Transcripts For CNBC Squawk Box 20131115

In our power to assure a robust recovery in the context of price stability. After hearing all of that, the dow actually adding more than 50 points yesterday to close at 15,876. The s p 500 up another eight points to finish at 1790. So its right within striking distance of 1800. And if you look at the futures this morning, youre going to see right now there are some additional green arrows. Dow futures looking to open by about 26 points, s p futures up by about 3. 5. The white house says it could extend the obama care fix beyond 2014. President obama announcing the plan to let Insurance Companies extend those policies that would have been canceled. He pointed blame at himself for the troubled rollout. I think its legitimate for them to expect me to have to win back some credibility on this Health Care Law in particular. And on a whole range of these issues in general. Thats on me. We fumbled the rollout on this Health Care Law. This fix, though, is on the Insurance Companies. Its hard to say in reality how any of this is going to work out. It took months. Months for the Insurance Companies to work within the law as laid out by obama care. Were going to talk about in this morning. In just a few minutes, weve got john harwood. Hell join us to go through the politics on this and some of the realities on how it can possibly work. In the meantime, lets send it over to andrew. We have a lot of Corporate News this morning. Kimberly clark announcing its board of directors authorizing its Management Team to pursue a potential tax free spinoff of the Health Care Business which has 1. 6 billion in sales. Take a look at shares of the Consumer Products giant closing at an alltime high yesterday. Were going to talk to the companys ceo tom falk at 7 30 a. M. Eastern time this morning. The play station 4 officially now on sale, a little over six hours ago that gamers were able to get their hands on sonys new game console. The price tag, 399. Were going to have a product review of what it is and what it means. Its 6 30 a. M. Eastern time. And were getting a peek into the portfolios of some of the worlds biggest investors. Warren buffett, snapping up stake in exxon. At yesterdays Closing Price of 93. 22, that stake is valued at 3. 74 billion. And a couple other notable 13fs that came out, carl icahns stake in apple now valued at 3. 9 million shares. He took a large position in apple. Before i send it over to you, john, the other one that struck me was the fedex stake. Weve talked to dan loeb at that conference, the conferences just two days ago about fedex and we found out yesterday that soros piled into fedex and we found out that john paulson piled into fedex. Yeah. And warrens move is interesting. You know, hes got a lot of i dont know if it was warren or right. Berkshires move. Because but, you know, im sure warren knows whats going on when almost 4 billion. But its one of those its a very liquid stock and its a lot of money, but not a lot for a 400 billion company or whatever exxon is at this point. But its sort of so solid and so blue chip and, you know, theyre going to keep finding oil and gas and were going to keep buying it from them and running things. And its just like a buffett you know, you dont have to be too you dont have to think about it too much. How many ice scars can be find . He tries and goes all over the globe. Reminds me of ibm. But i dont know, it seems like its maybe a better move than ibm, more of a nobrainer almost. I like what yellen said, too. Just one comment about that. She said we will continue to ensure a robust recovery with our actions. Its like the one youve been able to orchestrate for the past three or four years. Now i know that arguing counterfactual. The counterfactual is there, but just the uberous that, hey, we will continue to make sure we have a robust economy. Well, nothing youve done so far has given us even over 2 . So im glad you think you can. The other thing, all the papers have that she said she will continue the possibility of tapering near term or whatever as long as the economy recovers. Well, thats the same datadependent statement theyve had all along. Fuller said when he was here it could be the accumulate ewe lagz of th accumulation of this tepid growth. Remember he said that. I was trying to figure out how the fed was going to talk their way out of this corner. That was one of the things that he provided. Yeah. But hes the one who said it and i hadnt thought about that until that point. How do you talk yourself out of this corner . Remember the former quarterback money manager that had three different fund managers. One was up 40, one was up 30 and another was up 30. He said he was up 100 . Did you think that the hearing was about yellen or was it about it was like the hearing was really actually for our benefit, as if it was a you like that i said gellen with yellen and someone said i copied someone from a month ago who came up with it earlier. Who said gellen with yellen, when the commercials were on two or three years ago. Now we really are gelling with yellen, right . We are. Thank you. No, i looked because the new ones are might be are a little different, too. Im looking. Looking. You know what we have . We have a shirt and a tie. Thats all we can do. You wear your jacket once in a while. But really, all we have short of facial hair or earrings or something, this is all weve got. You could do a watch, i guess. You could do bow ties. If you spill something, you cant cover it up. You know, my sweaters. It hasnt gotten gold enough, but im breaking out switers. What about suspenders . I could try suspenders. Because you dont wear a belt. I guess harwood is going to try and you know, i know the journal is cynical, admit that. But obama cares nonfix. You still cant keep your plan, but democrats get political cover for 2014. I think everything that washington has done to this point has been politics on both sides on this. Nobody is trying to actually fix the problem. This was political, too. They tried to step ahead of the republicans. The democrats that are panicked are still want to do more to pretend that they really care about their constituents. Well, this is like toss it back out and its the Insurance Companys fault, yet theres nothing that gets done. Rs, theyve been working on re for months and months and months. To set them up and now its like anyway, lets get to our chief washington is he our chief washington . Yes, he is. If not, he should be. There he is. He gets up for you could wear a bow tie. He gets up for our show, washes his hair, and hes not a blow dryer guy. Later in the day, it will look totally different than it looks right now, right . Its still wet, johnny boy. A little bit. Lets talk about this. I want to hear johns take. I do want to hear johns take. You wish it was going better, i know, but you will tell us the truth about how this is not this is confusing, isnt it . Is this going to quiet anything down, john . Well, thats the goal. It is as you were quoting the journal i think a moment ago, it is more or less a nonfake fix because its not going to change all that much. What the president did was something to try to deflect some political heat from himself and from democrats by saying were giving permission for state Insurance Commissioners and Insurance Companies to do something if they want to do it, knowing that they dont want to do it. So it is not likely to change very much. Let me try to break it down just for one second. But i do want to disagree with something becky said a minute ago. Everything is all politics. Thats not really the case. The reason and thats the reason why this is a nonfix fix. Is because the administration believes that they have a strong substantive answer to the problems of the individual market and by fixing it, really fixing it, you would undermine those changes. Thats a substantive position theyre taking. But, john, i think what the average american hears and what i hear from every sturchl speech from every one of these guys that has gotten up and spoken in the last year and a half, i have not heard anything other than this partisan rhetoric coming out trying to blame the other side and there have been millions of americans left in the lurch on this and i have not heard real fixes from any of these politicians. Ive heard them try to grand stand. The Obama Administration yesterday got in a fight with the republican whip who got together to talked about their planned fix. I think what obama did yesterday was ridiculous, to not reach out to Insurance Companies and not reach out to republicans to try and come up with some legitimate fixes. And then to get out and say, look, heres a fix were offering. Its a nonfix. You said it yourself. And if youre wasting the time of everybody to listen to these speeches no, no, no. Theyre not saying what youre saying that we cant do this because it undermines something we think is an actual good fix. Youre right about that. But look, they passed a law. That is not political rhetoric. They passed a very large law that im talking about the fixes theyre offering up right now. Thats not a real fix. And this is political cover. John, youre saying they they as in democrats and there are people, even if the plans are better, i knsee what your point is, eventually people that thought they wanted to keep their old plans are going to like these new ones for the same price. But people chafe when the government says ive got all the answers. Youre going to do it my way. Sure. Yes. And even if it is going to be better, its like, thats the whole thing about, you know, ive got a hundred really smart people here in washington and youre its like a nanny state type of thing, where this is the plan youre going to have whether you like it or not. Big country, a lot of different opiniones and making change is hard. That is what is so horrible about it. Sure. John, the other issue is, look, if you allow to your point, if you allow these people to keep their plans, the ones who like their plans before tendeded to be the healthier people. Because thats who qualified for a lot of these things. They didnt have preexisting conditions. If those people get to keep their plans, as the president said he would allow them to do yesterday, it means those enrolling in the in the new obama care plans are going to be the ones who have a lot of medical issues that come along with it, are not going to be the patients who are along for the ride type of thing and thats going to make the whole plan that much more or less feasible. Absolutely. But thats why they dont really want to fix this problem and why so everything they said yesterday was not to be believed . Thats what im talking about with politics. When people are getting up and talking no, no, i dont think thats fair. Look, he talked for an hour. Most of what he did was defend the law that he has passed. And wleefs it. And democrats believe it. And it is very difficult to implement a major change like this. Forget the website. Thats another set of competence issue. Im with you on that. Whats more important is fixing the underlying law. But come january 1st, the website and the rush and the crush to put these things on, that created the immediate problem. What hes done yesterday is not a real solution. The Insurance Companies cant undo what they set up that quickly. Right. But what you just said, the important thing to fix the law, that itself is a political statement that the administration disagrees with. They dont think the law is broken. No, thats not true. There are a lot of democrats, including squeak emanuel who will say yes, there are a lot kinds of things that need fixed. Yeah, but there are very few people who think theres nothing in this law that needs to be change. Right. Thats not my point. My point is that the turbulence surrounding the implementation of this law is about the basics. Its not about details and small things that need to be tweaked. On the point that were discussing right now, the dislocation of those people, those younger, healthy, tend to be younger, healthier people who are either going to pay more for the same plan or its conceivable they could pay more for a plan that isnt as good. Okay. That is what the from a democratic point of view, from the point of view of the people who did this law, that is pain that has to be experienced in order to get to the higher benefit for more people of the law. Thats just the way it is. Some are winners and there are losers. Thats actuarial math. Thats right. And they think the number of winners justifies the number of losers. If you think that nobody can lose and need to fix the fact that some people are losing thats not the argument im making, though. Thats not the argument im making. If you go along with obama care, then look, you are agreeing that the people who are healthy are going to have to pay more to take care of the people who are less healthy. Right. I think at this point were past that. The obama care has been rolled out to that point. But there are all kinds of massive dislocations in the meantime. By not being willing to open it up, you dont address these issues. You have millions of americans are going to be without a Health Care Policy and those are the people who are afraid they dont get sick. No, no, theyre not going to be without a Health Care Policy. If you got candlesed and the Washington State insurance guy says that theyre not going to go ahead and allow this, theyre going against what obama said yesterday, there are no clear fixes to this stuff but theres nobody who if they cant get through the website, which has been very difficult for heem to get through and tried to figure