never change. Were dealing with the news stations, kids seeing the replication when our towers fell they saw it over and over again. Our little ones dont know if its happening again and again, they dont have that capability. Now were modifying behavior, looking at some of these children who misbehave or cant focus. Listen, some of the children ended up in the old days of changing the world, the bill gates of the world. I have a bigger question and im not against medication for children who are ill or mentally challenged seriously but are we giving these children the drugs for the right reasons . And is it basically deadening certain aspects of their creativity and innovation . Right . So i say that we start here, we lack at how we can manage our medicine cabinet inside, our serotonin, dopamine, all of these things that we have right here for the intention. So building a Better Society through our children, teaching them these tools that will take them through the rest of their lives. It isnt necessarily the abcs but we know that emotional in l intelligence are usually the people who succeed in life. What got you on to this issue . I have basically been a meditator since 1972. You do tm . I started out tm, then i moved into different principles, different functions. Sometimes ill look a mountain for five minutes. The point is we have to stabilize our mind. How do you stabilize this monkey brain that takes us in all these Different Directions and creates lack of focus . Focus is very important. Children actually are not focusing today. So the programs that were doing actually help them focus. Why does it happen today . We have so much distraction, its unbelievable. So the brain is multitasking. Its holding little bits of information, which it forgets by the way. Because it has no context to the reality, right . All of our little devices and the things we carry around, we dont even focus on each other. You want to say something. Im on a roll here. I read statistics that you brought up what show what a difference it makes in the classroom. I cant remember that. Heres our research. The research i did very early. It is evidencebased. Our children were 83 rise in optimism. Our kids heres the interesting part of this research. The line, the baseline the children who had no intervention at all went more depressed, below the baseline. Which i find more interesting than creating an intervention where children can become more optimistic. They work better in groups, the aggression went down on the play ground 30 . We does cortisol studies. They were able to manage it better than control groups. Which is incredible for health care. Thats the big killer. But the most interesting part other than that was the executive function that was done by dr. Adele diamond, a neuroscientist at ubc. Our children, the mind up kids that had this intervention were quicker on the uptake, their executive function worked better and had more focus and control than the control group. It works. It should be in every school in the world. Not just america. Because the act of empathy and caring is something that were missing as a society and as a global community. Did i get it all in . You got it all in. Thank you. 12 years and im committed. Great having you. I want to talk to you off camera for a second. Are you going to come up to the pebble beach at t with kurt and oliver . I wish i could say yes. I might fly up for a minute. I love golf. I love my men in my life and i want to see them win. Beautiful part of the world. Its awesome. It really is. Im not going to say no. You can come on squawk from there as well. You know when i started with tm recently because of all of this . Awesome. Highlights from our exclusive interview with jamie dimon, chairman and ceo of jpmorgan, plus, former treasury secretary Larry Summers will join us with his reaction to the interview with our current treasury secretary jack lew. Squawk box coming right back from davos, switzerland, in just a moment. And under the most demg circumstances. Experience builds character. Experience builds confidence. And experience. Has built this. Introducing the 2014 glk. The engineering and the experience of mercedesbenz. See your authorized dealer for exceptional offers throughcedesbenz financial services. Welcome back to a special edition of squawk box, live from davos, switzerland. This hour, more of our exclusive interview with jpmorgans jamie dimon. Larry summers is here and later, well talk to cocacolas ceo muhtar kent. Its a power hour of squawk box and it starts right now. First in business worldwide. Im changing my forecast a little bit. Im joe kernen. The weatherman. Yes, along with becky quick and Andrew Ross Sorkin. Were at the World Economic forum in davos, switzerland, speaking to some of the brightest in business. We just had goldie hawn which was incredible. I liked it. It was cool. In this hour, the ceo of airbnb and muhtar kent as well, the former treasury secretary Larry Summers will be here. And blackstones Steve Schwarzman will be here. Is he a contender. Hes