Transcripts For CNBC Squawk Box 20121126

Lawmakers have been trying to convince the naub they are willing to compromise. They return to capitol hill today. Everything should be on the table. Bring entitlement reform into the conversation. A group of Corporate Executives are calling on congress to rise above partisan politics to try to find some sort of a solution. We have a lot to talk about with gleg brown and well start that in just a moment, but first over to andrew. Finance ministers are trying to unfreeze the second bailout package for greece, but first they must agree on how to cut massive debt to a more sustainable level. Well head to london for details on that. And playing down a deal talk, tom joyce saying his countrys currently if talks with at least two firms on a possible sale of its largest business unit. But would only pursue a deal if it created value to shareholders and clients. And mexicos anticorruption body says it has found no irregularities in its probe of permits given to walmart. Two audits still under way. You are remember the New York Times reported walmart wribed local officials so it could open stores more rapidly. Mr. Kernen, welcome back. Thanks. Was i out . You were. Friday doesnt count. Happy thanksgiving. How about that. Thank you. Yeah, friday, nothing the mar cut was up, thin trading, but down today. Even though these guys are meeting again. In a sign of the slow pace, Senior Administration official said president obama and congressional leaders are not expected to reconvene this week. This is so the staff of both sides can continue to organize and work through the differences. And what is not a surprise at all, mr. Obama instead will probably hit the road this week to give speeches. Xwitner is supposed to be coming up with the details. Aides said mr. Obama will hit the road to mobilize public support. Just like the last, same speeches over and over. You saw Warren Buffett this morning. Some interesting points. He had an alternative minimum tax he had been talking about for the really wealthy. 30 or something. Anybody from 1 to 10 million. Also talked a little bit about raising the same thing hes been saying all along. He added that when it comes to who should be paying the higher taxes, he wants the threshold to be 500,000. And you see Steven Rattner on on talking about Capital Gains, deductions and things youve talked about a lot. Time for the Global Markets report. Ross westgate totally still confuse aed about thanksgiving and pilgrims. What was all the hoopla about . You celebrate boxing or something, dont you . Like we lost a great boxer. Is that what you celebrate . What is boxing day . Boxing day, the day of a christmas. You wrap all your presents in boxes . I think its something to do with all the presents. Im not quite sure. Yeah, put them in boxes. Maybe. So you ignored our thanksgiving. But feeling okay again . Yeah. You know, its okay. Its all right. Its gone. Now we can concentrate on the run up to christmas. And how much shopping we have to do. A lot of red behind you. We had a good week last week. While you were celebrating thanksgiving, european stocks did exceedingly well. In fact take a look at the exhave a dax, up 5 . Ftse up nearly 4 in the last week on top of pretty good gains for the u. S. Markets as you know between 3 and 4 , as well. So no surprise perhaps today that were a little bit weaker on the back of those gains. 8 2 just about decliners outpacing advancers. This is how it translates. Ftse 100 down half a percent. Xetra dax up a quarter. Ibex down about half of 1 . A number of things going on in politics as ever. We had Regional Elections in spain. Yields you can see slightly higher, but still well below 6 . Now, these Regional Elections fairly important because we know catalonia has been pushing on on independence. Now, it looks less likely well get that referendum, but not because people in catalonia are any less eager on a separatist movement. Just that they didnt vote for the main guy who is proposing it. They voted for Competitor Party which is makes it slightly harder in the short term for them possibly to get a referendum going. So eases the pressure in the short term but means there is still a longer term problem there. Catalonia is one of those regions that still has very large deficits, as well. So the politics in spain slightly skewed as they will be, but not so much pressure on rajoy at the moment. Unlikely to ask for assistance in the short term. We also have another Euro Group Meeting take, back in brussels, yes, i know, we seem to have one every week. They may come up with a long term Financing Deal for greece. Finally talking about Debt Forgiveness in greece which is what we all know has got to happen. Whether it can happen before the german elections in the fall next year is a mute point. Anyway, thats where we stand. Fairly down beat for equities and yields a little bit mixed. Back to you. All right. Thank you very much. Lets get back to the fiscal cliff. Weve been talking about the issues of taxes. As we mentioned, Warren Buffett calling for a minimum tax for the wealthy. He starts with suppose that an investor you admire and trust comes to you with an investment idea. This is a good one, he says, im in it and i think you should be, too. Would your reply possibility be it all depends on what my tax rate will be on the gain youre saying were going to make. Ifs taxes are too high, id rather leave the money in my savings account earning a quarter of 1 . Only a Grover Norquist imagination does such a response exist. Foos what he thinks should be done in washington, he says he supports president obamas proposal to eliminate the bush tax cuts for high income taxpayers. However, he says he prefers a cut off points somewhere above 250,000, maybe 500 thud or so. Additionally, he says we need congress right new to enact a minimum tax on high incomes. Buffett is suggests 20 between 1 million and 10 million and 30 on amounts above that and thats something he had laid out before. The real definition of the buffett rule. I always thought he was uncomfortable about the way the buffett rule was constructed and felt uncomfortable about saying something about it. Because remember, he never really spoke openly about it, he would intimate that 250 might not be his number. The buffett rule is 30 . But then hes also talking about the 500. But thats not the buffett rule. But if youre doing tax reform, then youre not going up anyway. I think the main point hes saying is forget about the larger reforms p. Maybe well get withere, maybe wont, but put that in place now. I dont think its fair to say hes not in favor of tax reform. Hes saying hopefully we get there, but enact this now and deal with Everything Else later. I can pick it out if we need to. Hes not in the house. Regardless of what he decides, its meaningless. Lets bring in our guest host, greg brown, chairman and ceo of Motorola Solutions and member of fix the debt. Org. You have said this is something we shouldnt do, go over the cliff, but you also think well get it resolved. What makes you so optimistic . I think both parties are going through the normal political calculus and game of chicken, if you will. Ive spent a lot of time with colleagues on both sides of the aisle. I think there is universal recognition we have to resolve it. Theres sonl so many levers you can pull and buttons you can push. So i think theres a rick nation tax revenues need to be higher. Theres recognition that across the board sequester cuts is a mistake. So i think well get it done. I dont know what to make of no meetings this week, but i dont gets a concerned about that. I think there will political posturing on both sides. It seems there is a growing block, something pointed out in Morning Money this morning about how there is a growing liberal block that would just as soon see us go over the cliff if it means theyre not going to get the revenue increases theyre looking for and theyre looking at higher marginal tax rates. Not some higher revenue number. It theyre not getting that, not willing to sign off on that, if it means youll be making these cuts to some of the entitlement program, they would just as soon go over the cliff. I hear you. And i think that its kind of popular to point out the sharp differences. I think theres more and more common ground. Even the president talks about willingness to do entitlement reform. He threw out the 1. 6 trillion. If you take that as a data point and reference where he was with boehner in august of last year, he was at 800 billion, are those roughly the goal posts for a tax resolution and remediation somewhere between the two . My view probably. But the whole question is whether they can ever get to doing it with loophole cutting or whether they do it with its all about the marginal rate stuff. Hell talk about marginal rates. Once again well hear about that. And i understand you can continue to put the house in sort of the obstructionist corner and call them tea party and theyre at 8 now. You might be able to drive the Approval Rating down to 1 . But if we do go over the cliff, no ones going to remember the names of any of these house guys. Theyll remember barack obama. I dont understand how maybe this is just where everyone will be shocked and all of a sudden theyll meet somewhere oond hell say fine, as long as you raise revenues. But i dont see it that way. Where are you on the numbers some. I think 250,000 is too low. I think 500,000 or a million is more in order. The administrations consistently talked about the ultra wealthy and the millionaires. I think the notion me personally of millionaires paying more is fine. I think if its done in the tone of constructive collaboration and everybody picks up an ore and rose for rez lose im fine. And where would you be on Capital Gains and dividends . Thats a little bit stickier, but to your earlier point, around your buffett example, can Capital Gains go up a little bit and dividends . Probably. Do i think it has a Material Impact on capital deployment and investment, probably not. I think, joe, your point on the marginal tax rate, i think that is the key issue on the tax side. Buffett talks about no one makes decisions based on tax rate. I guarantee you some of what were seeing in the market right now has to do with Capital Gains rates. Thats also part of the problem with the probably all of us are considering at some point. So youll see some near term selling based on but that is near term stuff based on the idea that taxes are changing and that weve never figured out exactly where theyll be. I dont know whether 28 versus 15 or 20 causes capital to become less available. What rattner didnt pick up, though, was the idea that taxes are going up on Capital Gains anyway because of the obamacare. So i dont know if he sees 28 including the 3. 8 or but at the end of the day, it has to be fiscal cliff resolution and absolutely comprehensive tax reform sometime in 2013, lowering the corporate rate, broadening the base. How do you force tax reform when the fiscal cliff was supposed to be the gun at everybodys head . If we say never mind, how do you actually force it in the new year . I think that first of all in terms of the fiscal cliff, its got to be a framework deal. Youre not going to get legislation in a lame duck. So calculate what the tax revenue number needs to be. Take the president s and you get a deal. If theres a tram work 4 trillion deal over ten year, legislation can be codified and enacted after the fact that solidifies that, then youve bridged comprehensive tax reform. I think the keys are revenue neutrality, broadening the base, eliminating the loopholes, the devils in the details. But i think theres also recognition that corporate comprehensive tax reform needs to occur. Both sides of the aisle wanted to wait until the election is over. Its over. We have to tackle is. But now were waiting again until we get closer to the next election. No, we cant wait. Becky, you know we have the highest Corporate Tax rate in the world. You can only wait so long. Consumers are borrowing again. I think theyre pretty healthy. Corporations are very healthy from a Balance Sheet perspective. The first thing in the conversations with senior government officials is the fiscal cliff. So we have a tendency to forget the Global Implications and that many people look for the u. S. To get its house in order, not only from a domestic Economic Policy standpoint, but from a Foreign Affairs standpoint. They say it would be better to go over it than kick the can. Now they say with have to do infrastructure, investment, but their main thesis was we got to do these progrowth tax reforms, take these steps to do these things. Im not sure theyre bringing rates down theyre talking about tax reforms. Big tax reform. Dont just we need big tax reform. Coming up, rining up holiday. Dana telsey in the only time youll see her on tv this christmas season, probably not true. She spent all weekend canvassing stores. Shell bring us her take on the americans consumer. But first the average age of this band is older than the supreme court. The Rolling Stones mashing their 50th anniversary with a concert this london last night. The band performed in front of an audience of 20,000 fans. Hits including i want to be your m man. The stones will play one more gig in london on thursday before heading to the u. S. To play brooklyn and newark next month. I always wait until the last minute. Can i still ship a gift in time for christmas . Yeah, sure you can. Great. Wheres your gift . Uh. Whew. [ male announcer ] break from the holiday stress. Ship Fedex Express by december 22nd for christmas delivery. Part of a whole new line of tablets from dell. Its changing the conversation. We have the results from the First Official weekend of Holiday Shopping. Court a courtney this, was a big week end. What fiscal cliff . I know were talking about it, but according to the National Retail federation, 139 Million Consumers shopped this weekend. 40 of it was on dllineonline. And todays cyber deals are expected to continue to drive online sales. Retailers have held back special products and prices to gain wallet share in todays shopping events and does expect the momentum to continue. Online 18 higher on thanksgiving. Black friday saw more than a billion dollars in online sales, up 26 from last year. And marks the heaviest spend day online so far in 2012. 