out. You cant figure out if your doctors are even in any of these plans. Its kind of a crap shoot if youre going for these things. Its a fix getting kramg cracra. There will be people left in the lurch, no matter what. The if that you stated, like if there are people who are unable to buy health care, theyre fought going to theres going to be a huge change, repeal, whatever, if they cant buy it. But i dont believe that thats going to be the case. The people who are getting cancellation policies are getting told that the model that youve been buying is no longer being offered. Heres the new model youre going to buy. Go to the website to see if you get subsidies. The problem right now is people cant get that information. If you cant buy it, Something Big is going to change, very big. Yeah, yesterday, one thing the president is always able to fall back on as so many liberals can always fall back on good intentions and it was you know, for a hundred years, we havent covered these people. I saw a quote from the guy from m. I. T. Who said if you werent genetically advantaged, you havent had health care, which is a weird way of phrasing it. If youre born into a neighborhood in a moneyed place, you have it. If youre not no, no, thats not what he meant. I meant healthy. What did he means of genetic lottery . Hes talking about people that tend to be healthier. Because i thought he meant if you were healthy. I thought it was feudalism in no, the reason he made that argument is because oh, so that people that are sick cant get thats right. On the individual market, its been difficult for people to buy coverage. Well, cancer, potentially. Joe . Yes . Can i get back to just a little no, but what i was going to say real quick is so everybody wants to cover you cant argue with the president that you want everyone to have access to health care. But as weve always said, a lot of good intentions, you know what they pave the path to hell to when its gone done right. And you feel virtuous and noble that youre doing it. Its almost like you dont even connect the dots to where youre taking the entire system when you do it the wrong way. Tease what scares me. Because he kept coming back to that, like hes doing this noble thing that had to be done. Finally, we did it and torpedos be if its just a cluster bomb. Can i say cluster bomb . Did i scare you . If it continues to be a cl t cluster bomb into january, the torpedos are going to hit and something is going to change. But i just want to in case our viewers are confused about this im sure we all are. Fix nonfix, i want to walk through it for a second. The way it has been work sg you can have these noncompliant policies up through the end of 2013. However, most states have been allowing Insurance Companies, if they want to keep offering them and if customers want to keep doing them to extend them into 2014 as late as next december. Some companies have said no, you cant do that. But the Insurance Companies, also, are going to have to say that they are going to want higher rates for those existing plans. Exactly. I just took care of my Health Care Insurance and costs have gone up an average of 5 or 6 . Theyre going to have to keep up with those regulations. That has taken months in the past. The question is will the state regulators say okay and fix these things immediately and step through its a lot of bureaucratic red tape to cut through quickly. No question. But what the the effect of what oh bam in did yesterday was to say if states want to go back december of 2014 they can go to the end of september 15 in the states that let that happen. But for the reason that becky just mentioned, companies dont want to it because its complicated and difficult. And most state Insurance Commissioners are not going to want to do that because they everybody wants to get to the new system. So that is why it is possible that the same kind of heat that is being put on democrats and the president will be put on state Insurance Companies and Insurance Commissioners to make them do it, but i wouldnt expect it. This isnt going to calm the anger. I dont know. I think its going to be tough to put the jeanie back in the bottle for all this, toothpaste back in the tube. I came up with like ten of those. Theres some really good ones. Anyway youre gellen. Gellen with yellen, dude. We are. I know. All right. Were going global now. Thank you, john. See you later. Well talk to you soon. Right now, it is time for the Global Markets report. Ross westgate is standing by in london. Ross, you must be loving this conversation watching the twists and turns that were going through here. Its confusing, to say the least. If youre on this side of the pond. Yeah, it is here, too. Yeah. I think we would probably go with joes comments president it clearly looks damaging. We failed to move on from the close close you had in the states. We are up near session highs, but nowhere near the gains weve seen in asia. The nikkei up over 15,000 for the time in months we saw earlier in japan. That market up around 9 this week. European equities mildly firmer at the moment. The ftse 100 is up 36 points yesterday. Its up another 34 at the moment. 0. 5 gains. Fairly flat with the xetra dax and the cac 40. The ftse mib down around 0. 6 this morning. Weve got an echo fan going on, the finance ministers meeting. The eu says germany has made no structural process about recommending recommendations. Take a look at the sector breakdown, then. Utilities, industrials slightly weaker, better moves from media and basket resources. Basic resources worth checking in. All those china watches out there, heads up, we have finally got some details out on that third party plenum. We didnt get anything out on tuesday and we finally have got them. They are going to relax the one child policy in china. Theyre going to relax curbs on foreign investment, ecommerce, logistics and care for the elderly, as well. Theyre going to legal local governments issue bonds, accelerate capital convertibility and speed up Interest Rate reforms. So lots of things we were expecting on tuesday and we didnt and there was disappointment. Were now getting the details out right now. So they are pretty big changes for china. Well get the implications on that. For now, though, back to you. Do you like your system okay over there . I heard you youre going to go and see the doctor and youre able to get an appointment in 2017 if you follow all those correct procedures. Then you get to go ahead into some fancy bacteria ridden not true. I used to live in london. You were young. No, you have a gp, you tell me, my experience you could go this is what ive heard, ross, that you guys you complain about your system, you know its not great, but then if someone over here just criticizes it, you get very sort of theres different systems. Theres the gp system, which is your local doctor. All of those have walk in morning surgeries. If you wake up feeling in, you get up and you do a walk in. And if you want to make an appointment, it takes a week or so potentially for an appoint. If you have an accident, an emergency, you could to the hospital. Most popts, if you had something seriously wrong with you, theyre very good. Really . Yes. How are the facilities . If you wanted to wait for a hernia operation, right . That would take you a very, very long time and then youre better off going private. And everythings theres enough money for the facilities to be state of the art and clean and well staffed . The nhs is an enormous burden on the british budget and things could be done a lot more efficiently than they are. I do not want to adopt your system over here. Im sure you dont want to adopt ours. Lets agree to disagree here. The one thing we know is that real football is shaped like this. Thats the only thing we can agree pop. Like you mean the rugby football . No. I mean one with laces out. Nanks, ross. Coming up, the play station 4. Bless you. Thank you. I held it. Dont do that. Youre going to blow out a kidney when you do that. Its a tv sneeze. Not good acting, man. If you itch, scratch. If you have to sneeze, sneeze. And this mornings executive edge has spying on banks that could be were going to look at spying banks that could be big enough to fail and a physical heir giving something back. Squawk box will be right back. Welcome back to squawk box. If you want to see our list of the top ten bands of all time for each of us, were playing it right now. Can you figure out would picked this one . I know. Go to cnbc. Com. Get all three top tens for joe, andrew, me. Gary kaminsky posted his link, too. You can submit your list for consideration in a future talking squawk posting. So do it now. Go to squawk. Cnbc. Com. Right now, its time for the executive edge. First up, big enough to fail. Moodys has cut the Credit Rating for big u. S. Banks including morgan stanley, Jp Morgan Chase after deciding the federal bank is less likely to bail the institutions out if they get into future difficulties. The review follows a similar statement from rival Standard Poors back in june and it comes after an attempt that the repeat of the crisis era. Andrew, too big to fail, is it going away . I think it is going away, but the timing doesnt make sense. They havent done it, they needed to do it. They needed to do it at some point . One thing that go get us me is when small banks say were unable to compete with the advantage big banks get. But thats what they complain about. So if there really is some lower funding cost that the big banks get, when moodys finally says, no, there isnt, and if they really believe now that these are b rated or triple b rated or whatever, then thats good because they really arent going to get but they would still get pald out. Ultimately, the issues ultimately . That just means at the very end. At the very end, they would have to be. I understand most things youre saying youre taking to the very end. Yes. Thats redundant. I want to see what you say about this next one. The cia is secretly collecting records of International Money transfers handled by Companies Like Western Unions, and that includes transactions into and out of the United States. According to current and former government officials, the agencys financial Records Program is using the same law that the National Security agency uses for its debate of americas phone records. Some details of the cia program were not clear, but it was confirmed by several current and former officials who spoke on the condition of anonymity because the matter is classified. Do you want to know what i think . Im on location. I know you are because you went to something last night. I watched the eighth episode of homeland and i wont tell you anything about it. Someone might have a really good reason, but if i see someone wiring money to Western Union to abu nazir at llc or whatever in yemen, i want to go and just visit the guy, maybe set up someone around his house to watch whether hes buying, you know, fertilizer. You want to know whats going on. I want to know if someone is sending money to a terrorist organization. Dont you . I do. I dont think this is going to raise the same privacy concerns. Anytime you have major money transfers, i dont think you have an expectation of privacy with that, anyway. If you take out more than 10,000 its fine. Im okay with you. And if you try to take out 9,900, theyre going to coand look at you, anyway. Abu azir is dead, right . Im not allowed to say that. Did you see Andy Kaufmans brother . He said hes alive. Thats like elvis, right . Im going to have to check that out on. Watch homeland. Hedge Fund Billionaire david tepper is giving another 67 million to carnegie mellon, bringing his total gift to the university over 125 million over the last decade. The money will be using to create a new academic hub on the schools pittsburgh campus called the david a. Tepper quadrangle. I dont know what to say except this is good. It is good. Some people say that i think hes bad . How can you take that position . Because i think david responded to someone who took that position when he was on the show. Oh, about giving back money. I think its good. But there are people that say, you made 3 billion last year. This is supposed to make us think youre a better person because you gave youre taking the Peter Buffett approach to i wasnt going the name any names, but yeah. Im saying that that is why you can count i would some people might disagree. Ill give you a disagreement. If you look at the universities that get in money, its, of course, the universities where so many of these people went, which is a good thing but a bad thing because there are so many other places you know, david tepper has given money to Rutgers University where his wife went to school. So hes spreading it around. Its a good thing. There you go. They could use the money to upgrade the academic blah, blah, blah, freedman went there, too. And calissa flockhart. The kauffman brothers are now admitting its a hoax. Actually, she went to Shawnee High School whether my brothers went to high school. I think she went to rutgers, too. Is she still married to Harrison Ford . Yeah. I have to go to break. Find out why all these people were on line at midnight. And why their purchases could be make or break for an entire industry. Coming up, well talk to the top executives from unum, Waste Management, kimberly clark, te and fedex. Bny mellon combines Investment Management investment servicing, giving us unique insights which help us attract the industrys brightest minds who create powerful strategies for a countrys investments which are used to build new schools to build more bright minds. Invested in the world. Bny mellon. 