TODAY.
I'LL GET TO THAT IN A SECOND
THAT IT'S HAVING A CHILLING
EFFECT ON THE ENTIRE SECTOR.
MICROSOFT CHIEF OPERATING
OFFICER BOB OR WALL.
THANK YOU FOR COMING.
>> THE MARKET GIVETH AND TAKETH
AND WE SHOULDN'T WHEN IT COMES
TO TECHNOLOGY, YOU KNOW, GET TO
HYPERVENTILATED ABOUT THIS.
THE FACT OF THE MATTER IS FROM
APPLE TO MICROSOFT BEAR UP
APPRECIABLY OVER THE PAST YEAR.
PEOPLE ARE GETTING ANTSY.
SHOULD THEY BE?
>> WELL, FUNDAMENTALLY I DON'T
THINK SO AT LEAST IN THE CASE OF
MICROSOFT AND APPLE AND AMAZON.
THEY HAVE REALLY SOLID AS MOST
MODELS AND YOU'LL SEE HICCUPS
HERE AND THERE AND THEY'LL BE
DRIVEN BY SOME OF THESE FORCES
THAT ARE EXTERNAL TO THE SECTOR
COMPLETELY.
VIA MARCH, THEY ARE VERY HEALTHY
BUSINESSES.
IN THE CASE OF FACEBOOK AND THE
CASE OF GOOGLE, YOU HAVE A
DIFFERENT SCENE THERE BECAUSE
SECURITY, PERSONAL SECURITY,
PRIVACY IS A BIG ISSUE AND I
THINK YOU'LL CONTINUE TO SEE
HEAVY PRESSURE ON THOSE STOCKS
SIMPLY BECAUSE THE FUNDAMENTAL
BUSINESS MODEL IS UP FOR GRABS,
UP FOR QUESTION REGARD TO THE
PRIVACY ISSUE.
>> I AM WONDERING, THE WAGONS
WERE TECHNOLOGY YOU HAVE THE
MOMENTUM CROWD THAT FEELS THEY
HAVE RUN UP TOO MUCH.
THERE'S ALSO THE PRIVACY CROWD
SING WITH A LOOK AT A COUPLE OF
THESE GUYS THAT WOULDN'T AFFECT
APPLE TO YOUR POINT THAT SOME OF
THE OTHERS.
OTHERS JUST SAYING THAT THE
ROTATION OUT OF WHAT HAD BEEN A
MARKET LEADER.
NO MATTER HOW YOU SLICE IT, THE
ARGUMENT IS IT'S NOT GOING TO BE
A GOOD ENVIRONMENT FOR
TECHNOLOGY BECAUSE IT HAD BEEN
SUCH A GOOD ENVIRONMENT.
WHAT DO YOU THINK?
>> WE'VE BEEN FEELING THAT WAY
FOR 20 YEARS NOW.
YOU KNOW, NEW IDEAS COME ALONG.
I THINK WHAT IS GOING ON WITH
THE CLOUD IN MICROSOFT AND
AMAZON IN PARTICULAR, THOSE
BUSINESSES ARE REALLY SOUND AND
THE CUSTOMER IS WINNING AS THEY
MOVED THESE APPLICATIONS TO THE
CLOUD SO THEY DON'T HAVE TO HAVE
THEIR ROAD DATA CENTERS.
THOSE BUSINESSES ARE
FUNDAMENTALLY IN VERY GOOD
SHAPE.
I WOULDN'T WORRY ABOUT IT TOO
MUCH.
YOU'RE GOING TO SEE VARIATIONS.
THIS TRADE WITH CHINA IS OUT OF
HAND IT'S GETTING CHILDISH
ALMOST IN TERMS OF HOW LONG IT
HAS GONE ON.
THEY SHOULD GET IN THE ROOM,
CLOSED THE DOOR, NO MEDIA, GET
IRONED OUT.
WATCH OUT FOR THE FACT THAT THE
CHINESE NEED TO SAVE FACE SO WE
HAVE TO GIVE IN ON A FEW THINGS.
VIA MARCH WE NEED TO GET THIS
BEHIND US.
WE'VE ARGUED ENOUGH.
LET'S RESOLVE IT.
IT IS BOTHERING PEOPLE A LOT AND
I THINK IT AFFECTS THE MARKET.
THE FED OUGHT TO THINK ABOUT
SLOWING DOWN.
WE NEED TO STABILIZE A BIT.
WE'RE SEEING A LOT OF CRITICISM
ON THE SPEED.