on the list. I didnt think it was going to snow, maybe late this afternoon, into tomorrow, it was totally clear, now i see something happening. Thank you. Did you look around . I wish i was as good at weather as al. First up, treasury secretary jack lew says the government will exhaust its borrowing powers by late february without action by congress. He joined us in the last hour to talk about the state of the u. S. Economy. Were doing pretty well in the u. S. Economy right now. We have tail winds. Were seeing the year ending strong, beginning strong. We have to make sure there are no more selfinflicted wounds, that we let the private sector heal their wounds. I think the private sector is ready to take a step up. Its the governments responsibility to do its job. And mcdonalds Quarterly Results just hitting the wires. The fast food giant earning 1. 40 a share, a penny above consensus. Revenues were basically in line. Fourth quarter global comps fell by 0. 1 . The company says 2013 was, quote, a challenging year. Probably not a surprise if youve seen the Monthly Sales numbers. Ebay is pushing back at carl icahn. Hes taken a stake in the company and is proposing a spinoff of its paypal division. Ebay argued that the unit would lose synergies with the overall ecommerce business. Ebay beat the street by a penny yesterday. I think the idea of splitting them makes a little bit of seps. Why . I was thinking not. Is carl interested in ebay, is he interested in money or does he want to be mentioned every day . Paypal is becoming a currency. Youd want them youre buying into this. I might buy into the idea of it. Ebay has performed very, very well. Its hard to make the argument. What does carl know about ebay . Were going to mention him every day no matter what. I think this is a pr thing. It always is. Well talk about jamie dimon now. He spoke to us exclusively. I asked him about the economy, Consumer Security and, of course, his record settlement with the department of justice. Heres what he says the public should know about the firm and his leadership amid those troubles. I think a lot of that was unfair but im not going to go into details. It all relates to most of it relates to staff l stuff happening from 1990, 2000, into 2008. This was litigation that built up over time. Im grateful to have it behind us. The most important thing for your company is you do your job, serving clients and commuters around the world. This was a huge distraction of management time, board time, when we should be helping our clients, which includes cities and schools. We just wanted to get back doing what were good at and what were supposed to be doing. On the stuff you think was wrong, do you think you fully remedied it . I guess at one point it doesnt matter if you think its wrong or right. We can argue this all day long. You are caught between two bad choices. We made the one better for the company. Right. I dont care anymore. Ive moved on. That was last year. Im looking forward to 2014. Was there a moment or what was the moment for you when you said to yourself, i want to put this behind me. Was there something that happened . Was it a conversation with the board . Was it a conversation with eric holder . What was that moment for you . First of all, the board was involved every step of the way in this. This is unprecedented, we have multiple regulatories, thinking it through, looking at options and realizing there are two really bad options. The wrong thing to do is complain, fight and then you could have said why not go to court. If you were my board, you would have said why would you do that and subject your company to three or for more years . The outcomes could be worse. They wouldnt necessarily be better. A lot of people said, if you think youre right, you should fight. Banks have a tough time doing that. It would hurt this company and that would have been criminal for me to subject our company to that kind of issue. Still to come, the super bowl is coming to the east coast. I mean, we always say that its new york. Its coming to new jersey. The new york area. That means big business for popular rental website airbnb. Then, Larry Summers with reaction to our interview with jack lew. Squawk box will be right back. Still to come, the ceo of an iconic global beverage company, have a coke and a smile with muhtar kent. Thats still ahead on squawk box. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Afghanistan, in 2009. Orbiting the moon in 1971. 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Weve been watching throughout the morning. The dow futures are down, not by schbs they had been earlier when they were down 60 points below fair value, the s p futures are off by 5. 5 points. Shares of mcdonalds, they reported 1. 40 a share profit. That was one cents more than expected. Revenue was essentially in line on this. That stock is down by about 37 cents. 94. 51. Weve now gotten december Comparable Store sales figures which came in below estimates in every category. Global comps fell by 1. 2 . U. S. Samestore sales fell by 3. 