20 years with the company. Hool. Thousands of presentations. And one hard earned partnership. It took a lot of work to get this far. So now im supposed to take a back seat when it comes to my investments . Theres zero chance of that happening. Avo when you work with a schwab financial consultant, youll get the guidance you need with the control you want. Talk to us today. In the headlines this morning, china has issued a widely anticipated reform document. Among the promised changes, the country plans to relax curbs on foreign investment, allow privately owned banks, relax curbs on the prices of Natural Resources and also relax its onechild policy. News of the changes help fuel the biggest china stock market rally in two months, moving more towards market oriented system as other places move away from those. Im not mentioning any names. And well be watching shares of mens warehouse. Youre going to like how you look. Today, joseph a. Bank are you, really . No. It says it has ended its 48 per share takeover bid. Joseph a. Bank said it would terminate the proposal if mens wearhouse didnt engage in talks. So that has happened. Lets talk about the battle of the consoles coming to a head today with the release of sonys hotly anticipated play station 4 ahead of next weeks launch of Microsofts Xbox 1. Both consoles will mark the first major gaming overhaul in years. Scott stein is joining us. Do i buy the sony today . Do i wait until next week to buy the microsoft . You may wait even longer. I think you wait. You wait, wait, wait, because these plat foerforms meaning tonight . For this moment, its hard to tell. Here is the play station, here is the xbox. Here is the new play station controller. The hardware is nice. Its an upgrade. Its not like an ipad or a pc where you take your software and put it on. They dont play the old games. You cant play the old games on it . No. It will be a continuing surprise. So yeah, you have to buy a whole new set of games. Straight up, which one do you like better . I like the play stations focus on indy games. If you like downloadable funky artsy games besides the shooters and the racers, sony has a big focus on that over the years that it pays dividends, i think. I like it a lot. X box, if you want to connect and have a computer in your living room experience, theyre banking on connecting to your tv. Were still you know, well have to see how that actually performs. Thats what that is about. And the games are going to play similarly. So theres two viewers who are watching this interview right now. Theres some that want to know which one is better because they want to go out and buy it and theres some that want to know because they want to understand who is going to win this game, meaning will microsoft beat sony and, therefore, should i be own onning microsoft stock . So who is going to be the winner from the perspective of a business based on just what you think of looking at both of these products . I think that they are going to be pretty neck and neck, honestly, and i think theres going to be attrition because of the fact that rate now its hard to appeal to anyone who is not a gamer with these. If you look at a connected living room, microsoft has the living room box and sony used to have these. They were superior bluray players. Now were watching on an ipad or were connecting to a roku box. So you dont have the mic microsoft is going to be whatever we think apple tv is supposed to be . Its tough. Its so much larger. Physically larger . Physically larger. You set this up. You have a camera. The idea is interesting the way it context your tv through. But not all of that is hooked in fully. Theyre going to work with your live tvs, but they dont support dvrs for recorded shows. Its halfway trying to find a way because theyre trying to find a way to partner with Cable Companies more in the future. So its not the perfect solution yet. But i think youre going to have a lot of people who wondered, you know, do you get an ipad, do you stick with your old game system . I think the play station 4 is about affordability. I want to get the Microsoft One for a different reason. I always wanted to try p90x. They now have it so it watches you and youre on the screen with them doing the exercise, which is kind of crazy. Anyway, unfortunately we have to run. Im not trading in my games. Thats the other problem, as well. You get them all and get all the games. Its too big of an investment. Thanks, guys. Still to come, our squawk guest fred smith. Were going to kick things off with our boss of unum, tom watjen joins us right after this. Hi, tom. [ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the Aerospace Industry in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. With investment information, risks, fees and expenses but with less energy, moodiness, and a low sex drive,y first. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron. The only underarm low t treatment that can restore t levels to normal in about 2 weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. 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 symptoms to your doctor. Tell your doctor about all medical conditions and medications. 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. Ask your doctor about axiron. Welcome back, everybody. While insurers try to wrap their heads around what the new Health Care Laws mean, others are getting pushed aside. Joining us right now is tom watjen, president and ceo of unum group. Tom, youre not affected directly by obama care. You do disability coverage. But what is happening to companies as they try and deal with what obama care means . Youre right, becky. Were not directly impacted. But i think even with the formation of this bill, weve begun to see employers and others providing benefits distracted. Theyre trying to help clients through this process. If youre an employer trying to figure out what you want to do with employees. So its a big distraction. Its affected our sales, especially the small and mid sized employers who are struggle with how to decide it was appropriate plan for their employees. It doesnt directly affect us, but does affect the theyre saying we dont have enough brain power right now to deal with all this and you guys wait. Were going to deal with this first and you can come back to us next year. Especially the small to mid Side Department who doesnt have a big hr department. To help work your way through these issues, it doesnt affect you, probably. And were beginning, by the way, to see people look forward and start to make decisions. I think this is all a temporary deferral of decisions, but its certainly gotten in the way of decision making. Can you put any im paperwo e number on the impact its had . We have two brands in the u. S. Both of those in that small employer marketplace for purposes of discussion its less than a hundred employees, as we define it. Again, understandably so, those players are going through a lot of soul searching, thought process processes, and planned decide. They dont have the resources to fal fall back on. Those Small Businesses are actually the owners is probably the hr department. 20 to 40 decrease in sales, does that did you even see that during 2008, 2009 with the Great Recession . No, we didnt. But then again, the good news is the mid market and the Large Employer market continues to grow. So, again, it is very dramatic in the small markets. Again, im not sure we fully expected that as we look to 2013. Its probably been a little more than we had anticipated. Were starting to see people get on with decisions again. Theres some sense that were going to move through this. That part of the market is certainly being affected. The other side of it, by the way, is the other part of our business is keeping our existing customers and our existing customers are as much as anything a big part of our revenue year over year. Frankly, a lot of our customers are not putting their plans out for bid. A big part of this is in the marketplace. We have a factor called persistency. Thats keeping customers very high. Can i ask you a Technology Question . Yeah. Do you have relatively complicated actuarials, but also the technology i was going the ask the same thing. What would it take to website . Thats where i was going with this. When you look at what others have done and you talk to your own tech people and i dont know if this conversation has happened, what do they say . With health care reform, we bit off a big chunk. This is a big initiative. It touches virtually every american. What they are proposing to do in the Affordable Care act affects a lot of people. I think the big question is are we getting to the uninsured, starting to deal with the quality issues. That bill i think i support, by the way, the intent to reform. But its a lot to get done. The system is just a piece of it. I thought you were going to say piece i thought you said that, too, twice. The system has got to not just provide you with choice but with the educational capabilities to understand what thats all about. Thats next to an impossibility. Trying to figure out what your Health Care Plan offers has never been easy. Its gotten more complicated now. I dont know whats in mind. Thats to your point, when we step back and talk about what has to be fixed, lets talk about what works. The employer marketplace is the best way to get to the vast majority of americans with health care. Its also how we distribute our product. That wont last long once this is in effect, tom. Thats true, joe. I think a lot of employers still feel a sense of responsibility to provide their employees dont you think long term that changes . Yes. How much of it . 50 . Do the math on 20 if it goes away versus the 14 million individuals. That changes the economics and the math of the whole proposition. Im hopeful that we dont get to that point. How would you like to be with an Insurance Company that changes everything actual rarely and then say its impossible to do it and they knew when they were saying it yesterday, its impossible to go back. I sympathize with my ceos in the Health Care Business. There are fundamental changes. He will not do anything that Congress Comes up with. Well, as the journal pointed out, too, you have to work with the incidents. Mechanically, its a very difficult thing to do in a short period of time. Im sure they are trying to do that but its a tough challenge. Its a cluster bomb. Tom, thanks for being here. Thank you. Our ceo summit is just getting started. Waste managements boss on what were calling the garbage indicator. And kimberlyclarks ceo. That much and more. Fedex one ra. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Still to come this morning, oil prices are lower for the oil business but not for the garbage business. Squawk box will be right back. No, thank you. We know youre always looking for the best fill price. And walk limit automatically tries to find it for you. Just set your start and end price. And let it do its thing. Wow, more fan mail. My uncle wanted to say thanks for idea hub. He loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. [ male announcer ] open an account and get a 150 amazon. Com gift card. Call 18882800149 now. Optionsxpress by charles schwab. Aaah aaaaah theres a guy on the window do something, dad aaaah aaaah what is happening . Theyre rate suckers. Their bad driving makes Car Insurance more expensive for the rest of us. Good thing theres snapshot from progressive. Snap it in and get a discount based on your good driving. Stop paying for rate suckers. Try snapshot free at progressive. Com. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Stocks rice on yellens testimony. We expect to maintain a highly accommodative monetary policy. The ceo of Waste Management joins us to talk fed. The president s obama care fix and the state of the economy. Kimberlyclark and a spinoff. Ill take whatever cash youve got. The ceo is here to talk Business Trends and, of course, huggies. Plus, is the tech bubble brewing . Its going to end badly. We found a fund manager who says not so. The second hour of squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick. The futures this morning are indicated higher. This is coming after record levels again for closes yesterday. In our headlines, the dow and s p coming off record closes after janet yellen appeared before congress. She did not indicate any changes regarding quantitative easing. The economy is not ready for the Bond Buying Program to be scaled down. President obama is talking about a fix for the Affordable Care act. They can only be sold to existing customers and republicans say that this fix doesnt go far enough. The bigger question is, how will it be implemented. Well talk about that later this morning. Just how much is snap chat worth . They turned down a 3 billion offer from facebook. In just about 30 minutes, talking tech and Popular Services that dont make any money are worth it. Remember the groupon entity didnt take money from google and now the guy who sold instagram to facebook sold out for too little, 2 billion . I went and checked all of my daughters stuff yesterday. She knew about it like a year ago and i go, did you ever no, both people have to have it to use it. I go, you know, you can take a picture of whatever you send. She goes, of course. You would never send anything because thats the flaw in the whole system is it doesnt go away. Talk to her more often. Im going to talk to her more often but pintrest is on there. She knew that somebody could i think they are an actually i saw something on there that was mortifying. Well talk about that during the commercial break. Joseph a. Bank offering to buy many mens warehouse. They would terminate a 48 per bid share if they did not engage in talks yesterday however they said they would consider a new bid if it was invited to engage in those talks. And the latest filings for some of the biggest hedge funds zoned in on the biggest sector. Jcpenney with 500,000 chairs and 489,600 shares. David pepptepper picked up 737, shares there. And lemar bought 2. 