44 of retailers will offer Free Shipping up from just 12 last year as that addon moves from being an incentive to being a requirement. And while its back to work for many, 4 said they will shop in the morning. Adobe has thes most bullish forecast projecting the biggest 2k5 day of the season for web buying. Bringing in 4550 in more sales. Com score says amazon, walmart, best buy, target and aem rounpp rounded out to the five on friday. Mobile shopping expected to see expo thnen mobile shopping expected to see expo thnetial growth. And they have the cyber monday ads all over the place. Hard to get on the web and not see Something Like this. Okay. Thank you, courtney. And joining us for talk more, dana telsey. Great to see you again. Thank you. Good morning. So you said to us on friday you could really call the season until december 17th. Exactly. But im going to force to you try to do it right now. Give us a couple names that you think are the winners and a couple losers. Basically what we saw, the winners definitely being macys, express giving out great deals and a lot of traffic. A vera bradley saw a lot of traffic. A lot of the deals extended throughout the five days. And, yes, today is cyber monday. So thats important, too. But lets talk about some of the losers. Give us some of the surprise losers. I think some of the ones where it was slow, Luxury Brands dont play in black friday weekend. They play closer to december 25th. Womens retailers are for self purchase. Dare i raise jc pen any again. We saw it crowded in the beginning of the morning hours. Certainly the 6 00 a. M. To around 9 00, but it didnt continue throughout the day. The entire store empty except for the 12 area and then you couldnt move. Is that how it works now . Small electrics is where theyre giving the deal. So house wears areas. Did anyone get hurt trying to get at those buttons they were giving out . I didnt see anyone getting hurt. When you think about this season and really trying to project out, if you go back and we talked about it a little bit on friday, 2008, the number on monday, like the number were talking about today was huge. And yet if you looked a month and a half later, two months later, you would have decided it was a horrible Holiday Season. How do you handicap where we are right now . I think where we are right now, we saw traffic overall just a little bit lighter, conversion higher. I think theres a long way to go. But certainly i think the season, its going to be a battle almost every single day as you keep getting through to those ten days before the 250th. I think we go into a lull period now before you get the big sales coming again. So well hear a little more depressing news before it gets better. Exactly. Okay. Dana, thank you for joining us. When we come back, well med to the futures pits and find out this stories are most likely to drive todays action. Plus a youtube milestone. This weekend, gangnam style became the most watched. This video has more than 800 million views. The video edging past Justin Biebers video for his song baby. [ male announcer ] this december, remember what starts with adding a friend. Could end with adding a close friend. The lexus december to remember sales event is on. This is the pursuit of perfection. The lexus december to remember sales event is on. I have obligations. Cute tobligations, but obligations. G. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. Nespresso. Where i never have to compromise on anything. Where just one touch creates the perfect coffee. Where every cappuccino and latte is only made with fresh milk. And where the staff is exceptionally friendly. Nespresso. What e . Welcome back to squawk box. Holiday music is okay now once youre through thanksgiving. Just get ready. It will be every day with us and everywhere you go. As you get older, the years start passing very quickly, it seems like youre basically in a permanent Christmas Music mode. It is. So you dont really get nostalgic for it. Its just still there. Never really goes away. So you never really say, god, im not sick of this. Im joe kernen. Between days after thanksgiving, i wish they would stop with the Christmas Music. I love it. Becky quick is here, andrew ross sorkin. And markets rallied on friday on hopes it will be a very merry Holiday Season for retailers. But there are issues on the fiscal cliff looming. Scott bower, Trading Market advantage. Normally they posture, but they finally do the right thing. But both sides have certain elements that would like to go over the fiscal cliff just to get something done that we cant seem to agree on. Where are you now . S p said 15 . Other people have said 30 . Do you think we get a resolution . I think that we get some sort of extension. Well get them to say were on the same path, were making progress, but we need another six months, so were going to extend everything thats in place another six months, but were working together. I mean, its really odd, joe. You think about it, and i will tell you that the feeling on the floor and the feeling in my community is that there is all these back room deals already. And just dont know what to believe. And you have to believe, though, that they do have something really worked out because look at what the economy look at where Consumer Sentiment is over the last couple months. I dont think they can really, you know, run the risk of that falling back. We made so much improvement over the last couple months. At least macroeconomicly, they cant run the risk of this thing going over. What does it mean for the stock market and how many Different Things are affecting it right now . I figure not knowing where tax policy is next year, some people know it will be hire, so theyre probably just going to sell into december 31st. And then youve got continuing problems in europe, as well, Morgan Stanley has a report out about possible recession in 2013. What are the factors that influence the market at 13,000 and do you think its a good time to ad money or take money out . Short term, i think the feeling is that things are going to work out. So well be in this range here of in the s ps 1390, 1420. I think if we break 1390, we get down to that next 1360 level will, again, there is so much money on the sidelines waiting to do something, waiting to get in, that i think that the big players that are on the sidelines already have it factored this about a Dividend Increase at some point and the tat tax rate increase and with both hands theyre waiting to get into the market. So i think theres major inherent support down below the market, maybe another 3 , 4 below where we are right now. And thats almost like a builtin floor. All right. Scott, i dont know. A lot of things that affect the market, including valuation and headwinds, tail winds, Everything Else. 421 points for the dow. A lot on friday. This one was around really. You guys were here. We were here. I know you were. It was a big day. It was not a svetter . I was wearing a vneck sweater. Company issued which i didnt know that could you do that. What all does the company buy for you now at this point . I have a lot of things in my contract. Underwear. Its very complicated. We shouldnt go there. Personal Hygiene Products . You really you got no answer. Socks. Socks . Not yet. All right. But the svetter, werent you surprised we buy his what about that vest you had . That was not company issued. They didnt pay for that suit . No it was my own suit. Who owns that tie . They gave me this. That vest, people brought that vest up to me over the weekend. Im not kidding. With all the pockets. Who . Im not going to say here, but it was brown and it had ashen, my friend. Would you wear a vest with lapels . I got see to make a comments, but it sounds a little sketchy. Sorkin sweater of the month. Perfect. Very nice. Lets talk about squawk sports news. Well start things off with sunday night football. The giants beating the packers 3810. Eli manning tossed three touchdown passes and became the giants alltime leader with 200 career td passes. In College Sports news, notre dame now tops the bcs rankings. Decisive win. Number two right now is alabama. And speaking of college team, we have a special guest with us in studio this morning. Rutgers Athletic Director tim pernetti will be joining us to talk about his schools move to the big ten. I watch that had gaed that g thoit we were going to have a respite from will every monday, we got to hear about rutgers. Finally ill get a break. So you bring in the Athletic Director to talk about the move to the big ten, which is a huge did you see his interview . During the game, he was so for like ten minutes. But i have all those same questions to ask him. You realize that the twri state area didnt really have a big ten team. So for the big ten, it opens up the biggest tv market as long as theyre good. Thats the problem. And people tell us probably that theyre big ten ready right now. Theyre not big ten ready. Well, with pittsburgh, it didnt look like you were well see thursday. I dont know what happened to louisville. How did they get beat . I was surprised. I was, too. But greg is on the board of governors, he was there and knows about all the things happening behind the screenes. Youve gone a listening way overcomi ov long way overcoming so it can be done. Rut dwrers isgers is a great school. Almost ivy league. You dont want them to be brainwashed. I dont want them to become socialists. I dont. Orlt r oral roberts . I dont know. I havent decided. If you have comments or comments, shoot them our way. If you think productivity is a little weak than normal at the office this morning, youre probably right. Our next guest whether know why. Com score saying that americans are expected to spend 1. 5 billion shopping online today. Probably from their desk. Its a new day. If youre a man with low testosterone, you should know that axiron is here. The only underarm treatment for low t. Thats right, the one you apply to the underarm. Axiron is not for use in women or anyone younger than 18. Axiron can transfer to others through direct contact. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these signs and symptoms to your doctor if they occur. Tell your doctor about all medical conditions and medications. Do not use if you have prostate or Breast Cancer. Serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet, or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. See your doctor, and for a 30day free trial, go to axiron. Com. Monarch of marketing analysis. With the ability to improve roi through seo all by cob. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. Im going big. [ male announcer ] good choice business pro. Good choice. Go national. Go like a pro. Still to come, a special squawk sports moment. Tim pernetti will be joining us in studio to talk about his schools move to the big ten and he has a surprise fwift for joe. [ engine revs ] [ male announcer ] oh what fun it is to ride. Get the mercedesbenz on your wish list at the winter event going on now but hurry, the offer ends soon. [ santa ] ho, ho, ho [ male announcer ] lease a 2013 e350 for 579 a month at your local mercedesbenz dealer. Who have used androgel 1 , theres big news. Presenting androgel 1. 62 . Both are used to treat men with low testosterone. Androgel 1. 62 is from the makers of the number one prescribed testosterone replacement therapy. It raises your testosterone levels, and. Is concentrated, so you could use less gel. And with androgel 1. 62 , you can save on your monthly prescription. [ male announcer ] dosing and application sites between these products differ. Women and children should avoid contact with application sites. Discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or, signs in a woman which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. Men with Breast Cancer or who have or might have prostate cancer, and women who are, or may become pregnant or are Breast Feeding should not use androgel. Serious side effects include worsening of an enlarged prostate, possible increased risk of prostate cancer, lower sperm count, swelling of ankles, feet, or body, enlarged or painful breasts, problems breathing during sleep, and blood clots in the legs. Tell your doctor about your medical conditions and medications, especially insulin, corticosteroids, or medicines to decrease blood clotting. Talk to your doctor today about androgel 1. 62 so you can use less gel. Log on now to androgeloffer. Com and you could pay as little as ten dollars a month for androgel 1. 