Transcripts For CNBC Squawk Box 20171207

Im telling you, it moved me smelled really good. Youre dry from flying, right . The lips dry. Ill say, in three days you spent two of them in the air. How far 16 hours one way, 15 the other. Whats the mileage . Im on a need to know basis . 10,000 maybe . 13,000 miles . I dont know. You go up i want to say 10 or 11 there doing the flight before. Okay. Thats some serious mileage. Frequent flyer miles. Very dry. I have to figure out if i can get them i think it may be a part of the delta line you had a pod not the big pod this is like the little one. Not the ones with balls with the shower i didnt have the shower. Exactly. We are glad youre back nice to see everybody our guest host today is steve grasso from Stuart Frankel and a cnbc fast money trader good morning. Guys, lets look at the u. S. Equity futures yesterday was a bit of a mixed day for the markets. Dow down by 39 points. The nasdaq put in a positive day. It broke a threeday losing streak this morning green arrows with the s p indicated up by 3 points, the dow 20 and the nasdaq up by another 20 points overnight in asia, youll see the nikkei bouncing back it was up by 1. 5 after losing 2 the day before. Hang seng closed up by a quarter percentage point the shanghai was down by three quarters of or twothirds of a percentage point if you want to look at whats happening early this morning in europe, green arrows across the board. Biggest of the major markets, the gainer is the dax. Look at crude oil prices yesterday crude oil was down by almost 3 . Settled at a threeweek low of 55. 96. This morning back above 56 at 56. 24. Lets talk about some big stories were watching now the big one, bitcoin, can you believe this every day. Bitcoin crossed the 14,000 mark late yesterday that comes less than 24 hours after it crossed the 12,000 mark this morning its already traded, yes, above 15,000 on some let me repeat some platforms, not all of them, which is also a complicated part about this the market value of bitcoin tops 2 256 billion i dont know i think you see this, more people say i have to get on the train, the train is leaving the station. Its almost 15,000 today. Cramer has been outspoken yes, he has talking about its a danger i would say, when he decides to step out like that, probably pays to Pay Attention. You remember erin burnett wearing that leopard dress that made her famous because shes standing next to jim when talking about the fed and how they know nothing. This keeps people out of bitcoin, chen you see it as volatile as this somebody is getting in it people are getting in, but its the average person who is left back. When you think of the bond market or the Foreign Exchange market, 2 256 billion is one company, not even a big company at this point. Banks are now concerned about selling futures on this. Thinking it will add risk. The whole market size is 250 billion then you have to think what will send this lower the issue will be liquidity. Theres going to be one day where everybody tries to sell and theres no marketmaker who wants to take the other side, because of how there are different platforms. Certain platforms can take risk. Others its a true market. What happens if that story gets out the way you said it, the fact there might not be liquidity. Thats enough to spoke people out of it. Facebook is 420 billion this is 245 billion. They have a long way to go if they want to be gold, right . Gold or any currency or any bonds. Its still a small thats why i guess it could go much further. The cboe will begin Bitcoin Futures trading this sunday. The regulated will follow suit on december 18th well see what happens there in other bitcoin news, nice hash, a bitcoin mine service, it says hackers stole the contents of its virtual wall let the site played the announcements yesterday after an hours long outage that was reportedly due to maintenance. A 20yearold florida man was responsible for the data breach at uber, talking about a different company, and was paid 100,000 to destroy that data. This is a white hack hacker concept, but in this case a black has the hacker, but paid with white has the money so easy to digest going back to the bitcoin what is a Bitcoin Miner . So, you can mine bitcoins what does that mean its not like traditional mining theres an algorithm. If you have your server running all day and all night there are these huge server farms running processors to try to mine bitcoins you could mine a bitcoin in an hour before. What does that mean, create one . You can create bitcoin out of nothing. How can you have a currency that anybody can create out of nothing. Its lyiike digging for gold its a difficult process. Because theres a limited amount as we have gone further out on the curve but theres a limited amount of gold, theres not more being created. This is were creating more. This is equivalent of like the diamonds they manufacture in the lab, right sort of, sort of not. Do you want to take this its not as easy of process to oversupply the market i have a different question, if you get 60 million, and you steal it, are you free and clear once you steal it . My understanding is you are because its untrackable thats what i mean. Its not like if you show up at a bank its like a bear bond, remember die hard . That safe had a bunch of bonds in it. Thats what hans was after isnt that part of the problem . This is part of the problem, you cant track it the more youre able to track it, it takes the luster out of bitcoin. The reason its valuable, as far as taxes and government oversight, government cant debase it. Its not government but we can debase is with the server farm. You cant debase it with the server farm. Yet the big issue is whether its forking. If they change the rules, and if they change the rules and create a whole separate form of bitcoin are you really saying forking . Forking thats what its called. Forking youre forking the process, and thats what people worry about. Then you could change the rules overnight about bitcoin. Then youre forked. Yeah. Thats a problem. Developing story, friends in its scary the wildfires are right in Southern California. Youve seen some of the video or pictures the signs on the 44 05 are signs that if you ever lived there, you have passed them a thousand times, the getty museum, sunset boulevard. Fire officials have ordered several thousand more people to evacuate as the blaze approached the ohi community, northwest of los angeles. There will be Near Hurricane Force Winds this morning the spread of the fire and the winds will continued through tomorrow officials are cautioning people to stay inside in several areas. Ucla is outside of the evacuation zone, but classes and sporting events were canceled yesterday due to air quality this video is going viral. During his evacuation in ventura county, a man stopped to rescue a wild rabbit. He stopped by the side of the highway to chase down the bunny. He actually carried it did he get him . I want to watch this. No no no my goodness poor bunny. Amazing look at that. Unbelievable frightening. More frightening than anything weve the difference is you dont know which direction it will go. At any point the wind can change direction. Embers are like shooting stars. They are coming towards your house. All right folks n political news, big changes could be coming to the gop tax bill ylan mui has more. This is no small change. These could be huge issues reporter there are issues where the corporate rate will end up as republicans began the final negotiations over the tax plan two key gop lawmakers in the house have told me that a 22 rate is on the table they described it as a dial that they could use to turn up to pay for other priorities such as expanding the state and local tax deduction. I want to caution this is not a done deal. In the senate, influential republicans like pat toomey of pennsylvania and orrin hatch are pushing back against this idea i talked to senator david perdue last night, he said hes taking a hard position on keeping the rate at 20 . The final version of this tax bill will be hammered out between the two chambers in Conference Committee over the next few weeks House Committee members met last night. They were expected to discuss the corporate rate during that meeting. The senate, it picked its Committee Members last night as well senator hatch will be one of them he took a moment to give his fellow republicans a little pat on the back for making it this far. There is still work to do as we work to iron out differences with the house and make sure that every section of this bill is ready to be eased into law or passed into law. That said, i think we deserve to celebrate a little bit all the attention in washington will be on avoiding a Government Shutdown over the next few days. You can expect the discussions on tax reform will continue behind the scenes as republicans race towards this christmas deadline that the president has set. Back over to you its december 7th were talking about massive details in a plan that if all goes as theyre expecting would become law in about three weeks time thats right. Thats been one of the complaints both from some republicans and also from democrats, that this process has been moving really fast because republicans want that win. Theres not been time to digest some farreaching implications of the tax plan. I dont have any idea whats in this plan i dont know what it means for businesses, for consumers. I have no idea, and it sounds like no one in washington knows either and were talking about something that will be the law potentially in three weeks i think the International Side is another area that businesses and companies are still struggling to understand its complicated they say were moving to a territorial versus a worldwide system, but its not quite exactly that its a worldwide system with a lot of deductions baked into it. Lawmakers say this will hash it out in Conference Committee. Thats why it took 36 years or whatever. It reminds me a lot of obamacare. We had no idea what would happen to a massive portion of the economy. The core of it is getting away from 35 . You dont know what you will pay in taxes next year corporations dont know. Corporations will pay less. Not if youre citi group or the plans are not that far apart. The way theyre thinking about it, you know, we talk about wealthy people, andrew wasnt here i dont know whether your ears were burning, the state and local taxes issue, they may do 10,000 of deductions with the property tax it could be property taxes or local taxes. 10,000 of new york tax, you will be like thanks, guys. Its not going to matter that much but you saw what the wall street journal says should happen. Bring the individual rate down even further so that if youre on the high end, it all if you make 10 million or something, you can make yourself a corporation and you will be paying the lower rate any way. Again, we were talking about whether you can become a passthrough we cant, but if you have these other irons in the fire that could allow you to do that are you an llc . Im an llc in certain instances, but not in others not here. No im a w2er the other thing i think is likely now, 22 i think so, too that was being telegraphed the whole way through. That frees up a lot of stuff. Especially when they say amt will not be in the final bill. Its not hard to get to passthrough by opening up the door and saying 22 , marco rubio says the extra 2 better be going for the child care credits that i want then everybody comes back to the table. It opens the pandoras box when you said it was like obamacare. This is not permanent. When they overtook 20 of the economy obamacare was not permanent either look what happened you have massive pieces of legislation and some of it is done by executive order, that party loses the house, it will be undone. Same thing with taxes. They have an easier time arguing this with people that are staufrnch against it, they will say it will roll off in x amount of years, maybe we can bring you to the table whats your musthaves but you dont know once the other party comes in, they can easily undo obamacare . 60 times they repealed it . Look, you dont think obamacare will fall . Part of this lbill will do with the mandate. You get a party in, they immediately undo it . They will immediately start chipping away at it. They havent yet. They have well see i dont think youll ever see obamacare go away. Part of this tax bill is attached to it the individual mandate will be a lot of obamacare if President Trump decides not to fund parts of it that were required under the executive law im not saying im happy about it but im saying you can see how difficult it is once you grant an entitlement, its impossible to pull it back. Its difficult for corporations and individuals to do advance the planning on these things because the rules are constantly changing. Thats what happened with obamacare. Thats what i think will happen with this. 20, 22 for corporations, and the territorial system but the devil is in the details. Theres a lot of crazy details we dont understand yet. Its hard work. You need a decider and a st strategery thank you, ylan lets get to the ylan is like shes gone shes like im out of here the economy and the markets. Joining us now is the pride of squawk box, jason pride, director of Investment Strategy at glenn need, covering the economic angle, rob martin and still with us, our guest host, steve grasso the president says 6 now. I would love 6 cant you shoot for 6 and take 3 1 2 i want 6 and a unicorn i want them both there was a quarter in 84 where it was 6 . You can get a day of growth above 10 , but its hard to get it on a sustained basis. Its because of the population and but productivity you can do something with thats with investments from the private sector so, this is clearly a tax bill designed at its heart to boost investment and get businesses to invest more. They will be paying less, i believe, under this tax form we dont know exactly in what form, but theyll boost investment, the question is how much growth do you get out of that its hard to boost the growth more than a quarter or half percent. When you talk about 3 , 4 extra on growth, thats when it comes back to my desire for unicorns well see a lot of people say next year theyre down to 2. 