85 million shares of free portmcmoran. The stocks were smaller while shedding wells fargo from its portfolio. Also, Tiger Consumer Management reducing its herbalife stake and tiger opened a large stake in pandora of 2. 9 million shares. Weve got a lot to do here. And then we have stan every time i look at it it gives me trouble. I like just stan. Thats what duquesne really is. He closed out of his position of procter gamble, selling 566,300 shares in that. Buying 79,000 shares of herb ba live. Joining us is David Steiner, ceo of Waste Management. Good morning. So many neat things. Because running your business you dont just pick up trash, obviously. Youve got to think about recycling, regulations, youve got to think about obama care, taxes, all of this stuff. You make it sound hard. It is hard. And you need a good ceo. I know wayne and how he came up with it. I dont even think he went to college. Bought a used garbage truck and realized if i could try someone for dumpster every week its good business. Heres what i want to ask you, though, as a proxy for the economy, theres a couple things. Theres people with boxes. Its such a big number you can see the slightest changes. Theres an i57 indicator. I imagine you can engage whether the economy is riproaring based on how much garbage youre collecting. Weve seen it with the bounce back in the housing market. Weve seen those types of trucks pick up in volume. What we havent seen is new Small Business starts. So weve got an industrial sector and commercial. The industrial would be Housing Starts, commercial building. Those are doing just fine. Our commercial, which is what you view as a dumpster, something behind a restaurant, a grocery store, we havent seen that pick up and i think what is going on is you have the Housing Starts but youve seen tuckin housing. You havent seen new subdivisions taken down. Youre starting to see that in southern california, texas, florida. Once you see that, youll see the Small Businesses start. The people who drive economy are new businesses and we need to see new Small Business starts. Economists collect all of this data and collate all of this crap, they should have your phone number. Seriously, you just told us you can see a rebound in housing so youre picking up a bunch of construction crap. And then whatever is left from that. But then, the other stuff from new business you can tell that new business formation is not up to bar. No doubt about it. From the standpoint of collecting trash. No doubt. Look, i think right now from what i see, most of the new housing is that they tear the house down next to me and build a new house. They are not taking down about swaths of land. Youre starting to see that but not enough to drive Small Business starts. How would you grade the overa overall economy right now . We know its subpar growth in terms of gdp. What kind of letter grade do you put on that . You know, with all of the ceos that i talk to and interact with, i think we all come to the conclusion that were going to be in a small period of growth. Were designing our businesses around that. When you had the sharp economic downturn, everybody reacted the same way. Pull your horns back and do nothing. The economy has come back but not enough to where any ceo would say, lets spend a lot of money waiting for the big flood of business to come. Isnt that almost a selffulfilling prophecy . Well, look, thats absolutely right. Before the demand is there but i dont know how you break out of the cycle. I think the way you break out of the cycle is to break away from the government. We dont have that in 2014. Thats my whole idea. If i could talk to obama about theres all these ideas on what he wants to do. He never brings it up. He had it on the table with simpson bowles, his own commission. Why isnt he doing that . Why arent we seeing that . It would be the number one driver of job growth. I dont know who is not up for it. Some will say they want more revenue. Others will say they want lower the Corporate Tax rate and add two million jobs. And then, by the way, lets take advantage of the huge Energy Change that we have, right . I dont know about all of the other stuff. I dont want a 2800 page bill. Lower the Corporate Tax rate closer to other countries and bring the money back here. But thats closing a bunch of loopholes. You cant just lower the rate and thats where things get complicated. I could lower it to zero if i wanted. We talked to ceos that would give up the loopholes in order to have a simpler tax code. Look. Simpson bowles had its flaws but if you ask ceos, we will take it. Flaws and all. If i lowered your Corporate Tax rate, how many new jobs would you add and why . Well, two ways. First, if you did that, i think you would see gdp up above 3 . If you see gdp above 3 , our volumes are going to start growing. We are not a company that can create new demand if i lower my price by 20 , you dont create new garbage. Its the general economy that drives it for us. If you saw gdp growth above 3 , id tell you that in the next few years wed be hiring 2, 3,000. Our workforce would go up 10 . The things you just mentioned are things out of the feds control. When janet yellen said that the fed is going to keep doing what they can to keep the economy going along, you dont think theres anything that she can do to fix the gdp problem . I think all she can do is keep us stable. If what we want over the long term for the United States is 2 gdp, thats all that is going to happen. If we had all of the houses controlled by the democrats and they decided on another 800 billion Stimulus Program for infrastructure, would that help you . Clearly it would absolutely help our business short term. But look, again, we are driven by the economy, right . We have volumes that grow at about 50 to 75 of gdp. So i not only have to think about the short term. Certainly infrastructure build would help us in the short term. The question is would a stimulus package help the economy in the long term . I frankly think there are better ways to stimulate the economy. I think youre right, Corporate Tax reform is the number one way. The fed always says we have to do that because were not getting cooperation from congress. On one side it means another 800 billion stimulus plan and on the other side it means Corporate Tax reform. So here we are going nowhere, stuck in neutral. I dont know, joe 50 of our people working. Some people feel like tax reform is the way to go. I dont think theres a lot of debate about Corporate Tax reform as a concept. Once you get down to the details you need obama to take a lead on this and he wont, right . You know, joe, weve got climate, gun control, immigration, jobs. You need someone to take control, thats for sure. Okay. Andrew, will you step up to the plate . Im going to take control because weve got to go to a break. But i will work on that. Up next, u. S. Crude on course for the sixth weekly drop. What does it mean for prices at the pump as we head to the Holiday Season . And kimberlyclark spinning off its Health Care Business. We have the companys ceo right here on squawk box when we return. What are you doing . Comcast is reportedly going to start selling movies downloading through the xfiniti website. It lets customers buy movies at any time on a variety of devices. The new service might start by the end of this year. Comcast is the Parent Company of Nbc Universal and cnbc. Will this help the company with like to counter netflix . This is a windowing issue. They are going to go straight to the consumer right after it is in the theater and then there will be the window after that with ondemand. Youre seeing it already. You pay more for it if you want to get the sneeak preview. Have you seen the financial movie, arbitrage, with gear . It was all the guy was satan. You can pay 20 to watch at home. Richard gere im giving you an example. I know youve seen it because it portrays the entire hedge industry being run by a bunch of madoffs. Im listening to my other songs now. Ive got to go. Will comcast be able to crush netflix on this in. I think its going to be tough. Its going to be tough. Netflix is selling i know. That Market Capital moved into comcast market. I think its not clear to me that netflix market cap makes sense. Thats different. But as a business, its a good business. Lets talk about something thats a little less controversial. Prices at the pump. Joining us is founder and ceo of citizens for Affordable Energy and former president of shell oil. Weve been watching Oil Prices Drop substantially. Do you think this continues . No, i dont, becky. They have been dropping largely because there really has been a reduction in demand in most of the developed world. The developing world is slow to bit and so theres a temporary surplus. But remember, if it drops too far, opec steps in. Opec sets their states budget based upon oil price and as long as we are dependent on foreign oil, were at the mercy of opecs pricing strategy. I thought a lot of the reason that it was coming down is because we had discovered so much more here in the United States with fracking. That helps. That helps. But putting it in perspective, were up from five Million Barrels a day in 2007 to up to 8 Million Barrels a day but still using around 18. But theres so much more in the reserves than we ever thought here. There is. Its vast. What many people dont understand is how huge it is and how long it could last but heres the rub, shale formations also have a high decline rate. And so from an economic standpoint its wonderful because you have to keep putting more money in to get more oil out and thats good for the economy. From a production standpoint, you go crazy trying to maintain the higher production rates because the decline rate is so high and you have to spend and spend and spend. You dont think the Big Oil Company also do it or they will . I think there will be a point where they say enough already and i think the point is around ten Million Barrels a day. Because what has to happen is the supply Chain Industry would have to recapitalize and expand enormously to sustain a production rate beyond ten Million Barrels a day. Is it ten million barrel as day that eventually is something that limit it is or is it just, look, as long as oil prices are above 80 that still make it is profitable . Where is the profit point for somebody doing fracking . Whats the level that oil has to be to make that a profitable situation . Well, its going to vary by company and by formation because there are different costs. Right. But if it drops much below 80, youre going to see a lot of drilling slow down because of the marginal costs are up around that number and its not a good use of capital if youre going to keep pouring more in at that number. But heres the opportunity that we havent taken yet and that is, ill be interested in davids view, far more use of natural gas as a Transportation Fuel to create an alternate market thats domestically driven that has nothing to do with cartel price setting in the middle east or opec. And so expanding natural gas for trekking, for training, for automobiles, that should be a national endeavor. That would be a huge economic stimulus because it would put so much capital to work but even more importantly it would reduce transportation costs for consumers as well as companies by an enormous percentage. David, youve been at the forefront with Waste Management. Do you hedge your fuel prices . We dont hedge our fuel prices. We have a fuel surcharge so its basically a natural hedge. But for us, natural gas, johns absolutely right. Natural gas has been a huge benefit for us. You know, we have about 16, 17 of our fleet right now. 90 of what we buy every year is going to be natural gas. And than we spend another 50 million a year on infrastructure. You know, thats going to be the next big so pressure to build the next natural gas fuel stations . Exactly. And thats the next big challenge of natural gas. Theres plenty of it. We know we have an abundant supply at a low price. Now weve got to get it to the consumer, right . Weve got to get it to our stations and then ultimately you can move it into it does sound like thats where a lot of private industry is eyeing things from the transportation side of things. No doubt about it. Its easier to do what were doing. Were doing compressed natural gas, not liquefied natural gas. So that l g infrastructure is the next big adventure. John, thank you for your time. Thank you. Okay. Coming up, the next tech bubble comments sparking a big debate on whether such a bubble is just ahead. And then the ceo of kimberlyclarks health care unit. Were going to talk trends and much, much more. Squawk box returns right after this. