Transcripts For CNBC Squawk Box 20131209

Today buying about 4. 5 billion in longer duration securities. Tomorrow there is a 30 billion threeyear note option. A 21 year billion and a 30 year auction on thursday. Take a look at the tenyear note. Thats whats been driving the stock market to this point. 2. 8 million. Thats been the steady climber. After the numbers we got on friday, you can expect that that number might be continuing to increase. Andrew, welcome back. Weather here, not nearly as good as it is in jamaica. We have a bit of Corporate News. Mcdonalds, same store sales. Rising. 3 . Shares of the fast food giant, up about 10 so far this year though they are trailing the broader market. Also, a Supreme Court justice has now denied a last ditch effort by a group of consumers and travel agents to stop the merger of u. S. Airways and american air liningirlineairlin. Doug parker will join us at 8 00 eastern on cnbc. Internal jpmorgan emails show the bank favored hiring people from prominent chinese families in order to win banking business in the u. S. The New York Times says that information in emails and computer files is being looked at. They say hiring sons and daughters of powerful people in china, quote, almost has a linear relationship with winning assignments. A little bit of news there but i imagine, becky, some people say as they do in rome what is it, do as when in rome. Here we are. When in rome. Andrew, when did you get back . Did you see the big piece in the times. I came back yesterday on a jetblue flight. I watched tiger and zach and saw new england win right at the last minute there. Tiger and zach. You watched the tigers tournament . I did. I didnt see it. Amazing. I didnt see anything you did. I know. You didnt again. I saw that he returned on saturday. Who won the tournament . Tiger lost in, what do you call it . A faceoff not a faceoff, a lastminute what would you call that . Playoff. No, both had to playoff. Call it a playoff. Thats not what it is. Lets go back to now i cant come up with the word. What does potter daulg when Jimmy Stewart says mall fees sentences sans. Lets go back to malfeasance. I read that peace. Reading it, it is damning. But i just want to know, are you allowed to hire someones kid knowing youre going to get business from that person . It seems like everybody else was already doing it. Theres five other banks and theyre all going to eventually have to i have a very strong view about this which is this. Unless the actual residents 245u went to the son and the son went to the father or mother or whoever is in position of power, somehow theyve agreed that by hiring this person youre going to get this business, i think its a tough case to make. Tough case to make. But do you really doubt that theres no. No, i dont doubt it at all but unclear whether its a true quid pro quo or whether it gets you in the room. The law that it would violate, no ones actually even the New York Times was afraid to say it was violating any law. It would be a bribery law. Is it a bribe to not that you can do business in china without bribes. Is it a bribe to hire someones son or daughter not clear to me. Thats why i said, it has to be organized as a quid pro quo. If its secretive, if theres things that people dont want to be known about it, i think thats a different situation. I think they did do it that way the way they did the spreadsheets. Now theyre saying they did the spreadsheets because they thought people were not really being truthful. They said they were bragging about the revenue and they wanted to see if it was real. I dont know. I think its a tough case to make but i also think there are things you wanted to hide, if theres something secretive you didnt want to be known. It wasnt like the people were being not paid on the regular employee rolls or that they were working but then were really going on vacation. It wasnt like they were being bought off. They had a real job. It is a tough case to make. And you pointed out in the past that, look, these are also the people, the children of these welltodo people are children of people that are fairly qualified. My argument is what typically happens is you hire these kids because theyre going to help you goat in the room, get the meeting. Then you have to make the meeting work for yourself. That is something that was said. I think they have a pretty good chance to get the business. Normally, then again, i said, if youre trying to be a success, trying to win in china, i dont know. You know, its hard to like you said, things are done with their own business. Did you hear that music . Were going to do this throughout the show. I said what is their a game . But that was dion and the belmont. They apparently think i would know about that since the first hit was 1958. And then 59. Im looking up when their hits were. I didnt know who that was. Thats not fair. I wasnt listening to this when i was 2. Do you have any idea . I figured the era. My area. Dion and the belmonts. Did you . No. I was 2 years old in 1958. Come on. Youre closer to 12 then. Yeah, right. And i was also thinking clearly listened to the 50s. My wikipedia had me born in 57 for a while. People do that all the time. I would like it to be off by a year or two. You cant change your you cant change that. Youre stuck with it. Were not going to weather. First of all, were going to talk about washington news. This is the final week of 2013. Both houses of congress are set to be in session at the same time. There is optimism for a budget deal. House and Senate Leaders are putting the touches on a budget compromise. Theyre not going to reform entitlement programs but this would be the first success fwl budget course in 2011. If you can get two years where this isnt coming back to loggerhea loggerheads, that might be something as well. Also, eight Major Companies are urging congress and the president to set limits on surveillance. Google and microsoft wants to regulate online spying. They have an open letter showing up in full page ads in newspapers. Apple, yahoo, facebook, twitter, aol and linkedin are taking part in the campaign. We mentioned stocks and bopds. Broader markets, oil prices up by about 14 cents. 97. 79. Since you went away, andrew, thats the big story. Crude oil picking up steam. Also, take a look at the dollar. At least right now youre going to see the dollar is down against the euro, wow, 1. 3709. Up against the yen. 1. 0307. Gold prices this morning are sitting relatively flat, 1,227 an ounce. I thought all of these things indicated more of a comfort with the taper. 284 was down from 290. It hit 290 on friday. The New York Times writes right. What allowed the dow to trade up 200 on friday was the tenyear didnt get out of control and then you would also think the end of tapering would bring a stronger dollar and weak euro visavis the dollar. That hasnt been the case. 137 making me glad that if we do go to davos, im not paying for anything. Im not paying anyway. I dont care. Independent about everything, arent they . Extra. You slept in this could the that im goi cot that im going to sleep with. No carpeting. But i have a bidet . I dont think theres a bidet. I dont care. He likes the water fountain in his room. I finally learned its not a drinking fountain which is good because for a while i couldnt figure out why iad to bend over that far to get a heres the thing. The shower is not a little shower. I know. That just drives me nuts. You would be okay. This sounds horrible because they do have it attached to the wall. Careful. I think im short enough. Right. Is there a shower . Is there a shower curtain . No, its a shower door. Is there a door . No, theres a door. You have to aim at bring your own soap. I dont understand that. Thats right, i forgot about that. Come on. I forgot about that. You dont have Little Things . Ill give you Little Things. Oh, my gosh, i forgot about that. You can pop them in with your they still feel superior over there because they have that . Been around longer. Europe to us . Theyre neutral about everything. Exactly. We have a couple of international stories. A number of economic reports out of china, eunice yoon joins us. Good morning. Offer good afternoon in this case. Its actually good evening here. Yeah, no, weve talked a little bit about the u. S. Dollar. I am very disappointed in where the u. S. Dollar is in the fact that i get paid in u. S. Dollars. The chinese yen is going through the roof. Theres excitement over the trade data that came out for november. It jumped by 12. 7 . A loot of that was powered by christmas sales in europe. People are talking about how those figures arent as easy to manipulate so we might be seeing some signs of recovery here. In terms of imports, they remain a little bit softer. Because of that people were a little bit concerned about what chinese demand is going to be like. The other guy we were watching, the ppi came in about 3 . A 2 rise. Thats what the government wants. Because of that the government was talking about how they had the wiggle room to push ahead with financial reform. They said a lot of people were talking about with the steps that appears to be in the right direction for Interest Rates liberalization. Here it is. Theyre going to allow the banks to issue cds that will be determined by the market. These cds will not have an Interest Rate cap like some of the others. Theyre going to be available to fund managers. Theyre going to be quite large. On 8 million. Theyre not going to go to individuals yet. Again, its seen as a step in the right direction, guys. Eunice, thank you. Again, thats eunice yoon. Well check in with her again soon. Stocks rising sharply after fridays job report. Does this mean good news for the markets . Could investors be end bracing the taper . Joining us is tom lee. Tom, what do you think . The idea of a taper gets forward into december or do you think theres no way its happening this year . I think the probability actually has increased. I think a few weeks ago investors would have been concerned about the idea of taper. It gives them comfort that the economy is doing well. I think fridays job report and some other items recently, i think investors are getting comfortable if it does happen in december. If it does happen, they say the fed is more likely to wait and happen next year. What is the fed going to be looking at at this point . You see a stronger jobs number. Its tough for a hawk to say that the feds have a definitive breakout pattern. Thats right. Our economists are saying the fed is probably interested in trying to begin the taper process. I think january is a better date. I think that will