62 . What are you waiting for . This is big news. Welcome back. It has been quite a week for rutgers university. They officially joined the Big Ten College while its Football Team zeros in on an orange bowl position. Joining us, Athletic Director tim pernetti. Is ththis is the fight song, the alma mater. All fight songs sound alike, dont they . A little bit. Tim, thank you for coming in. Is this huge. What this means for rutgers, not just about what it means for the Football Team, but really the money that the school will be bringing in as a result. Thanks for having me. Its terrific for rutgers and its a University Wide thing. When you look at conference expansion, i think everybodys impression is that its all about football or its all about athletics. But i got to be honest with you, College President s make these decisions. And the big ten president s are the ones that vote yes or no, so Institutional Profile is really the lead dog in these things. And we have a tremendous academic profile at rutgers. The timing is get. President had a heck of a week. So for rutgers its a great fit. Faculty is excited, board is excited, athletics are excited. And if me having to run the business every single day, it brings a tremendous amount of resources to the table that you just dont realize in any other conference in College Sports right now. So its an unstable time. Schools are leaving conferences all over the place, but for us, what we have at rutgers, the assets, the new york market, all those things gave us the ability to be positioned for stability forever. For the big ten, too. I think of it more for the big ten, that they get the tristate area. That was the point being made as i was watching your excellent interview onof they gave you like ten minutes. They did. I was shocked. But every question she asked, i was like, oh, my god, what hfrand then i was actually interested. Sold. I dont think anybody in the tristate area cares about watching wisconsin, but if rutgers is in it, its good for the big ten and rutgers. What commissioner toddelaney shared, penn state has been in the league for a long time and now its a bridge into the east. If you look at the map, you see the triangle taking shape. That coupled with the fact that the new york market has been unclaimed in College Sports. Since rutgers has been doing football, weve overdelivered the market. Was it not good to see them win that last game and have a pretty good year and that coach has got to be up for because i hope that team its sad what happened to that football program, but they had a better season than anyone thought. Its incredibly sad what happened, but i think if you look at the kids in that program and what coach obrien did, they did as good a job as a head football coach that anybody in the country good because it couldnt have been a more difficult situation to handle. How much money is this deal worth to you . I think like anything, our fans are like this is great, well get all the money right away. But what happens is you integrate over a period of time. We cant share equally in value we had no part this creating. So what well do is well enter the conference in a couple years, as we grow financially, well start at better than where we are slightly, growing to full membership over a five or six year period. But the big ten distributed 25 million per school last year in revenue we in our current conference situation are more like at 3 million to 5 million per year so its a pretty significant swing and they have their own tv network which is throwing hundreds of millions of dollars off coupled with their espn deal. You should be able to attract better athletes. It was funny i was at the press conference at rutgers and i invited all of the coaches and walked in and looked up and never seen bigger smiles than i did in my life, theyre all thinking recruiting, recruiting, and thats the lifeblood to any program and in football theres top kids in new jersey every year and we cant fight the argument of i love rutgers but i want to play in the big ten. Guess what . Thats over. Too late to recruit for that pittsburgh game. The time the game is over were on to the next one. The next one is a big one thursday night. In the midst of all the medical school, big ten, we play louisville thursday night at 7 30 for our first big east championship and weve never had a conference championship game on our campus. Every single report i saw on notre dame over the weekend, they all started with love em or hate em. Any champion. I guess. But the sec, is this not the perfect foil to try to go in and break their dominance on the National Championship . This is so great to have them there as the, you know, the david and goliath. For College Football its the ultimate movie stricript. Alabama or georgia . The way you look at it as a fan everybody wants to see alabama but for notre dame, theyre a great point because notre dame when they decided they were going to join the acc which they did in september was the linchpin. At least we know what theyre going to do. If its alabama, the score might be 53 or something, right . It might be. You really worry about a lot of details that dont matter, do you . I do. Im in business. Youre entertained by the game. Whats the matter with the score . Maybe 73 . I have a business question, because ultimately at some level this is all about business and all about money, theres always been a question whether athletes should be paid, whether the kids should get money for what theyre doing in terms of bringing the fans, the audience and the money to school. How do you feel about that . Its a great question and ive had the same opinion, youre creating the value, selling a jersey while hes competing and after hes competing but the focus is on the mission. Pay them or dont pay them. Why not as you generate revenue put that money in escrow and have sort of what the elive constitue equivalent of a post graduate scholarship because if we send three kids to the year to the nfl or one to the nba thats a lot. Have something that sits thereupon graduation for every kid i dont know how much it is, 5,000, 10,000, 25,000, gives them the ability to get started in their life but youre not dishing out special money, its graduate and here is what is here for you to get you started. I like that debate. Do you feel that debate will happen . Its not, for me i think because i was a student athlete there and after my first practice at rutgers at football, i guess the nfl is off the table because of what i played against but i was focused on my education and i think a lot of kids are because the views are publicly the kids are getting ready for the pros. Its not true. Kids are more focused on education. Youre an injury away, not quite as good. Ive tried to talk about that as much as possible because i think its somewhere in the middle that gives everybody the ability to share in the value but focuses on the mission, our goal to educate and graduate kids and set them up for success. Take some of the pressure off some of the ohio state head problems. Thats sad this year to go in undefeated and not even be in the it is, it comes back to the governance. The ncaa, im not being overly critical but the rule book needs to be totally revamped. Lot of regulations were written at a time when a lot of special circumstances werent concerned. I tried to set up a fund to help a player that was seriously injured, everything has to be overhauled for College Sports to be governed in the right way. Joe wore his rutgers red tie today, very kind of him and i see you brought something along, too. What i would really like to see him get this on because it takes four players to get a jersey on on game day. I want a picture of him trying to get one on. Did you get sorkin . Sorkin is in the middle so he gets a number two. And of course, rutgers love becky quick always number one with us on this show, you get a number one. That is great. We hope you display those proudly. Thursday night, may get up at 3 00 in the morning, but love to have you at the game. Im worried about it. Come sit next to me during the game and well worry about it. I might actually stay up late. Is it harvard on the raritan . Ive never heard of that. Did you make that up . Its good. You told me that was said all the time. Thats the first time now its a trademark. Greg brown said it, it will stick. Thank you for coming in. A nation on a cliff, Steve Rattner, another member of the fix the debt committee. Obligations, but obligations. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. Can i help you . I heard you guys can ship ground for less than the ups store. Thats right. Ive learned the only way to get a holiday deal is to camp out. You know weve been open all night. Is this a trick to get my spot . [ male announcer ] break from the holiday stress. Save on ground shipping at fedex office. Nespresso. Where i never have to compromise on anything. Where just one touch creates the perfect coffee. Where every cappuccino and latte is only made with fresh milk. And where the staff is exceptionally friendly. Nespresso. What else . You can stay in and share something. Or you can get out there and actually share something. The lexus december to remember sales event is on. This is the pursuit of perfection. Holiday central. Plenty of shopping days left. The American Consumer shopping and dropping more than a few dollars this weekend. Well ring up the state of retail. Rise above. Warren buffetts calling for a minimum tax on the rich, what are some of the nations top Corporate Leaders make of the idea . The a disruptor you have to see to believe, pushing the boundaries of man and machine as the second hour of squawk box begins right now. Good morning, everyone. Welcome back to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. Weve been watching the futures and the market giving back gains from last week. The dow futures down by about 64 points below fair value, s p futures off by six points and in our Morning Headlines the National Retail federation says a record 247 million shoppers visited stores and websites over the fourday Holiday Weekend up 9. 2 from a year ago. Americans spent more money there, too. The average handed over 423 during the entire weekend, up to 398 last year. Few interesting analyst calls today, facebook upgraded to outperform from market perform at bernstein. The target increasing to 33 from 23 and yahoo added to the list by Goldman Sachs and research in motion, sector outperformer from second underperformer at cibc world markets. Were trying to come one a clear solution to solving the debt crisis. Joining us as our guest host, Motorola Solutions ceo greg brown who has been with us this morning so far and new to the table, Steve Rattner, issues of the fiscal cliff dominating the sunday talk shows. Heres senator Lindsey Graham. I agree with grover, we should raise but hes wrong where you cant cap deductions and buy down debt. I want to buy down debt and i will violate the pledge, long story short for the good of the country only if democrat also do entitlement reform. You listen to what he has to say. Steve you had an oped over the weekend. We talked about Warren Buffetts oped, the 30 for everybody over 1 million. You talked about raising the rate 28 is your personal number if you take it. You say from everything im reading it would not have a huge impact and the conversation we have constantly is look whats happening in the stock market. People are selling stock in advance what have they think may be exactly what youre talking about. You have to separate two things, people selling things because of the uncertainty in washington, different from the question if tax rates were higher, people would own stocks for less longer. I was reassured Warren Buffett who knows more than i do about investing said the same thing today that his behavior hes been operating for 60 years across every tax regime you can imagine taken doesnt change his behavior. He buys stocks he likes, holds them for as long as he feels like holding them and sells them. Why 28 . That was the rate before clinton lowered it to 20 , the rate that came out of the 1986 tax reform pack annual. I dont know if 35 or 39. 6 is the right rate but its a reasonable rate and gets the tax rate on Capital Gains closer. How about dividends, steve . Do you, you know how a lot of times we look at whether markets cheap or expensive based on the dividend for years based on what the yield of the s p is and if do you it on an aftertax yield, if dividends were to go to 40 say or higher, would the market then be revalued . Would it have to be revalued at a lower level based on what the aftertax cash flow is . Dividends were taxed at 40 until the bush tax cuts and the stock market is back. Theres a lot of Different Things going on. Apples to apples, do you think that the market could be valued more cheaply if dividends aftertax were lower, much lower . On a theoretical basis yeah if youre going to get a lower aftertax return into one asset you might into another asset, bonds. What do you think in. I think there will be a nominal revaluation but at the end of the day, in the main you can handle it. As long as its not 50 on dividends. Right. Remember were talking about reforming the Corporate Tax code to make u. S. Companies more competitive globally. Im in favor of that. That comes down to Companies Paying less in Corporate Tax. If theyre going to pay less who are the beneficiaries, shareholders. The shareholders should pay a little more to make up for the loss in revenue. Are you an advocate of the u. S. Moving to a territorial system so the administration seems to be supportive of a lower rate, seems to be supportive of broadening the base. There seems to be reticence or reluctance to adopt a territorial system when everybody else has. Remember that Corporate Tax rates is a share of total federal Tax Collections going down, down, down, down, down, because corporations have become better in managing their profits in a way that minimizes their tax liability. Thes reticence you hear is tha we think corporations should pay their fair share. We need companies to compete globally. I do support moving to a territorial tax system if its coupled with the idea that the beneficiaries are paying taxes some other way. Corporations pass along taxes to their consumers anyway. To the customers as well, right, so then youre sort of saying theyre going to get stuck with it. Shareholders would get stuck with part of it and it also gets passed along with, that seems selfdefeating, too. Were talking about lowering Corporate Taxes on the shareholders. On the beneficiaries of those higher. You worked in the white house, steve. You know the president. I do. You know the way he thinks and frankly many of his cabinet members and those quhis pwhispe his ear thing. Hell barnstorm the country and talk about the 39. 