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CNBC Excerpts: CNBC’s “Squawk Box” Broadcasts Live from the World Economic Forum in Davos Today, Thursday, January 21st


WHEN: Today, Thursday, January 21st

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

All references must be sourced to CNBC.

Bill McDermott, SAP CEO:


As you know there's been a lot of noise about China slowing a little bit, Joe. I just got back from Beijing last week. You'd never know it by being on the streets of Beijing and meeting with state-owned enterprises and commercial entities that there's much slowing at all.


We have been very fortunate in Europe and our business in Europe is growing in steep double digits. So I think the common denominator that we see is if you're innovating and you're in an innovative product lifecycle, you can do pretty well. But I do not see headwinds in Europe and I am not worried about Europe.


What you kind of get down to is do you have the data model, the application model and the cloud model that is truly innovative. And what I'm learning from customers is they want that completeness of vision. Because who wants to deal with several different companies when you can deal with one company that can give you an even better service and even better value delivery.


And I actually think that's good to have a situation where you have to have very good customer loyalty and high retention rates to have a profitable cloud business. Because if you're bringing money in in the front end and losing it on the back end just as fast, it doesn't help.

Michael Corbat, Citigroup CEO:


We view what's going on really as probably a more a re-pricing of markets than any big fundamental shift. The combination of China, oil and probably a different outlook in terms of Fed stance or policy from just a month ago have people questioning portfolio mix, asset selection and we think the market is adjusting to that.


China shouldn't really be a surprise that it slowed. If you go back to 2010 when they announced the monumental shift of their economy and you look at where we are today, the world's a slower place. The Chinese currency has been one of the stronger currencies and exacerbating their competitiveness in manufacturing. You look at what's going on in terms of oil and the supply/demand imbalance. We're about a million barrels a day out of whack. About 1% of oil production out of whack. Those things are overcome-able.


What I hear CEOs talking about is topline is going to stay tough, it was tough in '15. We're going to manage our companies through real focused expense discipline, we're going to manage our shareholders through buyback. M&A probably, and with valuations where they are, probably remains quite active.


'15 was an important year for us. It was our best year since 2006. It was a challenging environment that we showed the focus of our business model. Today we're a completely different company. We're a bank. We're a global bank. That's what we do. We're not an asset manager, we're not an insurance company, we're not a hedge fund. We're a bank. And we showed in a challenging environment what our bank can do.


In terms of the stock price, I think there's a bit of a show-us attitude amongst shareholders, of "if you are different, let's see how you weather some of these challenges." And we've got to prove them wrong.


We've got a strong dollar. And the dollar, our opinion is going to stay structurally strong for the foreseeable future. So that in itself is going to be an inhibitor in the manufacturing sector, it's going to be an inhibitor in the export sector. You look at the competitiveness to the rest of the world, most currencies have devalued anywhere 10, 20, 30, 40 percent.


If you look at the financial system today, you're not seeing – you had someone on talking about the lack of panic. That lack of panic is because as an economy, much less levered than we were. And so you don't see it in the banks, you don't see it largely in the financial system. And so people have reached for yield, but largely those people that reached for yield knew what they were reaching for.

Penny Pritzker, United States Commerce Secretary:


I think what's important is they are growing and there's no one predicting a hard landing. They are going through a major transition from being an investment led economy to one that is more consumer led and that's a tough transition. It's particularly tough when you've got a global slowdown, but they're going about it in a measured way.


We've got a combination of things happening as it relates to commodities. And it's hard to sort out who's most or what's most responsible, but obviously you've got some slowdown in demand. You've got slowdown in China and then there's a lot of trading going on. The question is to how much impact that's having as well.


Let's not get overly focused just on China as it relates to the U.S. economy or U.S. commodities. I think we have to think about the fact that the U.S. consumer is in a pretty good situation and is benefitting in fact from the lower oil prices. About $750 per household per year. That's not insignificant. And you see that in auto sales or home improvements and home purchases which is also strong. We're starting to see wage inflation in the United States – that's good and we're also seeing low inflation in general. So the United States is sitting I think in a pretty good situation even though you're seeing slowdown in other parts of the world.


There seems to be a disconnect in to where the market is and where actually what people are seeing on the ground in their businesses. I can't tell if the markets have some knowledge that the rest of us don't have, but when you talk to business leaders and then you talk to them about their U.S. business, it's looking pretty good. I mean, unless of course you're in the energy sector which is really getting hurt.