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Coming up next, how much is amazon or priceline or google really worth . Weve got evaluations of these companies and the big question is, are they running too far too fast . Is there a tech bubble on the way . Well talk about that next. As we head to a break, lets look at futures this friday morning. Youre going to see green arrows. m beth. And im michelle. And we own the paper cottage. Its a stationery and gifts store. Anything we purchase for the paper cottage goes on our ink card. So you can manage your business expenses and access them online instantly with the Game Changing app from ink. We didnt get into business to spend time managing receipts, thats why we have ink. We like being in business because we like being creative, we like interacting with people. So you have time to focus on the things you love. Ink from chase. So you can. Welcome back to squawk box. In our heads, government is still catching up with its october reports after the shutdown. Well get the delayed report on imports and exports. Those will be out at 9 15 eastern time. Mpd reports that video games fell compared to a year ago. The drop in hardware sales. Playstation 4 is out today and Microsoft Xbox is out next week. So weve been waiting for it. Youre buying both of them . At some point, im sure. Gaming addicts. Newly public twitter is making a move to generate selfservice ads for small and mediumsized businesses. It will only be available in the uk, ireland, and in canada. Our guest host today is David Steiner from Waste Management. David, we were just talking about natural gas and how you converted a lot. What does lower gas prices mean for you . What does it mean for Waste Management . Sure. When you look at natural gas prices, for us, switching the fleet over will be ultimately 400 million of savings. Wow. Just next year well save nearly 25 million because of that difference between natural gas and diesel. And the other interesting thing is, over the last few years what youve seen is that gasoline prices and diesel have disconnected. Right. Remember years ago diesel used to be cheaper than gasoline. Youve actually seen diesel up now higher than gas prices. That makes it doubly important for us to switch to natural gas. David steiner is our guest host and well have more from him later in the morning. Tech bubbles have people wondering if another tech bubble is brewing. The music has changed and the dance is the same. Really . So its going to end badly . Its going to end badly. Amazon, out of control. Linkedin, they are looking at revenues. You cant give revenues to investors. Joining us from new york, john bar, the portfolio manager. What do you make of this, sir . Good morning. Well, we think there are pockets of exuberance but a bubble, 1999 was a bubble and this is nothing like 1999. Were believers in cash flow. There are plenty of ipos that have over 50 million in revenue, are profitable or have a current path to profitability. They are valued at single digit revenues where in 99 they were smaller companies, less mature. Does facebook make sense to you . Does linkedin make sense to you . Facebook does not make sense to us either. Not a cash flow generator. Not an earnings story. So thus far, every time i mention the fame of a company you say that one doesnt make sense to me but you say were not in a bubble. So tell me, then, some that do make sense so i understand that were on the same page. Well, we would look to companies that are generating earnings and cash flow positive. Two that are Financial Engines and wage works. Wage works is consumer directed management benefit company. And they are profitable. Becky doesnt like that company. But, yes, we both know about that wage works company. But when you think about the dotcom company, we were talking earlier about snapchat. This company had a 3 billion offer from facebook and a 4 billion offer from google. Were all trying to make sense how this possibly makes sense and youre saying theres not a bubble. Snapchat at 3 billion, i would look back at youtube. Billion dollar valuations can make sense. Whats sensible in your mind about the snapchat business . What kind of moat does that business have . Snapchat does not necessarily make sense to us. Okay. Give us just one is there any dotcomish company like twitter . Im trying to make sense in the valley world if theres one that actually you know, the lines line up for you. I think facebook with its mobile opportunity at the ipo price and particularly when it was kicked aside after the ipo was something that worked. It worked then. It may not work now. John, thank you for joining us this morning. Thank you. A buying lineup of ceos on todays lineup. Next, the ceo of kimberlyclark. In the next hour, tom lynch, ceo of a tyco spinoff. And fred smith joins us for a business update. Squawk box will be back after a quick break. Suffers. St it raises the price of fishmeal, cattle feed and beef. Bny mellon turns insights like these into powerful investment strategies. For a university endowment. It funds a marine biologist. Who studies the peruvian anchovy. Invested in the world. Bny mellon. I got this. [thinking] is it that time . The son picks up the check . [thinking] im still working. Hes retired. I hope hes saving. I hope he saved enough. Who matters most to you says the most about you. At massmutual were owned by our policyowners, and they matter most to us. Whether youre just starting your 401 k or you are ready for retirement, well help you get there. Customer erin swenson ordebut they didnt fit. Line customers not happy, im not happy. Sales go down, im not happy. Merch comes back, im not happy. Use ups. They make returns easy. Unhappy customer becomes happy customer. Then, repeat customer. Easy returns, im happy. Repeat customers, im happy. Sales go up, im happy. I ordered another pair. Im happy. both im happy. Im happy. Happy. Happy. Happy. Happy. Happy happy. I love logistics. Welcome back to squawk box. The dow opened up about 28 points higher and s p 4 points and nasdaq 4 points higher as well. Kimberlyclark shares are trading at an alltime high. You can see the stock at 113. Joining us right now is tom falk, chairman and ceo of kimberlyclark. Our guest host is David Steiner, the ceo of Waste Management. Part of the reason that you two are here is because of a partnership between you. David, you work with tom and you have a lot of the recycled products that they use. Absolutely. What tom has done is phenomenal at kimberlyclark but when you look at the news from yesterday, what hes done for shareholders is more remarkable. Tom, lets talk about what you do with those recycled products. You use those recycled products in terms of using tissue and Paper Products . Absolutely right. We use recycled fiber. It makes up 80 of our professional products and theyve got an active Sustainability Program that were driving now. At the same time i was down in houston talking to david a couple of weeks ago and were looking to reduce the waste at our manufacturing facility. 80 of our manufacturing facilities are landfillfree and its coming up with Creative Ideas and alternative uses from our production processes. Thats part of the reason why wall street has been so impressive. Youve been growing earnings and finding a lot of different ways to do it. Doing things with the recycled products and also through organic sales growth. We hear from a lot of Different Companies and you heard macys saying that the consumer was really strong but then you heard walmart saying that they were concerned about where things were headed in the Current Quarter. Somehow youve been able to come up with organic sales growth. What are you doing to make sure you get that organic sales growth . I think our International Markets have been growing phenomenally for us. Were seeing china, russian, latin america. It feels like the consumer is going side ways. We look at the birth rate that stopped declining but hasnt started to pick up yet to any great extent. So we are seeing still response to inknnovation and a year or s ago we launched new depend products and those are doing phenomenally well and thats are most incomesensitive consumer and the fact that those new products can take Additional Market share is i would say that if you got real innovation, consumers are still going to find a way to pay for it. But moms still shopping on a budget. You try doing a threehour show without getting up. Im here for you. Whatever you need, man. Can we talk about the spinoff possibly, whatever it means . Its interesting. Weve been around for 140 years and weve continued to work our portfolio. At first it was news print. So weve been in the Health Care Business for a while and weve been doing strategic work with that business and as theyve developed some exciting strategies to go more into surgical pain, those are areas that im not quite sure kimberlyclark is the best way to achieve those dreams. How did you come to that con crucial . How did you go et theget there . He with got into the Health Care Business and it was really taking our Nonwoven Technology to use diaper products and personal products to make surgical gowns. It was a great fit. As we go more into these upstream medical device areas, theres less that our p traditional consumer is going to bring to that part foortfolio. It will be easy to attract health care talent and companies are looking at their portfolios with that lens these days. Tom, now that the potential for the spinoff is there, whats the chance that it gets picked up in an m a transaction, it gets bought. There are companies out there this size that are independent companies. We think its able to compete effectively. But would you be happy with m a outcome as opposed to a spinoff or did you figure you either go alone or get picked up . Certainly the spin gives a certainty of transaction completion. And weve owned this business for a while. So the tax basis is less than the book value. So theres some tax cost if you were to pursue a sale to get a higher price in a strategic transaction. So we think the spin is a good outcome for shareholders and for giving this business a chance to go and accomplish its goals. Hey, tom, just in terms of the u. S. Consumer, you said you think things are moving side ways. David had mentioned earlier that thats a situation that he sees, too. How do you think we get out of the cycle . How do you think we get back to stronger growth . Well, i think some of the things that you talked about earlier in the show today, Corporate Tax reform for us would be one mace thplace that talking about government re regulation. Weve talked about this before on the show. Get to a 20 rate, sim pplify t tax code so we can create jobs and job growth through that organic activity is going to create a morrow bust economy for everybody. What are the odds that you think that that happens . You know, ive been on the hill talking to congressmen about this. Everybody thinks this needs to get done. Its tending to get caught up in the pursuit of a grand bargain. Obviously theres lots of things that are not getting done as well as wed like in washington these days but im hopeful that that is one that could happen in 2014. Who are the champions on the hill, the legislators to figure out if it really stands a chance of making its way through . Certainly senator baucus and chairman camp in the house are really driving this and well see if they can get some traction. Tom, other issues as you kind of look around. I mean, you said that a lot of the things that you are doing is helping you win market chair. Does that mean youre taking it away from proctor and ber gam . P g is tough. Spa is a european company. Were pushing Corporate Tax reform. All of those competitors have a tenpoint lower tax rate than we have. But for us in our business, becky, if we can get there with a better product and execute while in market, were going to win market share. Were also driving the category growth. So in a market where consumer is using one diaper a day, if we can get to two diapers a day, that doubles the size of the business for us. Youre talking about china . China or a place like africa, one that is really opening up and starting quickly. Were going very well in brazil. Were seeing double digit growth in units and many of our categories in brazil. Weve got pretty strong growth across the emerging markets. John, thank you so much for joining us today. We really appreciate it. Thank you, becky. Coming up, were playing tracks from our Favorite Music we got into earlier this week. How did that start . Our guest host had been at an eagles concert. You needed ten and you used captain and tanille. I saw you googling contemporary. You used all five, lance bass. Yeah. Bobbi brown and new edition. I know that one rap. I memorized that rap. Cool it down. Weve still got to get to boyz to men. You need to go from a boy to a man. Meanwhile, ive got ceos telling me about depends. A great way to kick off the weekend and at the top of the hour, bluecross and blue shield of florida, the ceo on the president s and this is in quotation mark fix for obama care. Squawk box will be right back. Announcer up next on squawk box, dont start your day without knowing the names that will make you money. Joe has your list of stocks to watch right after the break. Tresse go to a mat tresse go to a mat store and essentially they just get sold something. We provide the exact individualization that your body needs. Before you invest in a mattress, discover the bed clinically proven to improve sleep quality. The sleep number bed. Once you experience it, theres no going back. Final days for our lowest price ever on c4 Queen Mattress setsjust 1299. Plus special financing until 2015. Only at one of our 425 sleep Number Stores nationwide. Sleep number. Comfort individualized it is friday and that means its time for the latest squawk blog. Check out our list. Each of us made our top list of the top ten bands of all time. Go to squawk. Cnbc. Com. Find out where our musical taste is. It could be a person, a jazz it could be anything. I didnt get to put there were certain bands that i didnt get to put on there. Its hard if you think of only ten bands that you could ever listen to. Our viewers think that your number one pick is the wiggles. If i was being honest it would be elmo. Yes. Bieber or britney for me. Thats not what he picked. Go look. You listen to coldplay while youre eating spinach dip in your jean shorts. Yep, jean shorts. Absolutely. I thought we were going to we are. The love boat i like it. Incredible. I have to do these now . Ive got to do these. Let me do them. Mens warehouse, youre going to like how you look. Jos a. Bank making a bid to buy mens warehouse after they did not engage in the talks by the november 14th deadline. Exxonmobil and Berkshire Hathaway took a stake in exxonmobil. 