6 , talking about marginal rates. Where is the room to the extent you believe theres room, to compromise, with a house that doesnt want to talk about marginal rates at all . Where is the white house able to compromise . Ive been doing deals for many years, greg has, theres always compromise. Could you put the buffett rule in to raise a bit of money over here . The beauty of this situation, its difficult, but the beauty of it is, its not an either or, theres no black and white that has to exist. Theres an infinite number of possibilities. We can talk about this philosophic philosophically. President obama the man that you know how is he thinking about this in. I dont know but i believe hes thinking about this as the most important thing that will happen in his second term. If he wants to have a second term legacy unlike many other second term president s this is the issue. Fiscal cliff or the larger issue . The whole thing wrapped together. Is he willing to go over the cliff in. I believe increasingly people of his mindset are willing to go over, i believe its only the second worst thing that can happen. The worst thing that can happen is we extend all of this stuff which we could do with the stroke of a pen, cancel the sequestration, life to go on merme merrily except the country will go over another cliff. What is more important rates higher on the richer or vibrant growth in a economy. You set up an interesting dichotomy. The one thing he wants to be remembered for is raising taxes on the rich in. In the second term the thing hell want to be remembered for is a comprehensive budget package that solves our longterm deficit problem. If he does that, he will go down in history as a near great or great president. If he doesnt people will view the second term what else is on the second term agenda, maybe immigration . Were not going to get climate change. Fixing the debt is fixed by entitlement reform. Is he willing to give on that side . I believe the president has come to the party ready to do a deal. If youre raising taxes and cutting spending what does it do to growth and gdp. You have to raise it carefully. The debt has been coming down automatically, part of why unemployment has not been coming down as fast and why gdp isnt growing as fast. You do it gradually. I see a lot of the moves on the high end sort of trying to overcome the income disparity growth over the past 20 years and im wondering whether successfully redistributing a certain amount of wealth and being stuck at 2 would still be seen as a positive legacy for him, if he stayed at 2 growth but did raise taxes, is that a successful second term presidency if you dont get back to 4 growth and 5 unemployment . Sure, i dont know if well get back to 4 growth any time soon. Let me put it this way. Everybody below the 2 has been a loser over the last ten years in this economy. Median family wages are down 7 after adjustment for inflation. I personally believe globalization, technological change have played a big role. We need to help those people. If those people had been wiped out by a hurricane we would rebuild the houses. They have wiped out by other forces that have come to bear. Its the responsibility for the incomes of the top 2 to but its not solved by taking from one and giving to the other. Its solved by growth. Its solved by a mix. Growth is the most important. Sitting here youre going to get growth if you create a predictable, stable fiscal outlook forever the companies to operating it. Kicking the can is a terrible outcome. We had obama and boehner, cantor and biden, the super committee, the gang of six, the time is now. I believe that the recognition is that the time is now. All lower marnlal rates. No, and i also believe the legacy for the president is say vibrant economic recovery. I agree. If theres a political chip on the wealthy i dont think its 250,000. It shouldnt be the holy grail. I believe its a political talking point. First it was obama care, when you were focused on the economy we need significant revenue to work. Not a majority, man a quarter of the package will be revenue. We had increased revenue when we had growth. We had 18 or 19 . Were going to continue this conversation around the table, greg is sticking with us as is steve. Still to come on squawk, senator bob corker sounds off on taxes and the ifisical cliff, because black friday is in the books. Now we turn our focus, we have a name for every day basically, now its cyber monday, lots of deals. I dont know what tomorrow s takeover tuesday. Cart know reagan will run through some of them after the break. If we want to improve our schools. What should we invest in . Maybe New Buildings . What about updated equipment . They can help, but recent research shows. Nothing transforms schools like investing in advanced teacher education. Lets build a strong foundation. Lets invest in our teachers so they can inspire our students. Lets solve this. Comscore says americans are expected to spend 1. 5 billion shopping online today. Cnbcs Courtney Reagan is monitoring the deals. Brian shactman is in dodgeville, wisconsin at lands end. Wearing a sweater. Wearing a sorkin sweater but it looks good on him. I dont know, its weird. Courtney, what is going on . Joe its early but consumers are planning their cyber monday purchases. Google sent us their first data poll of the morning, not surprisingly electronics leading the way and three retailers are making the list. The top five google shopping search queries in the u. S. Include laptop at number one, nexus 7, television, amazon ipad mini, ebay and walmart coming in nine and ten. Retailers have upgraded to handle heavier load times. Consumers spent more than 1 billion on black friday according to comscore. Consumers are becoming moring agnostic and expect a seamless experience across platforms, its going to be really important today. The nrf expects more than 129 million americans to shop online. 40 of retailers offer Free Shipping, offer up 12 from last year and while its back to work for many, 44 have said theyll shop in the morning. Web traffic is forecast to spike around lunch. Atobe has the most bullish forecast for cyber monday predicting 2 billion in online sale. Brick and click retailers will bring in 450 more than todayer haves a typical day and online only retailer also see a sales spike of 200 . Brian shactman is in wisconsin. Reporter lands end, were already humming here just about 6 15 a. M. Local time, its in a pretty good sweet spot. Look at some of the national reation federation numbers. 50 of the people who shopped friday spent it on clothes and accessories. People spend money on Everything Else. I was surprised how the percentage was so low on jewelry but a lot of what courtney said bears itself out in the numbers. When it comes to lands end and courtney talked about the hybrid model, exactly whats going on, theyve been doing online doorbusters since last wednesday all the way through today and for comparison, its still important to have a big cyber monday, they processed at their peak hour last year of 21,000 orders the entire day they did 180,000 orders on cyber monday so it is diluted and obviously a big deal and andrew, we have a jobs element to this story, like fedex and u. P. S. , they will add workers for lands end, about 1,000 temporary workers in the next month to handle another shift and also its pretty much started as more of a Catalogue Company and all of their Customer Service reps are right here in wisconsin, and i will tell you this is not a lands end sorkin sweater but ill look at their collection, andrew, and if you want one, you should definitely let me know which one you want. Thank you for that, brian. Put in an order right now, just i dont know, a bright color but nothing too hideous. Joe will make fun of whatever it is. No, i said he looks good. I want to put in my order for a lands end sweater as were on the air. I dont think the sweater makes the man. Occasionally it does. Brian thank you for that. We will see you soon. Republican senator bob corkers plan to dodge the fiscal cliff. Well have him in just a moment. Dont go anywhere. Todays aflac trivia question, which current member of the Philadelphia Phillies won the American League cy young award in 2008 . The answer when cnbcs squawk box continues. This christmas. Yeah, how will you pay for things like food. Electricity . Dental bills. Gazooks. You need a backup plan. [ santa ] ho, ho, ho. Thats why we have aflac so ill have cash to help pay bills great. But what if youre still not better by christmas . Hmm. Afllaaccccccccc [ male announcer ] aflac. Weve got you under our wing. Rudolphs better. But now blitzens sick [ engine revs ] [ male announcer ] the mercedesbenz winter event is back, with the perfect vehicle thats just right for you, no matter which list youre on. [ santa ] ho, ho, ho, ho [ male announcer ] lease a 2013 c250 for 349 a month at your local mercedesbenz dealer. Or that printing in color had to cost a fortune. Nobody said an allinone had to be bulky. Or that you had to print from your desk. At least, nobody said it to us. Introducing the business smart inkjet allinone series from brother. Easy to use. Its the ultimate combination of speed, small size, and lowcost printing. Now the answer to todays aflac trivia question. Which current member of the Philadelphia Phillies won the American League cy young award in 2008 . The answer, cliff lee. Aflac. Welcome back, everybody. U. S. Equity futures at this hour, we have been looking at some red arrows. Dow futures down by about 68 points, s p futures off by 7. 25 points. Weve been watching whats been happening at the weekend box office. Breaking dawn part ii taking in 64 million. Daniel craigs bond adventure skyfall came in at number two and lincoln finished third at 34. 1 million. Have you seen, i made fun of the twilight saga the lines. You said you saw carl. Some of the men with their kids. I saw one it was pretty good, i watched them. You think theyre good. Yeah. I saw one with my daughter i thought it was the worst, bar none. I sent a check acting lessons for everyone. You havent taken blake to enough movies. The guy or the wolves all they do is run around with their shirts off, thats the only reason theyre there. The girl is in love with everybody. Its because you didnt start watching from the beginning. I didnt know what was going on but it was horrific, it was the worst two things, penelope must take blake to most of the things. I didnt want to watch, a lot of open mouthed kissing. I saw Silver Linings playbook over the weekend, absolutely fantastic. If you do nothing else go to see the movie. The new de niro film. He plays a Philadelphia Eagles fan. Whats it called . Silver lining playbook. Robert de niro. And Bradley Cooper is the star and its off the charts. When we come back well talk about weekend winners and losers in the retail space, find out where people shopped and what it says about Retail Stocks and republican senator bob corker, join us with his plan to dodge the fiscal cliff will. With the spark cash card from capital one, sven gets great rewards for his Small Business how does this thing work . Oh, i like it [ garth ] svens Small Business earns 2 cash back on every purchase, every day woohoo so thats ten security gators, right . Put them on my spark card why settle for less . Testing hot tar. Great businesses deserve great rewards [ male announcer ] the spark Business Card from capital one. Choose unlimited rewards with 2 cash back or double miles on every purchase, every day whats in your wallet . Heres your invoice. Nespresso. Where i never have to compromise on anything. Where just one touch creates the perfect coffee. Where every cappuccino and latte is only made with fresh milk. And where the staff is exceptionally friendly. Welcome back to squawk box this morning. Few interesting analyst calls out today. Facebook upgraded to outperform from market perform at bernstein, target increased to 33 from 23, a notable call because the bernstein analyst was perhaps the most wellknown bear at the time of the ipo and yahoo was added to the conviction buy list at Goldman Sachs so watch that stock and finally research in motion upgraded to sector outperform from sector underperform at cibc world markets. Joe, back to you. Goldman still has that conviction. Still. Still havent figured that out, five years into this and still got a conviction buy list. Senator bob corker out with an oped in the Washington Post on how to avoid the fiscal cliff. He joins us from washington. Reasonable people im hearing it from more and more say that kicking the can is not the way to go and if we have to go over it, we should go over it. Im hearing that from republicans and democrats. Are you picking up on that, too . A lot of people think that just more business as usual is not the way to do it. I couldnt agree more. I dont see the need to go over the cliff. The fact is that this congress has had two dry runs. Weve scored every kind of option there is both on the revenue side and on the entitlement reform side and what we need to do is make some decisions. This is easy. Steve rattner and i could probably work out a solution before lunch today but im encouraged that the president and Speaker Boehner both are showing flexibility. The fact is that this is really easy to do. Ive written a 242page bill, thats it, its got over 4. 5 trillion in savings by the time you include the budget control acts 917 billion we enacted, it replaces sequestration. This is easy technically to do. Lets make the decisions, rip the bandaid off, do the things we were hired to do and lets begin january 1st focusing on the greatness of the nation and put in place go ahead. Bob, does it extend the bush tax cuts for people making over 250,000 . Its got 1 trillion in revenue. Does it extend those . He has said repeatedly he will veto anything that extends the bush tax cuts for people making anything over 250 . Hell say that all week long, going out on the stump. It caps exclusions at 50,000, it puts in place something called chained cpi, which changes the inflation rate which moves people into tax brackets more quickly, but it also controls entitlement spe spending and Social Security was created to capture 90 of wages. Today its at 84. If you move that out through 2050 it creates revenues, thats 1 trillion. There are all kinds of ways of doing this and thats the point of my oped, this bill can be improved, but i think the last thing that people like you who influence the way policymakers think, the Business People who come in your program, the last thing that you need to do is talk about us kicking the can down the road as if this is too difficult to do. Its not. All it takes is political courage. Its not technically difficult. Its very easy for us to get this done over the next two or three weeks as long as you have two willing partners, partners who are willing to look at revenues and partners who are willing to look at real entitlement reform. We started out with an air that says this is possible and its easy to get this done if well make the decisions that need to be made and thats what you should be pressing us to do. Senator, does your plan raise the 250,000 a year income threshold or does it change or increase marginal rates . What it does is it caps exclusions and it generates that portion alone generates 750 billion. Sorry, that portion does what, bob, it raises how much revenue . 