8 and analysts looked for a 0. 8 decline. Mcdonalds fell short in europe and the asia, pacific, middle east and african region. They talked about how this was a challenging year. A crash pad if you will, ever wish you could find it . You can, airbnb, its offered in 192 countries, including here in switzerland. Joining us is brian chesky. Are you an an air mattress . No, i have a full bed. You feel totally comfortable. The people im with were totally awesome. These arent people you knew before . No. You dont know who they are. Thats the magic of it. Its also one of the big issues about it. A number of cities across the country and frankly the world are saying we have to regulate this. There was a woman reported in the New York Times who said she makes 10,000 a year. New york state says theres a huge number of taxes being lost. What do you make of all this . We want to work with cities. Were in 34,000 cities in the world. Were not against regulation. When you say work with them, would you consider collecting taxes for them . We are in discussions with numerous cities about how to streamline. What about the regulatory issue of whether you should be deemed a hotel. There are certain places where i cant technically ren out my apartment in my building because the rules in new york city say technically you cant did that. Theres laws for people, theres laws for business. Theyre people as businesses. I see them as a third category. As we work with cities we try to partner with them and educate them about who we are. We are Arnie Sorensen on, a number of ceos from hotel chains. How scared should they be of this . I hope theyre not scared at all. A lot of the people traveling airbnb werent traveling before. Its a 2 trillion industry, the Tourism Industry and its growing. Because of the business when you travel is a trust factor. When you go to somebodys home you dont know and stay there, harder to trust. Have you had problems . Well, we have had some issues. Every home is insured though for up to 1 million on our site. In this economy, the entire thing works off of trust. When i book with you, i see your reputation, your profile and mine. I think the trust, the currency of trust, of knowing who a person is is the reason all these different categories are really getting experiencing a sharing economy. You think of uber. Exactly. Another industry that may become regulated. Theyre totally changing the way people move around in cities. I think theres interesting things happening in economy from car sharing and home sharing to tour guides and chefs. Its interesting. What is the next big piece of the sharing economy . I think its services. You have homes, cars, the next thing is services. People doing gigs, tours, cooking food for you. Task rabbit. Task rabbit is one example. A lot of other companies will be coming out. Its anything where people have extra time. I think the sharing time will create millions of entrepreneurs. Now i can build a reputation like a business. How big are you . I know youre in 34,000 cities. On new years eve we had 252,000 people at that night staying at a home on our website. They came from 175 different countries, living together. That doesnt sound incremental to the hotel companies. It sounds like at some point you are a competitor. Were in 34,000 cities. What do revenues look like. We dont disclose revenues. Its growing pretty quickly. Should we expect in the next year for you to go public. We dont have plans to do that. You have venture capitalists. Theyre very much longterm shareholders. We want to do whats best for airbnb and growing the mission. We have former treasury secretary Larry Summers joining us with his reaction to his interview earlier with treasury secretary jack lew. Squawk box coming back from davos, switzerland, in just a moment. [ male announcer ] this is the story of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment the trajectory of growth is rising. That should reflect in more income and more income means more revenue because the system is growing. Thats treasury secretary, of course, treasury secretary jack lew. He appeared earlier with us this morning. Now joining us is Larry Summers. He served as treasury secretary under president clinton. Hes also a contender for cnbcs first 25 leaders, icons and rebels. I cant say for sure but i think which would be i dont know how youd is there anything bigger . He doesnt know what were talking about. 