The fed releasing the monetary report to Congress Ahead of testimony next week. We go to cayla toushy. In the blue print, the new chair sticks to the script touting data base decisions, a strong labor market, and inflation that is moving toward that ever important 2 target. It should be noted that in this report the majority of fed members said they saw inflation at that target by 2019 and stabilizing at that target over the next few years. They did say that theyre monitoring the effect of online retailers and international effects on that inflation level over time. For unemployment, the fed report said that hourly wage growth has been moderate but the labor market is near or a little beyond full employment at this point. For 2018 and 2019, the median estimate is 3. 9 ticking up to 4. 0 in 2020 as for the markets, the fed report pointed out that notwithstanding recent weeks, that is the mention to volatility that weve seen in the markets that equities remain higher and bond spreads have been narrowing this fed report echoed the minutes we saw on wednesday saying that valuation pressures remain elevated, specifically in equities and in commercial real estate they said banking risks are moderate corporate debt levels are high and that it was communication from the fed in the fall as well as the expectation of tax legislation that led the curve for rates higher throughout the fall they said that tax changes led the fed to increase their gdp estimates but also are leading to fed funds uncertainty theyre waiting to see how that tax policy plays out over time for gdp, the 2018 estimate has been raised to 2. 5 . 2019, 2. 1 and 2020, 2. 0 this is the blue print for what chair powell will say next week in front of congress where, of course, well hear more from him then carl, back to you. All right a lot of good information. Thank you very much. Meantime, the nasdaq higher in the session tech stocks closing yesterday in the red. For the fourth straight session unable to hold those intraday highs. The longest losing streak for the nasdaq as its november of 2016 for more on that, lets get to larry hafferty from caveli funds and Research Analyst from guggenheim happy friday good to see you both in light of what we just heard, when the fed sees valuations, larry, of equities elevated, does that apply to tech specifically if you look at the faangs as kind of a Cross Section of tech, i think three of the faangs valuations are fine im very, very comfortable with google im very comfortable with apple. Im comfortable with facebook but facebook is, i think, rapidly hitting the wall of its Addressable Market but im very weary of amazon and netflix. So its kind of a tale of two cities some of them are okay. Some of them are not and its individual situations sfwlchlt wheth when did that view crystallize . I have not been positive on amazon and netflix and the reason is that they dont make what i call an economic profit the market has given them basically a blank check. You spend 100 times cash flow to endorse netflix buying content and ten times cash flow for disney or time warner. Id rather spend ten times than 100 times. Amazon, jeff bezos coined the frayed your profit is my opportunity. And it sounds great but if you listen to larry kudlow, profits are the mother milk of the market so if jeff enters your business, your stock goes down and the reason is because the market doesnt require him to make a profit. And he has a zero cost to capital. And basically thats big risk the Economic System. And i think at some point, carl, amazon is going to run afoul of the antitrust people. I think its a situation very similar to standard oil in the early part of the 20th century we actually had this conversation earlier this week New York Times magazine came out with a big feature they actually laid out some of the argument there for google. But you think amazon is the one that can really get tangled . I think amazon is much more problematic than google. If you look at Standard Trust, the monopoly was in distribution it was in refining and in pipelines. And in order to effect the monopoly, Standard Trust had to have a coconspirator and the coconspirator is the railroads which afforded rockefeller discounts so he could underprice the competition. And basically drive them out of business in the case of amazon, the coconspirator is the market the market has given amazon a 750 billion market cap to basically destroy everyone elses profits just consider if youre a business and the government decides to get into your business, your stock is going to go down. The government has two economic characteristics. Number one, it has zero cost to capital. And number two, it doesnt have to make a profit thats the same characteristics that amazon has. And our Economic System cant really allow it to continue. I think there are major issues and there is more and more commentary coming out about it you had Scott Galloway on. Yet, rob, at the same time, a surprising quarter for Hp Enterprise the server business doing pretty well despite the fact that the cloud triven driven by amazon us networking and storage doing especially well wlach what to make of that is it share gains or something across the whole Enterprise Hardware marketplace investors ought to be paying attention to . I think with hewlettpackard you have two things. One is some recovery i mean, they this quarter was good but last quarter was bad. So there is some recovery that hewlettpackard is seeing. And i do think corporate enterprise, i. T. Spending is Getting Better there is a macro tail wind there for the first time in a while. And hooewlettpackard announceda big buyback. Talking more broadly about tech valuations, if you look at hpe or