Watch billionaire hedge fund manager Stanley Druckenmiller's full CNBC appearance

let's get right to our special guests and that is Stanley Druckenmiller Duquesne family office CEO is the founder of Duquesne capital and you manage that as well as a lot of Soros money Altis I don't know how you did so much at the same time if you don't know this man's record and I'm not even talking about being the biggest philanthropist in in the world and I think one was at 2009 Stan at eight hundred million dollars but I can't remember yeah all right anyway thirty years without a down market thirty-nine yeah thirty-nine but an average thirty years competing we don't really talk afterward is thirty and it i think after 30 years of not having a down year or getting thirty percent a year i you couldn't do it i don't see how you could do is you get up every morning whirring I think wouldn't you and and that's too much for anyone took tried it was a lot of luck in there I had a lot of big draw downs in a year it's just the way the calendar came out so there was a lot of luck involved with that I've talked to you in recent days and and you had an interview that got a lot of play at the economics club and so we'll start by saying so a thousand points today I'm sorry 100 points a day would bring us up almost a thousand for the week so we've had a snap back and I asked you you sort everything you said you know these headlines don't really necessarily cover the nuances of what what you've done in the last couple of weeks right I mean they said you've sold everything and got in Treasuries was that that's not exactly what what you did is it no but I did do a lot so I was over 90 percent invested me fat and happy fed looked like they were going in the right direction and the sunday of the Trump tweet came in Monday the mark was only down a half for one percent and decided to go to net flat that was the first chunk that was the China not China not the Mexico China tweet I just kind of wanted to take a deep breath and process it net flat doesn't mean I sold everything I kept all my long investments and used other vehicles again that flocked the other thing I did was I bought a bunch of Treasuries just because I wanted and by the way it took me three days I wish I had done it all the first day but didn't have the courage or the gumption or whatever and yeah that's that's what I did and pretty much stayed there until the Fed Rhee pivot acceleration what you want to call Tuesday morning and nowhere near back to where I was but I've I've gotten a little more exposed during a week but you also point out and you say a lot of it's luck so I mean it looked like you said wow I'm gonna play by Mirai these Treasuries as they go up in the yields fall bullets but that wasn't one of it you need to go somewhere and have me Treasuries and then all of a sudden that was serendipity and the Treasury market just took off after you did that too right so it looks like another soros ships have the set all the one-way bet what's a one-way bet that's when you you very have a lot of conviction that something might not move but if it moves it'll only move in one direction so I bought the Treasury sinking for example the two year I think it was like two thirty or something if I'm wrong it goes to 240 and you can envision a scenario where you could make 150 or 200 basis points so I didn't necessarily think I was gonna make money but it was a great risk reward and you're right now that it's down to 185 or wherever it is this morning it's no longer one way bet you could lose 60 70 still could probably make 150 so it's not like it's a bad bet it's just it's nowhere near what it was that particular day so you definitely sat up and took notice of what these tariffs might do to what you were pretty happy about and that is the regulation Tax Reform animal spirits for the markets all these things that did happen in the first couple of years of the Trump presidency you think this is enough of of a headwind to really reverse some of all that all those positive things to where you're we could we go into a recession could the market have a much bigger pullback than we've seen so far is that is that all in the horizon you still don't know Joe the answer is I don't know but I'm managing my own money and I don't need to play every day I'm not competing and you said it perfectly I think I called in right after my knee replacement the day after the election did and you guys were great we had a discussion about how none of us understood with cutting taxes and deregulation why the market would go down because Trump had been elected and I think we talked about animal spirits in that interview at the time and maybe the economy could grow at 3% under this guy and I wish I had followed my own advice more in action but that's kind of what happened and animal spirits is something you can't measure but confidence matters and you do wonder and the journal had a great piece on this I think Tuesday morning you do wonder whether this is enough to kill animal spirits and well what do you mean by animal spirits well for example if you're a company and you're thinking about building a plan or doing capital spending I mean really I mean aren't you going to wait now see how this thing is resolved what's going on but I don't know if you calculate the tariffs at least someone we've had just in and of themselves it doesn't look like it's it's that damaging but at the same time Ben Bernanke