81 cents a share for the Fourth Quarter beating estimates by five cents. It did predict that the Current Quarter would be below street estimates and fiscal Fourth Quarter profit of 1 cents above estimates with revenues in line. The company also said it saw more customers build new facilities as they ramp up production. Mens warehouse or jos a. Bank. Do you remember when you walked in and the suit that caught your eye . A tom ford suit, wasnt it . How much did it go for . 3500 or 5,000. And you have a discriminating the guy walked in and you said, is that a tom ford . Yeah. I dont even know is tom ford is that the ford model . Who is tom ford . Are you kidding . You know who tom ford is. Ive got an ed ford. Theres a whole song about tom ford. Jeff zucker . Jayz is on my list. I have a garbage question. So what else is new . Are you referencing my business or my suit . Heres the question. I live in new york city and people recycle but its not all mandatory. From your perspective, in your is abou business, do you think there should be mandated recycling . How should it actually work . Thats actually a great question because if you look at what has happened to recycling over the last few years, its not a pretty picture. Weve lost 130 million last year and 110 million this year. And primary cause is its one of those unintended consequences. We went out and developed a technology or bought technology that allows us to take what you throw away and we sort it for you, right . But then we didnt educate the consumers to i say, lets tell u what is recyclable and not recyclable. So when we say throw it all into one bin, you end up throwing things that are not recyclable, it wears down the equipment and makes our processing cost go up 10 to 15 . Weve got to do a better job of educating the consumer by saying, what goes in and what doesnt. I feel like its different wherever i go. If im at my parents house or grandmas house and everybody is messing up. The two things that cause us the most problem, first is glass. Because as it breaks up, its very rough on the equipment and theres no outlet to sell the glass. So you dont get money on the back end and its a high processing cost. Thats not supposed to go in there . It is supposed to go in but what were going to have to do is to say, look, most of the products the Business Model is, you give us the valuable materials, we separate it and sell it and give it to you back. We cant do that with glass. Consumers are going to have to realize, youre going to have to pay to recycle glass. Its not going to be a free program. And the second thing is a lot of organics. And organics are recyclable but when you mix them with other recyclables, its not recyclable. Like paper . Like paper and cardboard. Do you want us to separate or not separate . Well, look, if it was purely up to me, it would be wonderful if there was a regulation, i hate to say it, across the country, one rule on how this all works, what should it be . It would be no doubt that it would be more economic if you separated. The problem is then the participation rates come down. You know, were a consumer nation. Weve got to make it easy for the consumers, right . So if we can educate the consumers, say, heres what goes into that bin and what doesnt, we could make it to where we can continue to grow recycling. We generally invest 100 million in recycling assets. Last year 300 million. We wont be making those investments until we get a sustainable model that is economic to recycle. Basically that means youre not going to be doing the recycling . Well, we are still the largest recycler. Well still do 12 million tons but we wont be making additional investments. If we want to do more recycling, lets figure out a way where we can get a sustainable return so we dont have this volatility that weve had over the last few years. Is it just that we, the customers, are lazy . No. I think its that we have not educated the couns educated consumers. And then weve got to go upstream and talk to the manufacturers. We tell a story about a juice container that had a particular type of plastic in the handle that made the container not recyclable. Lets make this product a more recyclable product. That makes sense. All right. Youll still be with us the rest of the program. At the top of the hour, the obama fix or no fix . Pat geraghty of bluecross will be joining us. And fred smith will be joining us along with john paulson. Back in just a minute. Edex one. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. [tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. Tdd 18003452550 and seasoned market experts to help sharpen your instincts. Tdd 18003452550 so you can take charge tdd 18003452550 of your trading. Fedex will deliver big returns. Ceo fred smith will join us to talk about the investments and his outlook for holiday shipping. Health plan canceled . Not so fast. The Obama Administration changes the rules on some plans. How the industry will implement yesterdays decision or not. And breaking economic data, import export prices. Were having lunch. Hes an importer. Importer. And exporter. The third hour of squawk box starts right now. Welcome back. Squawk box here on cnbc, first in business worldwide. Im joe kernen along with becky quick. Joining us also as a guest host is David Steiner. Well get to Kelly Clarkson in just a moment but we have in our headlines this morning, kimberlyclark announcing pursing a tax rate of a 1. 6 billion in sales and ceo tom falk joined us in the last hour to talk about it. Weve been around for 104 years and weve continued to work our portfolio over that time. I think our first product 104 years ago was newsprint. Weve been in the Health Care Business for a while and weve been doing strategic work with that business and as they have developed exciting strategies to go into surgical, those are areas that im not sure kimberlyclark is the best owner for them long term to help achieve those dreams. Closing at an alltime high yesterday, were getting a peak also inside the portfolios to some of the biggest investors. Berkshire hathaway announcing a stake in exxonmobil. Its the sixth largest shareholder. Yesterday closing at a high of 94. 58. And apple, 3. 9 million shares revealed on twitter yesterday that he took a very large position in apple. And then theres jos a. Bank ending its offer for the 48 per bid share if Men Warehouse did not engage in talks by said. However, bank did say that they would consider a new bid if invited to engage in talks. Lets see how the market is setting itself up. Dow will open about 32 points higher. Nasdaq up 3 1 2 points and s p 500 looking like it will open 4 points higher as well. Becky, over to you. Andrew, thank you. The white house says it could fix beyond 2014. Announcing the plan to allow Insurance Companies to he can tend their policies that would have been canceled and blamed himself for the troubled rollout. I think its legitimate for them to have to expect me to have to win back some credibility on this Health Care Law in particular and on a whole range of these issues in general. And, you know, thats on me. We fumbled the rollout on this Health Care Law. Weve just learned that the president will be meeting with Insurance Industry executives a the the white house today on the obama care fix. Joining me to talk about how this will affect his company, the ceo of florida blue, pat geraghty thanks for joining us today. Happy to be with you. We knew the problem was big, that millions of people were getting this cancellation notices. Will the fix be fixable . We were complying with the law when we sent the letters to our customers. So we had sent a lot of information about how we could bridge people from where they were in their plans to what the options were in the exchange but now this gives people the opportunity to keep what they had. And as an insurer, were happy to do that. Were going to work with our state of florida and make sure that our incident is prepared and willing to work with us. We believe they are. But you dont just push a button and make this happen. Theres a lot of work to be done. You think you can reinstate these plans and work with the re regulator and let the state take care of this and have it taken care of in the next 47 days . Well, its challenging. I will not say for a minute its not going to take a lot of work and there will be confusion in the marketplace for sure but we are willing to take on that effort but we certainly want to understand all the parameters of the decision and so well be involved in this meeting at the white house to talk through all of the detail that comes behind a decision like this. What kind of detail . Sorry. Would it only last can you keep your plan for five more years if you like it or will is he hoping that you will be migrated into one of the aca plans . Its just more time to be able to get on the website to get the new plan . Is that what hes thinking . You still can keep your plan if you like it for another five ye years. Yeah, as i understand it, you can maintain your current plan and if its canceled during the upcoming year that you can renew that plan. So i dont believe it has a fiveyear time frame around it, no. No. I think its one more year so that you have time it was really addressing your problem, wasnt it . That youre out of this plan but you cant get into the other plan. How does it change the picture for you just from the math and from the numbers coming in . Youve offered these new plans that are out there. If you have people who want to keep their own plan, i would assume that most of them are healthier people that are happy with their plan because they dont need a lot of health care. If those people stay in the existing plans and you have a lot of people who are sicker or who had preexisting conditions who come into the new plan, what does that mean for you financially . We obviously have a concern about what it does to the risk pool left in the exchange. So at the end of the day its very clear that the Exchange Needs to work. Not just the enrollment part but all parts of the Exchange Operation will need to work to attract people into the federal exchange and so that execution is very critical and remains to be delivered on. So thats our focus, how do we work to make sure that the federal exchange is actually ing to come up and be operational . Without that we have a significant challenge in the risk pool thats in the exchange right now. When you say to make sure its operational, you mean to make sure that it makes sense that youre charging the right premiums to be able to cover the people that are sick, correct . Yeah. I mean soup to nuts. The opportunity for people to enroll, the data being clear and understandable, the payments eligibility to be made through the exchange. All of the operation of the Exchange Needs to be working in order for it to work for everybody who will be served through an exchange plan. And so thats going to be important and i think thats a big focus. I know the administration is working hard on that. Thats going to be critical at the end of the day. If it was working, do you think you can get to those those numbers . I just you know, even before any of this happened i think im not sure all of the young people i saw polls that said 77 werent going to do it. I dont know whether you saw that. That was a gallup poll. Now you have all of these problems. I mean, we need 41 Million People to do this that are uninsured and youve got 26,000 in the first month. I mean, 26,000 sounded like a pretty good number to me. It seemed like a lot of people. 