NEIL: I WAS TALKING TO A FED
WATCHER WHO SAID JUST THAT,
SAYING THE FEDERAL RESERVE IS
PERFECTLY JUSTIFIED,
PARAPHRASING HERE.
IT IS CERTAINLY RIGHT TO FIND A
NEW EQUILIBRIUM.
IT CAN'T BE 0% INTEREST RATE,
NOR SHOULD IT BE THE HISTORICAL
NORM OF 5%.
MAYBE THREE, THREE BY 5%, WHO
KNOWS.
THAT IS THERE A RISK YOU'RE THE
FEDERAL RESERVE IS OVERDOING IT?
THAT IS WHAT THE PRESIDENT HAS
ALLEGED IN JEROME POWELL THE
FEDERAL CHAIRMAN IS DOING IT AND
RISKING THE WHOLE MARKET IN
RECOVERY WITH IT.
>> I HAPPEN TO THINK SO.
I THINK THERE'S NO REASON WHY
YOU CAN'T LET YOUR FOOT OFF THE
ACCELERATOR FOR A BIT AND LET
THINGS STABILIZE.
I ALSO THINK WE NEED TO WATCH
OUT FOR THE FACT THAT THESE
MARKETS NOW ARE DRIVEN BY
ALGORITHMS.
SO WHEN YOU START TO SEE A SMALL
DECLINE, THOSE ALGORITHMS THAT
HAVE NO HUMANS INVOLVED,
ALGORITHMS THEY, ALGORITHMS THEY
HAD BETTER JUMP AHEAD OF THAT
AND START SELLING NOW BECAUSE
IT'S GOING TO GO DOWN FURTHER.
THEY TEND TO DRIVE IT DOWN.
DECLINES THE USE TO BE 100
POINTS NOW ARE 450 POINTS SIMPLY
BECAUSE -- NOT SIMPLY -- NOT
EXCLUSIVELY, ALGORITHMS ARE
RUNNING A LOT OF THIS.
NEIL: DOESN'T TAKE MUCH OF THE
HIGHER THE NUMBERS GO IT MIGHT
SEEM LIKE A BIG DEAL AND IT IS,
BUT IT'S CERTAINLY NOT THE SAME
BUT WE HAVE AN OCTOBER 87 WE
CRASHED.
VERY DIFFERENT NOW.
THIS IS ABOUT ONE AND THREE
QUARTERS OF THE DOW.
FOR TECHNOLOGY IN GENERAL AND
AMERICAN LEADERSHIP IN THAT
FIELD, WHAT ARE YOUR THOUGHTS?
>> WELL, WE CONTINUE TO BE
STRONG, BUT THE BIG RISK IS
TALENT FRANKLY.
WHAT'S HAPPENING IN CHINA IS A
POOR A KIND OF MONEY INTO THE
RESEARCH CENTERS ARE THEY
SIGNIFICANTLY STRENGTHEN
UNIVERSITIES.
TODAY IF YOU'RE RANKED THE TOP
10 ENGINEERING SCHOOLS IN THE
WORLD SUCH AS U.S. NEWS & WORLD
REPORT JUST DID, YOU GET FIVE OF
THEM BASICALLY IN A SHOW, WHICH
IS A REAL SURPRISE COMPARED TO
10 YEARS AGO.
THE SCHOOLS ARE GOOD, THE
GOVERNMENT IS POURING A LOT OF
MONEY AND WHAT IS HAPPENING IN
THE U.S. IS WE ARE TELLING THESE
KIDS WHO ARE GETTING MASTERS
DEGREES AND PhD'S IN COMPUTER
SCIENCE AND ENGINEERING, WE SAY
TO THEM ALL, WE DON'T
NECESSARILY WANT YOU AROUND.
THAT'S THE SIGNAL WE ARE SENDING
THEM.
ABSOLUTELY THE WRONG SIGNAL.
THEY'VE GOTTEN CAUGHT UP IN THIS
IMMIGRATION FLAP, WHICH AGAIN IS
AN ISSUE THAT KEEPS BEING KICKED
AROUND.
SO WHAT IS HAPPENING IN 2011,
45% OF GRADUATES COMING FROM
ASIA WOULD GO BACK HOME.
TODAY THE NUMBER IS 80%.
THEY'RE GOING BACK HOME SAID
GOOD JOBS INTO ENVIRONMENTS THAT
WELCOME THEM BECAUSE THEY KNOW
LONG-TERM THEIR MILITARY AND
INDUSTRY IS DEPENDENT ON GREAT