25 icons over the last we are choosing the 25 most important people in the world of business and the economy over the last 25 years. You are on the list of the top 200. You have not made the top 25 yet. Were asking our viewers to help us. Im just a humble guy doing a job. Lets get to some of your recent musings, about, number one, where we are in this recovery because it has been tepid. Your fear is it could remain tepid. You want a role more active in infrastructure buildout. Thats what we need. I do. Joe, look, we did a hugely important thing, the president s leadership made a huge difference. If you look at any economic statistic from the fall of 2008, the winter of 2009, it was worse than the corresponding period in 1929 and 1930 and we completely avoided a depression. That is a huge achievement. But if you look at growth since then, since financial repair was completed in the summer of 2009, its been just about in line with potential. Its been just about in line with no real growth in the fraction as the adults in the country who are working way down from previous history. And that says to me that weve got to find ways of doing more, that we have an economy that is short of demand and is likely to stay short of demand unless more is done for a long time. Im encouraged. The statistics for the last few months have turned upwards. I suspect that the next year is going to be better than the last year and quite likely will be the most rapid year of the recovery. But we are now 10 below, well over 1 trillion, close to 2 trillion, closer to 2 trillion below where one would have thought the economy would be at this moment in 2007. And that says to me, we have to do better. The fed has done its part, you can comment on whether you think they went too far in doing their part but theyve created a place where, if there were to be demand, the credit is there to satisfy the demand but you cant push on a string if the demand is not there, it becomes ineffective and maybe they start becoming countereffective at this point. I think the right priority now is on the promotion of investment. Public investment has a crucial role. Ive said it many times. If a moment when we can borrow money in a currency we print ourselves for 30 years and 3 range, and when the construction Unemployment Rate is close to double digits, if thats not the moment to fix kennedy airport, i dont know when that moment will ever come. We have to do that. But weve also got crucial issues of opening it up for private investment. And that goes to questions of the certainty of the regulatory environment. That goes to questions of confidence. It goes to questions of the speed with which we make decisions and give approvals. So theres beth a private sector side and a Public Sector side to stimulating the necessary investment. Part of it, i think the debate is starting to turn, we have had a debate thats mostly been about the longrun budget for the last few years in washington. The truth is, that the economy grows fast, the longrun budget will be fine. If the economy does not grow fast, we can do one measure or another and were still going to have rapid debt accumulation. The most important determinate of the longrun budget picture, the most important determinate of opportunity for my children, your children, is how rapidly we grow this economy. I hope we move to a focus on more rapid growth. Thats whats going to be essential for middleclass Living Standards as well. If we want toot have the wherewithal to do something about inqualiequality, i think important to do something about inequality, it is much easier, vastly easier to allocate a larger pie to those who are left behind than it is to allocate a stagnant pie. Thats why i have been urging that the focus of our Economic Policy debate move towards a much more central emphasis on growth rather than all these discussions of where the federal budget is going to be in 2030. You think entitlement reform is something we have to do. Well come to that. Those are all good things, joe, but theyre less important than getting the economy to grow over the next five years. We are losing kids who dont get started with the habit of work out of school every year that the economy stays stagnant. People who have been unemployed for two years have great difficulty going back into work. We are having more and more of them. Research not done, thats not something we ever catch up. So the irony is, that managing the shortrun right is the center of making good lodge run Economic Policy right now, because it is what will determine how much were investing in the future. When you talk about inequality, im curious about the way you think the democrats are aet ecpproaching this issue. Andrew cuomo comes out with a plan to pay for prek kids, which is exactly what bill de blasio wants. He says not good enough because i need you to raise taxes on the rich. They are both friends of mine. Im not going to get in the middle of that. I will say this. What do you say about the party, though . I will say this. We need to do that for those 4yearold kids. And we need to do it for those 4yearold kids and not take it out of what were doing for the regular public schools, not take it out of what were doing for public safety. Thats why the questions of revenues also needs to be also need to be explored. You think de blasio may be right on that . Im not going to get between the two of them. What i will say is this, America Succeeds by raising everybody up. It doesnt succeed by tearing anybody down. Its never better to make somebody poorer, even if theyre very rich. And the rhetoric of envy and the rhetoric of tearing down, i dont think is the right rhetoric for americas