WHEN: Today, Wednesday, January 20th
WHERE: CNBC's "Squawk Box"
Following are excerpts from the unofficial transcript of CNBC interviews on CNBC's "Squawk Box" this morning live from the World Economic Forum in Davos, Switzerland. For a roundup of all the interviews on CNBC's "Squawk Box" today, go to davos.cnbc.com.
All references must be sourced to CNBC.
Steve Schwarzman, Blackstone CEO:
SCHWARZMAN ON BEING LONG CHINA
China is actually slowing, but it's not collapsing. I think there's like an overreaction to what's going on there. They just reported 6.9% for the year. The IMF is calling for 6.2 I think it is for next year. It could be slower underneath that. Their consumer economy is growing quite well, services are growing. They created 14.4 million jobs last year against their normal expectation of 10 when the economy was growing faster.
SCHWARZMAN ON CHINA AND 5% RATE
The parts of the economy that are doing pretty well are quite good. And if China can settle down over time to grow at a 5% rate long term in a service economy, that would be a good thing. The disruption as you get there is really substantial.
SCHWARZMAN ON CHINA PERCEPTION
The problem, just generally, and the reason why there is so much negative perception around China is the management of their stock market. And the management of their currency. Both of which looks somewhat erratic. Lurching from pillar to post to try and fix-up the un-fix-upable. So that perception, which dominates financial journalism and you know, other media, is not the whole of China.
SCHWARZMAN ON OIL
The consumption of oil keeps going up, a little slower than it was, but the supply is just, you know, about 2 million barrels on a 93, 94 million consumption base is a bit too much. So that rapid decline destabilizes people because it is happening so quickly. Change that happens quickly gets investors very unnerved.
SCHWARZMAN ON ENERGY
We have sold most of our oil and gas quite a while ago so we have had quite strong returns in that area. Now, you know, what is one man's tragedy is another one's comedy.
Andrew Ross Sorkin: And you are waiting. You are lying in wait?
Schwarzman: So this is getting into the zone where you're going to start having a lot of troubled companies as a result of the price, you're going to need money to drill in certain areas. So this is getting much more interesting.
SCHWARZMAN ON TRUMP
Sorkin: Trump or Cruz?
Schwarzman: If I had to do that one, I would do Donald.
Sorkin: You would do Donald?
Schwarzman: Yeah I would. But I think where we find ourselves as a country now, it's almost like some kind of odd protest moment. The question is what is everybody protesting about?
Sergio Ermotti, UBS Group CEO:
ERMOTTI ON CHINA GROWTH
I would say probably a 6.9 is on the upside of expectations, but we do see around 6% or even if it is a high 5, you know, it's still a very good growth. In any case you have to put the base of this growth is not the same as we had 10 years ago. A growth of 5 to 6% now means billions and billions of additions to the economy.
ERMOTTI ON INVESTING IN CHINA
I think the adjustment can take a couple of years, 2 or 3 years. We have to put China in context of what they did in the last 20 years and what they can do in the next 10, 15 years. That's the reason why we are bullish on China. We think that's the time to think about how to start to invest. It's not a big bang. We are not going into China right now for the sake of going in.
ERMOTTI ON EUROPE
The current set up of Europe is unsustainable in my point of view. Both politically and economically. I think it is time to move forward. The concept of trying to develop a unified union based on a currency union and forget about a fiscal union and political union. I think that you see it also from a geopolitical standpoint of view the credibility of Europe as a united force on an international front is not there.
Randall Stephenson, AT&T Inc. Chairman and CEO:
STEPHENSON ON SATELLITE
Obviously, satellite is the most efficient video delivery technology known to man, right? Fiber being next, wireless probably being the highest. But you know, at this stage, we're in a unique position by virtue of having the spectrum portfolio we have. And so it's a position we're going to take advantage of.
STEPHENSON ON THE MEXICAN MARKET
When we announced we were acquiring DirecTV, it required us to sell our American mobile investment. And so we were out of Mexico. I love the Mexican market. The Mexican regulators and even the administration there have put in place a framework that is something that you love as an investor. It's very conducive to coming in and investing in the market. In fact we came in, as you said, and we acquired two companies in Mexico to go back into that market and to offer wireless service in Mexico. Each of those deals were done in 30, 45 days. We can't even get our applications done in 30 days in the United States. But it's an environment very receptive to investment and the new regulatory environment they put in place gives us a lot of confidence. We're investing in an LTE network nationwide in Mexico.