750. You add the other two components its over 1 trillion and theres a number of ways of doing this. The point is the very high income or the ones who are paying the increased rates but its a progrowth way of generating revenues. Senator, we could talk about all the different numbers, but when do you think were going to actually get down to brass tacks and people will sit down and negotiate this . I think theyre already beginning. The staffs are already talking. Weve shared this bill both with the white house, but also with boehner and mcconnells office, we did that early on. I think theyre already beginning and again the last thing that our country and people who, pundits and others need to say is that we cannot get this done this year, so again its a willingness of two parties to sit down and look at the options that have been scored. This congress is more prepared than any congress in history to address this issue. We just need to do it. I dont think its pundits at all. Were rising above here. We can get you buttons so you can rise above but there are people, patty murray, a lot of people that say if the rates are not going to go up, if marginal rates arent going up, let us go over the cliff. You have guys like trumpka and certain aarp constituents dont want any messing around with entitlements whatsoever. Someone is going to be really unhappy, if we were to do your bill as it is right now, senator, there are people that are going to be really unhappy and theyre going to be throwing spitballs at the president if he agrees to it. Bob, what has been the feedback from the white house . They would never do this. If you find a way to raise revenue but doesnt change the marginal tax rates. We sent it to the white house through erskinebowles and we did that last week. You cannot solve this problem without creating sacrifice and pain throughout the system and we all know that. This is tough. The longer with he wait, the lesser menu of options well have and the more draconian the decisions will be, so look, we all know, look, ill tell you this, 98 of what is in my bill is going to happen. The question is, is it going to happen now, and we can begin the next year, you know, focusing again on the greatness of our country or are we going to kick the can down the road for another six months, another year. At some point the kinds of things that are in this bill are going to happen and as a nation, shouldnt we address that now while its easier, you can do it in a more timely way than waiting until we get into a deeper and deeper hole. Thats the point. Most people say tax reform last time it took four years, three years. Youre saying you could do this with a 50,000 cap and its only 243 pages. People dont think that, senator. I know they dont think that. People have spent two years around here crafting bills that lay out a process, theyre like 1,000 pages long. Its so much easier just to create a bill that implements the policy. The tax piece of this is four pages long. People act like this is such a heavy lift. Its not. The lift is steve doesnt like this. Steve is willing to go over the cliff. Im totally with senator corker on the idea of getting this done and getting it done now. The question is where do the compromises come. If the white house said well take the top rate of 36 or 37 instead of 39. 6 and have a different cap on deductions are you open for those kinds of compromises . Steve, i dont know of any republican who has written a bill that shows 1 trillion in revenues and ive done this to help break the dam. Im not going to obviously negotiate on squawk box as to what i would be willing to do but im showing a way to make this happen. Am i showing flexibility yes. Many of my republican are in the same place, absolutely. The point is, steve, these changes are really not hard to do. Look, im open to whatever, i know Speaker Boehner has shown a willingness, the president has shown a willingness. We have to have real entitlement reform. That at the end of the day, steve, to me is the issue. I think the republicans are showing flexible on revenues. I think its going to be the real entitlement reform piece that is crucial to this. Im optimistic as we begin, but again, for all those in america who care about this, this is simple to do. It just takes courage, thats what you guys have hired to us do, lets execute, lets begin the year focusing on the greatness of this nation. Senator, thats good advice. Well try and do that. It is a great nation. Well find it. Senator corker thank you, very appreciate it. So what happened on black friday . How strong of a shopping day was it and will it be enough to bolster the Holiday Season overall . John lawrence is with us from memphis, managing director and Senior Research analyst at stevens and if you want to break down what happened you have to first look at walmart, the biggest of all the bigs out there. What did you read or glean from walmarts release that they put out . Good morning. First of all, you know, very positive, certainly weve talked about for a long time when walmart is, has inventory correct and they send the message to the public that theyre going to be aggressive on price more times than not it works. Black friday and the thanksgiving promotions were another indication of that. It was their best black friday ever, certainly the onehour guarantee where you didnt have to worry about would you get that item, certainly played a major role and certainly people were guaranteed that item and they had big crowds and people focused on those savings. John, what we learned with walmart last time around is that margins do matter. Is this an issue where they could be bringing people with sales that end up not necessarily helping their bottom lines . Theres no question a lot of people will thats been part of the Investment Strategy at walmart now for a couple years, and the point is, theyve been able to leverage and certainly for the Fourth Quarter were looking for a 1 to 3 comp. Obviously at the high end of that, you could get a better point to leverage. We think theyll continue to make investments and cost cuts that they can offset this investment in price, theyve been willing to do this and been able to snow over the last several quarters. So you didnt change your perspective at all after walmarts last earnings quarter . There was disappointing news in that. There was a little bit on the top line but once again, i think there was some noise and some expenses as well, some of these lawsuits, et cetera, but from an operating earnings gain, and some of the things were seeing and the most important thing is the initiatives at walmart are driving traffic into the store, thats the most important thing i think we take away from this. How do you compare walmart against someone like a target in. Well, i dont follow target as closely. I just know that in the rural south and where a lot of the smaller markets, i mean walmart is, theres so much more prevalence and have a larger space and presence than target and some of the smaller markets. What do you think about where the americans are playing out and how this plays out for the rest of the Holiday Shopping season. You can glean expectations from black friday but with a long period between thanksgiving and christmas sometimes that doesnt tell you everything about whats going to happen. Exactly. Obviously weve still got some time and well see as we get closer to christmas what happens with the public. Obviously they continue to look for deals, the markdown cadence at some of the retailers, what will happen over the next couple of weeks as far as giving the deals and a lot of people are waiting for the lastminute in time of need, but obviously following senator corkers comments, anything to help and make the public feel better about the fiscal cliff would certainly impact that consumer. John, thank you for your time today. Great, thanks for having me. Coming up our disruptors series continues, an exclusive report from ges chief economist on the industrial internet, bringing Digital Intelligence to the physical world of industry and top of the hour, lawmakers. Ed to meet again on a compromise to avoid the fiscal cliff. Were going to rise above the rhetoric with john harwood at 8 00 a. M. Eastern. Man these guys are slow. Reminds me of our network before cdw virtualized it. How . Cdw and hp networking implemented a Virtual Application Network that reduces the time to deploy cloud applications from months to minutes. With fewer bottlenecks like this. Finally. Charles client golf. Aim for the lake. Really . Heartburn symptoms causedelieve by acid reflux disease. Osteoporosisrelated bone fractures and low magnesium levels have been seen with nexium. Possible side effects include headache, diarrhea, and abdominal pain. Other serious stomach conditions may still exist. Talk to your doctor about nexium. Can i help you . I heard you guys can ship ground for less than the ups store. Thats right. Ive learned the only way to get a holiday deal is to camp out. You know weve been open all night. Is this a trick to get my spot . [ male announcer ] break from the holiday stress. Save on ground shipping at fedex office. General electric unveiling a groundbreaking new report on Technology Innovation called the industrial internet, pushing the boundaries of man and machines and joining us now from san francisco, marco anunziata, a chief economist at ge and executive director at Global Market insight. Marco, can you explain what youre talking about here . I remember long ago you heard of this guy jack welch, when people talked about the internet being a fad and all these Companies Back in the 90s and a lot of them fell by the wayside, the one thing that was going to happen was that business and industry was going to be able to use the internet and then b2b came about. Can we handle it now . The time has come . I think the time has definitely come and its going to be big because the industrial internet is the next productivity revolution. Let me explain what we mean by industrial internet. The industrial internet brings together Intelligent Machines and people so you embed the sensors into machines, into equipment and were talking about jet engines, power turbines, medical devices, and these sensors generate an enormous amount of data and with Software Analytics you can analyze the data and optimize the performance of the assets, you can optimize the way in which the assets are used which means for example that in the case of airplane engines can perform maintenance before something goes wrong and not before the airplane is due to take off so you avoid delays. In the case of hospitals you have a better management of hospital beds, of medical devices which means you can provide Better Health outcomes to more patients at lower costs, so we have a Huge Installed base of assets in the sectors we operate in from locomotives to jet engines, Power Generation, hospitals, and we can see the benefits this is bringing in terms of greater efficiency to our customers, and greater costeffectiveness of our services. In the bottom line of this, will be a huge impact on productivity, so fast Economic Growth, faster incomes growth and faster jobs growth in the u. S. And in the world as a whole so its huge, and it is here. It is starting now. Really. So youre talking about a sensor. Is it a little Wireless Sensor that actually has, i dont know, its reporting back to some server somewhere whats happening and there must be software written that congeals all the information to allow to you do these things . Are we talking about Wireless Sensors in every single device . Thats exactly correct. Were actually talking about multiple senators in each device potentially, because each device will be made of various moving parts and you can associate a different Wireless Sensor with each part and send into the cloud a huge amount of information. Once you have the analytics to analyze all that information, there is virtually no limit to the improvements in performance that you can generate. Marco, how does this differ, this idea of the industrial internet, beyond the sort of marketing scheme of calling it the industrial internet from what ibm is doing. They talked about the smarter Planet Campaign which to me seems similar. Am i wrong . I think youre wrong. I think what is different here is that the industrial internet, theyre calling it industrial because it really starts from the application in industrial machineries and machineries which you will see applied this in advance. So these are sophisticated medical devices, jet engines, locomotives, Power Generation turbines and the difference with big data is exactly the fact that you are operating directly in the machines, and you are improving not only the performance of the machines but you are moving towards greater degrees off automation. All these devices are getting increasingly complex, so what you need to do is get these machines to be able to operate in a more and more automated way, and by the way the other thing youre doing is you are embedding intelligence into the data. Youre creating situations where the data themselves, whether its the result of an mri in a hospital, or the performance of a jet engine after a flight, the data itself will know where it needs to go and get to the technician, to the doctor involved as quickly as possible. So it is different. Marco, with all of the new technology thats been introduced in health care over the past 20, 30 years, theres always been this idea that eventually you would become more efficient and therefore less expensive but ultimately its become more expensive. How does this change . Part of it is an issue of incentives and right now there is no doubt that there is and there will be increasing pressures in the Health Care Sectors to be more costefficient. It relates also to the medium term fiscal picture in the u. S. So the incentive is there, and what you need to do is to have the it technology in place that allows you to do that. For example, in the case of sensors that allow you to know exactly where all your medical equipment is, these are sensors that with the right software will allow to you provide care to a lot more patients over the course of the year at lower cost. So the difference is the technology is getting more powerful and incentives to take advantage of the technology to lower costs are getting also extremely strong right now. So you will see it. Marco, this is greg brown from motorola. Youre talking about the ubiquitous deployment of sensors and Cloud Computing and storage and massive storage in computing speed capability and machinetomachine communications, as this contributes to the next level of industrial explosion if you will or the industrial internet, who do you see as the winners, industrial or companies that are the big beneficiaries of this big technological breakthrough . I think the first winners will be in the area of advanced manufacturing. Sophisticated manufacturing equipment is the one where you will see the most immediate application of the industrial internet. Then i would expect the benefits to become much more widespread. We are calling it the industrial internet but it will spread to services via the improvements in productivity. I think you will see it operating like the first wave of internet revolution, the information dmun indication Technology Revolution we saw in the mid 90s where it started in industry and gradually broadened to boost productivity in the whole economy. The first point