who's a great great mind got a lot of IQ points on me he thought subprime was contained because if you just do the math same thing the tariff thing doesn't look that damaging but if you take all the other effects and confidence and we've had a few more things down the road since then we had Huawei and 5g was going to be one of the great engines of not only us but global growth that's challenged now we we've interrupted that supply chain supply chains all over the world have been sort of twisted around people are wondering then we got Mexico that one came out of nowhere so there's a lot of uncertainty and I'd love to sit here and tell you I have a crystal ball but I just I don't know I don't know you and Kevin Walsh have been watching the Fed and commenting on the Fed for for a long time it's probably too much shelf I mean I have so many questions about this and I'm thinking we only have an hour that's that was what just ran through my head that's what I thought but is a is the Fed still isn't there the law of diminishing returns for what they're able to do when we hit that yet I don't think looks like we have it because they've we got a pause which bounced us in December and then we got something more recently where there might be a cut and it worked again is it gonna always work just because it makes stocks more more valuable no one day I won't work we proved in 2008 at some point you start pushing on us on a string I'll say this I don't understand the the Fed's monetary framework at all I grew up in an era with Volcker and Greenspan both where monetary policy was primarily used for counter cyclical and when the market excuse me when the economy started running too hot after a period they would lean against it and when it looked like things were softening and rolling over they would lean against that now we have decimal point inflation targets like it's Armageddon if it's one point four three two instead of one point six five we're worried about inflation expectations five or tier in ten years down the road we have a two percent two point zero excuse me inflation target that if we don't meet it it's Armageddon and I have trouble with that whole the preciseness of it and the attention to it as you know Joe we're in well you may not agree with me but I think we're in one of the biggest productivity inflection booms since the late 1800s I am very confident that it's not being measured in real GDP I'm also very confident I couldn't measure it so don't think I'm arrogant up today but I know that we have all these free products out there that don't measure in GDP just a couple of examples somebody at MIT did a study and said the average American would pay eighteen thousand dollars a year to use the Google search engine I know I'd pay more by the way but here's here's just one little anecdote so in 2010 Americans took I think or globally took 300 billion pictures okay this year we took two and a half trillion pictures okay and the pictures this year on the phone in your pocket are better than the pictures you were taking with a Kodak camera eight years ago and if you look at GDP accounting all right there is no accounting and value for those pictures it's done nothing for GDP in fact you could argue since we used to go in and pay 50 cents per picture when we want to have them developed that added GDP and that's no longer in there so that it now literally subtracts from GDP and I could give you a million other examples right it's whatever agree a hundred percent really so putting all my clients in fotomat shares if real growth is higher you have these powerful long-term trends that are working in favor of that how is the Fed at two and a quarter to two and a half percent short-term interest rates restraining that in other words you mentioned that the Fed is sort of refitted because it seems to want to move toward where the market is at this point what's the difference if the Fed were at 2% or one and a half or two and a two and a quarter to two and a half of it is right now well because the gig economy is important but it's not the only economy and economics works on the mark the economy works on the margin and on confidence and there's a lot of other areas autos old-line retail global trade big that are deteriorating and I actually think the Fed is right to be worried I think we could be an inflection point and I think they'd be crazy not to think so I have no problem with what chairman Powell has done I think he inherited a very tough job I my biggest problem is what Yellen did we had a booming economy fairly early cycle I know I talk too much about the Fed but at the time I said they should sneak one in every time they can until they get to some normal rate I deeply deeply believe in a capitalist system you need a hurdle rate for investment and if that rate is not up there somewhere around three or four people are gonna get crazy investors going to get crazy corporations are going to get crazy zombies are gonna stay in business and we have the opportunity to get there but that does it did sneak one in December 2015 the markets kind of continued falling apart and then they were on hold for a year yeah but we we had that whole period in 2016 where in my opinion they could have gotten to three and a half or four we'll never know but they could have at least tried okay but once confidence turns down you know you got to deal with the hand you're dealt and and chairman Powell has now got a tough