25, i dont know thats what were saying. Right takes a while to change you sort of feel like it can never the new normal is below 3. As far as the stock market goes, it looks like even though it is becoming clear that something will happen here, the s p has had trouble doing anything the last four, five days you have bitcoin, its got to be some type of gauge for some type of you would think froth somewhere. This is kind of interesting certain aspects of the market are behaving in a way thats suggesting that tax policy is going to pass. Other parts of the market is not. The overall market is not reflected or reacted to it when you look underlying that, higher tax Rate Companies have actually begun to outperform again, having been underperforming basically since the beginning of the year. Within the market theres a different action thats actually showing that this these changes are coming about i think perhaps maybe one recognition is that investors build some expectation at the market level that some of this would come through they didnt know the underlying details of how the shifts would pan out. Now the details, people are filtering through the details of the bill, whatever 170 odd page count there is it was over 400 they are looking at the details to see what will happen to individual stocks now individual stocks are reacting to that in 2018, its that time of year now for talking about 2018. Its december 7th. I heard your unbelievable promo for what was coming. The economist the economist, 2018 global predictions. We should not try to spoil their predictions. Next year what did you say . Some stocks are showing a little bit of positive movement were up 35 in a year. Theres something there. Whether its global or whatever you want to aprib bute ttribute animal spirits, 35 next year on the dow or not this is where he tries to nail people down to precise prediction and then he saves the tape no particular strategist should be going out there in a range with a prediction like that. We invited you on, viewers are out there with wrapped attention, and you say the market can continue to rise, but its vulnerable to a correction. We dont need you if thats all youre going to say. Our models show a 6 return, but theres a are these Climate Change models 6 thats what weve been saying for the past ten years mid to high single digit growth. We got 35 what did you say the beginning of last year we were in the 7 to 8 range. Obviously theres a range of error around there four, five times. You get out in time, the range tightens any manager that tells you otherwise, the strategists will always tell you otherwise. The people actually running money, they will recognize that risk around those predictions. Would you ever say not mid single digit return . Absolutely. When evaluations are cheaper you might say down or up 30 . When valuations are richer, yes. Its safer to say mid to single high digits its the middle of the range, but its what models are pointing to with a valuation he headwind there really are models you want to see it . Will you send me one . Sure. All right steve is sticking around you are so nice yes i feel like christmas is here well get to the bottom of this maybe the guys from the economist have predictions i think they do. Coming up, yoga wear pays off. Shares of lululemon are you wearing your lulus . I wear lululen moor nothing at all the Company Posted an earnings beat and issued an upbeat geeuidance. Your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Welcome back to squawk box. Lululemon beating analysts estimates on the top and bottom line for the Third Quarter the Company Providing fullyear guidance above street expectations and authorizing a 2 200 million stock repurchase program. Joining us is oliver chen. Good morning good morning. These guys have not had a lot of good news and now theyre sort of nailing it were seeing Great Innovation in product the ever luxe pant growth in mens digital is 25 and theres the casualization of america happening. What happened we went through a whole period, a dark period for this company what happened previously was about quality control, supply campaign theres now management and thats been fixed. Its an expensive premium option is lulu cool . Theres new brands that over the past year we talked about outdid ou outdoor voices, theres a whole bunch of new companies coming up out of nowhere lulu created this market. Some fundamentals come down to fabric, style and fit. So the ever luxe fabric, the sweat wicking, its complicated at the premium end, but theres middle and lower end the lou lieu brand equity, the vertical integration that matters. Fabric is a competitive advantage because theres so many varying sweat opportunities as well as fourway stretch and antistink antistink really work . Can we have a conversation about antistink you have done that i have. Its convenient. A lot about millennials is an ondemand lifestyle. Do you not know so there are for certain shirts you get, called antistink, you can wear them more than once Nano Technology without putting it in the wash is the idea stink is not a thing that happens a lot, is it if you shower every day its about if you work out really hard. Ugh i dont stink after i work out, do you . Its not just about stink, theres other germs. Its about convenience, not necessarily being able to wash it and reuse it. They have the abc pant which offers comfort yeah. Did you catch that . He talked about the abc pant abc pant is a already been chewed the most comfortable pant in the world. You wanted to tell everybody what abc means you should tell everybody what is it. Youre here youre the analyst anti bacterial already been think round antiball a lot of comfort down there it offers you a lot of padding what is the a for antiball yes the c comfort never mind. Its about comfort. Im sorry i took everybody there. I didnt have to say it myself, im happy. Thanks for coming in thanks for having me. Hes like thank you very much nike, under armour, any of the big players taking share were seeing so much competition there. I think there will be great efforts there. At the premium end, our preference is lululemon. I dont cover nike thank you, oliver be sure to catch lululemons ceo joining the gang on squawk on the street at about 9 30 after the market opens a couple other stocks to watch. Broadcom reporting better than expected results on Strong Demand from wireless chips that company projecting current waurt quarter numbers above analysts estimates. Chevron said its 2018 spending budget at 18 18. 3 billion, 14 less than this year and lower for the fourth year in a ow the company companys capital spendings plans have been bro broadly shrinking since the Oil Price Collapse in 2014 turning to the wall street agenda, two key economic reports. Weekly jobless claims out at 8 30 a. M. Eastern. At 3 00, october Consumer Credit on the earnings front, Dollar General reports before the opening bell after the close, American Outdoor brands, the Company Formerly known as smith wesson now its american thats not smith wesson its American Outdoor brands good a hiking company. Yeah. Isnt the jobs number tomorrow yes adp was yesterday its like tomorrow is the 8th. Im ready to skip it its too late really it was supposed to be last week. The next one will be in three weeks. Was supposed to be last friday should we do it any way . Yes i was reading this morning we might get a lighter than expected job number. It is getting harder. Theres a reason the work force is not as many people to choose from, i guess. Still good still strong. And now hoping for the wage gains, right yeah. The wage gains that never happened if you talk to people in the business world, theyll tell you they cant pay enough to find the right person but we never see wages thats such a small incremental section that you see it doesnt have an effect on wages. Then you roll out and talk about inflation. Where is inflation thats why a couple fed governors, that are always dovish are saying skip december. Probably not going to happen, but a case to be made. Sources telling cnbc that bob iger will probably stay on as disneys ceo if the companys deal to buy parts of 21st century fox goes through sources also say that fox continues to view disneys bid as superior to others. Interesting because i talked to people last night involved in the transaction or proposed transaction. Apparently more than anything its the murdoches that want iger to stay because they want him to the issue is if lets say they would announce a deal next week, it is likely to take a six months to a year to get regulatory approval. Bobs deal is over at the end of 18 and 19. You would be walking into a deal with a new ceo taking over a company that they didnt personally decide they wanted to do you dont know what happens with the deal. If you care about the transition period and putting it together, you kind of need him, since hes the one vested in this deal, to stick around for at least another year. Hes 66 we know thats the new 40 . 40 probably you hear about him on a stair master not even on a stair master. On a versa climber i do that i do that, and i when the guy tells me youll do that, i almost start crying. To do it for two minutes is like i hear hes on it for 40 minutes or something hes in great shape so for you, you have to you have a lot to choose from for 2020 if its not iger for president , you can do the rock. I have the rock. Or mark cuban or kanye. Or shultz Howard Schultz. The entitlements under Howard Schultz would be ten times gdp hes got to be the most noble, nice, moral let me ask you a separate question can i ask you a separate question a lot of virtue. I wish i could be him. But i cant. He has a lot of virtue. Enough for all of us. Were all hopped up on the coffee let me ask you separately, if you are iger, does any calculus in your mind about this transaction go to 2020 if in the back of your mind, even just even if you marginally wanted to run for president , theres been enough marginal conversations about maybe does it enter his mind . Do you say, look, he kind of want to do this deal if i do this deal, i cant do the other thing. Why confine it to iger . If kanye le cutwill he cut a album there 2020 does the rock put off another movie . Im saying this locks you down rupert will lock you down. All these viable candidates crazier, i had somebody else not just anybody can become president. Somebody else said to me that it was a Conspiracy Theory for murdoch to take iger out of the running. God oka okay im just giving you all the different variations on it i see things on twitter i cant believe. Unfortunately one of murdochs homes was in the path of this horrible situation you know what the left is tweeting about that . Some type of ding. We live in a world now where its scary yeah. Isnt it . Little scary. I blame the cesspool eem li looking at here. Get off twitter im looking at a good picture of myself. Ge power announcing it will restructuring. The cuts are primarily outside of the u. S so you wont necessarily see it pop up did you see this ge stuff yesterday they were talking about it i saw 4500 yesterday. 4,500 was alstom. This is power. 12,000 jobs is that on top of the 4,500 i dont know. Theyre talking about a headcount Global Headcount reduction of 12,000. Power wascaused that problem, i was supposed to be 2, down to 1. 05 coming up, predictions for the new year the economist out with the world in 2018. Theyre impossible a lot of times i might just say crazy stuff and in this world anything can happen. You could be right usually youre not the executive order well talk to about the events to watch in the markets and pop culture. This is electricity. This is a power plant. This is tim barckholtz. Thats me this is something he is researching at exxonmobil using fuel cells to capture Carbon Emissions at power plants. This is the potential. Reducing co2 emissions by up to 90 . While also producing more power. This could be big. Energy lives here. Of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. 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Welcome back youre watching squawk box, live from the Nasdaq Market site in times square. Good morning weve been watching the futures this morning they have been higher today. Well see where things go. Dow up by s p futures up 1 and the nasdaq by 14 2017 has seen a lot of changes, trying to predict what will happen next year is tough, but we found someone whose job it is to do just that. Daniel franklin is editor of the world in 2018 on sale now. Thank you for being here we want to talk about predictions. One thing that jumps out is synchronized Global Growth at least. Its a change from recent times. Theres always been one area or two that has held things back. Now you have big emerging markets out of their recessions. Even in europe you have an optimism of the sort we have not seen a long time in the eurozone, not so much in my own country of britain which has brexit to contend with across the world theres a sense that everything is marching in the right direction. Thats unusuhual since the globl economic crisis started. One thing you do worry about, a concern is an area of tech lash, a backlash against the Big Technology companies theres definitely that here in america and in europe, a sense that these companies have gotten worrying large, the use of data is not always something people are happy with. Theres a whole question of their platforms being used for political purposes and i think we have one thing to watch out for, this big new piece of european legislation coming in next year, called gdpr which will affect american companies, too you think this will ab europe sto be a europe story or also a u. S. Story . I think both. These Tech Companies large loom everywhe everywhere we have suspicions of them, and these large economies of scale accumulate them and make them powerful there will be greater scrutiny of their takeovers and mrernler a sense that antitrust needs to look at them one of your predictions is this is a new era for medicine i feel we hear predictions like that allthe time why is this time different its not saying overnight medicine goes into a new era in 2018 i think well see the first types of drugs, a new category of drugs working at the genetic level being given regulatory approval. When you look back in history and say where did this new era begin, you have much more targeted upstream medication it starts small but this is where it gets going. That might be like a 3 tenyear, i think. Weve been waiting for this. There will be a quantum year where that happens, where all this base ek scien basic scienc its great i was looking at you have a dip in babies being born around the world. Then you have people traveling to other planets, were losing people there losing babies and people there so its shrinking, but you Vice President medicine where everybody will live to 150 maybe we dont maybe the malthusian arguments that we will overpopulate the planet, those may never come to truth. They havent in the past. I think you have also got the other side of that story, the tremendous advances that are happening in Food Technology and Farming Technology if you look at a world in 2050 where you have 10 billion people, you can cope with that in terms of the absolute amount of food needed or send them off to mars. We will need people up there doing stuff. Daniel, thank you very much for coming in. My pleasure. Coming up, a cnbc special investigation into gift cards. This is a big topic for me they found theyre fueling the acmaid epidemic as a form of blk rket currency that report at 7 15 a. M were back in a moment at cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. So thats the idea. What do you think . Hate to play devils advocate but. I kind of feel like its a game changer. I wouldnt go that far. Are you there . Hes probably on mute. Yeah. Gary wont like it. Why . Because hes gary. phone ringing what . Keep going yeah. laughs voice on phone its not millennial enough. There are a lot of ways to say no. Thank you so much. Thank you so were doing it. Yes we got a yes start saying yes to your companys best ideas. Let us help with money and knowhow, so you can get business done. American express open. Hello there friend hi hey there. Im an Imaginary Friend of a kid just like you. Youre going through a lot right now and i know youre scared. But youre stronger than you know. But look, well get through this together. And remember. We at the Imaginary Friends society always have your back . Still to come, Colby College is in the middle of a massive Fundraising Campaign. Well talk about the schools president about the future of education and Student Loans and more first, as we head to break a quick check of whats happening in the european markets. The cac and the ftse are barely holding on the dax is up 0. 