help. If we can see spending, well see how that will be a factor. You said at the end of november that december is likely to be a pretty strong month for the market. Last week was a down week. What do you think the month will bring at this point . I think investors will want to finish the year strong. I think theyre optimistic about 2014. Theres still a bit of performance chasing taking place. Then our position data we track, hedge fund and Mutual Fund Data and broader macro Fund Positioning shows investors are taking off risk. Thats usually con temporary ran. What does that mean . It means if people are taking off now, its more likely for the markets to rally. What you have is you have some capital being put on the side. Tom, taking a look at which sectors you like, where would you be if you could put the money right now . I think it works into year end so that means we want investors to be cyclical. I think theres the best buy that theres still large cap tech. Financials. Consumer cyclic calls. I think the breakout is showing a group that historically has led the market and is doing quite well. Im staying cyclical. Tom, great talking to you. The east coast getting hit by snow and freezing rain making travel pretty difficult. The weather channels alex wilson has the forecast. Good morning. Good morning to you. Look armed be the d. C. Area, we have rain and the purple, thats the freezing rain that you did mention. Slick roadways especially the secondary roadways. Bridges and overpasses in d. C. Looking at the bigger picture, freezing rain in southern and eastern pennsylvania. Up towards the new york city area dancing into parts of connecticut. Were also going to see some snow out there today. Additional snowfall 3 to 5 inches in northern sections of maine. 1 to 3 inches in the dark blue color. Lighter blue indicates less than an inch. Tomorrow on the west coast, theyre going to zip over towards the east coast and offer up another area of shower and rain up 2345into the virginias. Ice possible in d. C. To philly. Snow from d. C. To new york city. Could pick up a few inches of snow by the time all is said and done tomorrow. Andrew, back to you. Coming up, talking baseball and beards but not together. Also, there is a battle erupting in atlanta over a building. The new stadium for the braves. Find out why the tea party is on the grand scam. Wall street clean shaven is apparently preferred. Was that the story . Coming up in the executive edge. Rockefeller plaza on this nasty morning. Squawk box coming back after this. I want to spread a little love this year [ male announcer ] this december, experience the gift of unsurpassed craftsmanship at the lexus december to remember sales event. Some of the best offers of the year. This is the pursuit of perfection. Yep. Got all the cozies. [ grandma ] with new fedex one rate, i could fill a box and ship it for one flat rate. So i knit until it was full. Youd be crazy not to. Is that nana . [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. Welcome back, everybody. Right now time for the executive edge. This is a segment set to give Business Leaders a leg up. A battle is developing between the Atlanta Braves and the tea party. Gentleman, public funds, should they be used for things like stadiums . I need to do some research. Isnt that the way it usually works . It is. There have been complaints use for a long time. Im saying is yes, if it makes money. The problem becky is alluding to is it usually doesnt work. The Republican Party will say, yes, it will bring in a lot of Economic Activity over the next 30 years. They think its a win for the county. Again, if you go back and look at the history of these things, a lot of times it doesnt turn out to be that way. Its difficult to make a correlation between job creation. The democrat voted, no. In this particular case there seems to be Something Else going on, behind the scenes shenanigans. A lot of complaining in this particular case but more broadly, i think thats what governments do. Look at the olympics. This is public private. Sometimes you think of baseball teams not as utilities but it seems when the city is able to keep and attract a professional sports team, it almost seems like its part its not totally just private enterprise. It seems like its associated with the municipality where it is. Sometimes theres a question. Some of these municipalities feel like they get held up foran some. The question is are you going to move or leave if you dont have the public money . My other question is is the same organization which is trying to make a big stink about this suggesting that they wouldnt, for example, allow tax cuts or other types of things for Certain Companies and not others, right . This is whether we should have tax cuts. This happens all the time. Totally incestuous between public and private constantly. Look at places like illinois now where any company that stays is getting some kind of a deal except probably the small ones. Except the small ones. Any company of any size is getting a deal. Maybe the rolls should be across the board nothing . No. A friend of mine, joannea kagan. Didnt bob kraft do it in foxborough . I dont know enough. Lets talk about the next story. If you work on wall street and are considering growing a beard, an article in the New York Times says that while beards are in fashion right now, that is not the case in the finance industry. I guess its okay in fashion, its okay in design. A lot of different areas if youre a helpster but in the fashion world, gentleman, the argument goes it looks like you have something to hide. You could have done it in november. Our friends matt and and willie and everybody on the today show. I dont think its great for tv. The growing in stage is a little tough. Its tough. It points out that lloyd is allowed, blankfine, because hes just firing on all cylinders. Things are going so well. You know why things are going so well for him . Why . Because theyre going so poorly for jamie dimon. Thats one reason. Goldman has been doing pretty well. I think lloyd looks good. If jamie wanted to grow a beard, what would that say . I would say its a good idea. I like jamie clean shaven. He looks better clean cut but he might want to go incognito at this point. Its not stopping. Its unbelievable. Theres gary parr. Hes mentioned in that article. Hes like a carl icahn. He now has his beard. He can do anything. Gary parr, there he is. We have some beards. Gary is a you might not garys an artsy guy. Hes into the symphony. Philharmonic. Yeah. Im not going to youre not going to do it for december . Bernanke, of course. If he can do it, anybody can, right . A lot of people that are folicically challenged want to grow hair somewhere. Ive noticed that, too. Youre so nice. All right. I called it folicically challenged. Ben bernankes birthday is this week. Whose . Ben bernankes birthday is this week. Good for him. Lets talk about age discrimination because claims of age discrimination are on the rise as members of the baby boom generation entered their 60s. The bls says they make 20 less than they had in their previous positions. That is the biggest income loss for any age group. I dont think it ever takes a look at who is forced to retire earlier than theyd like to. I have a couple of questions. Maybe you have some. Others may have views, too. Youre asking me if i have views because its going to affect me . No, its not going to affect you. Generational. 60 is 70 now. Right. My question is do you think is there an age at which people are not supposed to work . No rchltsz in this day and age Everybody Needs to work longer and longer and longer. There are certain situations if you were doing hard physical labor i can understand some labor unions argument that you shouldnt have to do those jobs into your 70s if its hard physical labor. If its something where its mental acuity, i dont think you should push people out the door. Thats also it depends on the individual, too. Im sure that i mean, the brain is an organ, right . Sometimes i mean, there are people that start im sure start slipping a little at 70 depending on whether its i think its outdated to push people out the door at 65. Most major law firms in new york city, the big partnerships, 65, 70 they start to they say thats thats the deal. Going in, everyone knows what the arrangement is. Going out, thats the deal. Im not sure thats right. Its the way they do it. I think thats outdated. How old is the senator thats running again at 76 i think . Running for another term . Yeah. But there were questions. Things have changed. Unfortunately president reagan did have to battle alzheimers. When he got reelected at 72 or 74, 76, Something Like that, there was a question when he was running is that too old . Theres some senators that go to i want them to drag me out of the box. Youre 33 years old. I still want them to drag me out of the box. They will. We dont know where youll be by then. Youre on a fast track. You are. Youre a climber and youre very ambitious. Its hard work. Did you see google today . No. Who is this person . What is this . My computer doesnt work today. I cant see zblig she was a computer programmer. Grace happa. I want to run happa. See her . Happa. From the ads. Her name is happa. She was a scientist. I never heard of her before. Pioneer in the field. That doesnt mean anything. Have you ever heard of her . I havent. Will you say that for me. Harper. Harper. When we come back, the ceo of one of the best ipos will join us on set. The stock is up 40 since may. Well unveil the country. Plus, sunshine, tourism and tax breaks. Florida governor rick skotd will join us on set to talk about his new Corporate Tax claim. [ male announcer ] they are a glowing example of what it means to be the best. And at this special time of year, they shine even brighter. Come to the winter event and get the mercedesbenz youve always wished for, now for an exceptional price. [ santa ] ho, ho, ho, ho [ male announcer ] lease the 2014 e350 for 579 a month at your local mercedesbenz dealer. Impact wool exports from new zealand, textile production in spain, and the use of medical technology 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 maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Good morning and welcome back to squawk box here on cnbc. Im joe kiernin. It is green monday. The second monday of december is historically one of the biggest days for online sales. And growth in global ad spending. A unit of advertising giant publicist says that growth will be driven by demand for marketing via mobile devices as well as a broadbased economic recovery. Gasoline prices rose 