situation on his hand you've evolved was it four yeah I'd say we should really be cutting and it would be great but we're not at that what does that mean you think that there are bubbles that have built up in the equity markets and other market around if there are still zombie companies that are out there have we not shaken things out because we haven't been at three or four percent and yeah we have ten trillion in corporate debt we had six trillion I think you and I did an interview for delivering alpha and it was like seven and a half trillion at the time so ironically by trying to achieve escape velocity we are in worse shape for a recession now than of things that slowed down when the period you're talking about might because there's been a lot of nonsense that's going on since then now we have the global trade situation so you just know you're from what I'm hearing your views have evolved on on the Fed at this point and I I like what you're saying cuz it's a much more I think positive place that it puts us if it's productivity and innovation in technology that has us stuck in this low interest rate environment and I agree with you said you don't know if I grew that I've been said you don't want to pay for Google Maps what would I pay for Google Maps has changed my what am I gonna get somewhere oh I know when do I have to leave I know when I have to leave because it says oh but there's traffic on that right if I had that when I lived in LA I would I would have got off the freeways instead of being able to save seven years of my life with Google Maps it's the way this affects inflation - yeah quality it does that's that's why would rates are so late if this was measured properly we're probably already in deflation by the way that's a good thing we have good deflation and bad deflation so that's my objection to the 2% inflation target for all seasons in the late 1800s in the in the industrial revolution we had three percent deflation and we are growing at eight percent real so I don't know where we are I don't know whether we're at zero where they're at one or two but I wish would stop worrying about it because we're in a Productivity shock and this thing can't be measured so to sit there and count decimal points until at least a the economic statistics catch up with what's happened the preciseness I just think is but this didn't exist 15 years ago how much hissing worth and what this is capable I have the Encyclopedia Brittanica everywhere I go I mean and I mean I don't even know what Andrew does on this well if you mention the cycle clearance Encyclopedia Brittanica because used to pay for that yeah and that added to GDP so relative to now that's a negative I know that some of this shows up in advertising but a lot of that is coming out of TV and the whole value there's no way it but your larger point is that we're not correct or the Fed is not correct to fear the Japan scenario in this instance no not at all it explains why Treasury yields are where they are problem yeah and and this whole obsession with a zero bound you know why we're at the zero bound because they put rates at the zero bound we have never had deflation that I can find that started because we were near the zero bound we have deflation in every instant because there was an asset bubble so if I was trying to create deflation like I'm in this evil Darth Vader oh let's create deflation I would have been done exactly what the Fed did from 2012 until a couple years ago I'm completely confused you feel good about things right now we're bad I'm worried about the long term because you know and I don't like the victory laps about how great things are because we've used monetary policy to create a lot of buildups by the way I haven't even gone into what the government's done at full employment and no one would mind if the government hadn't been if the Fed hadn't been running policy to enable these guys and then you have President Trump running around saying well we need to keep interest rates low because the debt is high will Jesus why do you think the debt is high and if you went to debt to explode more just keep interest rates low I'm concerned about the long term as a practitioner I don't my central cases were not going into a recession I'm worried about it and with the with the new view of the said you know I'm a liquidity guy I'm not worried I'm not that worried about markets right if I hit they had to have a but also not that bullish I'm not nearly as invested bullish on record activity and innovation in capitalism though if we have to choose a billionaire at least we're not talking about how capitalism is broken and and I mean there's some good things happening in terms of of what innovation and but you know you let the free markets work and it gets pretty exciting your problems with entitlements and it's you know there's a lot of people think the answer is more government not less government so more and Joe one of the things you and I disagree on deeply is climate we do okay what we probably don't disagree on and the green New Deal is so over the top I'm not even there okay but if you're gonna if you're gonna finance these this stuff they want to do all right I this is seared in my brain because they went around to college campuses for two or three years but you know forty years ago government investment used to be thirty cents of government spend now it's fifteen entitlements used to be twenty-eight cents of government spend