2 this is weaker than a half hour ago. Well continue to watch it squawk box will be right back. Hey yeah . I switched to geico and got more more savings on Car Insurance . Yeah i switched to geico and got more. More savings on Car Insurance . Plus motorcycle, boat and rv insurance geicos got you covered like a blanket houston . You seeing this . Geico. Expect great savings and a whole lot more. Looking from a fresh perspective can make all the difference. Geico. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Welcome back to squawk box. Colby college launched the largest Fundraising Campaign in liberal arts College History here to tell us more about the 750 million initiative, gavin green is here, the president of Colby College. He has a backer not coming on the air right now. Should we say whos over there jamie dimon no, robert dimon. The other dimon. Say hi, even though you dont have a mic on, say hi, we have a camera on you for just a second. Nice to see you. Lets talk about this Campaign Just as importantly, weve been talking about tax policy when you talk to donors right now how are they feeling youre having big asks out there. Youre in the bigask business right now. Whats going on . People are excited about this campaign we started this Campaign Just over a year ago, we raised 380 million in the first year, the singlebest fundraising year ever at a liberal arts College People are excited about supporting the liberal arts. So a lot of times people have been critical, dare i say, of the liberal Arts Education, especially in this environment because everyone says i need my kid to be an engineer, i need my kid to be coding, i dont want my kid to be doing russian literature or english. You hear that . And i think the Value Proposition of a liberal Arts Education is important this is one of the things our campaign is addressing were focused on making sure our students have an extraordinary set of opportunities to complement their education so every student who comes to colby is having research experiences, global experiences and internship experiences that help connect their liberal Arts Education into the world and the problems of the zblorld are you going after mostly money from alumni mostly alumni and people from our family. Whats a big ask. I want to know about the actual process of the ask and how do you feel when you get rejected i would have a very hard time with this. Is that right i would. How do you do a show every morning . I dont reject him, i try i to help him. I dont reject him. The good part about this is its easy. Im not asking for myself, im asking for a cause i think is extraordinarily important and the reality is that philanthropy is deeply personal so the act of asking people is about getting to know them, understand about whats important to them and where they want to make a difference in the world. Tell us the process people have been on boards of different philanthropies when they think about im going after this guy who is the big whale, this guy has a particular interest so maybe i need to have lunch with him first to set it up explain how this goes . Dont these folks from cornell talk to you all the time theyre always asking i know what its like from the other side. Really its about understanding people and whats important to them in the end. So if you are on the other side, whats the best way to do this i mean this for real sometimes people say ill give a donation now, sometimes they want to make a fiveyear commitment where innocent to make a same amount for a certain period of time sometimes they give stock. Whats the best way to do it and at the same time if you feel like you cant do it, whats the nestest way to say no or i want to do something but well figure it out later i tell our donors i want you to do something you love and feel good about it, if you dont feel good about this, it wont be a great gift but if you care about it and you want to do it, it will be great from all sides, we want to a structure a gift that makes sense for you so for some people it may be a tax incentives, for others over five years. See how he did that i want to give him money right now. This whole idea of taxing endowments of private institutions how will that affect you it depends on how this comes out with the new tax bill but let me say this. One of the things that will hurt is the students who need it the most our endowment kicks off about 38 million, our Financial Aid is 38 million a year so the people who are going to get hurt are students coming in the second group that will get hurt, all those cities and places in our economy that have thrived because of the innovation of our great institutions and any time we start taxing innovation, were going to be hurt. David, thank you. Mr. Grasso, thanks for having out. Thanks for letting me hang out. Please come back. Thanks, guys. How come youre leaving coming up, our cnbc Investigative Team was doing a piece on gift cards and found theyre being used as currency in the black market for opiates. That report, which is special, very special, straig aadhthe im here to talk to you about how at t gives you more. And so am i. Like how when you buy the amazing new iphone 8 you get another one on us. See we give you more phones and more spokespeople. Are you guys doing a spokesperson thing right now . Yes. Awesome, can i be in it . Well, its kind of like a twophone deal. So two spokespeople. Got it. K. Thanks. At t its time for more. Its time for more. Buy the amazing iphone 8 at at t and get a second one to gift, on us. Wall street pointing to a higher open as investors await more development on the tax front from washington. The latest market news is straight ahead another day another record for bitcoin, the Digital Currency hitting another milestone this morning. Thousands, it seems like, everyday and breaking this morning, again, thousands here but unfortunately fleeing in Southern California as huge wildfires intensify. A live report from the front lines coming up as the second hour of squawk box begins right now. Announcer live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box. We are live from the Nasdaq Market site in times square, im Andrew Ross Sorkin back from china. The futures right now, take a look we have some green arrows. The dow looks like it will open up 12 points higher, s p 500 well call two points and the nasdaq 17 points we have two economic reports scheduled for today. Weekly jobless claims at 8 30 then at 3 00 eastern time, look for october Consumer Credit. We talked about it earlier, lululemons earnings revenues rose 14 the company says the Holiday Season is getting off to a good start. It saw the highest traffic and largest sales ever on black friday and cyber monday. Youre seeing that stock up 8 you dont want to miss this, lululemons ceo is going to hang out on squawk on the street after the market opens we have two key gop house members telling ylan mui that a 22 Corporate Tax rate is now on the table. Thats higher than the 20 posed and the news coming as republican lawmakers look for ways to pay for their massive overhaul plan. We have more on that in just a bit. What are you smiling about you knew we were going to 22 . Just the way it was written its at 22 , then you said the 22 is higher than the 20 weve been talking about 20 . But just the way it sounded it was like, okay you mean 22 is more than 20 thanks for that tidbit. Give the president credit for this. Its two points higher, right . Two points. See. He was locked and loaded for r 20 because if they got in earlier we could have moved to 25 . It still could, by the way. But there were a lot of things that if you stay at 20 theres a lot of things that theres a lot of dislocation. If you go to 22, the passthrough becomes easier. Get to 23, 24, youre still competitive. Well youre most concerned with the passthrough rates since youll be quickly switching to the Andrew Ross Sorkin llc, right . Billions, deal book the conference the side hobby on squawk boxs you do. Not an llc, an escort im at escort, not an llc. Whatever will get you down to 22 youll be. You have someone working on it. Then theres this, everyday its unbelievable. Bitcoin crossing the 14,000 mark thats less than 24 hours when it crossed the 12,000 mark and its already traded above 15,000 and thats happened only along some platforms. A half hour ago it was 14,800. So youre talking about its volatile. Incredible swings every ten minutes. Yes joining us is brian kelly, founder of Brian Kelly Capital and a fast money contributor hes the author of the bitcoin bang and specializes in additional currencies and crypto currencies what do you think . As much of a fan of bitcoin as i am, this is a speculative frenzy you mentioned that some of these exchanges are trading above 15,000. So look at coin base in particular and thats the retail onramp raiding at 5 to bit stamp which tend to be the more institutional ones it tells me youre seeing a speculative retail frenzy. Is there liquidity in the market if i buy and want to get out, can i 134 . Sure, no problem. Bitcoin traded more than apple on a daily basis it trades as much as the gld etf. Theres plenty of liquidity. Does this go up bitcoin itself is about a 250 billion market cap. If it takes 5 of the market cap in gold youre looking at a 25,000 price target i dont need to make a massive assumption to get there. Do you know for sure whether five years from now were going to look back, are we going to say well, that was the early days of this ubiquitous thing everybody has or will it be looked back on like 1999 was looked back on there will be pets. Com in this space there are pets. Com you look at 1995 if you look at the internet in 1995, thats where you are in Digital Currencies. Have you seen jim i have. Is he early i would say ignore him at your own peril. This is an asset that has gone straight up so as much as i love bitcoin, an asset that goes straight up investors have to be careful. That being said, theres a massive runway here for Digital Currencies as an asset class. Thats a big distinction, youre not saying boyne will be the one that thrives along the way. Digital currency is very different. You could buy these things and be a huge loser but you could see some Digital Currency down the road just like the internet. Can we say that the winklvi got the last laugh on Larry Summers . Larry summers yes, Mark Zuckerberg maybe not. They might be worth a billion now, what . I think they are, they made an 11 million bet and its like 6 billion. Do they need one more thing if you are a Value Investor in the crypto world, what crypto currency are you supposed to buy . I think near yum is a 40 billion roughly total value right now. Can you call yourself a Value Investor on any of these things . Youre not going to be able to use what we consider traditional metrics, right you need to look at it a value speculator. Yeah, a value speculator, etherium is the new internet they are thousands of the smartest minds building things on top of it. You think that has bigger opportunity than bitcoin absolutely. Just so i know and my own ignorance, theres a thing called etherium and etherium classic in. One has cap supply, wasnt doesnt. Ee etherium says we will only have so many coins regular habit made that decision. Who is making that decision the community thats a community decision. You have to have 51 of the community agree on what this decision is. Democratic currency is very complicated. Its very millennial, its a social network of money. Thank you for coming in. Any pleasure, thank you for having me. Joining us is karen cavanaugh, Senior Market strategist at voya Investment Management also kamal kumar who is president of kamal Global Strategies with thank you both for being here lets talk about the tax bill and the implications that has for the market we have seen stocks climb significantly at this point, a lot of it around this idea this looks more and more likely to happen we dont know the details and i wonder how much that matters what do you think . I think what is important is what the tax cuts are. Im not one who believes any tax cut is going to be immediately stimulative. 