3 cents in the latest week. Thats according to a lundburg survey. The average price of a gallon of regular unloaded is now a dime lower than last year. In global headlines, antiglobal headlines toppled a statue of vladimir lennon. Others chanted glory to ukraine. Hundreds of thousands of other protesters took to the streets to denounce the governments move away from europe and towards moscow. In thailand, the Prime Minister dissolved Parliament Today and called a snap election. Antigovernment protest leaders pressed ahead with mass demonstrations in bangkok seeking to install an unelected body to run the country. In north korea, state television says jim jonguns uncle has been removed. State media said that he was dismissed for mismanagement of north koreas financial system, corruption, womanizing and alcohol and drug abuse. Those are new to north korea. He had been regarded as the second most powerful man. Call 2013 the year of the ipo. Twitter, the Container Store and many others and now including our next guest, cloudbased Marketing Software marketto shares up 40 since it first went public back in may. Phil fernandez joins us this morning. Good morning. Good morning. Whats the difference been. Whats the difference been . I want to know what the difference has been being a publicly traded company. I spent a lot of time with investors. I didnt have the time to start. Its actually quite smooth and quite similar so far. Awareness is up. The quarterly grind is there. So my other question that relates to this is theres been this huge ipo window. Nobody knows how long the window is going to remain open. When you decided to go public, was it because people said to you, look, the window is open, you have to go through the window now. If you dont do it now it could close in six months or was it because you had said you had been planning on this the whole time. I know other companies have bought less because they know the window is open. We were ready. When the company is ready you have the finances, you have the revenue, the track record to prove it, the market. It wasnt trying to time any kind of market, of it a time when we were ready. We wanted the capital, the publicity and access that an ipo did. Has it changed the fundamental business . All of these other factors besides raising money . Its a small Silicon Valley in a market. Ipo is a great advertising outcome in some sense. It has raised our profile. It has created awareness. Its created awareness in big business. Its a good thing for us. Youre a marketing company. Market to us. There are people who dont know what you do. Were a Marketing Software platform. The buyer is in control. They can ask friends on facebook before theyre making decisions. Marketers need tools to reach buyers. Its becoming more and more important for marketers to use technology in todays digital world. We provide that platform. Give us a concrete example of i amif im ibm using your service. I said g. E. They use our service to build relationships with all the Different Companies to get to know them. To understand why their product is there to ensure that the order is placed and to ensure that its happening. We see it happening and we might see loreal selling shampoo and goating people to be loyal to their shampoo with a game that they play on a mobile device using our software. Anything from those two polls. How do you use the cloud to do that . Our software is delivered in the cloud. All of the Digital Marketing happens on facebook, twitter, email, everything happens in the cloud. Our own software is accessed by marketing users at fortune 500 companies and beyond to the cloud through the web browser. Theyre, in turn, marketing to their customers in the cloud. Why would somebody use you versus going to a big company in oracle . I believe that innovation happens in a company like ours. We wake up thinking about the needs of the customer and moving fast and delivering software on a monthly cycle. Oracle cant respond. Ive seen people compare you to salesforce. Com. Is that an apt description in terms of using the cloud and being a new company that comes up and finds a different way of doing things . Exactly. Salesforce. Com primarily sells to salespeople who need to close the deal. Weve upped that funnel to marketers who supplies the salesperson with leads and business. Its a whole new area, different job, different category. Similar model. I want to go back to turbines to understand it. Yes. If im g. E. And i want to reach turbine buyers. Power companies. Power company utilities, what is your software doing thats getting knee these people . Thats a finite group of people that can buy that . Thats right. Its Pretty Amazing that it gets used that way. As people are making those decisions, whats new coming down the pipeline. Companies that are Manufacturing Products and have products to sell need to get the word out to the possible buyers. If siemens comes in and says our hot new wind turbine is better than g. E. S, theyre likely to get an order in. People with email, social media and website stay top of mind. Before i let you go, barons here suggests that you could become an acquisition target by the likes of sales force, oracle, adobe, microsoft, s and p, ibm. Ive heard that. If you got the call tomorrow, what would you think . I think this is a gigantic market. Theres a billion dollar plus company to be built here. Preference is to stay as a force and build a great company. Fair enough. Thank you for joining us. Coming up, disney adding another hero to its lineup. If the music at least doesnt give it away love it. Indiana jones . Plus, Florida Governor rick scott plans to eliminate Corporate Taxes in the state of florida. He joins us on set in just a couple of minutes. Squawk box will be right back. , every weekend worked, every idea sold. You deserve a cadillac, the Fastest Growing fullline luxury brand in the United States. Including the all new 2014 cadillac cts, motor trends 2014 car of the year. Now during our seasons best event, get the best offers of the season on our Award Winning products, like the 2014 ats and srx. On our Award Winning products, 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. You can follow squawk box online and twitter and facebook. Now you can get a leg up with our morning newsletter. Go to our website. Morning squawk gives you a quick snapshot of the days top stories, stocks to watch, a quick rundown of the biggests on tv in the morning and a couple of fun water cooler items as well. Sign up and get morning squawk delivered to your in box. This happens every weekday morning. Also, disney has secured marketing and distribution rights for any future Indiana Jones films. Pair paramount will retain rights to the original first four films. Disney has not announced plans for the fifth Indiana Jones movies but it could make it easier to move forward on the next installment. Speaking of hollywood, disneys animated tale frozen brought in 31. 6 million. The hunger games catching fir fire, catching fire. For movies, they say consume mefrs are slimming down on diet soft drinks. Among the main reasons, the Health Effects of artificial sweeteners that the drinks use. The journal says that the diet soft drinks have been losing sales at a softer pace than regular soft drinks have in the past few years. Its happened in my house, not to me. I drink sparkling water. Im still drinking but now i buy eight diyiet cokes for th week. No soda in the house. Not because im banned on it. We dont drink it. Phosphoric its not good for you . The phosphoric acid, a doctor told me you can get kidney stones. Thats true. What if its in sparkling water, or pelligrino or perrier. Is that different . I dont know. Its still diet soda. People still think and the big Soda Companies have gone on a campaign to say ill drink it. As par tame is not warning, soda is why youre fat. You know what, we have vitamin water zero in the house. I like that. I drink that after i run. After i run i use orange theres something in vitamin water. Koom come on. Do you ever get the colored kind. The flavored kind. The calories, thats not water. Zero calories. Right. But its sweet because theyre putting Something Else in it. No calories. What do you think, its like the yogurt on seinfeld. What do you think is in there thats making it sweet . Sweet. Thats not caloric. Probably an artificial sweetener. Coming up, will we get that taper sooner or later in what it all means for stocks and bonds coming up in the new year. Is it yellen or bernanke. Where does floridas governor rick scott go to escape sunshine. Up here in new jersey. Jokes on him. Hes in the studio with his new Corporate Tax break. Check out the futures. More squawk box next. If yand youre talking toevere rheuyour rheumatologistike me, about trying or adding a biologic. This is humira, adalimumab. This is humira working to help relieve my pain. This is humira helping me through the twists and turns. This is humira helping to protect my joints from further damage. Doctors have been prescribing humira for over ten years. Humira works by targeting and helping to block a specific source of inflammation that contributes to ra symptoms. For many adults, humira is proven to help relieve pain and stop further joint damage. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira , your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Ask your doctor if humira can work for you. This is humira at work. Floridas state to eliminate floridas Corporate Tax entirely. Hes joining us on set with the its your money tax cut agenda. We have liked this a lot up here. It would help for you to see this kind of weather. You can walk around saying this doesnt happen. We have to turn down air conditioning so people can hear us. You have to turn it down a little. 82 degrees in lets talk Corporate Taxes. Its fascinating number one to look at the way different states handle Corporate Taxes. You can see the migration of companies and capital in this country and, then, hopefully you can extrapolate nationally. And say if it works out in this state, shouldnt they figure out something about being competitive globally . How much of the Florida State budget is now coming from corporations that you would be losing . Well, its a little over 2 billion. How much is that weve already raised the credit every year. So now 70 of our businesses dont pay a Corporate Tax. How are you going to its 2 billion, whats your total budget . As we get more people to move to our state, well pass new york in the next few months. As we get manufacture people to move there, the average person pays about 3,300 in estate taxes. Way below new york, half of new york. Average individual. Sales tax, property tax . Sales tax and property tax. What happens is theres no income tax. Yeah, no income tax. Were in a position working hard to compete. No income tax, right to work state. Lowbusiness tax and more businesses dont pay it every year. Companies like hertz are moving down there because they can solve their customer needs because they dont pay taxes. If theyre in new york or connecticut, theyd have to pay. Okay. So how will you replace the 2 billion . Sales taxes. Will they have to go up . No, im cutting taxes ive cut taxes every year. Ive been governor three years, cut taxes basically 24 times. Its property taxes, business taxes, sales tax. We have all budget surplus, i walked in with a budget deficit, i now have a 1. 