STEPHENSON ON TV EVERYWHERE
The bet we made Joe was TV everywhere is going to be very, very important. And people have been pursuing TV everywhere for a long time. I don't think anybody has really executed on it very well. Probably the company that's executed on it the best is Netflix. Just a nice user interface and you can get their content on any device. This is what we're after. Our content agreements are the long pole in the tent for getting this to market. We're getting those content agreements done very quickly. You can watch this show right now. You can stream it on your AT&T service.
Brian Moynihan, Bank of America CEO:
MOYNIHAN ON THE AMERICAN CONSUMER
What's interesting if you actually look at the earnings, you know, we grew revenue year over year, expenses were down, it was fine. And then if you look underneath it and see our customer base, investors and stuff, on the personal side and stuff, people are pretty stable. So it's kind of an interesting –
Becky Quick: You are talking about the American consumer.
Moynihan: Yeah, the American consumer, plus the American investor really hasn't moved a lot of money. And so, the institutional world is moving around because that's what they do. But the general population hasn't really adjusted this yet and we will see what happens.
MOYNIHAN ON FIRST QUARTER
The consumer is confident, unemployment is down, wages are growing – not as fast as people would like, but they are growing. So we see that and that's kind of the tug of war. That versus these other external impacts is going to be interesting as we play out the first quarter I think.
MOYNIHAN ON OIL PAIN
The next ten dollars – I mean, you've gone through a lot of the pain especially compared to last year. So the next ten dollars has less of an impact you know, sort of relatively than the first 30, 40, 50 dollars.
MOYNIHAN ON U.S. GROWTH
The U.S. is carrying the world's growth right now. it's actually growing at a 2.5% prediction. The rest of the world is slowing down. And the question can the U.S. keep going given all that around it? That's I think what you see in the current markets is people worried that the impact of China, the impact of other economies, emerging economies especially, slowing down. That's going to back its way finally into the U.S.
MOYNIHAN ON SUSTAINABILITY
We do twice as much lending to new sources of energy as we do to old sources. And that's because that's where the capital has gone into a lot. And so it is good business of why we do it. It is all about can we help make the transition we got to make, and our customers need to make it and they want to make it.
Vitali Klitschko, Kiev Mayor:
KLITSCHKO ON REFORM
We understand we need fast and effective reform. And actually, reform is doing not as well if we wish. But anyway, we understand the Kiev is main key and has to be example for whole Ukraine. And that's why we are doing and try to use all modern technology for management of the city.
KLITSCHKO ON RUSSIA OIL PRICES
Right now with oil prices, Russia has to focus on social issues inside the country and will be definitely less aggressive in outside politics.
Ray Dalio, Bridgewater Associates Founder:
DALIO ON CHINA
China is also dealing with a debt issue. A basic notion is that you can't increase your debt faster than your income for long. That means they are going through an adjustment process which means slower growth. And with slower growth, less inflation pressures. So we are now in a situation globally where China plays an important role on the rest of the world and the rest of the world plays a role on China. And that is negative.
DALIO ON RISKS BEING ASYMMETRIC
I think the risks are asymmetric on the downside. That's why I said before that I think the next major move in Fed policy will be towards a quantitative easing, not toward a tightening.
DALIO ON A BALANCED PORTFOLIO
So for most investors I think it's important to have really a balanced portfolio. That's why when we constructed this all-weather portfolio, it's a portfolio in which the assets are supposed to balance each other. The problem last year is that almost all assets in the world went down in value.
DALIO ON RESERVE CURRENCY
There's a short squeeze for dollars. The dollar because it's the world's reserve currency, has a lot of dollar denominated debt. And because of that, there's a squeeze. Emerging countries owe dollars, so they have to buy dollars. Very similar to 1980-1987 really. Once that squeeze is over, it undermines the dollar longer term. I think we're going to come in a couple years from now to a point in which we are going to be thinking hard about what is a good reserve currency? What is safe in investing? Is cash safe? In what currency?