23 you look at what the market has been saying since saturday morning is that the two to tenyear spread on the treasury has come down to the low 50s its signaling slower economic growth, not a pickup. You think thats a reflection of what they see in the details to date . I think it incorporates the details of the tax package among other issues, and if you look at the unit label cost which came out yesterday. The Second Quarter and Third Quarter the unit label cost has been falling it is negative joe and i have talked about whether inflation is going to pick up and bond yields are going to rise theyre not so the bond market even in 2007 and 2008 has been a better predictor of the economy than liquidities ever were. 232. Ands where your big growth . Its not happening. Its testing the low end of the unit range. But i think thats indicative of whats going on in europe no matter what we get for tax reform i dont care if its 22 , i dont care if its 20 , it will be stimulative and we will see growth i think this is the year we see the growth weve been looking for for so many years. For u. S. Or globally . Well, globally were already seeing that synchronized Global Growth and we havent seen that in quite a long time with so many countries moving forward at the same time. But here in the United States, weve been muddling along with 2 this is going to be the year when we see 3 numbers and weve seen backtoback 3 gdp and anything we get from tax reform is going to be good for the economy. Its going to be stimulative and well see growth. The last time we had synchronized Global Economic growth was a great time period, the first half of 2008 and we had the European Central bank increase Interest Rates on july 2, 2008, thinking the Global Economy was in a full boom. Wait a second, you think this is a replay of 2008 . There are clear signals of danger at the very least im starting to say the two to tenyear spread narrowing is suggesting extremely slow growth with the potential for a recession beginning as early as late 2018. 2008 when this happened Interest Rates were high enough we had room to bring them down Central Banks were able to do that to ease the way through the recession. What do we do this time . You start to cut Interest Rates again, you go to negative Interest Rates until banks have told you there is no limit is to what they can do that i think is a much bigger risk. What do you think about the thesis of 2008 in 2008 earnings were rolling over that was a clear signal. That was the canary in the coal mine the canary was wheezing so there was signals we were heading into negative territory with the economy. Right now corporate earnings are not showing that in fact, theyre accelerating. We think Fourth Quarter is going to be good, 2018 is going to be good i look at earnings errings always tell me what will go on and we saw that clearly in 2007 we saw earnings were actually declining year over year sri, last time it was because of financial moverings that took place, it was because the Housing Market had been built up into this frenzy and we saw a national decline in housing prices what causes a ae session this time around . You have a significant increase in debt levels in all cases, consumer debt, corporate debt has been bloated up too low Interest Rates for too long a period of time has been extremely stimulative so the debt situation has worsened and you have global risk which are i think significant, china, where i was recently, the debt level is increasing. At some point in time they are going to allow more defaults to take place that will have global repercussions and we dont even figure in north korea as to what developments could take place. You have global issues as well as debt buildup and those are the big reasons where i think any one of those could cause the trigger. It takes two sides to make the market you laid out the two sides perfectly today. The canary is wheezing . Canaries i dont think that canaries are either like this and then you look at them and then theyre like this i dont think that youve never seen a cartoon. But what is it with voya and animals . You have the squirrels, the little rabbits now youre talk kag naries its weird. Canary in the coal mine but youre mixing ining whee i wont use any more animals. Tweety may have wheezed. Youve never seen cartoons. The canary is singing right now. Thats a good thing. We dont have to worry. The fat lady isnt singing. You can say that. Its not i will say fullsized gal. Youre so p. C youre darn right i am. Thank you both karen and sri. Appreciate it. Separately, food delivery is a 100 billion plus market and uber making a big play for it. Youre here with some new numbers from the ride sharing. And a rare nonterrible uber story but we have new exclusive numbers showing as ubers, the food Delivery Business, expands into more cities and countries the number of profitable markets is growing as well look at this chart as of october, ubers food Delivery Business was making money in about 40 of the 165 cities in which it operates. Compare that to march of this yearuber eats was in 71 cities and profitable in just three of them you hear a great deal less about ubers food Delivery Business but it is a rare bright spot for the company. The new ceo has had his plate full with legal battles, crises from before and after he joined, he said uber eats was a pleasant surprise and he plans to grow it further in 2018. At the same time, uber isnt the only one that wants a piece of this 100 billion market its a crowded space that includes grub hub, a Public Company, caviar part of square, postmates and amazon through its prime now program. What makes uber different is its already Inplace Network of more than 2 million drivers globally and technology that has mapped out the most efficient city routes but amazon has that, too, it just hasnt made as big a push into the space. So an area heating up its good news for consumers if you can get things more conveniently. Theyve had a partnership with mcdonalds, which mcdonald says is going to expand to 10,000 stores. And jeffrey says the Uber Eats Partnership is going to lead growth next year so it has to be doing well if theyre expanding this much, you look at grub hub which is up 80 this year and its a 100 billion market. Did they say anything about profitability . Growth, yes but that does mean profitability . In terms of mcdonalds . No, uber eats. Whats interesting is they enter cities with food delivery before they do ride hailing, like tokyo and seoul theyre profitable in 40 cities which is remarkable when they were at the beginning of this year in march, just profitable in seven cities. On the eats product in the specific markets so the market could be the San Francisco bay area, that is one. Who was first, stubhub or grub hub stubhub does tickets, right yeah, who was first grub hub was 2004 so ill tell you this, seamless was first. Yes, 1999. Seamless was pregrub hub, grub hub bought seamless ill work on stubhub, though. Stubhub is a great product. If youve got no tickets you can get them. If youre willing to pay. The founder eric baker left stubhub in 2004 so it was pre2005 when it was created. Its kind of an elitist thing. Stubhub is elitist . It was yes ycreated in 2000. Ive been in a restaurant in florida and its twohour wait and you can buy stubhub no im trying to grease the maitre d and theyre saying no. They do that. There is a Service Called reserve in new york where you can pay for your reservation you pay extra. Thats elitist. Totally. You can do that in San Francisco, too thank you coming up when we rush this is a fascinating story. Gift cards, everyone more issues now. They are apparently fuelling the Opioid Crisis. A look at how drug users are targeting some of americas biggest retailers. Well talk about that after the break. And later, just how much has the nations work force grown over the past year . Thats the question. The latest data fromindi lken, stay tuned, youre watching squawk box here on cnbc. Is this a phone . Or a little internet machine . [ phone rings ] it makes you wonder. Shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. Choose by the gig or unlimited. And ask how to get a 200 prepaid card when you buy any new samsung device with Xfinity Mobile. A new kind of network designed to save you money. Click, call or visit today. Oh, were on tv. Hes doing his coffee. I am. Priorities its the time of year when Many Americans decide the best gift is a gift card. That easilyavailable ticket available to virtually every major retailer in the country but a cnbc investigation reveals i would havent thought of this a shadowy world where the cards are fuelling the Opioid Epidemic and the nations major retailers are grappling with whats become a deadly gift. Contessa brewer has the exclusive story. Reporter inside some of the countrys biggest retailers there is a shadowy world of commerce, crime, and drugs and at the center, gift cards. Are gift cards currency you can use to pay for drugs yes. Most definitely. Just saying reporter by all appearances these four women could be tidying up whatlooks like a college dorm room. But this is no university, its rehab. That worthlessness, that i mean that guilt and shame i feel everyday that i chose drugs over my son everyday theres no way to describe that to you no way reporter and these women arent students, theyre patients struggling with crippling addiction. Ive deficit . Ly stolen. I have tooken advantage of people reporter they sat down with us at a drug Treatment Facility in jacksonville, florida 23yearold kristin booths drug of choice, oxycodone and heroin. Shes been arrested twice for gift card fraud. I would take things off the shelf, left the store so on camera it looked like i purchased the items, come back, go to customer service. And some of the Biggest National retailers are the biggest targets because of relaxed return policies. I would go to home depot, lowes, walmart, take stuff, leave, go to another home depot, take it back and get a gift card reporter but more often the cards get sold to third parties, corner stores, pawnshops and special the i retailers make it easy to get cash and online exchanges like rays and card pool buy and sell thousands of dollars banknorth of cards at a time. As an addict, you learn this stuff. I dont remember how i learned it, i just learned it. Every addict i spoke with coast to coast told me they know about the gift cards for cash scheme and every agency i called told me they have seen an increase in shoplifting, return fraud and gift card abuse they believe is tied to the Opioid Epidemic the National Retail federation estimates stores lose as much as 15 billion a year in return fraud and retailers have begun changing their policies. For instance, were looking at home depot home depot says it will only issue nontransferable merchandise cards. Theyre going to tie them to the person who returns the item and then when that person goes to redeem it they will be asked for i. D. So thats a great way to do it to make sure youre not but it changes the like these rays. Com. Already were seeing raise. Com and the local stores that would accept gift cards cant accept home depots instore merchandise card anymore because theyre only allowed to be used in the store not online. But this is a round trip somebody shoplifts a product, returns it to get the gift card . Thats how it works . Right but heres what the addicts told me they said if you block our way, if you tie it to our i. D. , well recruit other people then to return the items and to go get the gift card. This is such an intractable problem. I hadnt thought about it with the gift cards before but if youve been related to or loved someone who is an addict, you know you cant give them anything you dont give them cash because you know what happens with that, you give them gift cards thinking that will work or you buy them something and give them a return if they want to return it you cant give someone any form of currency. Its rare to find someone who isnt affected in some way by addiction and heres what you know i know youre struggling and need food so im going give you a Grocery Store gift card. Guess what they are taking those Grocery Store gift cards and sometimes the dealer will accept them directly for the product. What about food stamps . Theyre involved because in our investigation what we learned is that people would go in and buy from walmart or from publix steaks with their food stamps and then theyd get a gift card. What do the dealers or what not pay . Is it like 80 cents on the dollar sometimes as little as 25 cents on the dollar depending on how desperate think of it from the dealers perspective. If you have someone offering to pay you with a walmart gift card you know theyre desperate and theyll take 25 cents worth of product. The true solution is what youre talking about, what home depot is doing saying were going to crack down on allowing this to come through the door if you want merchandise, youll get the merchandise and nothing else. But the addicts told me theyll try to figure out a way around it. So for instance they go through the garbage at home depot and find receipts where someone has paid cash for the item, steal that item and take it back but they said if you put an obstacle in our path, it makes it that much harder for us to get there. Right its such an Incredible National problem and trying to find ways and solutions around it. Thank you. Amazing story thank you for bringing it to us. Still to come, we have a lot to talk about. The state of the nations work force. Linkedins editorinchief dan roth will join us after the break to discuss their latest read on whos hiring as we head to the break, look at futures, the dow looks like its dipped were off five points, nasdaq opening five points higher and the s p 500 up over a point. We are back in just a moment take a deeeep breath in. And. Exhale. Aflac and a gentle wavelike motion. Liberate your spine. Aflac and reach, toes blossoming. Not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. So he had your back . Yup in just one day, we process, approve and pay. One day pay. Only from aflac the chase mobile app changed the game for us. We had this plan to go to the hottest place on earth, harness the energy from the sun to develop popcorn. We thought we had the right equipment, we quickly realized we needed more. We were able to send a Wire Transfer to a local vendor and get more Solar Cookers delivered, right here in death valley. Manage business expenses from virtually anywhere. The chase mobile app available with business checking. Chase for business. Make more of whats yours. Good morning, welcome back to squawk box on cnbc, were live at the Nasdaq Markets General Electric cutting 12,000 jobs from its power unit. Most of those positions are outside of the United States this is part of the companys Restructuring Plan to reduce costs. Youre looking at that stack up marginally, check out shares of broadcom, theyre projecting Current Quarter numbers above analyst estimates and that may be helpful to them in their quest for qualcomm, we will see. Roger goodell hassigned a fiveyear contract extension to stay on as the nfls commissioner the deal runs through 2024 its been a source of a lot of controversy after jerry jones raised objections. Roger goodells contract is reportedly worth nearly 200 million with a base salary of 40 million a year he became nfl commissioner 2006. Since then the leagues revenues have more than doubled to 14 billion. No word i have that seen yet on whether the plane, the