Safe Harbor is really about protecting privacy. The United States takes protecting privacy really seriously. The European commission wants to make that sure we're doing that and so Safe Harbor is a set of protocols that is protecting data flowing back and forth between the United States and Europe.

Meg Whitman, HP Enterprise CEO:


Business around the globe seems quite strong to me right now. And you have to remember we've invested a lot in R&D, we have reshaped our salesforce, we have— you know, the benefit of focus in this split is something I underestimated. So listen, there's a lot of challenges in a lot of different economies, but we're feeling good about our technology and our offerings. So there's a bit of slowdown in some economies, but I feel pretty good about where we are.


What has happened in the market in the last three weeks is a bit breathtaking I have to say. I've not seen anything quite like this.


Our job is to deliver the results. I can't control the market. What I can do is make sure that we show up with customers, we have the right technology, we fight for every sale, and we're doing all the things that we can do as a leadership team. So I don't actually spend a lot of time focused on this. And it goes back to my eBay days. Remember when eBay would go up 60 points in a day, down 40. I sort of got to the point where I just focused on what we could do as a leadership team.


We'll keep our eyes out. But of course now, from even three months ago, whatever we were thinking about would have to be a lot less expensive than it was three months ago because the market has changed.


I think people have to understand that having experience as a governor is the most relevant experience in my view to being president. And you know, listen, when I ran for governor of California, I ran with no political experience and was criticized for that. I said "listen I think I can get through that in the context of a state." I think it is very difficult to have the presidency of the United States be your first elected office. Because politics is different than business.

James Gorman, Morgan Stanley CEO:


It's not a perfect picture, ok? Let's be clear about that. And there is some excessive valuations in the market. No question. But is this the cause of the kind of correction we've seen? My screen I have at my desk, there's about 70 stocks that I follow – from energy, financials, consumer, housing, media – every single one of them is down. Precipitously in three weeks. What happened? What was the trigger point here? And I'm just not seeing it. I'm seeing – you can imagine a correction off the highs. I'm not seeing this kind of violence.


It's not obvious to me exactly what the connection is – absent oil of course. The U.S. economy, we've got 5% unemployment. The economy is growing at 2.5%. That's a 17 trillion dollar economy. Second largest economy in the world. China is growing. It may not be 6.9, but it's somewhere in that zip code. These are good things in terms of global economic growth. Oil of course has been the wildcard the last several months.


I think they've got to temper it a little bit given obviously the emotional state the markets are in. And you know, you hate to do that. You hate to think that your monetary policy is driven off short-term market. But I would be surprised if we don't see more rate increases this year. I really would be.


Are you getting the kinds of returns that you need to do to make the stock attractive for investors long term? And the answer to that is obviously no. Is that a function of R or the E? In other words, how much of it is an earnings problem, which would be a big problem, versus an equity problem – you got too much equity. I kind of like a high class problem. We've got too much equity. As a result, our returns are depressed against what certainly they would have been pre-financial crisis. So Morgan Stanley is in great shape.

Niall Ferguson, Historian & Professor of History at Harvard University:


There is a huge financial problem and economic problem that it's not easy for them to solve. They've been talking about liberalizing their capital account for a long time. At the same time, they do not want a massive depreciation of their currency, they want a nice gradual one. That may be impossible with massive capital outflows that have been in recent months. I think one of the big questions here to which nobody really knows the answer is it going to give? Is there going to be a big slide in the Renminbi in the coming months. That would be a huge blow to other emerging markets and to the world economy as a whole.


There's no doubt at all in my mind that the combination of a refugee crisis and intermittent terrorism by radical Islamists is creating an atmosphere in which the political right in Europe, the populace right, can make big gains and that's the thing to watch in Europe. Is there going to be a fundamental shift in its politics?


Economically if one goes back to the question of commodity prices and growth – I wonder if we're going into one of those periods from the mid-80s to the mid-90s when oil and commodity prices were very low with all of the ramifications that that had. Remember, that was one of the shocks that led to the disintegration of the Soviet empire – cheap oil – it's a really important point to bear in mind. I don't see a big bounce in oil unless there's a huge escalation in conflict in the middle east.