leaders. Are you concerned the party seems to be moving that direction . I dont care. At the same time, i think there are many who are prepared to cry robinhood and socialism at the very suggestion that we need to do something about inequality. If you go back, listen to previous leaders of our country, revered leaders of our country, roosevelt stood at Madison Square garden and he said, i welcome the hatred of the rich. John kennedy is said to have had the fbi investigate steel executives because he didnt like a price increase. Thats a widely told story. The things were talking about now are really very small on that continuum. So yes, the right focus is on lifting people up, not tearing people down. Yes, the rhetoric of envy is the wrong rhetoric. But lets remember that the people who are having the hardest time are not the people who are coming to davos. And lets not hyperventilate about expressions of concern about inequality, because theres a lot of validity there. We hope to see you again soon back in new york. Thank you for coming to visit with us. Thank you. And guaranteed onesecond trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. For what reality teaches you firsthand. In the face of danger, and under the most demanding circumstances. Experience builds character. Experience builds confidence. And experience. Has built this. Introducing the 2014 glk. The engineering and the experience of mercedesbenz. See your authorized dealer for exceptional offers through mercedesbenz financial services. Welcome back to squawk box. Rick santelli here. Initial jobless claims, from the original release of 326, they changed that by 1,000 down to 325. I guess i have to say were up 1,000 at 326,000. Continuing claims, a little different time perspective on the measurement there. Move from 3. 02 million to just shy of 3. 057 million. So no great shakes there. We continue to monitor this because were all concerned about employment or lack therein. And chinas pmi data last night up sling under 50, definitively set the stage for todays trading action. We know that Andrew Ross Sorkin out in davos will set the stage with ongoing cuts of the great interview with jamie dimon. I think the guy runs the biggest bank, whos getting pushed around by the biggest government. We need to watch this one. Thank you, rick. Appreciate the numbers. We do have more of that interview with jamie dimon. I sat down with jamie dimon and talked to him about the jobs picture and what he thinks the difference will be between janet yellen and ben bernanke when it comes to the taper. Take a listen. I dont know. I have enormous respect for her as does every Single Person i meet. Did you meet her before . Yes. Shell have to pave her own way. I think the tapering thing is a good thing. I saw a headline the other day and someone said tapering, Strong Economy bad because it means well start tapering. I thought the purpose of it was a Strong Economy. I think if we have a Strong Economy, it makes it easier to taper. Normalization of Interest Rates and fed policy is a good thing. I dont think youll see the fed completely do tough tightening things or dramatic tightening if the economy starts to weaken. Its always predicated upon as long as we start having jobs at 200,000 a month, you might have a tapering thing, which is a good thing. We talk about having 4 growth, you wont care if were buying extra 2 billion to 4 billion a month. That will not be the end all, be all if this economy starts to take off on its own. Jamie dimon, much more upbeat this year than last year about where the economy is headed. Hopefully we can take that to the bank. Hopefully. We have another guest who can talk about that, too. Cocacolas main focus here at the World Economic forum in davos is Youth Employment with an estimated 73 million young people unemployed worldwide. Joining us now, muhtar kent, the charm and ceo of cocacola. This is an incredibly important topic. What is cocacola doing to try and fight this problem . First, as the World Economic forum International Business council, i carry that at the moment, we got together, invited a group of mayors from all around the world, governors and mayors. The feeling we had is they can do things, they can act. We brought subnational government, we brought ngos together, International Labor organization others, we got together in a room, 130, 140 of us together with young Global Shapers. There are 50 of them here. Thats a group of 3,000 young Global Shapers of the World Economic forum. The 20 to 26yearolds, the minnenials that have a completely different dialogue in the way they frame things. We learn so much by having them in the World Economic forum. I think one of the best things the World Economic forum has done in the last three years is create this. We are a proud supporter of that movement. We got together in a room and discussed best practices, discussed in nine different work streams how business can play a leading role, partnering in the Golden Triangle with subnational government, with mayors, with governors, and really making a difference, creating value for the young that are unemployed and just one statistic, 1 reduction and the numbers are staggering. In Southern Europe, 35 of europe, 25 middle east, almost 30 . 