lifetime plane or Lifetime Health insurance comes with this transaction or not. I read that if everything doesnt go perfectly he could make quite a bit less than hes made in previous years still sounds good. Yeah, i dont know about you know what we would do it for i dont know. Were still are you saying were available. I think youre under contract. They could get us cheaper i wouldnt need 40 id do it for 39 and i dont need a gulf stream, id do the turboprop. Im sure the nevil owners are clamoring. You know who would have done it condi for less shes always wanted that. What are you going to do she can do it next time around. Weve really got to move on, im told you know what im going to do . When i talk to dan im going to waste time at the beginning. Hiring is up over 10 this career according to linkedins latest work force report and well talk about that first i have to figure Something Else out. Dan roth is here, editorinchief of linkedin. Who are these people that keep asking me to let them in if they ask once, does it keep happening . Or do they have to reask every time dont you tell them im not on linkedin im not blowing them off. Primarily its nfl owners reaching out to you. [ laughter ] theres some people i know and i feel bad. You dont know how to let them in. When jerry jones invites you to be a friend he wants to connect with you, you have to accept it. Lets get to that 10 number. We talked off camera theres a perception that when we had this huge labor pool four or five years ago thats when we were getting to 220 every month so i thought it was slowing because of the tightness of the labor force. Youre saying 2017 was the best year weve had. Thats right. How does that work . These are gross hires youre seeing people feel comfortable changing jobs and if you look at the sectors driving the hiring, its oil and energy, manufacturing, autos, construction, people want to buy stuff. People feel much better about the economy, theyre willing to buy, you have to have the equipment to buy it, theres a weaker dollar, mixed manufacturing makes more sense so it was a year to toast if you were a job seeker primarily because there were opportunities out there. And by the way its still strong thats what i was going to ask i wonder what our chances is for next year if there is tax reform and if corporations have theoretically have more flexibility because they dont pay as much in taxes you think we get 10 again if you look at the big jump the big industry that showed the most gains in november, its finance and that was an industry that hasnt been showing up on the list but it certainly looks like they are getting ready for deregulation, making it easier to hire, feel some animal spirits. In terms of the tax, one thing numbers are showing is that people are increasingly all year they have been leaving hightax areas for cities where there are lower cost of living. Thats talk about that. All of us here, the three of us, are fascinated by rich people and i think some of us maybe a little bit more. He goes to see dalio, jack mah, youre fascinated by go zillionares. m fascinated by successful people and im fascinated by people who have also had great failure. Weve done interviews in prisons. Im fascinated by people who are suffering. Im fascinated by interesting. Curious. Hes always talking to rich people so dalio is worth and hes got the most successful hedge understood so if he writes an article for linkedin, well be interested in it hes saying the salt stuff in this tax bill is going to the exodus weve already seen is going to be greater to places like austin or denver or even florida. But we dont know what the final bill will look like at this point when high earners face higher taxes they leave states and hi thinks even if a few of them, even if a small percentage leaves it has a huge impact. I thought the high earners were getting the benefits from the tax plan. If they feel like they are being overtaxed in their state, they leave the state if you look at the big cities that gaped professionals, seattle, austin, denver, those line up with the states that are lowtax states. This is an allegory we should think about in terms of just the country as a whole having a high Corporate Tax rate theres a Reason Companies leave, too, when taxes are too high you dont believe that i think there is a the issue dalio brings up in this piece is that once you have the high earners leave who make up 30 to 40 of the states tax revenue, thats less money. The states have to keep paying for services. Then theyll raise taxes even more. And more people leave. Wheres the polarization come from because you have states where people feel like they are overtaxed and not getting enough services, the rich people are all better off, going somewhere else he thinks it becomes a rich versus poor and taxes will be pushing us towards that direction. So thats looking at the unintended consequences of what congress is contemplatinging . Do you see any benefit in his piece he doesnt raise any benefits you could say people are moving around, youre spreading talent, that there are people are going different places and starting companies in new areas but what dalio points to is a problem that doesnt have an easy resolution. So in linkedins metrics do you see a shortage of stem people is that evident . Is that something we need to do . There is a demand for tech workers but there is a much larger demand in all of these cities for people in health care, teachers, retail workers, every month ive come on here and weve seen the same thing, the skills gap in these highgrowth cities especially are for people who can provide services and health care is one of those areas that you cant automate away if youre a Home Health Care aid, you have to be able to walk in and perform the service. Weve been complaining all day about how we havent seen Wage Inflation yet, about how companies arent paying up despite the skills scarcity. What do you think is happening there are enough people willing to move to go to these places i think companies are letting jobs stay open, they dont want to pay more. And there is automation thats coming this has been a great year for job growth but i wonder how much longer it can go on. All those industries i listed before are most easy to automate those jobs away. Oil, manufacturing, autos, you bring in much better machinery, much better equipment, artificial intelligence, how to do it, how to perform these positions with fewer people, you just dont need the people. You are one youre seriously, dude . Youre a contributor you made it . You are now a cnbc contributor one of our newest cnbc contributors. This was usually only a quarter filled with water, its now half filled. It can be a huge Holiday Season at the dan household this year. Absolutely. Dont blow it all. We have pictures up of you guys on the walls. You should. Were a big part of the income now. Thank you. Coming up, wildfires in we dont actually contribute anything to your fee as a contributor, do we just well, we have to be here for there to be a contributor i guess. Im going to start contributing more on inkedin how about that you can join. Youre on linkedin. I am on linkedin. Are you on linkedin yup. New years resolution, were getting you on linkedin 2018. Does that one not lose weight or this is the only one that matters. Greco is crying. That will be a new years resolution, greco, ill listen to you california, this horrible fire in the middle of los angeles. Tens of thousands of people are under evacuation orders and winds are expected to be fierce today, like above 50 miles an hour, even higher. The fire has destroyed nearly 200 homes and buildings anthd at number is almost certain to grow with a live report coming up next. At t. Rowe price. Weve helped our investors stay confident for over 75 years. Call us or your advisor. T. Rowe price. Invest with confidence. And highdividend strategies. Sure, these are investments. But theyre not what people really invest in. What people really invest in, is what they hope to get out of life. But helping them get there takes a pure focus. Because when you invest their money without distraction, hidden agenda or competing interests, Something Wonderful can happen. They might just get what they wanted out of life, and maybe even more. Welcome back, everyone several massive wild fwiefires burning out of control in Southern California. Adidi roy joins us good morning, belair is one of the most exclusive areas in l. A. And up until 20 minutes ago this street was lined with fire trucks guarding it lets take a view from above the big challenge is the wind gusts in the area. Firefighters are battling four major blazes across los angeles and surrounding areas. The winds are projected to reach 80 miles an hour overnight the head of cal fire said in a press conference yesterday that amid those windy and dry conditions they have no ability to fight the fires emergency officials have also raised the wind threat level to purple, the highestever recorded so far the fires have scorched more than 100,000 acres, 150 structures have been burned down Los Angeles Unified School district classes have closed today and tomorrow classes at ucla have been canceled the j. Paul getty museum, another iconic area landmark, thats also under threat and so is a winery and estate owned by Rupert Murdoch and were not far from that. Resources are pouring in from all over the country including firefighters from nine states and we understand that all of the nations firefighting planes are in use here. Andrew, back to you. Thank you for that. Stay safe and keep us updated on what is going on its a sad such a remarkable story of whats happening there. When we come back, we have more to talk about recode releasing its inaugural list of 100 leaders in tech and bune e names. Well tell you about them right after this short break back in a moment what is the power of pacific . Its Life Insurance and Retirement Solutions to help you reach your goals. Its having the confidence to create the future thats most meaningful to you. Its protection for generations of families, and 150 years of strength and stability. And when youre able to harness all of that, thats the power of pacific. Ask a Financial Advisor about pacific life. The moment a fish is pulled out from the water, its a race against time. And keeping it in the right conditions is the best way to get that fish to your plate safely. Bacteria can multiply to high enough levels that even cooking it will not destroy all of them. Its definitely the most important thing in my business. How fresh is the fish . Where it comes from . How it gets here. The more i know, the better. Sometimes the product arrives and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. We took our world Class Network and we developed devices to track environmental conditions. X x x. Ppening not only with the location of that asset, but also if its too hot, if its too cold, if its been dropped. Its completely unique. We ship fish, beef, poultry, vaccines, insulin. This is about monitoring and protecting everything we ship. I catch all this amazing, beautiful fish and then once its out of my hands, i have no control over what happens to it. If you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. Its really all about the network. You are looking at trillions of transactions a year. Not too Many Companies in the world can even scale to that type of volume. Who knew a tiny sensor could help keep the food chain safe . Food has to be fresh. Its that simple. Welcome back to squawk box live from squawk square. You said it, yay i saw it on the screen. I do what im told. Why wouldnt you say it thats where am i the dummy or the ventriloquist . Recode releasing their inaugural recode 100 recognizing the top 100 leaders in tech and business that have made the biggest impact in 2017 joining us with that lis frommer, recodes editorinchief. Good morning. Do you want to do this with surprises or start at number one . We should start at the top. It was a weird year and some people actually got stuff done. Tell us about who got stuff done then. Number one, i think in this was not only from our Editorial Team but also our community and a panel of advisers who are truly the peers of these winners chose jeff bezos by far as number one, ceo of amazon, someone who made a huge bet for the future this year, a weird bet buying whole foods but also managed to take over a lot of mainstream usa with the hq 2 competition this year which i think got way more attention than any of us realized. Who would be the big underdog surprise name that maybe our viewers dont know or pay enough attention to that they should be well, i would say thats number two, susan fowler who was an engineer at uber and left and just basically wrote a blog post saying it sucks to be a Woman Working at uber. Probably not thinking it would have a huge impact and boom, over the next several months essentially the whole head of the Company Ended up leaving, including ceo travis cal nick. So massive effect and i think domino effect that you could argue led to a lot of the bad men from leaving their position this is year. Quick question on this. Susan fowler is writing a book what do you think shell end up doing . Is she back in tech . Well, shes currently working at stripe which is a startup in Silicon Valley i dont know i think she could do whatever she wants at this point. You had a couple other names on that list we just showed it on the screen. Jodi kantor at the New York Times who wrote about Harvey Weinstein was on your list a couple of others any other names in tech, though in terms of ceos or entrepreneur startups that we havent spent a lot of time or enough time paying attention to . Stitch fix went public this year a lot of Startup Entrepreneurs on the list. But i would also say big ceos had a great year, too. For better or worse facebook had a big year but look at apple, apple could be up 20 billion in sales this year over the last year. What was the biggest among the editors and advisers thinking about this, who was the one name that caused the most conversation and controversy without a doubt donald trump. It would be impossible to say he was not the biggest business story in the world does he belong on our list where were celebrating people who had a great year carry swi kara swisher made our second list called the terrible 10 where trump is number one and you could read about that at reco recode. Net. Dan, thank you very much for the list you can check out the list on recode. Thank you. When we come back, amazons purchase of whole foods and its plan to shut down its amazon wine business is creating a buzz in the beer and spirits sectors. That story is next squawk will be right back. So youre looking for male customers, ages 2554, who live within five miles of your business . Like these two. And that guy. Or maybe you want to reach women, ages 18 to 34, who are interested in fitness. Namaste. 