Chuck Robbins, Cisco CEO:


I think in general it's a huge economy and when you see it growing at 6 or 7 percent that's still pretty significant growth for an economy that size. I believe that having been there for 20 years, we'll ride through some ups and downs but overall we're very optimistic.


We have to deal with some of these policy issues like the balance between privacy and national security, we have to think about cross-border data flows and all of these things. It's been a topic that we've discussed this week. I think it's something that both the private industry as well as public sector have to work on together.


We see the leaders in Europe, whether its Cameron, President Hollande, Merkel, Renzi. They all understand that this digital transition is significant. And they all understand that they need to think about how it brings job creation. Overall I think there are some challenges that Europe needs to work through like a single digital market, but overall I think the leaders there understand the power and value of technology and what it means to their future.

Jack Lew, United States Treasury Secretary:


Oil prices have gone up and down many times in my lifetime. This is the first time I've heard lower oil prices described only as a bad thing. And I think you have to be careful to get both sides of the oil price equation. You look at economic growth in Europe – even economic growth in the United States – where in spite of headwinds internationally we're maintaining steady good growth, good consumer demand. Lower oil prices are part of the reason for that. So there's definitely an impact if you're in the oil patch, it feels terrible. If you're an oil exporting country, it's very disruptive. But globally there are also positives.


I think that if they stick to the reform program that they've announced, they can have a soft landing and level off at a rate of growth that is sustainable. If they don't they have bigger problems than we've seen in the indicators. I think they've announced the policies that they know they need. Now the question is, can they implement them?


We have made clear to China over many years, certainly the entire time I've been Treasury Secretary, that devaluations that are designed to gain unfair competitive advantages are unacceptable and we will push back on that. On the other hand, if your economy is slowing down and there's a natural difference, you have to distinguish between the two…If they could be clearer about what they're doing, I think that it will be helpful. I can't tell you that I have 100% certainty of where they're going. I can tell you what they've announced as their policy. I can tell you what they've said in meetings and I think their activities, their policies, and their communication have been confusing.


They have not been entirely clear in their movements how they're behaving and it creates confusion. If they stick to their reform plan, if they refrain from competitive currency movements, if they make their economy increasingly open so that if business are failing, they don't produce more but they reorganize or go out of business, they'll be a stronger economy.


I don't want to pretend that there aren't downside risks. I follow the downside risks very carefully. I don't react to the minute to minute, hour by hour, day to day moves of the markets. That's obviously what you do here on the show and it's a different job. We have to look at what do we as policymakers control - how do we make sure our economy is as strong as it could possibly be and how to do help other countries to make decisions that strengthen their economy and have a stronger global economy.


Certainly Europe's dealing with the refugee crisis is in part a social and security issue, and part a financial issue. It's expensive. I think it's very important that Europe make the resources available to deal with absorbing immigrants in a way that works to build a stable, strong future. I think they know that. My conversations certainly reflect that. I think on our conversations with the British, we've been clear both privately and publicly, we think it's the best interest of both Britain and Europe and the global economy and stability to keep the European system together.

John Kerry, United States Secretary of State:


We are absolutely convinced the world is safer because Iran was hurdling towards an unaccounted for, uninspected, full-fledged nuclear program with high levels of enrichment where they had enough enriched material to make 10 to 12 bombs. Now, at frankly Iran's consent and their agreement, they have rolled that back.


The world now has a country that has gone from no accountability to the greatest amount of accountability of any program on the planet. And they have agreed they will never seek a weapon and they will have a peaceful program. Now the proof will be in the implementation but it has avoided a major confrontation in the region.


I think some of it will end up in the hands of the IRGC or of other entities, some of which are labeled terrorist. To some degree I'm not going to sit here and tell you that every component of that can be prevented. But I can tell you this, right now we are not seeing the early delivery of funds going to that kind of endeavor at this point in time.


I respect completely Israel's perception of the threat that Israel faces. We understand that. We disagreed on how we would manage it. We don't disagree that there are threats and a threat…Israel is safer today. The key here is to make sure that Israel's safety today extends all the way into the future as far as anyone can imagine.


President Obama has made it clear that the worst offenders, the people who do represent that kind of danger, against whom there is evidence. They will be tried. They have to be subject to the justice system. The people who have been moved out are people who have been very, very carefully screened.


John Kerry: They looked to me with an extremely quizzical look and ask me what is going on in the United States?

Andrew Ross Sorkin: And what do you tell them?