now it's over seventy that if you want to do this new stuff yeah all right the answer isn't to raise everybody's taxes because in my opinion that's going to cause damage the you do you go where Jesse James went you go where the money is and the money is entitlements there's nothing productive about transfer payments and they've got to be dealt with and I wish the young people out there would understand that there's no free lunch and if you want all this stuff the answer isn't to raise taxes because you're going to kill the economy and there's gonna be nothing for anybody the answer is to take some of it from from the old people like me they're gonna get you believe I'm getting a Social Security payment I mean how ridiculous that thing was set up as a safety net and financed it through the through that kind of stuff you're not talking about just taking away from billionaires though you mean taking it away on a means-testing from anybody who makes over a certain amount of money on Social Security yeah yeah and by the way if you need to do a payroll tax that specifically addresses with that that's okay too I just wanted addressed so the next generation doesn't get zero and you know it's funny one thing Hillary and Donald Trump agreed on was we're not going to touch entitlements yeah it's amazing to me well we're gonna decide we're gonna offer you a CNBC contributor positions I'm going to decline it but saying we can have you on like a quarter at least or so I mean there's some money involved here with the CNBC contributor stand in the house I hope they will do it but with Republicans controlling the Senate there's no guarantee we will succeed what we need is Walmart the largest private sector employer in this country to take a bold step forward and say that all of their employees should live with dignity that's Bernie Sanders confronting Walmart over minimum wage advocating that the retail giant should pay its workers at least $15 an hour let's talk minimum wage and much more with our special guest today Stanley Druckenmiller who is the CEO of decaying family office Stan you saw what Bernie had to say you were watching this week as it was coming out and you sent us an email because I got you a little fired up what do you think about it well first of all on the minimum wage we just had a discussion about innovation we didn't we didn't go into the cloud and to me the choices it's not minimum wage versus a wage it's minimum wage versus no wage and if you want to hurt workers with what's going on with the alternatives with technology Jack the women minimum wage up enough knee light you'll have job losses as a result so it doesn't make a lot of sense to me but the thing that really enraged me that comrade Sanders said was his his comment about charter schools I've spent the better part of my life one of the the great joys of my life was was meeting Jeff Canada it's funny I was talking to Fiona last night to have met Jeff Canada and Ken Langone have them both in my life for over 30 years I mean what a privilege and what luck but but getting back on topic when when he says he's against charter schools I know the man just doesn't care about inequality all he cares about power because that is disruptive to the african-american community who prefers us and the only way you get out of inequality is with education at the early level and giving everybody on this on this in this country a shot and believe me this myth about pulling up your bootstraps and you know I'm gonna make it that's fine for ninety ninety five percent of the population but there are communities out there where these kids have no shot because the public schools are just so terrible they're never going to be able to compete in our economy and for Sanders I assume he's in the pocket of the teachers unions I don't know why sit but how in the world can you be against charter schools if you're serious about the inequality issue and we should tell people about the work you've done in Harlem how long have you been there well I've been there I met Jeff in 1993 but it's Jeff's work it's not mine but we're serving thirteen thousand kids and twenty five thousand families in a hundred blocks of Central Harlem we've moved the needle on every single metric and that Keith just even drive up there and I showed you pictures of 25 years ago you won't you won't even believe what's happened the community are our biggest problem is gentrification which is a high-class problem relative what we're looking at and what's really cool is the Harlem Children's Zone model which by the way Jeff and vana not me is being replicated in communities all over the country Obama's Promise Neighborhoods started it so we're not just affecting like 13,000 kids up there now it's becoming a nationwide thing and I think it's one of the answers one to the whole to the whole inequality so it's it's very exciting when you see hundreds of millions of dollars pour it into a system like the Newark school system without really decent results to show for any of that what do you think it broke my heart but you know I I hate to say it because I know I know you're gonna have viewers who passionately disagree but I'm just not a believer in government being the most effective actor and this whole tax debate is interesting because I understand I really do understand why people want higher taxes and they think that's the solution inequality but you also need to understand I'd much much rather have