DALIO ON CHINESE CURRENCY
I think the Chinese situation with the currency is very important. Very important. If there is significant currency weakness for the Yuan that will mean more imported deflation and it will make things more difficult.
DALIO ON GROWTH
Monetary policy can be affected by either interest rates or currency and so the tightening of currency is a negative. Also there's a negative effect that we're seeing right now. Because the markets are going down, that will have a negative wealth effect. So when we start to look at what growth will be in the future, we are going to have a lower level of growth in six months than we have today. We guesstimate that will be about 1 and a half percent.
DALIO ON THE FED
I think what the Fed is doing that is mistaken is they are looking at the short term economic cycle. The classic is if you're operating with GDP slack gets tighter, unemployment rates get lower, at that point in the cycle it's appropriate to tighten monetary policy. And that's very classic and that's a very short term business cycle perspective. But there is such a thing as a longer term debt cycle and I don't think they're giving enough attention to that.
DALIO ON THE FED BEING FLEXIBLE
This will be a negative for the economy, this market movement, and that will mean as we look at that that the Fed should remain flexible. It shouldn't be so wedded to a path.
Ian Bremmer, Eurasia Group President and Scott Minerd, Guggenheim Partners Chief Investment Officer:
BREMMER ON CHINA
The question is whether you think it's 1 or 6.9, the government still feels comfortable that they can actually manage this, that there's no threat to their own political stability. They wouldn't be meeting with the former Taiwanese President. They wouldn't be facilitating Japan's South Korean rapprochement if they were concerned that suddenly their economy was going to collapse. Now you can say that they're all smoking something but it's got to be pretty good.
BREMMER ON THE MIDDLE EAST
In the Middle East, the better analogy is not another emerging market, it's climate change. You passed the tipping point. It's going to get worse and the only question is how much can you contain it. People are coming to realization when they look across the Middle East. They've done very well taking expensive stuff out of the ground; it was an historical accident for many decades. But they never reformed their economies. They never provided any alternatives for these disenfranchised young men, millions upon tens of millions of them. And now they're going to have to deal with that unsustainability. The question is how much it blows up, not whether or not - failure is an option here.
MINERD ON CHINA
The reality is that we've discovered that markets cannot be artificially maintained for long periods of time. Clearly the currency is overvalued and something has to give. And my view is that with overnight rates in Hong Kong up to 60% some days to defend the currency; this isn't sustainable and something going to give.
MINERD ON THE LACK OF PANIC
That's the kind of stuff that actually bothers me is the complacency and the lack of panic in the market. And I think that until we get some kind of volatility and panic, we don't have any indication of a bottom.
MINERD ON REVERSING COURSE
If we can't get back above 1860 today and we head down as I expect then the Fed is on hold in March, the Fed is on hold for a long time. And Joe, to your point earlier, I wouldn't be surprised if things got bad enough that they reversed course.
Glenn Hutchins, Silver Lake Partners Co-Founder:
HUTCHINS ON CONSUMER SPENDING
You first look to consumer spending – 70% of our GDP, right? You know, I've written a little bit about one of the causes – I think of the swoon in consumer spending, which is the insecurity of income in American households – but offsetting that increasingly is really excellent job growth. We continue to have – we had 200 and plus thousand jobs created every month over the last year. American companies, while experiencing some issues on the edge, is still continuing on that pace of job growth.
HUTCHINS ON RECESSION
If there is a recession in the United States, it feels to me more like something we might have experienced in 2000 rather than 2009 because it's not associated with debt levels, it's associated with equity levels having gotten too high and correcting. If that happens, I don't think it will, but if that happens, it would be short if it's of that nature because an equity correction has much less long term impact than a debt problem.
HUTCHINS ON BITCOIN
There's bitcoin as a currency, which I think too many people are focused on and don't understand is less important than the bitcoin technology. The bitcoin technology has two important elements to it. One of which people talk a lot about which is the block chain. The other which people talk less about which is a potentially explosive piece which is a means to transfer value the way the internet transfers information today.
HUTCHINS ON STAYING POSITIVE
I think we've gone too far in the pessimistic direction. I think there's really important issues to be understood, to be grappled with. So for instance, let me give you an example. You can talk about Middle East is a mess. You can talk about Europe is having a big problem in the migration crisis. You can talk about real important issues or you can also say, "we had a real chance to deal with these problems," right? Today, one of the things I've been talking to people about here and I see emerging is a strengthened U.S.-European collaboration on a host of global issues.
