Right now on the russia controversy. Well go there live in a few moments. Major banks out with earnings. Jpmorgan with a quarterly beat stronger loan demand offset a decline in trading revenues. Citis results also above consensus, helped in part by lower costs and better than expected trading revenue they both mentioned brexit a year ago, jim. Really helped trading and yearonyear comp is tough joe asked me earlier which is better and i went with citi no slight to jpmorgan, their quarter was excellent, too theres fantastic growth how about this statistic you know that jamie dimon bought back 4. 5 billion worth of stock, even though the stock is up at 97, scitigroup had every line item better than expected citi gave what was considered an analyst day. And i sat down with mike korbat, the ceo on analyst day, skpeman everyone told me, pie in the sky, he exceeded everything that he said. It is a best in show situation theyre buying back 60 billion worth of stock walmart buys back 20 million, everyone gets excited. Citi is the one to beat. The tangiblebook is at 68, so theyre buying above tangible book credit card really, really strong dont forget, they do have this Great International business and we are in an international expansion. So citis got a lot of things going. The naysayers will have to eat a lot of crow at citi, of which theyre essential. And i may mail them some the dead crows you put franks on crow, because you can put that on anything you mentioned international naysayers. The imf is having their meeting today, the world bank, and they have a report that says sitciti one of nine banks that has thin buffers, paths that arent sufficient to build those buffers. Its really interesting, because theyre so wrong thats it yeah, im going to complete dismiss that out of hand they have a huge amount of capital. They were the ones that passed it, stress test, when we did the faitoo big to fail test, they w number one corbat has just thats rather surprising from an organization they really trust. I always hate to think as a generalist ive done more work than they have but theres a lot of components of citi that are very safe if youre going to pick on mexico, maybe, maybe you can make a case there, 4 growth but when i hear that kind of thing, i say, this is exactly why citi has a low multiple. I would rather go to Sheryl Sandberg than handle what they have speaking of d. C. , imf meeting there and Sheryl Sandberg with mike allen of axios. Lets take a listen. What i reiterated in those meetings is we think its important that they get the whole picture and they explain that transparently to the american public, so that when they were ready, when they wanted to make a decision to release those ads, we stand ready to help them, and make sure they dont harm anyones, you know, give out any personal information. So we said that if they wanted to release them, we were ready to help them and then they announced that they were going to and were going to help them but we also talked about other things that really matter. Because were also cooperating with other companies so when these badactors are trying to cause harm, they dont just go into our platform, they go into others so one of the other things were doing along with cooperating with government is working with other companies, so that when anyone identifies a threat, we can get them off of all of our Misery Loves Company . Its imported efforts need to be coordinated thats really important. And the other thing we talked about, and i think this is important to mention, too, are the things facebook is taking on these problems so were investing very heavily in Machine Learning, because we really have to go after fake accounts were higher 4,000 more people to increase our jeef oversight u ads and our content. Compare that to 2 billion users. Well get there well get there. Well, this is also really important is, were working on transparency that we hope to set a new standard for transparency and advertising, because we believe everyone should be able to see and youre right, youre right that this is a new threat. But its not really a new challenge. And unfortunately, there have always been bad actors out there, who are trying to undermine our society and our values and whats important about these meetings and all the work were doing together is that if we all Work Together, well never solve everything completely, but we can make it a lot harder to harm us and preserve the right of people to express themselves freely and openly so sheryl, most of the coverage has been about the ads, but even more nonad material from russian accounts came into play in the election should that be released . We talked to them yesterday we gave them now, so far, the ads plus the pages they linked to, so they have some of the content. Theyre asking followup questions, which we expected well continue to provide information. So, maybe no, were going to continue to provide information for them. We think its really important that the American People get the whole picture. And so, as we share information with the investigators and they are willing to make it public, we stand ready to help them. We think its important. So will you commit to providing them any of the nonad organic material that they want . Yes, were going to give them the material they want and we said that yesterday and we want to give them the material we want the full picture to be understood we dont want this kind of foreign interference and none of us should want this kind of foreign interference and in order to prevent it, were all going to have to fully cooperate with government, with each other, across the board these ads were taken down because they were from fake accounts if they were from real accounts, would you have let them run . Thats a really important question, because these ads are divisive and they are down, and the pages are down because they were from fake accounts. Some of them are hate and some of them are violence, and those come down on our platform. But a lot