a Jeff Canada implementing programs and use his talents through private sector donors and donors that hold his organization accountable rather than letting the government just to be clear you think that's a solution for the five percent of communities where you're not getting decent public schools correct you don't think that this is something I mean I'm a product product of the public schools for most of my life my mom was a public schoolteacher my kids are in the public schools in Harlem we're not one of the big myths perceptions about Harlem Children's Zone is where a charter school network a that's a small piece of what we do up there we have baby College we have pre-k we have employment and technology centers you know basically from cradle to college we're all over these kids and all over the process but we deeply deeply believe in public schools so that's not that's not what I'm talking about here I'm just saying that there are kids that need a shot and it cannot be done just through charter schools and by the way if they're charter schools that are not performing they should be shut down what do you think of Bernie Sanders and other candidates who are now on the campaign trail basically saying you need free college you need Universal basic income you need universal health care how do we deal with those issues and what happens in an environment where things are so charged well I just don't believe in any of that I mean one of the problems with colleges that's been subsidized now through student loan programs and what's happened it hasn't helped the student psychology just keep raising their prices and these students come out and they're in debt but all this sounds wonderful Becky universal health care free colleges but you got to pay for something and you know I started my career in the 70s there are a lot of people that thought the Soviet Union was the answer okay I've watched socialism in various forms my whole life the latest example is Venezuela and the people that would like socialism and think this is a way to go they should go down to Venezuela actually they shouldn't they'd probably be shot ken Langone was with me last night and he pointed out a statistic I had not heard the average Venezuelan lost 34 pounds last year I mean that's what you're dealing with and look I know capitalism isn't perfect I know there are issues but the alternative is absolutely I I've seen this movie before and I don't want to go down that route although the alternative that is being presented is not centrally planned dictatorship like in Venezuela it is a bigger safety net or widening out entitlements and having it pay for it through higher taxes I mean it's not to say the government throw Mike of course it's through government I mean the health care system to me very simply they want Medicare for all Medicare is going to go bust okay so so let's let's make it even worse and let's do Medicare for all why is Medicare going to go bust because the way the thing works right now we don't know what we pay for our health care and until you have consumers have choice and understand when they go to a doctor what the cost is and there's some kind of choice this thing's just it's not going to get better so yeah I understand what you're saying but I've seen government in so many forms I mean I'll give just one small little anecdote so when we started the pre-k program in the Harlem Children's Zone we had our little thing called Harlem gems and I'm very proud to say that in in 12 years and like 15 to 20 percent of the kids are homeless got a lot of special needs kid one child one out of 12 years of kids has not been school ready at kindergarten so it's a great program so we start this thing takes us about three to six months to get it started up off we go and across the street we get Head Start money and believe me I love the Head Start money and I'm you know I think it's a great program it didn't take us three to six months to start it up it took us six years and we fill out a questionnaire every quarter 1,700 questions from the government are we complying with not one of those 1,700 questions is about student outcomes now it's a head start better then not have anything at all yes and those kids are having the same outcomes as the kids across the street but I'm just talking about the delivery life everything where you get government versus the private sector involved the answer has always been the same I'm gonna shock you I kind of agree with Biden I don't I don't really think capital gains promote investment as much as advertised out there and it's hard for me to believe Larry Page and Mark Zuckerberg and Jeff Bezos what I said oh my god the capital gains tax is going to be 35% I'm not gonna I'm not gonna try and found Amazon or Google so I don't have a problem with it but I'll probably want to you wouldn't want to expand entitlements you'd probably want to fix entitlements and debt with the money so a conservative dollar I don't want to give you a heart attack over there but would also not be giving like tax breaks for buying used corporate jets I get the new jets okay somebody has to make them you get employment yet all that but used yet so there's all kinds of stuff in the taxes yeah the problem with the capital gains hike and I don't really know the answer is it might not raise that much revenue right and I'm not I'm not into something just because it's fair but frankly I think I kind of agree with Biden but