Kerry: I tell them I am in diplomacy now. I'm out of politics. And I don't have an answer.

Gary Cohn, Goldman Sachs President & COO:


I don't believe the sell-off in oil is really reflective of an economic slowdown. In fact if you look at the fourth quarter year over year demand for oil it was up 1.1 percent. So we're not seeing a demand slowdown in oil, what we're seeing is a massive oversupply of oil. So we're now having to price oil to such a level that we can actually price in all available on-land storage and then we'll move to floating storage.


Instead of saying ok there's fundamental oversupply in the oil market, we're then saying ok if the oil market is oversupplied therefore there is a huge decline in demand, we must be having a decelerating economy, therefore all other financial assets need to go down in value.


Are we seeing some slowdown in China? Yes we are seeing a slowdown in China. Has China gone from a cap-ex to an op-ex economy? Were they building out infrastructure for many decades? Yeah they were. Have we gone to a consumer discretionary economy? Yes. Think of that. That's discretionary spending by consumers. You can't predict discretionary spending the way you can predict a government coming in and spending money in China. We're seeing that transition, but that transition is working.


The CEO community that I'm talking to, which is our clientele, which is across all industry groups and all geographies, and most of our clients are global in nature so they've got businesses all over the world- they are clearly feeling some type of slowdown in their business. Now this slowdown didn't start January 1st of this year. This slowdown started in the end of last year.


We all know that we've had a bit of an economic disruption, we've had a bit of a change in monetary policy, we've had a slowdown in the Chinese economy- at a time when many of the financial regulations have changed and come into effect in the United States and other places. So the answer is, liquidity is dramatically different in financial markets today than it has been in the past.

Robert Diamond, Former Barclays Group CEO:


On the one hand, it's hard to believe the impact people ascribe to moving from zero rates to 25 basis points in the U.S., but I think Governor Draghi has credibility here. It wasn't that long ago when he came out and said he'll do whatever it takes. He introduced that long term repo operation – was it three or four years ago. I think the impact of his easy monetary policy in Europe very, very late – not Governor Draghi because he did it when he was appointed – late I think in relation to when the U.S. began to ease, but it had a very positive impact. So I think his words will mean something to the market.


When you look at the underlying fundamentals of what's going on with this market decline, it's more around China, the commodity complex, oil. And I try and look at the positives. And frankly, I think about the U.S. and the economy as is a real positive. I think about the last two years in Europe in terms of recovery as a positive. The thing that really perplexes me is I remember in the 1970s and then four or five years ago when oil went way up. Everyone said this is going to have a huge negative impact on the economy. And here it comes from 100 down to 27 and isn't this going to be positive for GNP? I mean, there's countries like Rwanda, countries like Singapore that import all of their energy that are going to have a very positive impact from this move in energy prices.


Twenty odd countries in the European community, the only country in the European community that has made a conscious decision publicly to not be in the single currency is the UK. So can they have the benefits of the European Union and the benefits of their own currency and we'll see how the discussions go. But I think they're in a very strong position.


I think the challenge for a global bank owning operations in Africa come back to if you're a SIFI or a G-SIFI, you have higher capital levels. The UK banks get a tax on their global balance sheet. So if they're taking deposits in Botswana, they're taxed in the UK. So I think the business model is one of a regional or super-regional to be investing in Africa.

Muhtar Kent, Coca-Cola CEO:


What we're not seeing yet is that the financial contagion so to speak if you like has not passed over the wall to the consumer and hopefully it will stay that way.


Everything is volatile, Becky. You know, there's – commodities are volatile. Who would have thought that we would be here with the price of oil six months ago, eight months ago, a year ago. So there's a lot of volatility. And I, actually, you know, in terms of the commodities from our perspective, it's a pretty benign environment right now. And it looks like it will stay that way.


I think more than transportation – yes it does help with distribution costs – but more important than that actually, it helps particularly in a place like the United States, it helps the consumer. Mobility goes up, the amount of travel goes up – that helps our business. And we've seen that in the last sort of six months or so.


I think consumers just want more choice. That's why you see, from our perspective, a company that's for a century been almost pretty much a one product company and one brand company. And now we have more than 500 brands and 3,500 products and going.


If we don't do anything, if we just sit and watch this, the unemployment rate in the world for youth is going to go up. And that is not a good picture for the world. That is not a good place for any of us to be.

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