of them, if they were run by legitimate people, we would let them run and we spend a lot of time on what content can run on our platform its a really important question and its a difficult question. So so most of them would have been allowed to run . Most of them would have been allowed to run now, we dont allow hate we dont allow violence. And we dont allow bullying. And we work hard to get that stuff down and we know enforcement is always hard and we need better at more thats Sheryl Sandberg, as the first public interview of a senior facebook executive since those revelations about russianbacked groups buying ads on the platform were made public she met with some lawmakers yesterday, jim it looks like were going to get to see some of those ads, eventually if they were sophisticated about their questioning, what they would ask is, would it hurt your Gross Margins to put actual people in. Do you really think that the machine is ready to be able to detect hate . I have tremendous respect for the machines, for Machine Learning, for whats been done alg rorithm algorithmically. I think theyre fantastic at looking what i regard as key words. But it would cost them money to have humans to review and spot check. And yet humans are the only ones right now that can detect this we are not in a position yet to have the machines learn and understand and block, but none of these senators and congresspeople seem to understand, this is about the Gross Margins of these companies. If they have to start hiring people who are english lit majors rather than this computer scientists out of standford, you would see their Gross Margins go down i do not trust the machines to do what people can do, at this stage of the game. But they seem to not understand the way wall street works and whats really going on here. Do you think that would be material that incremental amount of labor . I think that they should say, listen, do you want i mean, maybe everyones taking as a matter of fact and i think theyre being buffaloed that the Machine Learning you know, listen to what she says. And shes a genius, i love facebook my Charitable Trust owns it for a hundred points but the essence of what theyre saying is, the machines are going to take care of it i think when it comes to fake news, i think when it comes to lies, you actually need a human component. If i were these congresspeople, i would say, do you mind putting some humans in charge of the meer machines is it because it costs too much . Is that why you wont do it . Is it because you think humans arent as good as machines i think its overconfidence in machines, because they are not from the real world. Whether its machine or human, do you believe there needs to be more absolutely. You cant have cryptonazi stuff next to Procter Gamble nelson says they cut back at proctor procter to make the quarter. David campbell said, no, its because we done want to be against contest. I use the term cryptonazi because i dont want to say russian, russian, russian, its more about hate content, its about charlottesville. But when you get off the desk with people like clorox, who are still willing to commit theyre going to have more than 50 of their ads online. But i think that these companies have a level of responsibility not unlike what we have on our network, where there are people who basically say, you cannot say that and you cannot do that and they need humans maybe they need to outsource it. Maybe they have to get a truth squad. But to come to congress and say that the machines can do it, do these congresspeople not know the way the Silicon Valley works . Is there anyone from Silicon Valley in congress because the machines are being equated with these supernatural ability to be able to detect hate hate is something that is deeply emotional. It is something and hard to define. Yes so thats why you need humans. And if you can came down there and said, you know what, were going to commit humans because we dont think the machines could do it, i think this whole debate would be very different but to come in there and say, listen, i know Computer Science and Computer Science can detect wh wh what geshls has to say the whole point is you cant understand what it says. So is this the gross margin make you sour on the stock no, it just makes me i want them to come and say, look, well commit money, even if it hurts our bottom line. Thats what i want to hear and give me a nickel a share but you know what, they get away with it. They get away with it because people have a belief that because of alexa, because of amazon, because of the ability for spotify to tell you what song, because of netflixs ability, if you like this, then you might like this. These people are being buffaloed by these very smart people in Silicon Valley who are really overestimating the ability of machines right now to detect it. So our machines can do it incredibly, they can do autonomous driving and nvidia can do 325 trillion different calculations, so theyll know if its a human walking in front of your car and make a judgment but that does not allow them to be able to detect what theyre doing, go back to russian propaganda its not the daily worker. Its not that easy to spot well hear more from sandberg as that interview with mike allen goes on. If she makes some more headlines, well get back to it. As far as the banks go, jim, we were talking about citi, j. P. Mpmorga jpmorgan, loan growth up 7 yesterday you said you did expect them to accelerate, was that enough . I do. These stocks, we expect them to run. I dont think its enough that the fed is going to hike citis Net Interest Margin is roughly the same but what i find to be encouraging is that these banks are going to begin to have a different regime you know, you have to rule out you know, he ruled the banks with an iron fist and a mercurial and away you never knw whether you were loaning too much now we have j pals, very sophisticated regular later. And mike corbat or his group can say, you know, im willing to give that loan now, there