1 reduction in youth unemployment adds 75 billion to the World Economy. Wow. In gdp. We need to do this for selfish reasons but we need to do it for also a much more important reason and that is that the social fabric and the social peace in the world, no doubt, is going to crack if something materially different is not done to actually find a solution. Have mayors been here before . Somehow i came to the same conclusion, thinking about you can have a topdown idea with a bunch of muckety mucks here. Subgovernment is key. Instead of a pop marathon its an action biased group of people. Is this the first time. First time. I could have told them this. We had this idea last year when we were here. I put this idea Forward Together with my colleagues, the ceos at International Business council to the World Economic forum. I said lets do something different. We tried everything. We talk and come back here again with the right page. The key here is this is going to be a multiyear commitment. So that next year, this time we come here and were going to say what worked in what country, what program, why, how did it work . How was it funded . How many jobs were created . Are those jobs sustainable . Are they still employed . Lets learn from these, lets expand. What didnt work, why . How do we go forward . Tell us one of 9 moof the mo exciting projects you came up with. More accreditation for apprenticeships, shortterm work, internships, working with universities. We have this notion in the 20th century education framework that everyone has to get a fouryear degree, bachelors. Everyone that has to go into finance Services Needs to get a twoyear mba. We need to move away from that and redefine work. Work is not necessarily has to take place now with technology in an office. Especially in western countries. We need to Leverage Technology and leverage social media. People can work at home and add value. We in our call centers are moving to home work. Thats a much better framework. People dont need to get in a car, go to a place, do things that add value. They can work from home. We need to catalyze and Leverage Technology much better and then the other thing is, Companies Need to also create programs where work can be created outside their four walls. For example, the 5 by 20 framework of the cocacola company, creating empowerment for women, 5 million women by 2020. Thats a commitment. How do we do that . Its good for our business. We create small distribution units owned by women. We provide the training and mentoring and these small distribution units all owned by women are selling consumer goods. Everyone benefitsp this they benefit, the communities they are part of. Women spend money on educating their kids. And spending it on their communities. Everything gets better. When you talk about distributed workplaces, people working from home, what does it say about the culture . You remember last year Marissa Mayer from yahoo said stop working from home, its screwing up the culture. We need you to be in the office. Shes right, too. You need people get together but you dont have to have huge offices and bricks and mortar. Create places where people can convene and thats important. People need to look at each other in the eye and have discussions. Right. And really create relationships, good relationships at work. And thats how work is done. But they dont have to actually have go to their offices. You need communal places where people can convene. Thats where we need to move to much more than the current framework. I know youre in a quiet period for cocacola with earnings coming out on february 18th. Can you tell us what the Global Economy looks like right now . Different in different parts of the world. I think africa is one of the strongest places. I think it is still, in my opinion, the untold story of this decade. Africa is really strong in most parts. But latin american, i think brazil is getting a little better. We see rays of hope in brazil. I think across latin america, barring one or two instances, i think its getting better. And the u. S. , i believe, is the strongest by far western economy. And we had at the ibc, we hosted Prime Minister abe yesterday of japan. I think hes got some really exciting programs coming up. So im optimistic about japan. So, therefore, i believe 2014 overall could be slightly better. Great. Before you go, we have to talk about this. These are customized cans. Youll sell these in the stores . We have this program is called share a coke. Its a Global Program where we basically offer cokes with consumers names on them. This was not just made for us. Youll sell an andrew can somewhere. Andrew is a nice, popular name. This is a sticker. This isnt on the can. This is at the moment made in davos from a specialty machine. We had this Program Running across britain, running across Southern