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Also the beer, wine, and spirits compani companies will see the order and delivery process for getting their brands into consumers home other potential winner, alcohol distributors that strike deal to supply the hundreds of Amazon Distribution Centers around the count country. Who loses out . The distributors shut out of servicing the centers. Also startups like mini bar, drizzle y post mates who are drying to be the uber of alcohol abili ability. The local Liquor Stores losing out with the likely loss as customer traffic when ordering becomes as easy as saying alexa, order budweiser. In short term, all involved will face higher cost do to initial investment capability as ecommerce seems more real business than before and in the long term the threat of amazon getting into private label alcohol products could prove to be a real buzz kill for the alcohol giants back over to you. My amazon account just ordered budweiser. I just made your night, andrew. You did thank you for making the weekend come early appreciate that. See you in just a bit. When we return, congressman john yarmuth is going to join us, Ranking Member of the House Budget Committee on the impact of the tax plan and what it will have on our nations deficit plus, the latest on the wildfires in Southern California thousands have been evacuated, hundreds of structures destroyed and it will lyon get worse strong winds expected today. Squawk returns in just a moment. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Win an uncertain world . K predictable income pgim sees alpha in real assets. Like agriculture to feed the world. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over 120 billion dollars in real assets. Partner with pgim. The Global Investment management businesses of prudential. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Two big stories were following out of washington first, the fight to fund the government. Reporter sir, is there going to be a shutdown. It could happen plus, hammering out a final tax bill well talk to a key player at the negotiating table, senator john cornyn. Bitcoin hits another new high the market value now 256 billion. Plus, americas retailers targeted by drug addicts. Would you mind explaining to me about the gift cards . An investigation you can only see on cnbc as the final hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york, this is squawk box. Good morning and welcome back to squawk box here on cnbc live from the Nasdaq Market site in squawk square. See, they put times square in for me, i just change it with you you now say squawk square im joe kerrnen with becky quick and Andrew Ross Sorkin the s p is indicated down less than a point and the nasdaq diverging and is indicated up about eight points not as much as boib but itcoin. Check out the price of bitcoin. The Digital Currency crossed the 14,000 mark late yesterday less than 24 hours after it crossed 12,000 and just this morning it has already traded above 15,000 on some platforms. Right now we are 14,612. Heres what else is happening. Ge power will cut 12,000 jobs as part of its restructuring efforts, about 18 of its work force. Theyre working on cutting a billion in structural costs. The positions are primarily outside the United States. Right now General Electric shares up by four cents. Check out shares of Dollar General. That stock trading higher after reporting earnings that came in a penny below estimates however revenue beat and same store sales were up by 4. 3 . The retailer said hurricanes resulted in increased traffic and higher spending at its stores the stock is up by almost 2 . A developing story in california thousands more people evacuated in the southern part of that state because of wild fires, the National Weather service is predicted Near Hurricane Force Winds from the santa ana winds, about 70 miles an hour thats going to make the spread of the fire rapid and unpredictable. The winds are expected to continue through friday. Sources telling cnbcs cnbcs david faber, not cnbcs bob iger that bob ieger er igey to remain ceo of the company if it buys parts of 21st century fox. That is true, i can also say thats true as well. Sources saying that fox continues to view disneys bid as superior to others but Companies Like comcast and verizon are still in the hunt for some of foxs assets in particular, the reason iger would stay is in part because of murdoch believe if the transaction were to go through he wants him around as part of the transition given that you want the guy who made the deal to be invested in the deal to still be there as weve said, cue the conspiracy theories about the political machinations of whether iger would then no longer be able to run for president of the United States if you thought that speculation was real to begin with. I dont think of rupert and iger being particularly aligned. No, thats why im saying cue the conspiracy theorists. Lackland and james are more align aligned. But, remember the channels that were going to disney are not that doesnt include fox news. And the new speculation its not even new is that they would take those channels and potentially take that money and use it to take newscorp, the newspaper business, private and merge those assets together. In the meantime, Democratic Leaders Chuck Schumer and nancy pelosi are heading to the white house today as the house tees up a vote to try to avoid a Government Shutdown ahead of fridays deadline. Kayla, what can you tell us. Good morning, becky the house moved yesterday to vote as soon as today to keep the government open for two more weeks, setting up a potential Shutdown Scenario three days before christmas as texas republican Pete Sessions notes, to buy republicans time on tax reform. Were now trying to work through what would be one important bill, and this is the tax bill and i think a lot of issues are now turning to this so yes i would say in my opin n opinion, it would be my best opinion that december 22 we better come up with an answer. That gives republicans two weeks to negotiate through a fullyear spending bill that includes a large increase in defense spending democrats have been asking for an equal increase to Discretionary Spending and some democrats are pushing for protection for d. R. E. A. M. Ers, despite the fact that a deadline for that decision is not until april and that the president has been working behind the scenes with some republican senators to do that. Trump yesterday because of that pinned the blame on democrats if the government did shut down but the real fracture right now is within the republican party. The Freedom Caucus wants Republican Leaders to hold the line on any new spending and make guarantees that the short term bill would continue defense spending for longer than that twoweek period. Gop aides say there is a broad agreement after Freedom Caucus chair mark meadows met with leadership multiple times yesterday. The Freedom Caucus was set to meet again as a whole last night but im told that meeting didnt result in any official formal position or acceptance of a deal by the Freedom Caucus. Well see if they come around today. Thank you very much. Joining us to talk more about it is congressman john yarmuth, the House Budget Committee Ranking Member thank you for being here today. Good to be with you. How should we be thinking about this we havent spent much time focusing on these talks because we thought it should be wrapped up we now were finding out this was not the case. It should have been this deadline was coming two and a half months ago and instead of dealing with the fundamental operation of the government, republicans have been trying to force through this bizarre tax reform package that nobody seems to want and is widely unpopular and there is no urgency about a tax reform package theres no dead date on that but there is a dedicate on funding the government and thats this friday so its been irresponsible prioritizing by the republicans as far as i can tell and as far as shutting down the government, the only one whos talking about that is President Trump. Democrats certainly dont want to shut down the government, we never have trump said earlier this year maybe what we need is a good Government Shutdown so im not sure whos negotiating in the best faith here. Congressman, the democrats havent had any power when it comes to whats happening on the tax bill, thats been completely out of your hands, doesnt matter if not a single one of you votes for it this is a slightly situation when you start hearing what kayla was talking about from the house Freedom Caucus sounds like they laying down the line they dont want additional spending taking place. How will the democrats react to that well, if they have 218 votes in the house they can pass anything they want the reality is theyre unlikely to have 218 votes. They havent over the last few years and if they want our votes they have to deal with our priorities but theyre not just our priorities things like the chip program, Community Health centers, funding for the v. A. As well as daca, those are things that have bipartisan support there are three dozen republicans in the house who signed a letter saying we need to deal with daca before the end of the year. But lets talk about the daca piece for one moment Republican Leaders said yes, we want to deal with daca but we want to do it after the new year, after the budget concerns, after taxes, what is your response as a party to that . Our response is there are a thousand d. R. E. A. M. Ers a week losing their status. There are thousands bhor are making a decision in the next couple of days or weeks whether they enroll in College Next Year while the technical deadline for reauthorization may be march, the reality for most of these d. R. E. A. M. Ers is this is a daytoday risk for them and we need to act fast because were really putting many, many lives in jeopardy. How united is your party on that idea, if there is no daca deal, will there be democrats who vote for continuing the government i dont think that is a dropdead issue for the entire caucus for a certain portion of the caucus it is i dont know what the number is, maybe 40 or 50 who wont vote for any continuing resolution without a resolution of daca but we have a list of eight or nine issues that we want to see addressed and that need to be addressed urgently. Perhaps the biggest Sticking Point is going to be how leadership can find a way to appease the Freedom Caucus and democrats. If theyre agreeing to freeze the line on no additional spending, will they win any democratic votes no. What they want to do is raise defense spending by 54 billion above the statutory caps theyve offered a 37 billion increase in nondefense Discretionary Spending but thats not enough to address things like the Opioid Crisis, emergency funding for the fires and hurricanes, things like that so thats going to be a real problem if they try to hold to that line. The budget control act actually was premised on equal treatment of defense and nondefense spending and theyre not holding up to that end of the bargain and we have to remind them constantly, a third of nondefense Discretionary Spending is security related homeland security, the fbi, a number of things that dont relate to actually Human Services and human needs. We have heard both parties decry the idea of shutting down the government and both parties use the idea of shutting down the government as a weapon or a way to be the people who have no power who suddenly have a way to use power. Tell me what you think about the idea of shutting down the government, if its a good idea to do that and what this means for the economy if we do see a Government Shutdown. No, its not a good idea back in i believe it was 2013 we shut down the government for a couple of weeks the estimate was it cost the economy 24 billion. But congressman, you are talking if you dont see your priorities met saying no, you wont vote to extend this. If they dont address any of them, yes because we have no other leverage. So we are back in the same position of being the Party Without power needing it to find a way to get back in the game. Right, again, if they have 218 votes in the house they can do anything they want, they dont have to address our priorities, thats the way this works. It may not be the ideal scenario but, again, we have important priorities in the country. D. R. E. A. M. Ers, 80 of the in polls, 80 of the people support letting d. R. E. A. M. Ers stay, so why wouldnt we do that when a thousand of them are losing their status everyday . Congressman, thank you for your time today. Youre welcome, becky. In the next half hour, well talk tax reform with senator john cornyn. But up next, todays top corporate stories, including who uber paid to keep that major data breach a secret well tell you its quite surprising. Then later, are gift cards purchased at your local home depot being used to fuel the Opioid Crisis . Its a cnbc investigation and you need to see it stay tedyoreun, u watching squawk box on cnbc see thats funny, i thought you traded options. Im not really a wall street guy. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade i thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back to squawk box. Check out the futures right now. The dow is indicated down 22, the nasdaq has gotten mopositive and the s p is unchanged check this out, President Trump taking note of the linkedin jobs report on twitter. I guess eric trump either saw squawk or the linkedin report and he tweeted one of our headlines from cnbc, a 26 rise and then the president retweeted eric trumps tweet. Woi. Well take what we can get. Someday hell actually tweet about squawk box someday. Maybe. Hes got a lot of followers. He does. He does a development do you want that or not youre not sure. I dont know what to think. You dont want everyone as a viewer. I want everyone as the viewer i would love the president of the United States to be a viewer. Are you sure . I am sure i am sure. A development in the major data breach at uber. A 20yearold man responsible for the hack at uber last year was paid 100,000 by the company to destroy the data. Uber made the payment through a Bug Bounty Program designed to reward security researchers who report flaws in the companys software so those guys are typically called white hats, the people who hack but are doing in the the name of good this fellow was considered a black hat but was paid off with white hat money. One way to think about it. Coming up in the last hour, we brought you a frightening story about gift cards funding the opioid addiction up next well show you part two of that cnbc investigation how police are cracking down on abuse. Stay tuned squawk box will be right back. A wealth of information. A wealth of perspective. A wealth of opportunities. Thats the clarity you get from fidelity Wealth Management. Straightforward advice, tailored recommendations, taxefficient investing strategies, and a dedicated advisor to help you grow and protect your wealth. Fidelity Wealth Management. This Holiday Season, many families will choose to give gift cards if the recipient is a drug user, though, those gift cards could turn into opioids or heroin or other illegal drug which is i dont think any of us know about this we brought you part one, now part two of this cnbc investigation and contessa is back with us for part two. The scheme works like this. Its fairly simple a shoplifter steals and item from a store and because so many retailers have lenient return policies, the shoplifter returns the item without a receipt to the same chain, different location they receive a gift card or store merchandise card for the full value of the item plus sales tax that was never paid and we spoke with multiple people in recovery from opioid addiction and every single one told us its a common scheme to fund a crippling habit its been our experience that theyre going to commit these crimes when theyre desperate and needing their next fix. Reporter we ride along with lieutenant dave ballard, on a Shelby County sheriffs tax force devoted to retail theft in the memphis area. Well follow someone whos committed these thefts then theyll go one store, then right next door to the next store. Reporter the cdc ranks tennessee the third highest in per capita opiate prescriptions. Shoplifting return fraud and gift card abuse have skyrocketed in the state deputies arrive at a j. C. Penney to arrest an employee for embezzlement involving gift cards. Suddenly they spot a theft in progress at the store and gave chase through the mall parking lot. The suspects cornered and arrested for shoplifting investigators find a slew of gift cards on her front seat youve got, like this is a vanilla card, those are popular. Aldo. Would you mind explaining to me about the gift cards . Would you tell me what you were doing with the gift cards . Knee cher suspect wanted to talk and investigators have not linked their alleged crimes to druggi drugs. Within an hour we had two incidents at the same store, one while we were affecting an arrest and another incident takes place. Reporter just a normal tuesday . Normal tuesday. In knoxville tennessee in three months in investigators tied 85 of overdoses to gift cards. Law enforcement agencies nationwide are struggling to identify the crimes. Theyve come together. They have this Organization Called clear trying to Work Together and retailers are grappling with how to crack down on return fraud. The industriers may erstimates between 9 billion a year. Home depot has changed its return policy to try to put a stop to it now the merchandise card they give in exchange for the item nonreceipted can only be used in the store not online and only by the person who returned the item addicts say they can find different ways around it i wont solve the Opioid Crisis if you stop the issue of retail return fraud and gift card abuse. We know the Opioid Epidemic has been skyrocketing and spiraling out of control retailers have had a problem with the shrink. Has that increased with time as the Opioid Epidemic . I asked them to quantify what that you are shrink is and whether they can correlate it with a rise in opioid crime and they wont even detail it. They say the only time they tell investors what their loss is is if its abnormally high. But if youre looking at 15 billion annually in return shopping alone, that doesnt include stealing items and selling them to pawnshops, there is Software Available by retail analysis, a company that offers tracking for gift cards in use of tennessee and florida theres legislation pending in multiple states that wants people to register the purchase and sale of gift card so they can identify problem users its not just individuals. Home depot told me they recognize its not only tied to addiction but drug trafficking, Human Trafficking and terrorism and theyre affectively working with state, local and federal authorities to crack dun on that we heard the similar story from lowes, target, not quite as candid but all of them say we know its a problem and we have policies in place to deal with it these opioid addicts, are they just more innovative or industrious . Remember meth . Remember in the midwest . Method has been around and breaking bad. Did they use gift cards for that or crack why suddenly did they figure this out for opioids. I dont know that they figured it out but it might be a different set of people. This is reaching professionals there are lawyers and doctors and dentists. Are they taking oxycodone are they crushing them up . Smoking it injecting it all of the above. It all goes downhill. The way it starts especially for a lot of professionals it starts because they go to the doctor, they get a prescription for back pain thats an opioid and then theyre hooked. Their bodies are absolutely hooked to it and its a downward spiral for the young women i interviewed as part of this story that are currently in treatment trying to get a handle on this addiction, they said you dont understand what its like. Your body starts dying a little bit if you dont have a fix and when you cant get the prescriptions then you turn to heroin, its cheaper, easier to get, widely available. Thats when the injections start. And all four of the women i interviewed in treatment for this story, they all have children and they are all separated from their children. They all used this gift card scheme to fund their addiction. I had some broken ribs and my appendix out you only do it for like a day because you know, right . One of the guys in recovery told me he goes if you were the kind of person for whom opioids do it, its like getting a hug from god. Thats more than one pill, i think, right obviously. We need a different mode of pain relief for really bad pain because there are uses where and research into why addiction happens and how to stop it because we keep seeing this pattern of people and these are not when you have it in your own family, and i do, my stepsister died of a fentanyl overdose, i think when you have it in your family you recognize the people who use are not bad people, they have a physical addiction to a drug. Thanks, contessa, thank you coming up, we have breaking economic news, weekly jobless news is about to hit the table plus, well talk to someone who will have a seat at the negotiating table, senator john cornyn will be with us in just a moment gglobal bonds, and highdividend strategies. Sure, these are investments. But theyre not what people really invest in. What people really invest in, is what they hope to get out of life. But helping them get there takes a pure focus. Because when you invest their money without distraction, hidden agenda or competing interests, Something Wonderful can happen. They might just get what they want out of life, and maybe even more. We are the driven. The dedicated. The overachievers. We know our best investment is in ourselves. We dont take no for an answer. We fight for what we want. Even for the things that were once a given. Going to college. Buying a home. And not being in debt for it for the rest of our lives. But were only as strong as our community. Who inspires and pushes us to go further than we could ever go alone. Sofi. Get there sooner. Were seconds away from weekly jobless claims. Take a quick look at futures before we get to Rick Santelli youre looking at the dow down about 17 points, s p 3500 looks to open higher all of that, of course could change literally in the next ten seconds. In those ten seconds we are going to get to Rick Santelli who is standing by at the c, many in chicago. Rickster, the numbers . Initial jobless claims move from 238,000 down to 236,000 down 2,000 no restrange or change to last weeks 238,000 number. Continuing claims, a slight revision higher, hardly any, 1. 96 last week this week 1. 980 so it dropped a bit. Continuing claims one week in arrears. Markets set up very interesting as you pointed out andrew, were looking at pressure in the equities space but theyve had a nice run over the last several plus weeks, Interest Rates are testing the low range theyve had in tens, low 230s, europe has broken down a bit, had the lowest yield close of a tenyear boom but not by much, by a half basis point but it had the lowest yield closed since 26th of june. You want to Pay Attention to that relationship going in towards year end becky, back to you. Rick, thank you very much the move to end or limit the deductibility of state and local taxes is causing an outcry in the high of the tax states but how big of an impact is it going to have. Steve liesman is here and he has more on that. Becky, thanks, anxiety levels are running high because theres some deductible here of the ability to deduct sedate and local taxes. Unfortunately theres no data on the specific impact and no one seems to have studied it what is known is that ending the deductibility of state and local tax the the biggest revenue raiser it will hit states with the highest taxes the hardest, including california, new jersey, new york, il immaterial and texas. And if youre looking at that, ray dalio wrotes ending deductions will prompt more people in high salt locations to move heres other fallout thats been talked about the Tax Foundation says it could reduce gdp by 0. 4 by other offsets. That alone would have that impact overat fitch theyre concerned many states cant or wont lower their taxes in response. And over at s p theyre concerned about impact on property values. All that may be true but its hard to know the impact from the entire tax bill since some people may get a higher standard deduction the. The house version and Senate Version allows for a 10,000 property deduction and theyre talking about boosting that for allowing income taxes to be included inthat as well. Youre shaking your head a senior policy fellow at the Tax Policy Center says its real money when you compare it to the size of the overall economy, its hard to move the needle much. He points out that the data show people dont move because of higher taxes, they move because of weather. Or jobs. Or whatever thats the reason why they dont move you raise the taxes, my job is here, my business is here. I was talking to somebody on the desk saying its great, see if you can commute from alabama have a good time with that the Bipartisan Group of mayors are up in arms about it, governors in hightech states dont like it and a lot of taxpayers dont have any idea. I tried to run down what all of the Major Economic groups and study this stuff and im trying to put a study together to look at it as a percent of gdp. We still dont know a lot of big details. Maybe it will be 20 for Corporate Taxes. No theyre talking 22 they dont know where the extra 2 is going to go to offset what so its impossible to figure out whos going to be paying what and were talking about something that will be law in three weeks potentially. And they were going eliminate the amt and that was going to be an offset to this because the wealthiest people in those states pay it. So that seems to be gone. Unless you dont. You eventually dont pay the amt anymore. Ive talked to my accountant. Whats she telling you . Share, people dont know. I was outside the i dont know why my question, liesman, if you were sitting down from scratch and designing a tax system, i dont know how youd come up with state deductibility. But once youve got it its impossible to get out of it but i would not design it this way so i think it should go. This is from becky and andrew and queue probably know this, too, from the department of overreporting, i looked at the history of this. Its one of the oldest deductions in the nation it goes back to the civil war and try this on for size, joe, it actually goes back to federalism, they think, which is to limit the overreach of the federal government so they shouldnt overly tax state resources. Thats cool and it keeps being included even when they redid the income tax in 19139 but now you have it in context of federal taxes being reduced. Which is the opposite of what it was supposed to counter. Although domestic. So conservatives should be behind this for that reason. When you hear the idea of them getting rid of it, and a validsounding argument is look were not going to subsidize these hightax states anymore, we wont do that but when you look at the high tax states and who pays in more. Youre subsidizing 40 billion to the federal government but thats to the federal government, thats a different but the money gets redistributed to other states. Apples and oranges because you have water nearby so all the rich people decide to live in the watt. Its not because the water, its because jobs are here. What about the double taxation of this, joe . Youre double taxing i dont thinkish. Well, different entities back in civil war times, what was texass income tax florida has zero we have states a lot of users but texas is one of the biggest users of deductibility because they have a lot of rich people there. What about the argument on jobs, you say the water is here, wealthier people is here. And they pay but what about the argument that a state like new york has spent a fortune educating their people, creating a remarkable infrastructure at a level, frankly, that most other places dont have. This is just your and you love the yankees, too. The rest of the country doesnt feel this way about new york. I dont like the yankees but its a point. You both have valid points, you dont know what the secret sauce is that makes these wealthy states wealthy it could just be the concentration of people. Well, wall street is here. But what about the education and how they spend the education . Its just as much of an argument saying the red states should not subsidize the blue states because thats not whats happening. Thats apples and oranges. Can i make one point. There are about a dozen other deductions that were not touched. Theres deductibility of Retirement Savings so they picked on this one because well, the blue states would pail the most, the ones that voted blue would pail the most of it so it appears to be the one thats most politically palatable. Another way to have done it it would be take