apple which i really like, i mean, these stocks are trading well below market multiples. I dont think one could argue that the valuations are stretched at all and you have a buy on apple, robert we have this report out from Goldman Sachs today that apple is least loved of the Tech Companies among the hedge funds. Why do you that i is i think one of the worries that people have had for a while with apple is theyre already so big. You know, how can they continue to grow . Their challenge is youre pushing 270 billion in revenue, how do you grow that big a top line but i think with apple, one of the most interesting things is they are continuing to grow. I dont think theyre going to grow at the rate they have historically you know, the numbers are pretty darn big but i think were going to see the best iphone growth this year than weve seen in the last three. Then theyre growing in services and theyre starting to grow in other products so its, you know, a model of selling more to the customers you have and apple has, you know, the best customers out there they have the high end demographic that spends. Larry, quickly, i know youre big on the Gaming Business amd moved side ways for the past year though its rise in chip is popular. Nvidia has been hot. What are the real ways you see to play this that investors might not be thinking of well, i think the big winner here has been sony and the reason is that these newer games basically encourage network play and sony owns the network. And they have marvelous Financial Disclosure if you look at sony, they break out the network profits. And the network profits or the Network Revenues accelerated to 40 . Now, jon, the network is bultd you gement tt the Network Effect theyre dropping through and have 85 rate. This is a hidden jewel within sewn dwla sony that is absolutely terrific and the gaming companies, i like them all but some of them have gotten very expensive Electronic Arts is 25 times and thats an awful lot of money to pay for a Gaming Company sony is around eight times so thats my best horse in the game hunt. I just love the Game Industry. The smartest guys in the room in the Game Industry are ten cent and theyre trading at about 35 times earnings i think their cash flows are going to accelerate because we chat is now accepted in china as a transaction mechanism. So its going to get more engagement the engagement is going to bring ad dollars and ten cents cash flows are going to accelerate. Sony and ten cent are the plays there. And in our fund, we own ten cent which is one of our biggest positions. Naspers owns 35 of sony and basically you get the value of naspers if you market to market is about 80 billion ahead of the market cap of naspers stock. Can you drive a fleet of elephants through the valuation discrepancy. The renaissance of sony is something we dont talk about enough thank you for the discussion appreciate it. It is almost a wrap. The Winter Olympics coming to a close this weekend of course, well have closing ceremony and one last chance to talk with Andrew Ross Sorkin in pyeongchang. How are you before we go, i want to show you a couple interesting things here one is a company you got to keep an eye on. This is in addition to all the coverage of the olympics we want to take a look at some of the really most Innovative Companies that make up south koreas economy. We took a trip to seoul to visit the headquarters of kupang one of the Fastest Growing ecommerce sites in south korea. And the companys coupon is the amazon of south korea. Over 50 of the countrys adults have the app installed on the smart phones our motto is lets create a world in which customers ask how did i ever live without coupang. It was founded in 2010 by bom king, a entrepreneur that dropped out of Harvard Business school to start the company models as groupon and then ebay before the company pivoted into the Current Business not will to improve customer service. We realized consistently, day in and day out, half of our customer complaints were around the delivery experience. Thats why we decided to make this massive investment and fulfillment and last mile. Its last mile network carried out by over 4,000 delivery men known as super men to deliver orders within 24 hours as part of the rocket delivery service. This is the first order in a while, youll say mr. Sorkin, welcome back for this is the first order, we say welcome to coupang. This is the fifth largest market for e commerce by 2022, it will be the Third Largest behind china and the United States. If you just take a look out at the windows here, the density in korea, the density in seoul, i mean i lived in many u. S. Cities you just cant find this kind of density in American Cities but thats actually how a lot of asian cities are evolving. This is the future of how people are going to live. And there are a the love problems in this market that were solving that havent been solved before. Kim sees seoul as a template for how it will approach its future markets coupangs investors are soft bank and black rock and the speculation is that the company could soon go public in the United States by 2020. I would bet well be seeing them either at the New York Stock Exchange where you are or at the nasdaq very soon in meantime, carl, you know, were not going let you off the hook here. Our coverage in pyeongchang coming to a close. You started it and did a remarkable job its been a great two weeks here we put together, as you would imagine, a little trip down memory lane. A lot of slow motion of us drinking, basically. So were going to go do a little bit more of that right now but, carl, thank you for everything did you an excellent job it was really fun to spend time with you