will be more loan losses but in order to be able to have more growth, of which the growth is really starting to accelerate, you have to make some mistakes as a banker. Not everyone loan is going to be perfect. But i liked everything i heard i loved the International Business of citi, what they kept corbat, you turn the lights on every day to make money. Jamie dimon, he is taking advantage of the better economy and lending. And you know, there are statements i know everyone thinks its all platitudes jamie dimon spends a lot of time talking about what hes saying and it is good, good, good when you go over and hes talking about the Global Economy continues to do so well to do well, u. S. Consumer remains healthy, solid wage growth and then, these numbers were done with terrible natural disasters in our country these numbers are done with houston and florida, the two greatest growth states in our country. S so i really like these numbers very much. These are companies that deserve a price to earnings multiple equal to at least the average industrial so its early days, but to these two results help to put to rest worries into the quarter about credit quality, delinquencies, consumers falling behind on credit i think they do i think thats a great point, carl and ive got to tell you, citi has such a good credit card business they can tell you whether there was deterioration. If anything, there is i mean, i know it sounds like a poly pollyan pollyanna, but these banks have been through hell and back and i just genuinely believe that when you sit down with these numbers, youll say, wait a second, why am i paying 23 times earnings for colgate and 12 times earnings for citi why isnt citi buying back so much stock, huge numbers, 7 number why isnt citi at 98 i can craft the story where citi can be at 98, but why colgate can be at 98 i think were going to have a big change in the way we look at banks. Normalized earnings, not going to be wrecked by tony westen at the Justice Department whos a tough guy. And all hinging on tax reform or not none. Because theyre realist, and they know even though the harrisburg speech i love that, like the harrisburg speech you know, the big truck behind them the harrisburg address. You know, gettysburg is over here, harrisburg is over here. They should fix the train station at hasrrisburg, its terrible looking but it was not four square and you know, this was about blue state, red state, this and that well talk more about the president its not the ultimate measure in this thing. About stock market cap and the debt and a lot more. When we come back, the treasury secretarys message on tax reform what he says is not negotiable well get to dominos. Well get calls on square, disney, bitcoin, record high when we come back in a minute. What started as a passion. Has grown into an enterprise. Thats why i switched to the spark cash card from capital one. Now, im earning unlimited 2 cash back on every purchase i make. Everything. Whats in your wallet . The treasury secretary continuing to make the case for tax reform this morning on squawk he was asked if the white house would accept a corporate rate slightly above 20. Heres how he responded. The president s made it clear that he wants 20 . Thats the one part of this bill that not negotiable. We want 20 on Corporate Taxes thats what we need to make america competitive. Didnt get into too many specifics again, jim, although ongoing reports that the president may reconsider state and local deduction. As our friend, Jimmy Pethokoukis said, there goes another payfor. Look, i think this is so far away and i appreciate secretary mnuchins comments about something being inviolate. I think youre going to your people in congress and say that somethings inviolate on their side and i think you almost inviolate means, okay, its up for grabs. I dont mean any disrespect, whatsoever, but the 20 , well, then, okay, then youve got to come up with something else. And i dont theres got to be a realistic approach by the media. Were all so beaten you know, we can be charged with being fake media pinpoint the tax cut, okay i think it should be 15. That should be so im President Trump times two in this is stuff. Im just saying weve got to be realistic. The people in congress are not friends of his what happens if senator corker comes out and says, you know what, 28 is inviolate then what do we do when you call them Little People and attack them on twitter, they have the ability to exact revenge and they will exact revenge. I cant imagine what youre referring to yeah. Interesting, marion lakes making some comments boy, i like her she mentions tax reform quote, its not front and center in the dialogue were having with our clients about whether they should or shouldnt do a strategic deal its Neither Holding up business nor spurring business. Yeah, look, shes a serious businessperson and she understands that to add something into the mix that cannot really impact numbers is a big mistake. Now, they wont they also wont talk about federate hike, because we just know how much a federate hike works, but they dont want to inject themselves. They feel like if they inject themselves in this debate, they will be blasted as for being but we had heard anecdotally that Tax Accounting for taxes was a roadblock. Right look, i think what matters with these guys is that the consumer is so strong i think people are misjudging the consumer lets say the consumer gets the 4,000 number that mnuchin is talking about. No, thats not it. Its about getting increase in wages and having easier time being flexible, being able to move to another job. And those are the things that jpmorgan, which is deeply rooted in trying to hire people, hiring veterans, theyre talking about job growth from the private sector and thats good. We dont need the government i want the government to be as good as its people and get off the backs of the people. No, not lincoln, reagan. On a day where continuing claims are down to 1993 levels you know, just get out of the way,