but I did want to say this you know how we could solve inequality very easily I've welt just do something disastrous to the economy the stock market would go down 40% well that's what we're nailing quality would drop substantially fell in 2008 that's exactly what happened we had the biggest decrease in inequality since the night that's the problem of this whole argument today I mean a little-known fact because the media doesn't want to put it out there is real wages have gone up under Trump it's the first time it's happened I think in 40 years and we all know african-american employment is up because President Trump tells us every 10 minutes we all know other minorities and so the bottom is doing better the problem is the top the differential is getting even bigger and even though it's one of the seven deadly sins one of the most powerful human emotions is envy so the narrative about inequality is is correct but one piece of the story is left out is that everybody is doing better or the people that are really accelerating so I don't believe the way to solve this is let's just ruin everything and then everybody will be worse off will be more right but the inverse of that which is a conservative say well growth will solve everything in fact during high growth periods inequality increases so it doesn't solve inequality I am shocked though that you're you're saying you would support a higher Gaines right you're a guy that I would guess makes a large share of your income from capital gains right we're some to short-term but I have had substantial capital gains but it's no has that change for you was there a time when you would wouldn't have but now you ever been I've never been big on what the what should the rate be what do you think it's a fair rate for it should it be taxed the same as income 37% there was a time when they were the same I wouldn't have a problem with that but then don't tell me you're gonna raise the 37 to 50 and it's going up on both of them right okay as far as I'm concerned they didn't do tax reform okay we did some tax reform in 86 this wasn't tax reform and the thing became even more complicated yeah but I would have no problem with normalizing capital gains I'm hope I'm not I hope I'm not wrong because I could be to me you don't want to raise any taxes unless you're gonna raise revenue I don't want to rest it raise capital gains taxes because I want to hurt somebody you say do you think the marginal rate is it the right level right now I don't know I'm a Laffer curve guy I don't know where we are you know we know it's between zero and a hundred I don't know which it is but would you do we need to that you've mentioned seventy cents of every dollar I mean that's a problem is it not what summits I mean if we do anything with increased revenue I mean spending should still probably be cut and we need to address entitlements we don't even need to cut entitlement spending we just need to slow them down or make them grow at zero and not exactly display my idea of the leading 20 over five or six percent last year with nominal GDP growth less than that they're still gaining and by the way we haven't even gotten into the really demographic the gray boom spot I talked about twelve years ago if you remember I'm sure you don't I thought the real consequences won't screw up until 2025 2030 I said this in 2012 well it's not 2025 yet we're getting there and we talk about it quite a bit especially with as I just said I mean if you look at the basic thrust of the 22 clown car or I shouldn't say clown but the 22 Democrats that are running right now it is entitlement expansion that's that's the whole thing but the big debate in this country right now because of a lot of this is on whether socialism is effective we've interviewed versus capitalism we've interviewed a number of people and some billionaires on this program had to get their issue take on the issue Jamie JPMorgan Chase CEO Jamie Dimon defended capitalism and what's the same vein as our guest host and an annual letter published in April writing I'm not an advocate for unregulated unvarnished free-for-all capitalism but we shouldn't forget that true freedom and free enterprise capitalism are at some point inexorably linked socialism inevitably produces a stagnation corruption and usually tyranny actually often worse he didn't say that I did a few days later or a few days after Dimon publish that letter billionaire Ray Dalio spoke out about this very same issue I didn't say broke and I said that it needs to be reformed I'm a capitalist I'm a professional capitalist the system has worked for me I didn't have anything and then I got something through the capitalist system and capitalism means the ability to save and invest in capital markets and private enterprise and all of that and I'm supportive of that I'm not really sure we tried to pin him down on exactly what he wanted to do with it but I mean comments on I don't know if you saw the whole interview with Dalio I didn't see it let me just say again I look capitalism isn't perfect yeah but it's lifted hundreds it's lifting billions of people out of poverty and to me it's proven to be the best system we've had my problem with today's narrative is we're we're not doing capitalism right now as I see it we've been moving further away from it we're moving further away through free trade we're moving further away through manipulation with crazy monetary policy we have all this crony