its one of the great assignments, a privilege to do it i think everybody should try at least once to go to a games if you love sport, even if you love business stories everywhere. Not to mention getting to know a culture for more than just a couple of days all very true i will see you and ill see the whole gang back in new york next tuesday. Have a great weekend and enjoy the closing ceremonies on sunday night. Safe travels. Great stuff from both of you thanks, andrew. Andrew ross sorkin social Media Companies continue to feel the heat over fake news. Joining us next, a former facebook insider who cure yated news General Mills buying blue buffalo. Well look at the next brands that could be targets for take takeover and the olympics are nearly in the books. Well take a look back at all the fun we had as you just saw whether squawk alley continues. Directv gives you more for your thing. Your toprated thing. That five stars, two thumbs up, 12outof10, would recommend thing. Because if you only want the best thing, you get the 1 thing. Directv is rated 1 in Customer Satisfaction over cable. Switch now and get a 200 reward card. More for your thing. Thats our thing. Call 1. 800. Directv some more news on martin screlli. It is the last hearing before he is sentenced in march. His attorney just leaving the courthouse we had a chance to catch up with him asking what he expected of the sentencing he said he hoped the judge would be lenient he didnt want to speculate whether he would get my more jail time than he served we didnt see him leaving the courthouse he was taken back to the Detention Center where hes been since september when you recall he was remanneded into custody after posting a bizarre series of facebook posts where he seemed to be asking his followers to grab one of Hillary Clintons hairs and offering them 5,000 to do so he was convicted in august, of course, of three out of eight counts including securities fraud. Today is largely about the amount of losses the government argues he caused to investors and to his Biotech Company as well as the forfeit tour amount the government is seeking in punishment for his crimes. Theyre seeking 7 million from martin the attorneys argue the losses and forfeiture because they argue he made money. Well be waiting for the sentencing date on march 9th back to you. Thank you very much for that. Facebook, at which time eastern youtube are under major scrutiny for failing to see press fake news and the manipulation of what is trending on the sites investors wondering if the issues and tax issues will have the long term impact on thez companies. Joining us to discuss it is kara swisher and Scott Galloway from the stern school of business good to see you both again its been a while, kara, since weve had a chance to talk it comes on a week where that youtubal youtube algorithm was talked about. We just talked with youtube last week at code media about this issue she said they were doing something about it i think its still an issue. When these fake videos rise in popularity, youtube, you know, doesnt do anything about them the same thing happened on facebook i think the quote they used was our platform doesnt correct for people who lie. And maybe it has to. But its going to be an on going debate as these videos rise higher and higher. Its a problem because it creates a cesspool as i talked about. I dont know for about 18 months and ruins the platform essentially. Scott, it seems like were in maybe a third era of how tech deals with media first era is stay away from media. You know, aside from microsoft getting involved, you know, a decade plus ago. Everybody seemed to think it was a bad idea then it was use media but dont make any decisions just sort of be a platform what is this third era how is tech going to navigate it oh, gosh. Thats a correct question. My sense is that were coming to the conclusion of the observation that tech is going to have to be forced to employ a very expensive attribute and that is human discretion algorithms have a difficult time deciding what is false verse yaus wh versus real news look at the Fact Checking they put out. And the most Sophisticated Technology in the world cant stop obviously false content from not only getting on a platform but being shared and circulated so i dont think i think this is going to have to come i dont think its going to be a company led revolution i think it has to come from parents or citizens or regulators because the smartest people in the world cant figure out a way to prevent this content from being posted on their platforms. Right they also benefit from it. Theyre making a lot of money from advertising and Everything Else i think thats the link you have to make. And regulators will be the worst outcome here because they dont really understand these platforms and will probably use, you know, use a hammer when something more sophisticated is needed what we really need to do is there needs to be an outcry among the users and companies have to understand theyre moving into a new era of responsibility which i, again, i sound like a scold but its the same idea that they have to take responsibility for their platforms. Its for the better of their business Going Forward they dont want to just be this freewheeling wild west platform where a false video can rise to such heights and be zrbdistribu. Its irresponsible and woefully irresponsible. The idea of bringing more Human Element into it, i mean, humans have biases as well they make mistakes as well theyre the ones that write or encode the algorithms. How do you balance for that as well so youre right humans get it wrong. But organic intelligence tends to get it wrong a lot less than artificial intelligence. And