of contact will be advanced manufacturing and this is where it could have a very strong competitive advantage for the u. S. Marco, interesting. Brave, new world. We appreciate your time today. For more on this and other, go to disrupt eedisrupters. Cnbc. Co. When he said that to have a sensor that will tell you when a part is going to fail, do you remember in 2001 thats how we got the first word howell was screwed up, he said its going to fail and they went out and got the computer at home, the other h. O. W. Said we dont sea see anything wrong and they brought it in, it was not going to fail and that was the first thing. Everything running smoothly. I get nervous having machines doing this many things. I think this is going to be. You do. In a motorola example you never had a how. Youre ibm, somber, sorry, i knew it was Something Like that. Were putting more intelligence sensors in our enterprise products, smaller example would be rfid, capturing that, asset management, inventory management, and Public Safety which is the heart and soul of what we do, putting intelligence sensors and Video Surveillance to capture situational awareness, bring it back to a 911 or command center and do the deciphering and discerning. Were going to have sensors in us. Thats the market of the beast supposedly if you get something stuck. It tells you anything you do. Sleep, walking. And you wear it on your right hand which is weird for me. Beck . Well continue the conversation with greg brown in a moment. Squawk will be right back. From currency trading for a few to a currency market for everyone. The potential of fxcm unlocked. Nyse euronext. Unlocking the worlds potential. The potential of yelp unlocked. Nyse euronext. Unlocking the worlds potential. Welcome back. We have had two guest hosts for the last hour, getting final thoughts from greg brown, chairman and ceo of Motorola Solutions and greg i have just checking out your stock chart. You said its been a year and a half. A little bit more. Since Motorola Solutions spun you have and that is an impressive stock market. What are you guys doing . I think it was finally about motorola unlocking the value of the firm, we had a conglomerate discount and not performing in certain businesses. We spun off the mobility business got acquired for a 63 premium by google for 12. 9 billion. Weve gotten more focused on a pure play, Mission Critical Public Safety and Mission Critical enterprise. Weve returned over 3 billion of capital to the shareholders, initiated a dividend, the stock is up 45 in a year and a half and were well positioned going forward. How much do you rely on Government Spending . I ask in the context of the fiscal cliff conversations, a company like Lockheed Martin has 83 of its revenue coming from the federal government. Were twothirds government, onethird enterprise but in that government segment becky its really u. S. State and local. And international, so the fiscal cliff and everybody talks about the dra coneon armageddon with defense contractors thats not us. Our government is state, local, homeland security. Do you expect google to make handsets five years from now . Very, very tough business. Mobility lost 530 million last quarter. I think its a tough road. Theres room for apple and samsung and maybe one other player. Tough. Im glad we got out of the business and are focused on what were doing. Last point on fiscal cliff, its not about ideology and not about oh yes it is. Its about making a deal, not a point. Im optimistic we can do it. You should get into the censor business. Thank you for being here. We really appreciate it. Coming up, crunch time for retailer, well get a cyber monday report from power retailers. D to cost a fortune. Nobody said an allinone had to be bulky. Or that you had to print from your desk. At least, nobody said it to us. Introducing the business smart inkjet allinone series from brother. Easy to use. Its the ultimate combination of speed, small size, and lowcost printing. Well that was uncalled for. Folks who save hundreds of dollars switching to geico sure are happy. How happy, ronny . Happier than gallagher at a farmers market. Get happy. Get geico. Chances are, youre not made of money, so dont overpay for motorcycle insurance. Geico, see how much you could save. [ male announcer ] you are a business pro. Governor of getting it done. You know how to dance. With a deadline. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. This is awesome. [ male announcer ] yes, it is, business pro. Yes, it is. Go national. Go like a pro. Olaf gets great rewards for his Small Business pizza [ garth ] olafs Small Business earns 2 cash back on every purchase, every day helium delivery. Put it on my spark card [ pop ] [ garth ] why settle for less . Great businesses deserve great rewards awesome [ male announcer ] the spark Business Card from capital one. Choose unlimited rewards with 2 cash back or double miles on every purchase, every day whats in your wallet . Forget doorbusters. Ive got it. Ahh i got it its cyber monday, when shoppers turn to the net for the best holiday deals. So whats the deal . My mission is to protect you. Youll get an update on retailers expectations for the season. And its also a crucial time for Charitable Giving. The president and coo of the American Red Cross will tell us how the year is stacking up so far. Avoiding the fiscal cliff. Ahh the consequences for Economic Growth if politicians dont rise above the rhetoric and get a deal on debt. The third hour of squawk box begins right now. Welcome back to squawk box on cnbc First Business worldwide, im joe kernen along with becky quick and andrew ross sorkin. Our guest host, duelling guest host, greg brown from motorola is gone, Steve Rattner former Obama Administration car czar. Its willett, are you in timber . Thomas willett, first mayor of new york. Hes working for the mayor. This is the mayors money. Thats right, thats cool to be a guy who has his own advi adviser. Like michael dell, this is his guy. Not just a guy, a lot of guys and gals. Exactly. Willett advisers chairman and also on the Steering Committee of the fix the debt campaign. More from steve still ahead. First your Morning Headlines brought to you by becky quick. Thank you, joe. Youre welcome. Among our top story the National Retail federation says a record 247 million shoppers visited stores and websites over the fourday Holiday Weekend up 9. 2 from a year ago. Americans spent more money while they were out shopping. The average Holiday Shopper handed over 423 up from 398 last year. Eurozone finance ministers and the imf are meeting to freeze the second bailout package for greece but first they have to agree on how to cut athens debt to a more sustainable level. Well get an update from Michelle Carusocabrera at 8 30 eastern time. Lets look at the markets here. We have seen red arrow this is morning. The dow futures down by about 71 points below fair value, this is as the markets look like theyre giving back some of the big gains we saw last week, over the course of the week last week the dow was up by 421 points for a gain of 3. 35 , you saw stronger gains if you looked at the nasdaq. Overseas in asia, we did see those markets end up well mostly red arrows across the board. Hang seng down by 52 points, shanghai by ten points. In japan the nikkei gained 22 points and europe youre seeing more of what weve been watching of the futures here, there are red arrows there as well. The ftse down by 37 points, in france the cac is off by close to 0. 9 . In germany the dax is down 0. 3 . Brian shactman is talking about cyber monday. How much does it mean for the retail world . For a power retailer lands end is means a lot. Brian is in dodgeville, wisconsin. Reporter andrew t is their busiest day of the year but its interesting even though the cyber monday concept is only a few years Old Companies like lands end have been doing online koor busters from last wednesday through today. The classic canvas tote if you had a baby in the family, people send about 20 of them to you, they had it on sale usually 25, it was on sale for 10 starting at 5 00 a. M. , it sold out in 33 minutes. They had a fleece blanket a couple days ago as a doorbuster, sold out in 11 minutes so people clearly are going on the web to find these deals and this Distribution Center here in dodgeville, wisconsin, is completely ready for it. They have about 50 u. P. S. Trailers out back, there are seven miles of conveyor belts ready and in terms of staffing they go from 6 00 a. M. To 4 30 p. M. At this distribution facility, theyll take another shift all the way through to midnight, but it is fascinating when you talk about marketing concepts, guys, because there are some people i talked that think the whole cyber monday image will be gone in a few years, well get a complete hybridization. The concept here at lands end is to bracket thanksgiving, start before it and end after it and have sales different ones every day all the way through. Brian, thank you, well see you again in the sweater. I think it looks better on brian than me, i will say that. Brian, see you soon. Lawmakers expected to work on a compromise deal to avoid the fiscal cliff. Cnbcs john harwood joins us with more. Good morning, andrew. . I shot at anything happening this week . Doesnt feel like theres negotiations going on. Feels theres public campaigning on each side. I wouldnt expect anything to happen this week, andrew, but i do think there is a lot of discussion going on that has a considerable amount of promise that something will get done before the end of the Holiday Season, before the end of the year. Theyre likely to come up with some sort of a framework for resolving the cliff, raising a certain amount of tax revenue, cutting a certain amount from entitlement programs and other programs and fill in the details in the early part of 2013 but you saw yesterday on some of the sunday shows people like Lindsey Graham making the argument that yes im willing to put tax revenue on the table, not rates but revenue, but thats a big concession by republicans because they have not been willing to do that before except revenue as it comes from growth. Theyre talking about Something Different now, talking about actually raising taxes if not tax rates themselves. That concession, john, is it big enough to where democrats would then say wow, that is a pretty would they realize thats a big enough concession to say im not going to have feet in cement on marginal rates and not going to have feet in cement on entitlements . You have two things that are democrats now are getting just hammered on by the left, by trumpka and others. You have to give on the marginal rates and give a little on entitlement and i dont think theyll think thats a big enough conception from republicans to do that. Thats what negotiations are about. The president himself indicated hes willing to move some on entitlements. For republicans the evaluation will be have they really moved, is this fundamental reform, is this something that will make a difference as opposed to patching and filling and democrats from the other side make the argument, is this real revenue, is this real money that will make a difference, thats part of the give and take. I dont think marginal rates themselves are a principled point of disagreement from the democratic side. There are groups on the left who say heck yes we want the rates up to where they were when clinton was president to 39. 6 but if there are other ways to get money for example i could write the president s speech right now hes on the road this week and every single time hell be talking about 250 and above and the bush tax cuts. Umhum. Youre saying thats not that big a deal. Is it just still more bargaining and posturing to stake out that side . Hes done it so many times. I dont see how he can go back on it. There are different ways of getting money from people who make more than 250,000 a year. You dont have to do it through rates. For example one of the things theyre talking about is essentially making the effective tax rate, the average tax rate for people at the top uniform, that is not give them any lower benefit from the lower brackets up to certain levels of income, the 10, the 15, the 28, i forget what the lower brackets are. Thats a way to get money. The question is how much money can you get. Not that much. And the other option, and i talked to kent conrad about this ten days ago or so when Carl Quintanilla and i were on the white house north lawn doing interviews. Right before you were arrested. What . No, im kidding. Get off of the what are you doing there, you snuck on there . Youre allowed. Go ahead. I threw you for a loop. Go ahead. Conrad. Youve been there. Conrad was talking about the possibility of leaving the individual marginal rates untouched but going up on cap gains and dividends. There are different combinations. I know. Again the president in his News Conference said so many times. You can do it without raising the marginal rate. He said ill veto any bill that doesnt let them expire on 250 and above. He said that so many times. Why keep saying that. He said it. But he talked about doing that in isolation. In other words if they get day deal that obviates any veto talk. The question is what are the elements of a deal. I thought he said any bill, i will veto any bill that extends the tax cuts on 250 and above. That was in response to republicans saying lets do a oneyear extension or twoyear extension. Hes in a negotiation and the outcome of the negotiation is going to trump the veto. Do you think the president would be willing to let us go over the fiscal cliff unless we have real deficit reduction, do you think the president is determined to have a legacy piece of legislation as opposed to hodgepodge that gets us past the cliff . Yes and democrats are willing to do that, too. They believe that theyve sort of gained the high cards by virtue of the election, by virtue of republicans losing strength inspect house and senate, losing the president ial race. Youve heard this from some of the democratic negotiators, well let them go and propose a tax cut. John, youre like a clinton in a second term. You are tacking to the middle. You are tacking to the middle. Im getting a little teary. Joe, the only way that i was not there before was in your imagination. Which goes wild, my imagination. You are, john, im feeling warm and fuzzy. Youre rising above, even though you dont have a button, but youre rising above. You know what . No, im not going to go there. Go ahead, please do, because you know when you say it, it stays forever. Ill send it right to the ceo. Anyway john, thank you for that, well leave it there and save everybody. Tattle tale. If you thought the hewlettpackard autonomy was over think again. Former Ceo Mike Lynch says he was caught unaware. Others would hide behind lawyers and he has not. Couple things were shocking to me. He says repeatedly he didnt know that this investigation was happening and anonymous executive is quoted saying they actual lay proechd mike lynch and said he was evasive, not forthcoming and didnt remember, after Something Like that, you dont bother telling him youre being investigated. And theyre taking shots at him anonymously as well saying, this say weird one, on at least two different crosscountry flights on an hp private jet, mike lynch went to the back of the aircraft and refused to talk with anyone for the entire flight, and then they have a spokesman for lynch saying that he had not been on a Corporate Jet before and didnt know the proper etiquette. Very bizarre and strange story. The whole story is bizarre. Its hard to imagine that now we get down to petty things. Right but the big story youve been talking about, its hard to imagine revenue mischaracterizations could cost them 8. 