100,000 people with the state but even 100,000 when youre talking about 41 million thats why we did this, that was the whole rationale behind this. Do you really think its going to work . Yep. So let me tell you, our volume in the first couple of days was off the chart. It still remains fairly high but initially we had people through our Retail Centers. We have Retail Centers all across the state of florida. I have 16 Retail Centers where consumers can engage us. We have a direct phone line. We have agents all across the state. We were prepared and executing 3,000 meetings across the state during this entire open enrollment period. We had a tremendous amount of activity. We know we had upwards of 100,000 people that were ready to enroll. So theres a lot of interest out there. The challenge and question is, will we be able to recultivate that interest as the operation of the exchange comes up. Obviously from an insurer standpoint we want as many people to be covered and we have a good mix in that pool that brings in young and healthy as well as everybody else that we serve. So we really have an investment in making sure that a lot of people are involved in. So were going to do everything that we can to educate and bring people into the health care coverage. I know you must have spent months and months preparing for those changes that you expected to be implemented by january 1st. Now its a little unclear as to well, its very unclear as to what is going to happen when. Do you have any idea what this is going to mean for the bottom line for you over the next year . You know, its hard to make that call right now and obviously if we get the exchange up and running and we have an opportunity to enroll people, that will be one scenario. If it takes a long time to come up and running, obviously the impact on us will be more significant. So its very much a fluid situation right now. And it has our concern and our attention, obviously, and well be discussing more of that when we meet with the president. Is there anything that would make you decide that its not worth offering some of these obama care plans . Well, you know, i cant speak for all insurers. I speak for florida. Were in all 67 counties on the exchange. We serve 400,000 people in the individual market today. You know, my primary concern is taking care of the people in my state and so we want to make sure they have the opportunity to have coverage, have affordable as coverage as possible and so were dedicated to that. And so we wont be walking away in our state but were going to be trying to figure out how to do this as effectively as we possibly can. Pat, your biggest question that you have for the president , for the white house today . Well, we want to make sure that the president understands the risk pool issues and how we can balance what could happen in the exchange as a result of keeping people in the plans that are outside the exchange. And so it will be important to really talk through that issue. Uhhuh. Pat, we want to thank you very much for joining us today. Wish you the best of luck and hope to hear back from you when you get more answers and try to move down this road. Thank you. Coming up, there is a swear jar in the office of Te Connectivity for any Board Companies that call it by its former name, Tyco Electronics. Anyone who says george bush, dont they have to immediately pay up for that . As the nastiest thing you could ever theres a joe kernen jar. Thats what were hoping for. Ceo tom lynch will join us next to talk manufacturing and tech. And i love progressive jazz. Its the only thing i like that would be called on the Progressive Side of things, is progressive jazz. Later, were going to ask fred smith miles. Miles davis. Weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens, and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Im bethand im michelle. And we own the paper cottage. Its a stationery and gifts store. Anything we purchase for the paper cottage goes on our ink card. So you can manage your business expenses and access them online instantly with the Game Changing app from ink. We didnt get into business to spend time managing receipts, thats why we have ink. We like being in business because we like being creative, we like interacting with people. So you have time to focus on the things you love. Ink from chase. So you can. Welcome back to squawk box, everybody. Weve been watching the futures this morning and they have been indicated a little higher. Dow futures are up 3. 5 points. Some investments in highprofile stocks disclosed by hedge funds, now owning about 738,000 shares in retailer jcpenney while tiger sold out its position. Mega advisers upgraded and fairline manager cutting stocks in yahoo and visa. And components for products you probably use every day and dont even know it, ceo tom limp lynch is joining us as well as our guest host David Steiner. Thank you for coming in. Thank you. We said there was a swear jar in what the companied used to be called, which was Tyco Electronics and i also asked was there a swear jar if you mentioned the cause . Is tyco the brand name gone . Its gone. Te is at least ive heard of tyco. We have a few people say the other name. How much does it cost . How much do you have to put in the jar . It depends. For directors, its 25 bucks. For employees its a dollar. When did you guys change the name, by the way . Three years ago. And you really found the name had well shlg , we needed to est our own identity. What does the e stand for . Tyco electronics . Ties us back to our history in a subtle way. Connectivity really tells the world what we do. Tell us what you really do because the business still has lots of different businesses embedded in it. It does. But fundamentally the common thing we do is we connect things. Were the Worlds Largest maker of connectors. If you think of everything that you make during your day, it has our connectors in it. We have 5. 5 billion worth of connectors in car. And then you also have broadband. We have broadband. When you search for something, that signal comes out of a server lets say in Silicon Valley through new york, its going through tens and thousands of connections. We touch it all. Given that you touch it all, sort of your view right now he was a very good indicator, actually, of the economy because he was saying, you know, you know when theres new business simply because you know if youre i can approximatipicking similar. It is similar. Were a broadbase indicator. Weve seen seven months growth. Were starting to see a pickup in europe. China is coming back over the last three quarters. The u. S. Is pretty strong in automotive. I would figure i initially thought you would be the way you describe it its cyclical with housing. I would think youre pretty elastic. If they are not buying cars, we are not selling connectors. You would have to pick a much better manager. I can vouch for that. Youre selling this stuff globally and the question, therefore, for me becomes, what cisco said, dont know if you followed that. Did i. That seemed to be a real indicator that there is trouble ahead in the emerging markets. Do you feel that . It depends on the market. Automotive and industrial transportation is very strong right now. Industrial equipment, which has been slow for us for the last couple of years, were starting to see a pickup year over year order growth in the last four months. Telecom networks, were in the fiber portion of it. Its mixed. Our consumer business was a little bit slow but overall how much is business is a consumer facing . Well, we dont sell anything directly to a consumer but things that go into a smartphone and pcs, about 15 of our business. And what percentage of your business is the snu. S. . Were about a third, a third, a third. We follow the customers where they make their product. What is the market cap at . Were 21 billion today. You built a pretty good interesting we did. We absolutely did. You add them up and david said it was a rollup and if you add the market cap up, its still there. Ed created the value. And really positioned the companies as they got out to create a ton more value. Because were really focused now. Were focused on connectivity. Thats everything that we do. Who does adt . Adt does adt. Not only do you make the connectors but you all innovate to the next generation. Talk a little bit about that. Our typical model is were working with our customers very early on in the design of their products. So in the Automotive Industry especially where it takes years to develop a new car and to put a new feature into a car, well be sitting at their area of design three, four years ahead of time. So we have to really know what is going on. Thats for new products. They are locked in with you when they sit down and start planning this out . Once we design in, yes. And there is the next deal you are in every car . We are in every car. Are you in tesla . We are in tesla. A typical car has 1500 connections in it. Highend car, 3500. You lay it out and it would fill a 10 by 8 here and its from your antilock brakes to your seat heaters. Its a fabulous business. And the growth area is safety . Green and connected. The number one driver of growth is fuel efficiency. You have to put more intelligence in the engine, that means more connection. Probably number two would be entertainment. Everybody has to bring their smartphone into the car and have it integrated and the third would be more antilock brakes. Thank you for joining us this morning. Thanks for having me. Well call it te from now on. Thank you very much. We will not fine you. Te. Anyway coming up, fedex drawing the attention of some wellknown Hedge Fund Managers including george soros and john paulson. Were going to ask the ceo of fedex what makes the company so attractive. And we are playing songs from our top ten artists of all time. Youre listening to one of beckys, the great aretha franklin. Go to squawk. Cnbc. Com and click on the link to our Facebook Page to submit your own top ten bands of all time. You could pick, yes, you could, featured on our blog and for some reason David Hasselhoff didnt make my list. Five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. Afghanistan in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation because it offers a superior level of protection and because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Welcome back to squawk box. About 140 Million People plan to shop online or in stores during thanksgiving weekend. Thats actually down, believe it or not, from the 147 million who planned to shop last year. About a quarter said that they would plan to shop on thanksgiving day. We are just a few minutes from the import and export prices for december. Stay tuned. Were going to talk to fred smith, chairman and ceo of global shipper, fedex. This is jack johnson. Well be right back. Ything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. [ male announcer ] introducing fedex one rate. announcer at scottrade, our clto make their money do more. Re ann to help me plan my next move, i take scottrades free, inbranch seminars. Plus, their live webinars. I use daily market commentary to improve my strategy. And my local scottrade Office Guides my learning every step of the way. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Welcome back. Apparently we are just seconds away from october import and export prices. Apparently. Jim iourio is standing by. Here it comes. Weve got negative. 7 on the import price. Thats month over month. Weve got negative 2. 0 on the import price. Last month it was negative. 5. So its a little lower. Negative 2. 21, thats a crummy number. We were expecting a positive 5. 0. This is two days in a row with fairly weak numbers. People watching these numbers pretty closely, particularly because we had a decent labor number last week. Everyones on pins and needles waiting to see what the fed is going to do. All in all, this is not a good number. The stock market is staying positive because it always does. Bond market not much of a move there either. Because it always does. Well, i dont even know how to interpret what kind of numbers are going to be good or bad for the stock market. Either way they love it. Didnt walmart recover everything . You cant short this market. Did anything yellen surprise you or confirm any of your fears or hopes and aspirations . It confirmed my fears. I think that, you know, when all they have is a hammer and everything looks like a nail. They look to the economy and say, the only thing we can do is keep the pedal to the medal. Its hard for them to accept that fact. Were in a difficult time as far as the fed goes. You have to combine that metaphor with they are like a baby with a hammer. No doubt about it. And they think in their head that they have more tools in their bag than just their hammer and they really honestly dont. Can you imagine . Like a toddler with a hammer, a china shop . I have a small little guy and hes got a plastic hammer. It hurts. Go ahead, jim. No. Im saying we can just keep going with that metaphor. I love it. Everything looks like a hammer. Unfortunately, they are only 11 months old. Amen. You know what, i read, shes a true believer but we already knew that. Of course we did. Shes definitely a true believer and i actually hoped when she came out because we pained her as the queen of the doves, i hoped that she would take a centrist angle on it and she didnt. She said were going to keep the pedal to the metal and thats frightening for me. Anything to do ensure a robu robust recovery. As long as that didnt let Interest Rates set themselves. Havent you noticed a little bit of fed action over the past five years and have we have a robust recovery . Of course not. Why does she think she can do it . She cant. Heres the issue. Fed policy is so very effective if used at the right time for short periods of time. Once you throw everything at it and five years pass and six years pass, it starts to ruin the recovery. It discourages savers and divides the economy. Its a bad situation right now. All right. Jim, thank you. When we come back, ceo fred smith. Were going to ask him about his expectation for holiday sh shipping. We had a very constructive conversation about the company and we had ideas and we shared them. Life goes on. Its just a normal part of the process. Are you an owner of fedex . We are. And you like the stock . We do. And you like fred . I like fred. So youre not going to oust him . No, absolutely not. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back. Lets get right to fred smith. Recent investments from some of the biggest names in hedge funds, just to name a few. Good morning, fred. How are you . Im fine. How about you . Good. You cover the whole spectrum. I mean, george soros, i guess the both of you guys can get along although you may never be out to dinner. Wow. What was that . You may never actually talk politics together, i would imagine. Well, hes probably got a little more liberal bent that i do but i enjoyed meeting him. Hes obviously a great investor. Dan loeb normally does things when hes thinking about a ceo change. At this point i dont think hes talking about that and you have stated youre going to stay there for the i mean, the near end and maybe even longterm future, right . Well, obviously the clock particul ticks on. Im not going anyplace for the foreseeable future because were so optimistic about our business and would be even more optimistic if we get a little growth going around the global economy. But we enjoyed meeting mr. Loeb. When you heard that dan loeb wanted to meet you and made an investment in your company what did you say . What is going to happen next . We said it was great. We meet with shareholders all the time. So there wasnt anything unusual about that. And dan loeb asked if he could come down and bring a couple of analysts. They bought some shares and it was a lot of fun. They are very smart people. He said that you disabused him of some notions. What notions are those . I think what dan does, hes very analytical. Hes always looking for an opportunity, an undervalued company and clearly in some cases he thinks they are undervalued because the management didnt do the right thing. So they analyze companies and try to find upside opportunities and they came down and had some ideas and some of the understanding that they had about the business this is a very complex business. Were a little off the mark. But i think the fundamental issue was they recognized the course that we set a year ago in october at our Analyst Meeting where we were executing on it and we were flattered that they took the position and we enjoyed meeting with him. Youre the founder. You did something that no one thought could be done. Taking on the post office and winning. You were a marine, werent you . I dont think its some little piss ant came in and i dont think i would be afraid. I looked up a piss aunt and its a type of aunt with a 14th century origin and has nothing to do with being ill change it to whipper snapper. I like it, too. I just wanted to use that word and then explain it. You are allowed to use that. Its not a bad anyway, i think youve got maybe someone else might worry but i dont think anyone else could come in and worry about it. Lets go to wa we wehat we wereg about with my esteemed colleague from Waste Management. Wouldnt that all in large part, if we did our Corporate Tax reform, help you achieve a lot of your goals at fedex . Of course. And not only would it help us increase our earnings even more than we anticipate we will, it would reemploy millions of blue collar americans. And its just unfortunate that we cant get tax reform because of this broad agreement that needs to take place. I get frustrated a lot by talking about all of the people that youd like to help but not i dont know. Is it not they come from a different place nowadays, fred, where you cant really connect the dots between where the job create would actually come from . I mean, its a good game to say i really want to help the middle class and i want any job ill look high and low for any job but then not to take action that we know would generate . And im talking about bringing back money from abroad, also. Well, clearly bringing the money back from abroad is something that should happen tomorrow. Right. Were not doing any of these things. Were not doing any of these things. Were not even talking about any of these things. Well, i think they are talking about it. I think chairman max baucus of the finance committee and david camp will know the president is actually endorsed corporate i know. Tax reform and modified system. Thats what i said. Everybody is supportive. Its just they cant seem to get it together to move forward. Youre saying youre supportive. You need to take the lead on Something Like this. If youre serious about, you know, Getting Better than 2 growth, if youre serious about et goi getting under 7 and serious about getting the fed and depending on them as a crutch, you need to take the lead on this and forget some of these other things. No . Well, listen, i think thats joe talking. Joe, ive heard speeches on this. Thats andrews and the New York Times talking. No. That was me. Well, ive given all kinds of speeches about this and ive shared on this with larry kudlow and others the charge that show that job creation is a direct corollary of investment in equipment and software and to a lesser degree Government Spending on infrastructure. And we are not spending enough for capital and software and thats why we cant create the jobs and the tax code has to change in order to insent people to do that. Are you in favor of Infrastructure Spending . Becky, its not only that but restore the level of funding that was established back in 1994 because they havent been adjusted for inflation to Fund Infrastructure improvements. It has to happen. That may be the place to find common ground. The criticism is when they say investment, they are talking about Public Investment and building out infrastructure and when the other side says it they are talking about Business Investment which is historically low, fred, right now for some reason. And the real i mean, the business, the private sector investment, if it got going, would dwarf what the government is doing. Maybe we could get them both going and that would be the bipartisan thing to get them going, some investment of some type. Well, first of all, Business Investment and equipment and software dwarfs government investment. Its about 1 of gdp. Back in the 60s it was 6 . So u. S. Business investment in equipment and software is not even back to the levels that it was prior to the 2008 meltdown. And the reason theres not sufficient Business Investment is because the tax code is very punitive to investment relative to financial investments, leverage, speculation, whatever you want to call it. You have to lower our Corporate Tax rate or provide investment incentives the way the Kennedy Administration did with investment tax credits in order to take the risk down for people to invest. Frank, while we have you here, can i ask what you see with the consumer right now . Because we heard from walmart it disappointed the street because they said they may not earn as much as expected. They sounded very concerned about what they are seeing in the consumer. What are you seeing . Well, we think that our traffic is going to be up substantially. But i hope thats because of the Good Strategies that were executing that attract people like dan loeb and others that invest in our company. But i think the economy is not strong. Its not strong because we dont have pro growth policies in terms of taxes and trade and the centerpiece of that is reforming the tax code to incent more Business Investment. It could be that walmart and other retailers are seeing migration into the ecommerce sector. That would be with all of the mobile devices and pads that were all equipped with now can shop from anyplace and get it deliver delivered conveniently and that could have an impact on the individual company impact. Fred, we have the Holiday Season coming up. What do you all see for shipping and how many jobs will you create during the Holiday Season . Well, dave, we forecast that we will put on over 20,000 extra people for the holiday. We project our peak day to be so called cybermonday, the peak shopping day a little different this year because the time is compressed between thanksgiving and christmas and people are shopping in great profusion online and well move about 22 million shipments that day. Thats up someplace between 10 and 11 . Well move about 85 million shipments that week and thats up about 13 year over year. Fred, another thing i want to get your comment on is this news that amazon is going to start using the Postal Service on sundays. Whats your take on that . Well, if the consumer wants ecommerce items delivered on sunday, fedex, with our broad portfolio of services in that space, is uniquely situated to do it and well be looking at that carefully. Weve looked at it in the past, not found the sufficient demand there but this is a small rollout from amazon and the Postal Service. Were a partner of the Postal Service, by the way, with our fedex smart post for lightweight items going to residential addresses where we pick it up, transport it, and then insert it into the Postal Service for last mile delivery. So if there is substantial demand for sunday delivery, you can count on the fact that well be out there delivering on sunday. Fred, real quick, the other question that i had about amazon, do you ever see them getting into the shipping business themselves . In certain metropolitan areas they are trying to do one day you order it, it comes right to you. And they are opening online supermarkets and things which i assume could also turn into Delivery Services for other products long term. Well, amazon. Com is expanding its footprint of Distribution Centers to be as close to their customers as they can. Because of the economics of delivery, the vast majority of those will still be delivered overnight or twoday. The sameday market is a small market. Its generally confined to metropolitan areas like new york or Downtown Chicago or san francisco. We have a Wonderful Service called fedex sameday city. Its in a 20some odd cities now and were rolling it out as sameday demand for ecommerce increases. We intend to be there as well. But amazon is going to use everybody, particularly in the peak season because there is such an extraordinary runup during the holidays compared to the rest of the year. Fred smith, appreciate your time. Keep up the fight. Fantastic. He is great. Appreciate it. Well see you. I think that its nice that he wasnt sure whether it was me or you. You so quickly distanced yourself from that line of questioning as if you dont want more jobs, or as if you dont want why would you distance yourself from trying to i would like to help. Coming up, were going to talk to jim cramer. I had kenny chesney. When are we going to had ken chesney. That was another one of yours and jani. And john tesh. And Kimberly Clarks spinoff plan. The ocean gets warmer. The peruvian anchovy harvest suffers. It raises the price of fishmeal, cattle feed and beef. Bny mellon turns insights like these into powerful investment strategies. For a university endowment. It funds a marine biologist. Who studies the peruvian anchovy. Invested in the world. Bny mellon. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the allnew fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Get 200 free trades when you open an account. Jim cramer join us now. Do you want to share with the whole class . Wed like to but we can. Kimberly clark, what you make of it. Of the nine analysts that follows them, there are six holds and three sells. Its been a remarkable performing over the years. It keeps Getting Better and better. We just talked to fred smith. With you are are on fedex these days . Ups is cheaper. Fedex has done a remarkable job. The stock preannounced in 92 and negatively again in 84. Mr. Smith said a restructuring is going to take hold. Its been straight up ever since then. I think ups has some catch up. And warren buffett. The last quarter for exxon was a breakout quarter. They had at many as eight straight quarters hurt by xpo. I think its not an expensive plan. They have a 50 year plan. A 50year plan . They actually do have a 50year plan. I think the only thing that could disrupt the company is David Steiners natural gas crusade and hes been an amazing supporter of domestic fuel. Thats a nobrainer to use natural gas for our truck fleet. Go on. Jim, we will see you in just a couple minutes on squawk on the street. Were looking forward to it. When we come back, an oped from jack welch in the wall street journal. We talk to our guest host, David Steiner, to see what he thinks about that. And coming up on squawk on the street, much more on how insurers are handling the changes. I put i think my third pick was myles, who had so many i mean, that led to jazz fusion. He launched weather report, remember pat matheny. You cannot overstate miles davis influence on all music, especially jazz and rock infusion. Thank you for broadening our very well, very well. He used to turn around and not face the audience when he played. Why, he didnt want to look at them . He just got kind of quirky as he got older. I can understand that. Jack welch penning an article this morning. David, earlier this week microsoft made this announce men it was no longer going to be doing the same sort of appraisal system it used and jack this morning is writing about rank and yank. He says every now and then they come up with a management practice, they dub it rank and yank, how companies supposedly identify their worst performers once a year and, boom, fire them. It makes me want to scream and i know im not alone. What do you think . I think across Corporate America probably the thing that we do the worst is employee evaluations. And its human nature, right . No one wants to sit with someone and say you are arent succeeding. Everybody thinks a performance evaluation is here are the two things you do well, here are the two things you do bad and ill see you next year. You really need to let people know where they stand and get on with it. David, it has been a pleasure having you here. We hope to have you back again soon. You, too. Have a happy Holiday Season. Have a great weekend. Its time for squawk on the street. Good morning and welcome to squawk on the street. Im david faber with jim cramer and kelly evans live from the new york stock exchange. Carl quintanilla has the day off. One day after the dow and s p closed at record highs, we are sitting up for a bit of a higher open. 10year always important. Heard from yellen