a fraction off the other ones reduce all the deductions. Just because you have highly paid people that pay federal income tax doesnt allow your State Government to totally subsidize the things the rest of the states tighten their belt on so you have profligate spending and give everything away and spend all this money that other states tighten their belt on that doesnt give you the right because you have rich people paying federal income taxes. You think illinois should be able to spend the money they spend if you want to make an argument that nobody should subsidize each other, every state keep your own money. Every time theres a hurricane in florida or a hurricane in texas or some kind of well, you cant talk about they dont do that on purpose. Thats an act of god we used to think that, anyway. But who pays for it you deside you have to pay for it. Lets ask him that question. You dont pay for overspending on and not watching your ps and qs on every Government Service the state gives you. Do you want to be responsible for what illinois does the democratic governments that have been in illinois and what theyve done. Im saying its a disingenuous argument. If nobody wants to subsidize, nobody subs ties. If you dont want anybody to subsidize anybody lets get to senator cornyn texas is a place if any place can get a break i think it should texas because its half our economy in this country, right . Senate Majority Whip John Cornyn joins us now are you listening to this . I sure am. Is this worse or better than conference where you are it sounds like the republican conference and maybe the Conference Committee on taxes now that theyve been appointed in both houses to work out the final details of this bill we have a lot to do but i think youll see more fine tuning rather than major changes. I think its i have a pretty good idea of whats going to happen. With the salt stuff, its tough medicine to take because we all of us do either live in new york or new jersey with fierily high incomes so there will be large tax increases for us were probably the 1 or whatever but there will be for a bill that is talked about cutting taxes, its certainly not cutting taxes for a lot of people back here is that okay you need to talk to the mayor of new york and the governor of new york, theyre the ones imposing those taxes but i do believe as i heard one of you say that under the status quo, there are lowtax states like mine that are subsidizing those taxpayers in other states. That puts everybody on a level playing field. That was me they say because theres so much federal income taxes that come from new york i say its because of wall street and people like living on the water so they pay federal taxes so theyre already subsidizing the rest of the country, supposedly, because they pay federal taxes more than most states. Well, i could take this position that texas is subsidizing the rest of the country because weve had the strongest economy over the last eight or ten years but the point is we want to get the tax code in a pro growth mode we want to become more competitive and not see business as an investment and jobs go overseas but come back home. Whats it going to look like . And we want to lower taxes for the median family of four. Senator, on an actual dollar basis, what does texas pay in and take back relative to california and new york . You know, i dont have those at the top of mind but the point is here what were trying to do is get the economy growing for everybodys benefit and bring down taxes for every tax bracket including the median family who will see a four senator, im going to get you those numbers, but im pretty sure that texas would not be at the top of the list. But federal versus state is not if youre asking the question. Is it 22 or 20 . Whats going to happen will it be 22 . What do you decide on in conference right now its 20 and i hope it stays there but thats what conference is for is to determine how you pay for this we are operating under tight budget procedural constraints so i hope we can keep it at 20. That keeps us competitive globally. Is franken in or out today, do you know . Hes going to have an announcement, everyone said it was going to be a resignation, now everyone is saying he hasnt made that decision. I dont know anything that you dont know all i hear is what you and others report. What do you think he should do i think its up to him. Each of these cases are individual but it sounds like hes lost the confidence of his own members and this is a real problem in our society and it affects every part of our society. Im not a conspiracy theorist, but you know if moore gets elected after franken resigns i dont know how handle that some people think thats the whole reason for democrats calling for him to resign. The Ethics Committee will be busy to be sure. Yeah, you should be full time all the time back there in d. C. In the swamp, senator. Anyway, i cant believe we dont have more time for you today is there one is there any breaking news you can give us on whats going to happen in conversation do you have anything not out there yet . No, we just got appointed last night, the conferrees in the senate this is going to go pretty fast because we cant to get this done and get it on the president s desk before christmas. Senator, your most important issues if you want to get 20 Corporate Tax, or 22 , what are the issues you would be more generous with . The most important number is 51, thats 51 senators senator, theres a report that the Senate Leader mcconnell is in favor of expanding the state and local deduction cap to include property and local property and income taxes. Can you tell us the state of play in conference i do know the house i talked to leader mccarthy and he told me this is an item of contention in the house. I dont know what will happen to that we did adopt the 10,000 deduction for property taxes but there may be movement in that space. I frankly would anticipate that. Senator, thank you very much. Thanks for listening you can use some of that stuff in conference. Appreciate it. I want you to quote me or liesman or whoever you agree with anyway, thanks. When we return, real estate tech platform compass getting investment from sobaftnk, were going to talk to robert reffkin, the companys ceo right after this break his advisor ran the numbers and showed that he wouldnt be able to retire until he was 68. The client realized, i need to get back into the markets i need to get back on track with my plan. The Financial Advisor was able to work with this client. Hes now on track to retire when hes 65. Having someone coach you through it is really the value of a Financial Advisor. A. Welcome back to squawk box. The Worlds Largest Venture Capital Fund Softbank visions fund is betting on real estate, investing 450 million in compass, a real estate tech platform joining us for more is robert reffk reffkin, ceo and founder of compass. Good to have you back. We had you on when this started so its an amazing ride you guys have been on tell us about im curious about the interaction with softbank, the decision to take the money and how that manifested itself. First i want to thank you four years ago you brought us on this show after our first small fund raise, we had one office, 25 people. We now have 40 offices and 2, 500 people so thank you. No, no, its this is what we love. We love seeing companies succeed like this. So you have this last round. Is there others besides soft bank in have involved. The last round a few weeks ago was a hundred Million Dollar round led by fidelity, wellington and existing investors. How much of this company now youre right you see compass stores not stores how much of this is really a real estate company. Compass is on path to be the number one Real Estate Technology company in the world. Agents can run every part of their business not just from search but showing, valuations, tours, marketing, closing, and thats not something Brokerage Firms are doing. Theyre outsourcing a subset of 300 plus tools from other providers. We do everything in house. But i guess where im going with this is how much of this really is just a traditional real estate business thats powered by a better version of the technology and the vol situation being applied is currently on the technology side. Is amazon a store, is test will l. A. A car . That distinction is getting fuzzier. Were both were connecting the best of technology, powering the best of what agents provide to their clients around the country. The vision fund i dont want to say theres been controversy but theres questions given the size and scale that theyre putting big money to work and creating dare i say a bubble within the Technology Community its hard for you to say anything but amazing but im curious how to think about that. Its hard to speak on their behalf what i can say is when we talk with investors, they believe that their there should be a truly Great Company in real estate, the largest sector of the Global Economy 270 trillion is the value of real estate in the world four times the size of every Public Company and it moves back and forth through agents all the time and there should be a Great Company power thatting. The biggest investor is saudi, 45 of the fund, there is a conversation going on in the valley, and i dont know how much of it you have been part of given the arrests about where people are getting their money from is you had before we did it thats not a conversation we had at all when i wake up in the morning, i think about, how do we make compass the best it can possibly be how do we empower agents, allow them to come on and make 24. 9 more in their first year my mom is an agent in compass. Shes had more listings than shes ever had in her career so final question, you do residential. Is there ever going to be a commercial opportunity and could you ever see combining with wework because i know that softbank also has an investment in them commercial will be a part of our future when we return, jim cramer live from the New York Stock Exchange and by the way, tonight on mad money, dont miss jims interview with boeing ceo, Dennis Mulenburg thats at 6 00 p. M. Eastern time squawk box will be right back. S of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. 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Get there sooner. And i am a senior Public Safety my namspecialist for pg e. My job is to help educate our First Responders on how to deal with natural gas and electric emergencies. Everyday when we go to work we want everyone to work safely and come home safely. I live right here in auburn, i absolutely love this community. Once i moved here i didnt want to live anywhere else. I love that people in this community are willing to come together to make a difference for other peoples lives. Together, were building a better california. Good s p, with you know, what, 50 company or 10 i dont know its a lot, all right . But facebooks 400 billion. If this really gets going in terms of froth, you could see it go above 250 billion. You might what youre talking about might not come home to roost for a hile, right . Yeah, i think thats true, because there seems to be a level of hoarding. People who own it arent flipping it. There could be a corner going on i think about hunt and silver, years and years and year ago maybe theres hedge funds that just said, look, the more we buy, the more we squeeze m maybe theres a short position thats being obliterated its clearly going to go higher. The tool keeps getting talked about. They gave you a big hit before they became flowers. So certainly bit coin can go much higher, because its fascinating to people and theres no taxes, if you take the capital gain but no ones taking the capital gain a chart, though, jim. Theres just no way of looking at that and not just saying, that that ises a asintonic you didnt know what that was. If you didnt put bit coin on that and just saw it, things like that just doesnt at last forever. Its got a Cape Canaveral feel to it its been launched and once they break loose of the gravity pull of the United States, then it goes of the globe, it just flies this does feel like it has broken out and its on liquid oxygen and its going somewhere and i dont blame anyone for wanting to own it, because its going to be its a fun ride and i dont want to talk about when the party is going to be over, because maybe the thing is going to mars. Maybe the thing is going to jupiter. But i do want people to understand that there are mechanics behind this thing that are making it so theres no sellers. And if there are no sellers, it is parabolic until you find sellers. And they cant find to seem a level where sellers come out all right, jim, thanks. I know youll talk about this more in a couple of minutes. And dont miss later on cnbc an interview with billionaire investor marc lasry. Hell be on squawk on the street at 10 00 a. M. Eastern. Well be right back. S every day. 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Time in and out for your kensho stat of the day since 2010, the Financial Sector took the top spot in december. Its top components, regents financial, aig, and bank of america. Welcome back, everybody. Lets get a final check on the markets. Weve been watching this morning and the futures started off in the green. Right now, theyre looking in the red. Dow futures down by about 40 points s p futures down by just over a point. Of course, the nasdaq still positive its up by 11 points worth pointing out that the nasdaq yesterday ended a threeday losing streak. Well see what happens as we get a little closer to the opening bell, which is just a half hour away in europe, weve seen some similar conditions we started with pretty strong green arrows, particularly in germany, which i think was up by about 0. 6 that is now flat with the kach and ftse in negative territory and weve continued to watch the tenyear tenyear right now yielding 3. 236 crude yesterday ended down pretty sharply this morning it was trading slightly above 56 a barrel, but that is another one to keep an eye on okay. Make sure you join us tomorrow, everybody. Squawk on the street begins, if you can believe this, in three seconds. Now. Good thursday morning. Welcome to quack on the street im Carl Quintanilla with james faber and jim cramer were watching the senate vote go to conference the fires in california, plenty on the disney fox front. Europe is mixed. Jobless claims down for the third week in a row and the bond yield at 2. 33. Our road map begins with bit coin, busting through another record high, crossing above 15,000, but regulatory and security concerns continue more developments on that potential deal between disney and fox. Well give