Dan Schulman, PayPal CEO:
SCHULMAN ON BLACK FRIDAY
Interestingly for the first time ever on Black Friday more people shopped online than they did in-store. And that to me, when I talked to a number of friends at retailers, really woke them up to the fact that mobile payments especially, because that's where most people did their shopping- on mobile- is here to stay and is growing quite dramatically.
SCHULMAN ON CASH
The biggest competitor that I see is cash. 85% of the world's transactions are still in cash today. And cash is an incredibly inefficient form of currency. This secular tailwind towards digital payments, towards mobile payments, the big enemy is really going after cash and seeing that move towards a digital payment.
SCHULMAN ON CHANGE
I think we're going to see more change in the next five years than we've seen in the last 30. Money is digitizing, there's a proliferation of mobile phones predominantly smartphones. If you look at the millennial generation right now they're really using their smartphones to manage and move money and that's just a look into the future. So I think you're going to see a tremendous amount of growth and really a reimagining of what financial services could be.
Aneel Bhusri, Workday CEO:
BHUSRI ON SECURITY
We happen to have two data centers in Europe and we actually have a large development staff in Dublin. So for European customers, we have committed to run all of their systems and only have European personnel be around their data. And that was very warmly received by both customers and prospects.
BHUSRI ON GROWTH
I would say, with a caveat, we don't have a lot of exposure to Asia and very little exposure to China. But Europe is going gangbusters for us and the U.S. continues to be very strong.
BHUSRI ON VALUATIONS
I do think that at least in the private markets, the valuations were way ahead of themselves. And people had forgotten about things like profitability and cash flow. I think the public markets had been more sane.
BHUSRI ON SILICON VALLEY
There are down rounds, there are companies that are having a hard time raising money. I think it's actually all healthy. It's better to get back to a rational world in Silicon Valley if we want to keep it moving forward.
BHUSRI ON BEING A PUBLIC COMPANY
We compete against two giants in SAP and Oracle, who frankly are dinosaurs at this point. But they've been around a long time and they're well known in the public market. So Workday being public, continuing to grow, having over $2 billion of cash, it takes away a customer's concerns that as a private company they might still have with us.
BHUSRI ON SECURITY CORE
When Mark started Salesforce and we started Workday, we knew we were going to be exposed to threats and so we built security at the core. And that is a big difference between all of the true cloud vendors like Amazon and Google and Workday and Salesforce, than some of the other ones that try to slap security on as an afterthought.
Devin Wenig, eBay President and CEO:
WENIG ON EBAY WITHOUT PAYPAL
Seven months since we have spun PayPal out. It's been good. We are executing a long-term plan to reposition the business. Ebay without PayPal is a different company and we came to the conclusion early on that we just need to be very different. That the eBay brand needs to stand for something different. And that's what we are doing. We are changing the inventory.
WENIG ON E-COMMERCE BUSINESS
There's no distinction between the digital and the offline world anymore. So we are talking about $14 trillion of commerce. Not everybody is going to shop the same way. And for us, it is exactly what you just said. The majority of our 160 million shoppers think the same way. So for us, we don't want to compete in logistics. We are not a logistics company. We are never going to be good at that. And I don't want to be almost as good as fill in the blank. I want to be a better eBay.
WENIG ON COMPETITION
A lot of things worry me, but to be clear, you have to be fast enough – not everybody needs everything instantly, particularly if it is a unique item. So, when I look at our holiday season, almost two-thirds of the hundreds of millions of items that we sold over the holiday arrived in three days. That's, for most people, fast enough. Particularly if they got the best deal that they can get anywhere or a unique item. Now there are going to be some that need something in an hour and that is a segment that eBay – that's not our core competency. We don't need to compete in every segment across a $14 trillion industry.
WENIG ON ALIBABA COMPETITION
I think Jack probably worries it will be a challenger to him in China. And our pages don't look quite right in China either, but I can almost assure you that there will be a healthy and growing Amazon, Alibaba and eBay as part of a $14 trillion market opportunity.
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