8 billion on an 11 billion acquisition. There is a bit of sandbagging in the numbers. There might have been problems at autonomy and 8. 8 billion seems like a stretch. I would put it the other way, this may turn out to be one of the greatest value destruction acquisitions in modern history that hp made such a mess out of this company. As a function of fraud . I think fraud will turn out to be a relatively small part. I dont think revenue mischaracterizations cost 8. 8 billion. I think they said 5 billion was the writedown related to accounting misrepresentations. Seems high to me. Well continue on. Coming up, tis the season for Charitable Giving. The American Red Cross president will join us to tell us how things are stacking up and the bottom of the hour the Economic Impact of going off the fiscal cliff, well talk to economist Jeffrey Cleveland when we return. And his new boss told him two things cook what you love, and save your money. Joe doesnt know it yet, but hell work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. Hell start investing early, hell find some good people to help guide him, and hell set money aside from his first day of work to his last, which isnt rocket science. Its just common sense. From Td Ameritrade. We dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn. Well, having a ton of locations doesnt hurt. And a santa to boot [ chuckles ] right, baby. Oh, sir. That is a customer. Oh. Sorry about that. [ male announcer ] break from the holiday stress. Fedex office. Welcome back to squawk box. In the face of destruction from Superstorm Sandy, how is Charitable Giving standing up this year . Join success gail mcgovern, president and ceo of the American Red Cross and gail, thank you for joining us this morning. Thank you, becky, for having me on the show. Weve been watching whats happened with Superstorm Sandy. We know the red cross has been one of the organizations that has risen to the forefront of this movement to try and help people. What happened in terms of Charitable Giving for superstarm sandy . My heart goes out to the people affected by Superstorm Sandy. I have talked to so many people who have lost everything including loved ones and its just heartbreaking and i also want to thank our generous donors. Theyve stepped up and were doing Everything Possible to put their hard earned dollars to work. This has been a massive operati operation. Weve served 7. 3 million meals and snacks in four weeks. In terms of how it will impact giving we recently did a survey and what we learned is that three out of four people who donated to Hurricane Sandy will continue to step up during the holiday and donate to their Favorite Charity and 90 of the people that provided political contributions plan to donate to charities as well which was very heartwarming because i know that everyone in the Nonprofit Sector is concerned about that. Gail, when we look ahead we talk about the fiscal cliff and some of the fixes and solutions and proposals out there to change tax law. Programs suggest maybe you need to cut the deduction for Charitable Giving. What would that mean to an organization like yours . We hope that doesnt occur obviously, but having said that, the american publics generosity never ceases to amaze me and they seem to step up because they want to help people that are less fortunate than they are and time and time again i have seen that over the last four and a half years that ive been with the American Red Cross, and its made me very optimistic in the spirit of american giving, and i believe that people will continue to donate regardless of the tax law changes. Would it impact your organization or not, you think it would not impact it . Well, its hard to tell. You know, id like to believe that people donate because they think its the right thing to do, not just because they get a tax break. Time will tell. Gail, are you dependent on the really big bucks guys like if it goes to, say it went to 50 on a cap, youd still get, the average donor that gives to the red cross it wouldnt affect, that still would be tax deductible but are you dependent on people giving 1 million or whatever . Im sure there are a lot of people that do that as well, right . Well, we get large donations primarily from corporations and corporate foundations, and we get lots and lots of small gifts. As an example, during the earthquake in haiti, we got 32 million from texting 10 at a time so we also get very small gifts as well as large gifts from corporations. But not individuals giving 10 million usually so it might not hurt you that much if it was a cap at 50,000. As i said, time will tell if that will have an impact. I hope it doesnt. I believe people give because they think its the right thing to do. If you had to look at some tax proposal senator corker was his proposal to cap any deductions of 50,000. Simpsonbowles would eliminate some deductions. My guess is youd rather see the cap at 50,000 . We would rather see the cap at 50,000 obvious ly and other nonprofits as well. I have a lot of faith in our country and peoples need to give, because they think its the right thing to do and i hope that holds regardless of what the tax laws are. Gail thank you for your time. If people want to give to the red cross they should go to the website, for Superstorm Sandy . Redcross. Org. They can learn how to make financial donations, brows through our gift catalogue, learn how to donate blood and learn how to volunteer. There are lots of ways to give back. Thank you very much for your time and we wish you the best of luck with your efforts. Thank you so much, becky. Makes it a lot clearer. Am i a team he ward or team jacob . After what you told me i think youre team edward. The reference to twilight. He has more makeup on, patinson, he has more makeup on than i have. Probably not. Coming up as lincoln, this guy had more makeup than i wear, as Abraham Lincoln generating oscar buzz but could he hunt down the vampires from twilight . Its funny you would say that because there is an Abraham Lincoln hunter vampire. I just read that book. You read that book . Avoiding the fiscal cliff, were going to break down the Economic Impact of the spending cuts and tax increases set to kick off at the end of the year. [ penelope ] i found the best cafe in the world. Nespresso. Where i never have to compromise on anything. Where just one touch creates the perfect coffee. Where every cappuccino and latte is only made with fresh milk. And where the staff is exceptionally friendly. Nespresso. What else . [ engine revs ] [ male announcer ] the mercedesbenz winter event is back, with the perfect vehicle thats just right for you, no matter which list youre on. [ santa ] ho, ho, ho, ho [ male announcer ] lease a 2013 c250 for 349 a month at your local mercedesbenz dealer. Welcome back to squawk box. The twilight saga breaking down part two took in 64 million during the fiveday holiday stretch that began on wednesday. Skyfall came in at number two. Lincoln finished third with 34. 1 million. When we return well look at the International Flash points that are affecting Global Markets. We have chief International Correspondent Michelle Carusocabrera bringing us an update and the Economic Issues driving the month of december. Jeffrey cleveland on consumer spending, the european christis and americas fiscal cliff. Tdd 18003452550 and the streetsmart edge Trading Platform from charles schwab. Tdd 18003452550 gives me tools that help me find opportunities more easily. Tdd 18003452550 i can even access it from the cloud and trade on any computer. Tdd 18003452550 and with schwab mobile, tdd 18003452550 i can focus on trading anyplace, anytime. Tdd 18003452550 until i choose to focus on something else. Tdd 18003452550 all this with no trade minimums. Tdd 18003452550 and only 8. 95 a trade. Tdd 18003452550 open an account with a 50,000 deposit, tdd 18003452550 and get 6 months commissionfree trades. Tdd 18003452550 call 18004339947. Welcome back to squawk box been among the stories were following, Morgan Stanley is upgrading equities to attractive from neutral. Autos and farm suitals raised to overweight, telecom and utilities downgraded and Morgan Stanley prefers europe to the United States and is increasing its exposure overseas but still the broad class of equities looks like its getting an upgrade. Onyx is buying usi for 2. 3 billion. Nice little deal. It was supposed to be tuesday or takeover tuesday. Mcgrawhill is that the last revenue . Close. Close to apollo. Would they be out of the textbook business at that point . That is weird. I think of mcgrawhill every theyve become s p. Why would apollo is that good or bad . Is the business still viable . Eventually it will go digital. For the moment its viable. Its about the content. Sure and the function of the price. Textbooks are still a great business. They wont be forever but private equity has been owning textbook businesses. Somewhat mixed results. You can make people buy the books for a lot of money. My daughter has an ipad and i cannot get used to having a big old book. Your daughter has it on an ipad. I used to carry around a knapsack with 20, 30 pounds of books. Now youre sounding old and crot crotchety. It builds character to have the heavy books. And trudging through the snow. Uphill both ways. Exactly. Michelle carusocabrera is with us this morning, she has an update on International Flash points and how its affecting local flash points. Lets go around the world, egypt, violence in the streets again today continuing protests after the president of egypt declared for himself a broad range of autocratic powers thursday night, the stock market in egypt opened yesterday, much of the middle east thursday is the end of their business week, the market plunged, a little bit of recovery today. Speaking with sources in the Banking Sector theyre worried whether or not the president says the powers are temporary whether he means it. Theres a Euro Group Meeting today, they might eventually agree to give greece the money. The narrative stands that greece gets the money, they have to calm concerns about the imf. Spanish elections in the catolca catalonia win the Regional Elections. The stock market reacted a little bit, it would have been worse if the leader of the separatist movement had done better. Lets move on to what i think is the most interesting story and could definitely affect a lot of investors who watch cnbc, argentina. During all the retail hubaloo, a federal judge in new york ordered argentina to pay nml securities 1. 5 billion. He has ordered this many times before. What is different is the remedy. There are two things that investors need to know. If you are invested in an emerging market hedge fund you should be worried about whether or not argentina will pay a gdp warrant december 15th. They very well may not and most indexes when it comes to the emerging markets contain argentinean debt. Is it going to be systemic if they dont pay it . No, but you could be affected. The second thing is the remedy that the judge has imposed. This is very interesting. He knows argentina will never pay so now what he said is i dont care if argentina doesnt pay. All of you third parties that are involved in helping argentina pay one set of bonds, if they transfer that money to you, you have to give some of it to paul singer of elliott management. So bank of new york is the trustee. Theyve gone to the judge saying how do you do this . Help us figure this out. He is imposed this on third parties. This is problematic to the payment and Settlement System of the International Financial community. People are perplexed. Its gotten to the point where the u. S. Federal government filed an amicus brief on behalf of argentina because its so problematic. The judge has the authority, he has jurisdiction over u. S. Institutions and he can say go ahead, defy me, which is what hes done. Hes done this on purpose the u. S. Government has filed on the other side. Filed the amicus brief on the other side. Right but he is so furious with argentina, fighting with them for ten years n his 80s, berates their lawyers in court all the time about all of these issues, hes had it and wants to bring this issue to a head now. She has said no way, federal court. They claim theyre going to appeal, it will be difficult to get an appeal. December 15th will be extremely interesting to see what happens. This story keeps on giving. Christi Christina Kirchner was worried because theyve seized a vessel in the port of ghana recently. Well see what finally happens when it finally gets done. Steve you have any thoughts on how that might affect more broadly . No idea. The basque separatist . They would be the basque country, a different part of spain. And portugal looks like they cut that out. At least they stick to the language. Different word for every word . Thats weird. Greece, i think has the longest term systemic issues that still arent going to be solved. I dont think greece is smic anymore. Cut it off and let it go. Angela merkel has an election next year, and she gets through it and we discuss the question and she drives the bus as well. She drives the bus no question. Michelle, thank you. Youre welcome. Thanks, michelle. Lets get a check on markets. Joining us from the cme in chicago scott nations, cool