capitalism with lobbyists in Washington so for the last 30 years I think we've been moving further and further away from what I would call capitalism but that's not the debate the debate out there is capitalism for versus socialism and we've seen that movie and we know how it ends so I just I don't get it you you talked about about Google and and we need to bring up that what also has been happening lately and that is the big I guess pushback against how great these companies are how well they do how big they are how much of their lives are involved what but capitalism produced some of these great innovations has a are these guys too big too powerful now do we need to take a look look they're big but first of all let's go to they've now got enemies on both sides let's take President Trump first I don't happen to be a nationalist and I don't know what I think about yeah I'm what you hate I'm a globalist okay and I don't know what I think about economic wars but if I was gonna have an economic war from China with China and I was a nationalist okay the last thing I would be doing would be attacking our best companies for the next 30 years who are going to be in that fight which are the AI leaders Google Facebook Amazon while they you'll notice Joe about a year ago they had kind of gotten quite tough with the private sector the Chinese had and then the minute the trades stuff happened they pivoted okay they got rid of Jack Ma but then they became very friendly to Alibaba they've started reduce restrictions on all the stuff that $0.10 does we all know what they do with Huawei so they're oiling the companies that are to compete with us in the next 30 or 40 years because let's not be naive this is all gonna be about a AI and technology and what are we doing we are attacking our companies that are the leaders in this stuff but man it's great we're putting we're supporting our steel industry our coal industry our aluminum industry way to think about the future president from just genius now let me take the other side so we have the Democrats out there and president Trump we all know his motivation is these are all left-wing liberals out there that run these things his words not mine so now the Democrats hate them because they're convinced that Facebook's platform got President Trump elected that's complete nonsense I mean whether you like it or not President Trump won the election because more people voted in the right states for him that voted for her and the Facebook ads are just dwarfed by anything else so I just do not understand the the emotion over this issue then you've got the whole privacy argument and very simple to mate if you don't like what Google's don't either privacy don't use Google okay don't go on it don't go on Facebook and good luck to you by the way if you want to go to another search engine the woman from Denmark who keeps going online you could put Google on the fourth page and they'd still use it compared to the other search engines competitive because I'm old enough and stupid enough I hit the wrong button and I get trapped in one of those search engines and like I go crazy how bad they are and also that I'm too stupid to know how to get out of it but you're pointing out how powerful they they really are and and consumers have benefited have startups been hurt by monopoly power of these big companies is competition being hurt around the edges we could make it I don't know make some changes that make it fairer yes I I think they're awesome look I'm a capitalist and you can have monopoly power that becomes punishing for capitalists and we've never had to deal with the networking effect which the Internet is created and absolutely when you see acquisitions made to eliminate competition that's to be seriously thought about but the narrative that Google is gouging on prices well first of all their products are free so how are you gauging our price and they're anti innovation I mean this is one of the most innovative companies in the world if there's a reason not to own as a stockholder is they're spending so much money on on crazy stuff trying to advance science in the world so I don't like I don't like that narrative either but I do agree yes if if they're buying companies to eliminate competition there's stuff we can do there you make a persuasive case that we shouldn't be targeting these companies as an investor as a trader though what do you foresee in terms of whether it's going to affect them in terms of restraining evaluations I mean if you had to say do I fade this trend and think it's gonna blow over or do I think it's gonna be with us for a while well Mike I don't think they're gonna break up Google what if they do it'd be worth more problem I mean there's some of the parts will be worth for Facebook would be worth less because obviously messenger and the platform that's all integrated Amazon you could but you could arguably worth more you got AWS sitting over here probably worth what five hundred billion by itself and and this going on so I think it's debatable it it does make obviously investing in all of them more challenging it's it's over the head but we'd have to change the law as I understand it literally change the law which going to take years to win a monopoly case against somebody whose products are free well they're free and you don't give them anything you don't give them exclusive right to no wires in your house right there's nothing I don't want to run out of