2 billion surplus. Were making our economy the opportunity economy where, you know, if you want to build a business, you can and you want to get a job, you come to florida. Your Unemployment Rate has dropped quicker than any other state, i know that. And youre now 6. 7 which is below, we got down to 7 . I dont know, yeah. Anyway, youre at 6. 7 , were you higher . I would think youd always be below. Unemployment went from 3. 5 to 11. 1 . Where was the National Average . 9 . Never got above i think it was nine when i came maybe ten. I think it was nine when i came in. In the month of october, we generated private sector jobs, my good friend governor perry, only had 12,000 jobs. Oh, you two guys go at each other. I see that a lot. Thats a great rivalry. Almost like a football he was number one. What do you want to be . I want to be number one. So i go after number one. Whats the minimum wage . Its 7. 67. Is that a way to help with disparity to raise that . Heres the issue, is it going to help jobs or hurt jobs . Everybody has facts and figures on their side. About 3 of our jobs are minimum wage. Were trying to Grow Companies like hertz, were growing tourism, hospitality, technology, weve got the second most aerospace, aviation establishments. Adding 1,400 jobs. What im doing, just got back from japan, getting the highpaid jobs to move down there. If you want to have any type of job, you can do it in florida. I was in preparing for this, last week, i saw a piece about your jobs are an illusion down there. I watch and i read the actual article. I think it was in the miami herald or something. And i read it. 440,000 jobs private sector. But you lost its like the National Unemployment when i came in was 1. 1 Million People were down to 600,000. Its dropped everywhere else. What was the thrust of that . And you acknowledge in that piece that it takes some of these are longterm jobs. That youre not the efforts youre doing now, youre not going to see pay off until and you dont operate in a vacuum. The National Economy means something to you. We generated 440,000 private sector jobs. Weve taken the number in unemployment to about 235,000. Unemployments gone from 11. 1 to 6. 7. So we have we are winning. And youve also lowered the number of government workers to what . I started with 127,000. Weve got the lowest number of state workers per capita in the entire United States. Its not politically correct to say moving from the government to the private sector is a good thing. You know that. Getting are rid of government jobs is still getting rid of jobs. Were adding private sector jobs. That might be better. Then you can collect taxes from those people to pay for the government jobs you have to have. And housing prices are up. New home constructions up. My real quick question is, can you apply this to other states across the board . Does it become a race to the bottom . Does it work for you but doesnt work for another state that has legacy costs they cant deal with or other things . Heres the problem. Were competing in a global economy. So if we can put our company and countries the bear is the federal government. The federal government more taxes, more regulation. So were beating all of the other states. My competition is texas. Right. But our country eventually is going to say were competing in a global economy. We cant have higher taxes. Thats sooner or later more regulation. Governor, weve got to go. Medicaid going to be part of florida . You wanted to do it but now the legislature well, we revamped our medicaid program. Now, it works. Is it going to be part of you tried to get to sign up for it. I dont think its going to be expanded. My job is to get people more jobs. And then people are really happy irvin myer got beat. Im happy that Florida State is number one. Awesome. We will win the national championship. Now, you have a real team. I think its better. Might be a better game. I dont know if its going to be a good game, do you . Florida states going to win. Thats the most important we have three florida teams. Theyre the one team that has never wavered. Other ones, they have shown their weaknesses. They beat everyone by 50 points it seems like. Move to florida, 82 degrees in miami. And we do most of our interviews on remotes anyway. Do you have a problem with that . 258,000 job openings. Its going to happen. I think a show from south beach would be good. You want to move down there, andy. You would miss manhattan. No, theres no way we can move. Governor, thanks. When we come back, time is running out for your Holiday Shopping with under 16 days left until christmas. And will santa deliver a taper for markets just in time for the holidays . Larry bossidy says dont bet on it. Squawk will be right back. Every day were working to be an Even Better Company and to keep our commitments. And weve made a big commitment to america. Bp supports nearly 250,000 jobs here. Through all of our energy operations, we invest more in the u. S. Than any other place in the world. In fact, weve invested over 55 billion here in the last five years making bp americas Largest Energy investor. Our commitment has never been stronger. The taper dilemma. Fridays jobs number raises the drama for the markets and the fed. But does sooner or later matter at this point in the game . Countdown to a budget deal. The future of obama care, well put the topics on the table for senator ron johnson of wisconsin who will be visiting us in studio today. Squawk goes shopping. Were going to find out if more consumers are starting to hit the mall. Squawk box begins right now. Good morning. Welcome back to squawk box. Im Andrew Ross Sorkin along with becky quick and joe kernan. The new American Airlines group begins trading today under the the tickle ticker tickle . Tickle me elmo. The merger between American Airlines thats freudian. Im going to come over and tickle you. Closes this morning after a lastditch appeal by consumer groups to delay the deal was denied by the Supreme Court. Im sorry about that one. And the ceo of the combined airline, doug parkers going to join us next hour right here on squawk box. And were going to talk to him all about this tickling deal. Dow component mcdonalds will be a stock to watch. Reporting november sales in about an hour from now. Analysts surveyed by the street account think that comparable samestore sales rose by. 3 both globally and for the u. S. Thats the number to beat. And Jpmorgan Chase reportedly gave hiring preferences to candidates from highprofile china families to win Investment Banking business. Thats according to New York Times citing documents that apparently were being examined by u. S. Authorities. However, the report does not say theres an indication that executives at jpmorgan knew of the hiring practices in china. That tickles. Thank you. Thank you very much. Regulators are set to vote on the volcker rule tomorrow. Five separate regulatory agencies are expected to give the green light to the measure that bans banks from making bets for their own profits. But Court Challenges are expected as wall street starts to avoid one of the harshest elements of the post financial crisis crackdown. Bob diamond is returning to banking. Hes launching a vehicle hoping to raise millions of dollars to invest in african banking. Diamond left barclays last year after the bank was fined for manipulating libor. A number of stories in the paper about health care. Insurance agents are feeling left out of obama care. And the article uses the example of one agent who helped work with a hot line to pick a midlevel health plan. But refused to credit the man as an agent on the application, that means he wouldnt get his commission or be listed as the followup contact. Then theres the story all over the place. Cedar sinai arent covered. The best they think theyre too expensive and the journal, the deductibles on some of these of people that dont have a lot of access to money are going to be really, really high too. You know, the glitches on the obama care website, thats just that is the very first. But theres back end glitches too. Other washington stories this morning. This is the final week of 2013 where both houses of congress are scheduled to be in session at the same time. Optimism for a budget deal. House and Senate Negotiators are reportedly putting the finishing touches on a compromise. To reduce the debt, to close tax loopholes to do anything to reform entitlement programs. But there are some people who think combined with the good jobs number, if they just do something that lasts a couple of years where the government doesnt get shut down, we could be off to the races. If you have a few years where you dont have to come to our guest this morning is larry it says here. Larry. It just says larry. You know what, i was going to start by saying no, larry legend. Larry did larry byrd were you already larry legend then . We grew together. You grew together. It was colegends at the same time. Yeah. Excellent. And the first thing you need which i need to totally revise my thinking. Auburn has a good chance of beating Florida State. Theyll be the favorite by the time the game is played because they played a much more rigorous schedule. They did. And Florida State has not. And im going to put my money on auburn. Were you glad ohio state lost . Im from ohio. I dont know im glad they lost. Illinois i dont think the big ten represents the country in terms of competitive intensity. What if its some crazy ending again . Every time this is a team of destiny. I think they win it. When you saw according to you that jobs report was more accurate picture of whats going on than people that were saying the economy is overrated. You thought that made sense. I do. Because i think the americans for some reason are resisting good news. It isnt just the jobs report. We were going to sell 16 million automobiles, weve