Europe this year. We had it in china and asia. Well have it in multiple more countries. Consumers love customization. All across this can will be a popular can. You may have to pay a licensing fee for this one. Thats not a commercial can right now. Mine says joe. Muhtar, thank you very much for joining us. Thank you. Still to come, private equity player Steve Schwarzman. Hell join us. And tomorrow on squawk box, Goldman Sachss ceo lloyd blankfoin and the ceo of google, mr. Schmidt. Welcome back to squawk box, everybody. Lets get you up to date an what the futures are telling us. They are suggesting a lower open across the board. Making headlines this morning, ebay, carl icahn has revealed a stake in the company and is calling for a spinoff of the paypal unit. Thats an idea that ebay immediately rejected. Separately, ebay reported Quarterly Earnings of 81 cents a share, beating by a penny. Netflix Beat Estimates of 66 cents, the Online Video Service also said it added more than 2. 3 million streaming customers during the quarter. Squawk box from davos is coming right back. [ male announcer ] here at optionsxpress, our clients really seem to appreciate our powerful, easytouse platform. No, thank you. 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Let us get down to the New York Stock Exchange where jim cramer will join us. This is the one thing that reminds me of home, jim, is going down to you at the big board. I just loved your programming today. Theres so much thats good. I have to tell you, the last interview with muhtar kent, the idea that brazil may be getting better, i am learning a great deal about what could happen in 2014 from what youre doing. Thanks, jim. I worried about the stockholm syndrome, maybe youve turned into a euro socialist. Its slowly happening you are. You can put a bunch of people together and come from the top down, come up with ideas from global unemployment but institute it back where all politics is local. In other words, go back to, you know, different areas. Its a daunting challenge to try to compare africas unemployment problems with the unemployment problems in the United States. But there are similar solutions. Do it with the mayors. Youd be good over here, jimbo. I listen and come back with the dimon interview, Larry Summers, i come back and say United States is doing very well, rest of the world not doing as well. Europe getting better. Need more about china, guys, whatever you can come up with. I dont like what im hearing. World commerce is on the increase and that makes me feel more comfortable about being in these industrial stocks that have been working since the year began. Jim, let me ask you quickly about earnings season. I have to admit were not watching as closely as we would be if we were sitting back at home. Whats your general sense about how things are going . I think if its technology its much better. International economics, its much better. If its retail its atrocious, still trying to get my arms around that. Netflix, there are special switches, they are defying reality and making people come to terms with the idea that there are literally anomalies left and right. Lets not forget activism whether it be dow, ebay or things wed be interview yesterday, theres a lot activism, countering areas that have been soso. I also forgot super bowl is coming up. What do we call it football when football is really soccer, isnt it . I have a problem that were calling the big sport in the world soccer, that we took that name and i just dont think its oh, my. What is happening to me . Come back home soon, joe. I dont want to hear this. Next youll be saying that manchester youve nighteded is who you care about in the super bowl. Please. Well see you in a little bit. But coming up the cnbc first 25 contender. Steve schwarzman, and then a check on the rails with union pacific. [ male announcer ] the new new york is open. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. 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And as your needs change over time you can adjust your bed to sleep better together. 48month financing available through february 2 only at your local sleep number store. Find your sleep number setting and know better sleep. I nethats my geico Digital Insurance id card gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. Just a tap away on the geico app. Could save you fifteen percent or more on Car Insurance. Everybody knows that. Well, did you know that when a tree falls in the forest and no ones around, it does make a sound . Ohhh. Ugh. Geico. Little help here. Welcome back. Some say that davos sets the tone for business in the year ahead so who better than one of the most world renowned deal makers to tell us what to expect, Steve Schwarzman is here and hes a contender for cnbcs first 25 icons and leaders. Thank you for being here. Its good to be here. Weve had a lot of ceos tell us about the world of business and where we are. Your take the last time you were here last year you were remarkably optimistic. Are you more optimistic . Less optimistic . Well, actually, andrew, i dont even remember what i said last year, but if you tell me i was optimistic, i was positive in terms of what would happen and it certainly termed out tha. The world looks improved from last year. The u. S. Looks like it has forward momentum. The emerging markets have probably hit bottom and europe ought to be creeping up a little from a low base. Would you invest in europe now given the creep or is it still too early . We are investing particularly in our real estate area quite actively for the last i would say year and a half two years with a lot of acceleration in that, so yes. The answer is. Ireland youve been investing in . Weve been investing in ireland and in spain and the uk. Northern italy. Weve been pretty active in a lot of different areas and different Asset Classes there. Whats your take on japan . Abe is here and hes clearly trying to bring the Business Community with him. He brought his own Business Community. I met with him yesterday. Hes really quite an impressive person. Hes bright. Hes quick. Hes enthusiastic. Hes got a new run. I was just meeting with the head of the central bank in japan. And theyre clearly making a major turn in what theyre doing. Theyre getting a response from their domestic constituents. Is it the market youll be in . Well, i think they have a lot of challenges. But what theyve done for the first time really since the early 1990s is theyve changed the conversation. Theyve changed the level of confidence of their own people in their own system, and usually theres something good that happens with that. Steve, we just had jim cramer on and he was asking for any more intel on china. Hes concerned about the news hes been hearing out of china, just how the economy is going. What are your insights . Well, china is moving ahead and reporting their normal 7. 5 to 7. 9 growth. Its a pretty remarkable country. As the growth rates have slowed a little bit, its actually the same amount of growth, the basis is just getting bigger. Theyre going through very significant changes. They have a new leadership that is very active, alert, thoughtful, flexible and strong. And i anticipate theyll be obviously some impact from all the changes theyre putting in which might slow things a tiny bit. Its interesting that they announce that theyre really ambivalent to that slowdown if it occurs because what theyre trying to do is set a better base for future growth. You dont have to do this. Lets say its a board game and you have to invest in the United States, okay . What where would you go where you are sure you can buy something today, lever it up and sell it three years from now if you run it better for a lot more than where it is . Are there things left in the United States . Because we still have a domestic audience that needs to know where to buy. Well, joe, youre never sure. Thats why its a board game. Fake money. What would you do . You think youre sure. But one of the interesting areas is the energy area. Its such a large opportunity, and there isnt enough capital to invest in all the different areas. One thing thats adjacent thats important to note is that it looks like mexico is going to be opening up their Energy Business for the first time i guess since the 1930s. And theres a huge demand, catchup demand, for things there and energy globally is such a huge business. And were becoming World Leaders again. And, you know, the cost of energy in the United States for users is going to be half of what it is in europe. And when you do stuff like that, theres all kinds of opportunities that everything cheaper. We hope. Steve, a blackstone specific question, you and seaworld, seaworld has been a Great Success for you. Your take on this black fish documentary which showed a very horrifying picture of what goes on in this world. Well, i actually havent seen that. And it had a had a run. You know, seaworld is a remarkable business. And people who go there love it. They had one safety lapse interestingly with a situation where the person involved violated all of the safety rules that we had. What happened to the fish . Did you not see the documentary . It was pretty bad. The fish are mistreated . I dont know if you call them fish because some of them are mammals. Mammals and things like that. All right. Is it a mother jones documentary . No. No. Youre right. Youre right. Okay, im sorry. Im sorry. Steve, thank you. Were out of time. Its good to be here. Its great to have you here. Thank you for the optimistic outlook. Seems to be fine. Thank you, steve. Thank you, steve, we appr appreciate it. That does it for us today, make sure you tune in tomorrow. Squawk on the street starts right now. Good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber at the New York Stock Exchange without a doubt the busiest day of this holid holidayshortened week, earnings from mcdonalds and netflix and ebay whose ceo well talk to in a moment about carl icahn and the tenyear yield finally some macro to react to. Claims were okay and well get existing homes later on and europes pmi