name. Sounds made up like a weathermans president and cio and also nation shares which is a good name, his name and also an options action contributor and liesman. Thats not a made up name. No. Taking out from tour, werent you going to own up for stones, the mud puppies . No, the mooncussers played for bob yeager. Scott, friday was pretty good, were down again today. I think were being held hostage more than stuff that happens in greece at least for now . I think last week that was the case. Im not certain thats the case today only because i dont think that the fiscal cliff is going to be decided in the next 30 days and im not certain that anybody expects some sort of overarching solution. On the other hand, greece should have been settled months ago, and i think were a little fed up there and we have all the finance ministers of europe getting together, imf seems a little recalcitrant, lets call it that. This has been going on for months, for years now and i think that the feeling now is, if we cant solve greece, how would we solve italy and spain. Corker just came on, senator corker, he said you do a 50,000 cap, 243page bill, instead of sending it, instead of agreeing to do something in a year, its not that, the lift is not that heavy to do something big, almost a 4 trillion deal between now and the end of the year. You think hes crazy, scott . My point is if it happens it will happen at the end of the year. I dont think theres the political will right now for anything to happen this week or next week. But thats my point t will take 35 days because if nothing else, republicans have to inoculate their constituencies. Rates are going to go up a little bit. Were also going to cut deductions. Everybodys ox will get caught, nobody will be happy. Senator corker is talking about Something Different than from what everybody else is talking about. Everybody else is talking about a framework for a downpayment at the end of the year and then you move into next year you flesh it out. What senator corker wants to do, incredibly and wonderfully ambitious but i think probably unrealistic is get the whole thing done, every little bit of it in his 242page bill, signed, sealed and done at end of the year. It would be wonderful. Just to illustrate how hard this is going to be, reuters has a headline max bachus, chairman of the finance Committee Says he wants to preserve the estate tax break because its important to farmers and wants to preserve the tax credit for wind energy. Cant do that. Everybody puts their hand up this is mine. Its less difficult, and cap you get to keep what you want. Its going to affect the high end, at 50,000 it wouldnt affect steve, what do you think about the 50,000 cap proposal or another number . I think the cap proposal has some merit. In the real world you probably end up exempting charitable. Apart from what the head of the red cross is, charities see this as potentially devastating. Do you want it to apply to everybody or only with people with income above 250,000. If its 50,000 or 28 cap of adjusted gross you end up exempting people with lower incomes because they dont use that much. There are people, theres actually two Different Things. The 50,000 cap there are not that many people but some people who would use it. How can you use more . State and local taxes, health care, all this stuff if you put it in there. There are some arguments that health care shouldnt be exempted anyway. I understand but theres also a view at least amongst some of us that the top 2 should pay this trillion, 2. 5 trillion whatever it ends up being and you dont want it to leak below the top 2 . Some people advocating the cap know it would leak below the top 2 . Why a percentage or dollar value . Yes, because youll never get something done where you argue should we do mortgage interest, charitable, health care, 401 k s. Youll never get agreement. Why handle it as a dollar value cap 50,000 as opposed to what the obamaedobama administr proposed, 28 . 28 doesnt matter as much, doesnt raise nearly as much revenue. Thats the problem with it. The trillion you talked about on the 2 , over ten years. You need about 1. 2 trillion over ten years to make the deal work. Thanks to Steve Liesman and scott nations. Catch scott on fridays. Unfortunately today is only monday. So youre jonesing for scott nations you have to wait until friday on options action which is at 5 00 p. M. When we come back, we have economist Jeffrey Cleveland on how to view the fiscal cliff. He says americas debt crisis is more like a garden than a cliff. Hell explain right after this. [ male announcer ] you are a business pro. Monarch of marketing analysis. With the ability to improve roi through seo all by cob. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. Im going big. [ male announcer ] good choice business pro. Good choice. Go national. Go like a pro. Or that printing in color had to cost a fortune. Nobody said an allinone had to be bulky. Or that you had to print from your desk. At least, nobody said it to us. Introducing the business smart inkjet allinone series from brother. Easy to use. Its the ultimate combination of speed, small size, and lowcost printing. Jeffrey cleveland is the senior economist with payton and rygel. You have an interesting thought process about the fiscal cliff. You say thats a bad analogy, that its really more like a garden, but what i want to know, if our economy is like a garden, if we get to january 1st and we dont have a deal is that the equivalent to releasing aphids into the garden or what happens . No, i dont think so. I object to the explanation of how the economy works and the image thats been created by this krisical cliff discussion is that of a car headed for this cliff and the only driver that can save us is washington. They got to steer us away and i think thats a wrong way to look at an economy. Its more like a garden and what do i mean by guarden . Theres no single group at the top that can manage that garden in a topdown fashion. It will be organic, bottom up and there are things they can do to harm things, releasing the aphids wouldnt be good but the real problem is, i was eavesdropping on that discussion in the prior segment, all the discussion about whats expiring, what possible tax plans could be, could they just kick this out into mid 2013 . Thats the real problem, thats the uncertainty. Its hampering people in our garden, hampering our clients. Youre going to willingly be chauncey gardner, we need growing, we need roots. Are you too young to have seen that . Havent seen that one, ill put it on the list. Being there due like to watch . You dont want to answer that one, jeffrey. Were trying to figure out it may be something where you cant manage the whole thing from washington but would you agree that washington at least is the gardener in this situation and can decide whether to dump fertilizer all over the place or whether to weed certain areas . I think there are an unwanted visitor transforming all over the lawn, that hethats the cl. If you believe in the car analogy and ignore the garden analogy, then you think that everything that ails the economy is a demand side problem so i see that from washington all we need to do is get a onetime boost to consumer spending. From mr. Bernanke last week its mostly demand side. Youre going we need to have some tax policy that offers certainty and that will help everybody else kind of go about their business in the garden . Thats how youll be able to make longer term capital decisions, investment decisions, thats what will help entrepreneurs and the economy flourish. And the market seems to be happy if there is some deal before year end and pushes things out to six months from now and i think that might be actually the worse scenario because it doesnt eliminate any of the economic uncertainty. Thats where you find some agreement with Steve Rattner, our guest host and he had pointed out steven you think the worst Case Scenario is we dont deal with this. Im coming around that we keep kicking the can down the road, businesses dont know what to do and never deal with the fiscal problem. Everybody in america agrees on one thing, we have a major fiscal problem and we have to agree how to fix it. Jeffrey what would you like to see in terms of a tax overhaul, looking for certain plans. Would you take just about anything as long as it gives you certainty . Something that sets it up not as a one off for the rest of the year but a longer Term Solution and cannot be focused on the high income earners. When you look at the revenues generated by the federal government, federal tax receipts the income tax is important but theres all other taxes, namely Social Security tax on wage earners that are big and important as well. I think you need to have a bigger more wholistic take on the revenue side and same thing on the spending side. Congress spends their time tinkering with what to me is onefifth of federal spending and a full 63 of what were spending money on are entitlement programs or automatic checks that just go out every year. Theyre not addressing those things. I think you need to have a bigger discussion. The problem is i doubt you have that discussion before the near end. That will keep Economic Policy uncertainty high and growth slower than otherwise and our garden will not flourish. Strong roots need to the with aer it. Thats awe your assignment, jeff. You got to rent it, being there, peter sellers, shirley maclaine, being there. Im here early in los angeles. Might take some time to dig that out. Got to. Jim cramer stocks to watch, well ask if hes fired up ahead of the opening bell. Retailers ahead of the opening bell. So anyway, ive been to a lot of places. You know, ive helped alot of people save a lot of money. But today. sfx loud noise of metal object hitting the ground things have been a little strange. sfx sound of piano smashing roadrunner meep meep. Meep meep . sfx loud thud sound awhat strange place. Geico®. Fifteen minutes could save you fifteen percent or more on car insurance. To a world of superconnected intelligence. The potential of freescale unlocked. Nyse euronext. Unlocking the worlds potential. To investing with knowledge. The potential of Td Ameritrade unlocked. Nyse euronext. Unlocking the worlds potential. Welcome to the world leader in derivatives. Welcome to superderivatives. Welcome back to squawk box this morning. Lets get down to the new york stock exchange. Jim cramer joins us now. Whats going on, jim . Everyone would have expected given the fiscal cliff discussion negativity and i think sales would not have been that good in retail. Im not hearing anything bad. Im hearing big volumes. Its very encouraging. Shopping. How much are you taking away from all of this . I think apple was a big winner. I think amazon is a big winner. I like what im hearing from macys. Urban outfitters. I like what im hearing from them. Its funny. We were up so big on friday that if we had we almost borrowed a really rally here. I know it wasnt supposed to be as strong as were hearing. I come back to the idea that perhaps the reports underestimate the wealth of this country. The wealth in this country is extraordinary. Did you see the piece in the New York Times about Hewlett Packard and mike lynch fighting back. I love a fighter. Give me details. I know david will talk about it later. It is true. In the deal book you talk about how Hewlett Packard did not say fraud. I dont know. A big 5 billion charge, you dont do that for nothing. Does meg last in all of this . Yes. Why . Because they need some stability. It wasnt her fault. It isnt she was on the board though, right . Look, cash flow is good. It wasnt her fault but has anything good happened with Hewlett Packard . Nothing good is happening in that industry. Theres nothing good at dell and dell is a good company. Theres nothing good in the suppliers to these guys. Theres a secular shift toward apple but people dont want to own apple. I think thats a mistake. I think apple is okay. We want to hear what david has to say about hp and well hear that soon. Thanks, guys. When we come back, the last word from our guest host. Stick around. Squawk will be right back. Announcer tomorrow on squawk box, counting down to the fiscal cliff. Three guest hosts who know wall street and washington very well. Squawk box rise above starting at 6 00 eastern. Cash . Heres one you may not have thought of fidelity. Now you dont have to go to a bank to get the things you want from a bank, like nofee atms, all over the world. Free checkwriting and mobile deposits. Now depositing a check is as easy as taking a picture. Free online bill payments. A highly acclaimed credit card with 2 cash back into your fidelity account. Open a fidelity Cash Management account today and discover another reason serious investors are choosing fidelity. [ engine revs ] [ male announcer ] the mercedesbenz winter event is back, with the perfect vehicle thats just right for you, no matter which list youre on. [ santa ] ho, ho, ho, ho [ male announcer ] lease a 2013 ml350 for 599 a month at your local mercedesbenz dealer. Facebook almost back at 25. Upgraded to outperform from market perform at bernstein. Target increased to 33 from 23. We found a base of 20. Fluctuated around 20. Now back to 25. Well get the last word from steve but also becky quick can join in on this. You had a column recently and have been battling it out on the internet lately. The word is krugman. What say you . I think his ideas are way further to the left than anything i can imagine myself being in favor of. Secondly, my one problem with him is that if you criticize an idea of his, he attacks you personally. I dont think any of this stuff should be personal. It should be about ideas. What did you get in battle over . Whether debt matters. One was whether debt matters. I think he implied that we dont need to worry about the national debt. I think thats obviously implied . I obviously dont think thats the right approach. Ever since you saw the spanish economists undress him in europe and he basically said that the problem is if someone win as nobel prize, they think this other stuff they say somehow has voracity all of a sudden. Specific thing he won the nobel prize for. Back in the early 80s about something that has nothing to do with basically he had been a political hack for the past 20 years. In fairness, hes a very distinguished economist. He has a set of views. He has an incredible following behind those views. Hes almost too far to the far left. Hes certainly within that