got 950,000 housing starts, 75 of the corporations beat the analyst for the quarter just just concluded. Theres lots of good reasons to think the economys doing great. Not pollyannish, its making solid progress. Youre allowed to say this, you havent really said this. No, i havent believed it. But i think quarter after quarter. But you were right because it was tepid for three years it probably was when people thought it should have been better than it was. Nonetheless, theres signs in my mind, theres signs. By the way, the rest of the world is Getting Better, too, specifically europe slowly climbing out of their recession. I think overall, the situation is pretty optimistic. Do you credit qe3 with whats happening now . I credit qe3 for the stock market. Not for the housing . No, i think 75 of it go into the market. Thats what some people think. Keeping rates low. But on the other hand, it sets it up for a tinderbox. You saw when rates moved the summer a little bit, Mortgage Market just at the same time, you know, seemed to weaken substantially. So but i do think they should start tapering. When i was on last time, i thought they should have started tapering. And i think people misunderstand the word taper. Theyre not going to eliminate it. But i think over a year or two, theyll begin to reduce the amount of purchases they make. And i think thats a good thing. You credit the Obama Administration for the auto sales for saving the auto sector . No. Because frankly bush was the one who started to say the Auto Companies and was criticized for having done so. Obama came in and continued it. I think it was two administrations working together. Well, maybe. Ill give you that. But on the other hand, the Automobile Industry is vastly cyclical. None of you remember, but go back to the tesla story in the stock. You cant make it in the Automotive Industry. So nice of you to remember i dont remember that. I hope you dont but i do. Not because its not a good car, people say it is. But it takes so much money to plan in the Automotive Industry to live through the crashes. When you stop losing top line, it drops right to the bottom and costs a lot of money to play in the game. Theyve really restructured the Auto Companies. Theyre in much better shape than they were beforehand. So isnt the rest of the world in autos. Theyre all better, but itll still be cyclical, becky. Yeah. And when it doesnt it doesnt ebb, it crashes, it comes back. Its a tough industry. Theres a trump golf course. Thats what i hear. He had a little trouble with financing for his company. He did. He did. He thought, if i import a huge amount of coke and make some money that really happened. It did. He was going to keep his auto company afloat by dealing coke. We dont have ceos like that around. There are not enough of them around. And it wasnt the soft drink he was pedaling. No. I met the man a couple of times. Dashing. And married to the beautiful remember, she was like a model or something. An italian beauty. And then made forever famous by back to the future. I dont think you buy one now because you cant do anything with it. You should know the new tesla will have doors that is that true . Yes. I would never do that just because of it. When a fire starts im sorry. You know the teslarians are probably as bad as the aolians. My friends tell me its a good car. The thing the one thing the entire bottom of the car is all battery, right . Its very close to the ground, too. Close to the ground. Theyll change. But other cars have 20 gallons of the flammable liquid in place. Higher, though. So you think there is something to no, i think theyll change it. I think theyre probably in the process now of elevating it so it wont be so close to the surface. You can still buy. It would be nice to get batteries that work better and better and better and longer and longer. Batterys the toughest technology youve seen. Look at the fuel cells. And the one thing that stops the growth, you cant come up with the batteries. What else do you want what really has you going . What else . You want to talk about you call it aca now or ive seen some right wingers say youve got to use the whole name now. The patient, blah, blah, blah. Youve got to use the whole thing because saying the actual name that they dont want you to say anymore because it rings, drips with irony at this point. They like obama care now because he does care. I did see something over the weekend. Another aspect of it which is always negative. Now it turns out if these exchanges are not balanced, if the composition between old and young is skewed toward the elderly, then theres a provision in the act that allows congress to bail out the insurance company. Because of the loss. Can you imagine what this thing is going to cost . Can you imagine insurers getting involved if that wasnt the case . How were you supposed to write deductibles and make a profit on any of it when theyve changed the rules so many times . And theyre going to have to continue to change them. And this thing is a moving target. Its going to be an evolving situation. You cant repeal it because theres too much gone through. Canceled too many policies. Theres going to have to be significant modifications. In the meantime, pain and suffering, republicans will decide not to do anything and ride this through the election. Were going to continue this conversation. In the meantime, were going to talk weather. East coast getting slammed by a snowy, icy mix creating a traveling nightmare. Well get to one of our favorites, truly one of our favorites, joe, jim cantore is on our show. Youre kidding . Im not joking. Hes on our the most famous the most famous weather guy is on our show in andover, massachusetts. Are you going to come to davos again this year, jim . Reporter you guys have been hitting the coffee pretty hard this morning. Its good to see that. I dont know if davos is in the plans because ive got olympics with nbc sports and weve got some outdoor hockey im going to do. Well see. But ive got a question for you guys. How much of a hit if any, is american going to take . 5,000 flights, guys . 5,000 Flights Canceled in and out of dallasft. Worth since last thursday. Is that a big hit . Or is it . I would say they would call it material, but something that is the cost of doing business because theyre used to this. I was thinking about how proud i am of the whole industrial right now, believe it or not. Because they finally are viable. How much, jim, how much do we need a Viable Airline industry . Its the one thing we all do and we all need to be able to take for granted. We can get thats what we do with our leisure time. And weve got three big ones that will not undercut each other. They p keep going in and out of bankruptcy and finally where we need to be. I think we should be happy. But this is your fault. So size does matter here with this. And they may thats just an amazing number to me. It is. 5,000 flights. Thats just astounding. This is not part of the plan. Reporter they dont. And the problem with the southern snowstorm, when you get cold afterward and it doesnt warm up and melt everything, it keeps the whole place in gridlock. My trip, yesterday, by the way, canceled out of dallas. Had to drive to houston, take a flight to detroit, then take a flight to boston and drive up here. 17 hours to get here just to show you this beautiful snow here, guys, which is about 25 miles or so north of downtown boston. Most folks here said i know the snow is coming, im going to leave earlier. This place was packed, this interstate was packed. The good news is, we got the trucks. Were not going to see you again, are we . I hope we do. This morning . Next hour. That sounds nice. Good. Will you explain to me . You come up with the whole explanation, its Global Warming but it also accounts for this, right . Youll come up with youll explain that to me . Also the really cold stuff south . Youll come up with this for me . Ive gotten so many tweets in the last few days with the cold that say, oh, jim, what about this Global Warming thing . Well, Climate Change means extremes from one end to the other. Thats convenient. Saturday morning any adverse weather event is because of the warming, is i would like to be able to just no, no, no thats not right. What is it . I think earthquakes are, i think that asteroid was. Its all Global Warming. Get on the program, jim. Weve got to go. Jim cantore, we love you. Well see you reporter thanks for having me, i think. No, trust me, were very happy to have you and we look forward to talking again in the next hour. Coming up, the storm surrounding the taper were going to talk about high pland capital will be joining us to break it down what this means for stocks and treasuries. Plus, senator ron johnson will join us in studio to talk budgets, minimum wage and obama care. Welcome back to squawk box this morning. Taking a look at futures. See how things are setting themselves up for the day. We have green arrows, dow looks like it would open about three points higher. Shares of gilead getting a boost this morning. Coming up, American Airlines completing the merger with u. S. Air after all of this. We have the very first interview with doug parker at 8 00 a. M. Eastern time. But first, stocks, bonds and the taper. Making his way to the set with his Market Wisdom right here on squawk box when we return. Every day were working to be an Even Better Company and to keep our commitments. And weve made a big commitment to america. Bp supports nearly 250,000 jobs here. Through all of our energy operations, we invest more in the u. S. Than any other place in the world. In fact, weve invested over 55 billion here in the last five years making bp americas Largest Energy investor. Our commitment has never been stronger. The United States population is going to grow by over 90 oveMillion People,ears and almost all that growth is going to be in cities. Whats the healthiest and best way for them to grow so that they really become cauldrons of prosperity and cities of opportunity . What we have found is that if that family is moved into safe, clean Affordable Housing, places that have access to great school systems, access to jobs and multiple transportation modes then the neighborhood begins to thrive and then really really take off. The oxygen of Community Redevelopment is financing. And all this rebuilding that happened could not have happened without organizations like citi. Citi has formed a partnership with our company so that we can take all the lessons from the revitalization of urban america to other cities. So we are now working in chicago and in washington, dc and newark. Its