time but so if Trump had not you're now worried that he's gonna that I don't know if you're worried but you think he's gonna lose because of screwing up all the good things he did with tariffs in the trade war you're worried he's not why they need all those taken all those because I've analyzed the data in Pennsylvania Michigan clean thoughts and and I think he's in bad shape I think he will win if he runs against comrade Sanders or Elizabeth Warren but I think it's very very difficult for him to beat any centrist candidate when I look like crazy or because of something else because the tariffs are hurting the auto industry or other places I'd say a lot of it Becky's causes behavior soccer moms he doesn't need to lose one don't forget he won these states by less than half a percent my old stomping grounds Pittsburgh has gone blue because high tech moved in there and it's booming Pennsylvania is is stuffing he don't win without Pennsylvania you think and you I guess Becky won that one with it he and pence keep talking about the booming economy and the booming nests of the booming that if you don't think we're gonna be booming in 18 months and that's clearly a risk I don't see how he wins because I don't know what the narratives gonna be if you think it more likely I guess a Biden or a moderate is the candidate but if one of the crazy ones did win and did win the election he calls him this is he calls him the craziness he does calls him crazy I know I know you want your entitlements and you want your safety net expanded all right but if they do you think that would be bad for the stock market if Bernie became president I think stock prices should be thirty to forty percent lower than they are now the good news is we'd all be much more equal because everybody would be poor but the rich would be have lost a lot more wealth than the poor would've and you have no idea whether whether they run someone like that or whether that person could what you think burn I don't think Bernie Sanders could win the general election but I could be I don't either but you know stranger things have happened the young people love them the young people by the way who how can you be under 30 years old and vote for Bernie Sanders who wants to give more money through more entitlements to old people I just don't get it right old people they could be living - okay yeah they could be living much longer and they're gonna do 100 and they could thank for the whole system yeah bankrupt the the the entire sister and thank you do you think I think we're gonna go a little further okay yeah we're gonna go a little for my been the only all I want to get to here is is back to the market outlook and what's most likely and and it's always just percentages and do you think that that somehow trump is able to successfully deal with both China and Mexico in a way that the stock market can take advantage of these lower interest rates and head higher I feel very strongly that the secular growth companies cloud payments have enough runway that they can they can grow just and fast and a one-percent economy as a three percent economy and those companies are unequivocally worth more with rates at 2:15 than they are with the 10-year at three I also very feel very strongly that there's a risk that the economy slows down a lot we'll see and if it does there are a lot of cyclical companies that are worth less if interest rates are 215 and three because they have negative earnings leverage affecting them very quickly you said that you were 90 percent infested until that early mate wheat about China tariffs at which point you bought a lot of Treasuries closed out some positions you came back in earlier this week only a little bit unfortunately I wish I'd bought more yes but you came back in early into the equity markets a little what percentage if you were at 90 percent before I'm at 15 and it's it's you're a very smart lady but it's not a great question because I could be very different on Monday and your viewers should take nothing I say on Friday with seriousness about where I might be on Monday or Tuesday well if you came back on the show we'd on what you're doing jobs numbers important today I think they're very important there's a technical thing when you have five weeks in May that could bias the number up word the seasonal adjustment they're important only because they affect the fed I don't use the job numbers to predict the economy it's just unbelievable the obsession with a lagging indicator I use them for entry and exit points to fade but I think if the job number is weak given everything else they're saying the Fed will be on a clearer easing path by July Stan Druckenmiller thank you for spending so much time with us that you know a long time coming a lot of begging a lot of whining a lot of cajoling a lot of but thank you thank you for the opportunity to talk to your viewers just been a lot of fun we've really appreciated how many there's a lot of fun I hope it was a great experience for you it was wonderful to have to wait a long time for the neni way you you

Channel: CNBC Television

Views: 140,584

Rating: 4.6944447 out of 5

Keywords: Squawk Box U.S., CNBC, business news, finance stock, stock market, news channel, news station, breaking news, us news, world news, cable, cable news, finance news, money, money tips, financial news, stock market news, stocks

Id: XlgBS6ZB5gI

Length: 49min 5sec (2945 seconds)

Published: Fri Jun 07 2019