amazing how important safe, Affordable Housing is to the future of our society. Does it end after youve expanded your business . . After your companys gone public . And the capitals been invested . Or when your companys bought another . Is it over after youve given back . You never stop achieving. Thats why, at barclays, our ambition is to always realize yours. Welcome back, everybody. Stocks and treasury yields rising as investors continue to anticipate fed tapering. Who gets hurt when the fed starts to pull back. Joining us right now onset is highland capital cofounder and chief investment officer. And, mark, i guess its not too soon to start thinking about the fallout of whats going to happen after all this money thats been printed. Oh, sure. I think its the end of the year, good time to take stock in where weve been and where weve gone. Its been a great year. 13s been a great year. Thats a great year, where is that coming from . A lot of cheap money floating around there. Weve added 13 trillion since the bottom. Thats a lot of money, right . Of course, we fell a long way to get there. Sure. And im not saying i think that comes back, but i think next year will be the year where the data probably isnt that exciting. And find stocks that you think have a great story, something behind them and allocate your money there. But the overall market i think struggles to make a great return from here. Just because valuations are stretched. If you look at the total valuation of the u. S. Stock market and you look at that versus gdp as a percentage, were almost back to 2007. Thats a big number. I dont think theres anything i see in the tea leaves thats going to derail us any time soon. Youre not calling for some sort of a catastrophic 2014 . No, no, no. But i do think that the beta is challenging here. The valuation is so strong. So if the valuation isnt going to move a lot, what do you do with your money, right . You should rebalance, have some discipline. Take some of that money, where do you put it . If you put your equity market money, i would put it in story names or in long short equity. The markets really been much more micro than macro. Macros fading, micros picking up. Thats great for highland. Were a fundament player, we love trying to bet on stories, on ebitda moving, et cetera, et cetera. I think thats going to be a good story for the next couple of years. As we digest this new reality where some of this moneys got to come out of the system. Oh, larry . I was just going to say the credit markets have been very generous this year in terms of financing, six, seven times staples. Whats that going to lead to . Do you see that a nice place for distressed debt to participate in the year or two ahead . Absolutely, larry. Youve got 800 billion of paper thats been printed this year. Thats a record, crazy amount of money. When youve got that much money chasing that these deals, were back to leverage ratios that are almost at 2007. I keep saying that over and over again. But every time that happens, two years later, right, youre going to get distressed. Were getting ready for it. I think one of the big issues were seeing is in the middle market we see a lot of little deals getting done. This liquidity has driven a lot of investors to push down and down on the credit quality. But even into the smaller deals. And as you know, Smaller Companies cant compete with bigger companies. So if you go back five years, whats the total total subsidy weve gotten from the fed on rates. What would rates have been . And i guess weve got theyve said zero and they said it would be for years and years and years. And they did all the qe, one, two, and three. And infinity, how much of the longterm or the tenyear was manipulated. How much was subsidized . Half point overall . More . A lot more than that. Doesnt that create a dislocation. Ive been making the case as weak as the economy was, maybe 2. 8 is not a bad place for the tenyear to be. He thinks the real economy is actually stronger. Where should it have been . Four . I think the recovery has been substandard because of the manipulation in the rate market. If we had a true market where the u. S. Gets back to putting money to work its been negative . The economy that has really puffed up is the government economy. The stock market . Yeah. And then the stock market. Given money to the rich guys which is okay, i guess, if youre one of them, but thats not the general public, right . Theyve gotten minimum wage jobs. Ask no savings. Yeah. And no savings. When did you start buying, first of all . Well, once the deal looked like it wasnt going to happen because doj tried to block it, bonds were down 30 points that day. We jumped in and weve been because you thought the deal would happen or didnt matter to you . Yeah, if you looked at the position. We were in the convert. There was a stand alone deal, american was certainly going to be worth a lot more than the valuation at 95. If they got the merger done, then they got cost savings, we thought it would go up from there. Looks like the merger is done today. Theyre trading still at a discount to delta and united. They just get to the market multiple. We see 30 of the stock from here. Yeah. Mark, thank you so much for coming in today. Great. Thank you for having me. Nice seeing you. Squawk will go shopping bill totman, is going to tell us if traffic trends are growing with 16 days now left until christmas. And then senator ron johnson of wisconsin is going to join us onset to talk about all the big issues facing capitol hill and all the senators in Corporate America as well. Well be right back. Business p. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year [ ding ] at the lexus december to remember sales event. This is the pursuit of perfection. You can fill that box and pay one flat rate. I didnt know the coal thing was real. Its very real. David rivera. Rivera, david. [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. To help secure retirements and protect financial futures. To help communities recover and rebuild. For Companies Going from garage to global. On the ground, in the air, even into space. We repaid every dollar america lent us. And gave america back a profit. Were here to keep our promises. To help you realize a better tomorrow. From the families of aig, happy holidays. Welcome back to squawk box, everyone. The futures this morning have barely budged. This comes after the first weekly decline in a long time for the markets. Of course, fridays market did see stronger gains after that better than expected jobs report. Right now, you see the dow futures up by about 8 1 2 points above fair value. No economic reports to sway investors today as the dow and the s p 500 again come off their first losing streak in nine weeks. The friday rally fell short of wiping out the s ps weekly loss by about 3 4 of a point. The s p hasnt posted a losing december since 2007. Its a trend thats got to be broken at some point . Right. The upbeat u. S. Jobs report helped boost japans nikkei 225 by more than 2 in overnight trading. You think weve had market gains this year . This market is up 50 for the year and its on track for the best yearly gain since 1972. Also the downward trend for gasoline prices appears to be reversing. The latest survey shows the average price was up 2. 7 cents over the last two weeks. The survey author says that is the result of higher crude prices as well as higher Profit Margins at gas stations. The average price is now at 3. 28 a gallon. Okay. Thank you. There you go, a nice graphic. Frigid weather wreaking havoc over the country the last few days. How much of a Chilling Effect will it have on the shopping season . Good morning to you, bill. Good morning. How are you . Im great, thank you. Were all doing well minus the weather. Lets talk about the weather. What kind of impact are you seeing it have on shopping . Well, clearly, it is having an impact. Three or four Shopping Centers shut down for most of yesterday dallas and other places. Clearly, you know, for the last couple of days, its having an impact across the country. Having said that, you know, the shoppers are still going to come out for christmas. They have a certain amount of money to spend, a certain amount of presents to buy. And were expecting that traffic will be heavier over the next couple of weeks. How much of it do you think was pulled forward during the thanksgiving sort of, you know, blockbuster sales . Were now sort of talking about it as sort of black week or black friday week or however cyber week, all of it. Because, you know, the opening on thursday you certainly have to look at thursday and friday together and, in fact, a lot of the stores were having discounts earlier in the week similar to black friday. And then they continued on monday. So its almost like it becomes an entire week. And i would say the entire week was up modestly. Sort of 2 , 3 . Something like that. Its been sort of flat since then, i would say, up and down. But, you know, we are optimistic. Certainly luxury seems to be strengthening which i think is interesting. It has not been that strong all year. And clearly, we are shifting from selfpurchasing, which was very evident on black friday until much more gift giving. Id say wed go from 50 50 to 70 30 in terms of gift giving versus selfpurchasing. One of the questions weve always struggled with during the Holiday Season we talked about a lot was this idea that really economically all thats being done during the sort of big sales moments like black friday or black week or whatever we describe it is gets pulled forward. It actually doesnt really create more money going to the retailers, getting pulled forward into more weeks. I think thats right to some degree. But the problem is, unless the governments going to stop everybody and make everybody closed, theyre going to get the business. Everyone wanted to be open thursday except for the higher end guys. Youre going to lose that business to somebody else. To the extent they have growth, in some cases, a lot of growth, its coming online. I mean, clearly online has an impact. However, its relatively small percentage of the business. And i think what you hear from all retailers is the way in which online is converging with brick and mortar and how theyre using online to drive brick and mortar and vice versa. Now theyre talking about they pick up in the store, order on the web, pick up in the store, return in the store, et cetera. Its becoming seamless. You see everybody sitting in the store sitting on their smartphone, looking at availability of sizes or colors, ordering online while theyre in the stores. I think it gets much more difficult to divide one from the other. Online continues to expand at a faster pace than brick and mortar overall. We still have a lot of unemployment in this country. Some 11 million folks as well as 4 million for six months or more. Does that have any impact on the buyer . And do you feel it in terms of level of sales in the malls . Well, not so much in the malls. Remember, our customer is fundamentally better educated and wealthier customer. In the malls in general, and, of course, our company is more upscale than the average. It clearly is impacting the big boxes. Look at walmart, target, best buy, et cetera, where you see the direct impact. Our customer our sales have been very strong. Right. The industry, the mall industry has been quite strong over the last few years. Bill . Sorry. Real quick, minimum wage, does taubman have a view on this . I dont have a view on it. Its a complicated subject. Theres no question that most employees are not on minimum wage when you go the malls. Generally above minimum wage particularly when you add commissions. Theres no question itll chill some job growth, but will it increases disposable income . Thats out of my pay grade for sure. All right. We appreciate your time this morning. All right. Up next, Budget Committee member senator ron johnson on reducing the nations Regulatory Burden, the tax system, also health care. Hell join us onset after the break. And later, new American Airlines taking to the sky today. We speak to incoming Ceo Doug Parker about the newly formed airline. [ 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, everyone. In our headlines, hsbc is considering the flotation of up to 30 of the commercial banking arm. The move would help the company cope with planned new rules that demand british banks. And in fox sports news, the rutgers Scarlet Knights have accepted an invitation to play in the pinstripe bowl in yankee stadium. By the way, this will be the eighth bowl appearance in nine years for rutgers. Gratuitous, i know. I dont know. I have to let this go. I have to let it go. Becky, theyve been so successful, becky, they let three of their coaches go this morning. I feel sorry they its a long way to fall. A long way to fall. Im excited. My whole family is. The pinstripe bowl against rutgers. My whole family has rutgers affiliations and notre dame royalties. Theyre here for the holidays. Next year, right . Or next year next year. Next year. Get ready. Oh, boy. Thats why i have to celebrate this and take it yeah. Every game is going to be a bowl game. Becky, theyre going to make a lot of money. They are. 40 million. They are. Big, big, big. I dont know if i want to be the players, though. You can keep telling them as theyre if youre taking them off the field trying to blot them up from the field. Its going to help with who they can recruit, who they can bring in. Maybe a couple of rough years of entry, its going to be good. Theyll get to play wisconsin im told. The deadline, which is going to be something to watch too. The deadline for the congressional budget panel is this week. No official agreement has been reached. Although both sides continue to talk. Senator ron johnson, member of the Budget Committee joining us now with his outlook. There will be like fireworks and celebrations if you guys just do anything. I know that probably doesnt make you happy because it doesnt address any of our longterm issues. But are we wrong to celebrate . Oh, lets face it. The last thing anybody wants is a shutdown other than maybe harry reid and president obama distracting from the Patient Protection and Affordable Care act. Im the right wing saying we need to use the full name. But no, the federal government does enough harm to our economy, day in and day out. The last thing we need is keep on additional harm by shutting down the government. I know republicans are absolu absolutely dedicated to fixing the longterm problem. But we certainly dont want a shutdown at all. I know paul ryan. And i think chairman murray are really working together to try to stabilize the situation, come up with something. If we can get some longterm mandatory reforms in exchange for, you know, some sequester relief, maybe plus up some defense, i know people are highly concerned about readiness in our military. And youve got to do a little giving from that standpoint. You need some real structure reform to the longterm mandatory spending programs in order for that deal to work. It puts it out past the 2014 election. Thats theyre talking. Lets hope nobody throws a poison pill in there. At this point, youre from wisconsin. I see wisconsin at best a middle of the road state. I think you kind of lean left. Ill call it a common sense state. The government ought to live within its means. Really . I think so, yeah. But you do, i think of it as kind of a isnt madison, wisconsin . Well, it has its pockets of interesting individuals, sure. But from what you can tell. From what youre hearing, how is 14 going to go . At this point, if obama care continues to to go along the path its going, what are what will 2014 look like . What will the makeup look like in the house . In the senate . Well, again, because of the disaster of the implementation of the Health Care Law, i think 2014 actually does look, you know, pretty optimistic. You predict youll be in the majority . Im predicting nothing. But i think for the first time, americans the problem with trying to repeal obama care beforehand was it was theoretical. I knew for, you know, forever that millions of americans were going to lose their health care and thered be millions more. But it was theory. Now americans are feeling the real disaster that the Health Care Law is where weve got millions of americans losing the health care, losing access to the doctors and treatments that are keeping you alive. And thats going to have a negative impact on democrats trying to run for senate. Lets face it. Anybody that voted for that bill. Anybody that mouthed those same words, if you like your health care plan, you can keep it, and there are plenty of senate democrats, House Democrats that told that exact same untruth. Lets put it that way. Senator, assuming that the Affordable Care act does create some difficulties for democrats, particularly those seeking office, what should you what should Republican Party do to kind of advance its own cause between now and 2014 elections . Well, i heard you earlier, its its difficult to repeal obama care. Its no longer just a piece of paper you can repeal and make go away. Right. Its been implemented. Its structurally in place. So i think the responsible thing to do is what can we do to limit the damage . Thats why i introduce the bill if you like your health plan, you can keep it. You cant do a whole lot for individuals who have been canceled, but you can do an awful lot to make sure that individuals get group policies, insurance through their employer that those Health Care Plans can be preserved by reducing or eliminating the coverage mandates that are driving up the cost of health care. You know in wisconsin, if youre a 27yearold male on average your Insurance Premium will increase by 124 , going from 1,100 to 2,400. What do you mean reducing . What i would do i heard dr. Emmanuel on saying this is about choice. No, its not, its about coercion. Lets preserve freedom and choice and health care. Fine, keep the Obama Care Health plans in place. Give those as an option for individuals. But we should also give individuals the freedom to choose a plan that doesnt have the mandate of coverages because that is what is driving up the cost. It doesnt work. Its not going to work anyway. But if you want to set this up as an insurance pool which means youre paying insurance and youre a man and you dont want to have paternity coverage, youve got to pay it too. Thats the way it works out. And im not arguing whether this should have been done or not, thats the only way it works. Its not working out. But thats what youre talking about is does anybody believe the cost curve has been bent down . I mean there are arguments. Im not picking up the flag and waving with this, but if you have peter orszag or somebody else come in, they will say, yes, it will bend. It is also because of what was happening with things Like Health Savings accounts and higher deductible plans, which is really where the Movement Toward insurance should be. If you want a Strong Social safety net, we should make sure every american has a catastrophic care plan. Prevent that bankrupting. We agree with that, we want preexisting conditions. We did 85 americans were satisfied with the health care they had. Now, they might have been too expensive, but they liked the health care plan. You didnt have to destroy that system for 85 to provide care for the other people. Its madness. Were going to spend about 2. 4 trillion on this Health Care Law over the next ten years. Senator, back to your plan. Youre saying we cant repeal this. What you are proposing is actually a repeal of it. For you to say you dont have to have the mandates on it. That is trying things like risk sharing pools for small businesses. These exchanges exist. Call it what it is. Lets make them functional. What you were talking about is repealing obama care. I dont know. Obama theres no mandate in corporations now. I would call it limiting the damage, start moving toward a free marketbased solution. None of it is going to work. If young people get to opt out. Im saying, the only way actuarily it theyre going to pay the penalty which wont be collected. And weve seen memos, they have no method of collecting this thing. And when you can buy insurance regardless of preexisting conditions, why buy it ahead of time . And so that those are the incentives your 27yearold example, he wont buy health care. Its 100 penalty or Something Like that right now . But its going to be 2. 5 of their income in two or three years. This isnt about choice, this isnt about freedom. This is about coercion. I think americans are going to take a look at this and theyre going to see its a disaster. They are going to demand change. And i think the responsible thing for republicans to do is do everything we can to limit the damage, try to preserve those plans that president obama promised. Try to preserve the situation where people can keep their doctors, keep the treatment. Do you have a solution that allows you to save those plans . Yeah. You can do catastrophic care. If you had a preexisting condition, you went to the highrisk pool. It worked. Every insurance policy was, you know, basically paid into that highrisk pool. There are about 22,000 wisconsinites. It worked. When their condition was over, they would come back into your health care plan. The system worked and you could do there, listen, we will guarantee catastrophic care plan as long as youre insured you go into the highrisk pools, no preexisting conditions. Theres a way of doing this with 20page bills not 20,000 page bills. The system wasnt perfect, but it was pretty darn good and thats the problem. Senator, thank you very much for joining us onset. Thank you. When we come back, an airlines outlook from American Airlines Ceo Doug Parker. This is a first on cnbc interview that you cant afford to miss. In the meantime, take a look at the futures right now. Dow futures up by about 11 1 2 points. Squawk box will be right back. if every u. S. Home replaced one light bulb with a compact fluorescent bulb, the energy saved could light how many homes . 1 million . 2 million . 3 million . The answer is. 3 million homes. By 2030, investments in Energy Efficiency could help americans save 300 billion each year. Take the energy quiz. Energy lives here. When you do what i do, iyou think about risk. I dont like the ups and downs of the market, but i cant just sit on my cash. I want to be prepared for the long haul. Ishares minimum volatility etfs. Investments designed for a smoother ride. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus, which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. 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[ male announcer ] 1. 21 gigawatts. Today, thats easy. Ge is revolutionizing power. Supercharging turbines with advanced hardware and innovative software. Using data predictively to help power entire cities. So the turbines of today. Will power us all. Into the future. Its that time of year. Ho ho ho. No with the november jobs report out of the way, is this market set up for a santa claus rally . Or will the grinch spoil Investor Expectations . Ready to take off, the new American Airlines group against trading today on the nasdaq. Incoming Ceo Doug Parker joins us for a first on cnbc interview. And sleet, rain and snow. Major travel delays and icy conditions making travel very tough this morning. The latest travel forecast is just ahead as the final hour of squawk box begins right now. Im joe kernan along with becky quick and Andrew Ross Sorkin. Were here with the former chairman of honeywell. Mcdonalds is across the board weak as far as global comps are better than expected. Global comps, but only because of strength in europe. If youre looking at the u. S. And asiapacific, those were all weaker. Yeah. The big concern has to be the u. S. Because the comps the Comp Store Sales in the u. S. Are down growing 0. 8 . They were looking for a gain of 0. 3 . And if you listen to comments from the company, they talk about how theyre really looking at what happened here. They say ongoing competitive impacting performance strengthening key elements of Customer Service and leveraging the breadth of menu choices. Europe did better, up. 9 . Instead of up. 5 . Europe came in much better than expected. Pointing to the signs that things are picking up in europe. Its in france. They look down their nose at the at eating but they are french fries. Yeah. The best french fries from the world. That kills them that mcdonlts makes good french fries. A week they are pushing for higher minimum wages, but the u. S. Part of their business is suffering significantly at this point. Competitive environment, you wonder what all of this would mean. Youve got to keep changing your menu, youve got to keep reinventing yourself in order to keep the growth the minimum wage comes out, theyre in trouble. Thatll be much more difficult. It is a 96 stock now. With a billion shares outstanding, 96 billion company that was 11 a few years ago. And theyve recovered. Amazing. Yeah, they have. A new survey by the National Association of business economists says that the central bank will begin to taper early next year. 62 of forecasters, expected the fed will pull back on the bondbuying program in the first quarter. Another 30 believe the fed will taper in the second quarter. And i dont know, you dont need to stop the presses on that story, do you . Lets hope so. We have other Corporate News this morning to get to you. Walmart has agreed to contribute about 25 million to settle unresolved lawsuits filed on behalf of consumers that allegedly were injured or killed in explosions involving portable plastic trash cans. The money amounts to slightly more than 15 of a proposed 16 1 million fund that would settle dozens of lawsuits against the manufacturer of these cans. Also, in other retail news, today is what theyre calling green monday. Ebay coined the term back in 2007 because the second monday of december is historically one of the biggest days for online sales. Also, eight Major Technology companies are launching a Public Campaign today to urge president obama and congress to set new limits on government surveillance. The group is being led by google and microsoft. Today theyre presenting a plan to regulate online spying. The call is being accompanied by an open letter showing up in fullpage ads. Also, apple, yahoo, facebook, twitter, aol and linked in are taking part in this campaign. U. S. Foods. What are you looking at . Cisco and u. S. Foods. Buying u. S. Foods. And it is not the Router Company in this case. This is sysco. Yes, syy. And issued 3 billion of common stock, 500 million in cash. Its about 3. 5 billion. Whats u. S. Foods make . You know . I believe theyre in the same business that syscos in. Clayton and kkr own u. S. Foods . Yes. Theyre buying it from clayton. Its a foods distribution business, isnt it . Looks like a food description business. For sysco, that makes sense. Interesting. Well do work on that and come back to it. It is, one of the u. S. s largest distributors, 19 billion in annual revenue, the tenth largest. Not as big as sysco, right . No, i think theyre the biggest. New American Airlines is ready for takeoff. Phil lebeau joins us and has a special guest with him today. Phil . Reporter thank you, becky. Were here at the american headquarters, the new american headquarters with the new ceo of the new american, doug parker. Congratulations, todays the day you guys can finally say its done, were ready to trade on nasdaq. Yes, we can, were excited about that. Thats going to be under aal. Thats correct, American Airlines. This brings up the question, now this merger is complete. A lot of people are looking at this in the Investment Community and saying thats it. The consolidation game has played out as far as the airlines are concerned. Youve been in this industry long enough to realize it never completely plays out. Does it at least take a pause for a while . I dont know. It may. The reality youre right. You never know in this business what comes next. But for right now, were happy with this transaction. Weve been working on this for a long time as you say. Its great for our investors, customers, employees, and its a really big day for us. When you look at you guys along with united and delta and being the largest of the three, the big battle now is going to be you all have global strength now how do you win over the corporate traveler . Because you all have access to the Main Business centers of the wor world. Yeah, of course, we have to compete. But, yeah, its going to be i think youll see more of this being based upon the product. The inflight product, which is good for our customers. And something we can do extremely well. Youre right. Three of us have the ability to take people pretty much anywhere in the world. And what used to be a Business World is purely on schedule. You need to compete on product and were prepared to do that. When you look, you have new aircraft coming online over the next four to seven years. You believe will be the difference maker. Its a big difference maker. You cant do it with just airlines. Were also excited about the excitement that our employees have about this. Our employees have been through a lot. This merger has got them energized and ready to go take care of our customers. So all sorts of things come together. But the fleets a big part of it. Do you feel any greater pressure when you look at the fact that you now have american coming out of bankruptcy, the Balance Sheet has been cleaned up. You have moderate jet fuel prices relatively speaking. And youve got an improving economy. A lot of people look at you guys and saying, its not enough just to be profitable, you need to be very profitable in airline terms. We have to provide a return to our investors, we know that, last 10, 11 years have proven that airlines that cant do that arent allowed to grow and expand and do the things we want to do. We expect to produce a profit that will provide a nice return for our investors. Thats what they expect from us. Thats what we plan to deliver. Andrews got a question for you. Doug, im going to come at this from the consumer standpoint. Tell me which routes will cost me more and which will cost me less or where youre going to hold the line. Andrew, nothing about this transaction is going to affect prices. As weve discussed in the past, were putting these two airlines together. Theyre highly complementary. Were keeping all the airplanes, all the people, so supplies should be unchanged. As long as demand stays the same, nothing should happen to prices. Well, i hope we can talk in two years. The other big question i have, just given the weather, the weather in dallas, how big a hit is the airline taking on this . Well, its look, its been a really rough weekend for our employees, our customers. But our employees are working through it, taking care of our customers, looking forward to get this to melt off and what kind of cost estimate do you put on this . I imagine theres not a million deicers and all of the pair paraphernalia in a place like dallas. I dont know what the cost impact is going to be. The real impact is to our customers and our employees who we want to get moving again and we will do that in the next couple of days. Right. Doug, larry bossidy, youre a good example of the value of persistence. Thank you. Appreciate it. A lot of these Airline Mergers havent gone smoothly. I dont know if its the reservation systems, the culture or pilot assimilation and they take too long. Do you have a program to get this done in a relatively expeditious time frame . Well, larry, look, youre right, its hard work. And we know that, and were ready to go to work. Weve done this before. Our employees have done it before. We know its not going to be easy. But we have a plan in place to do it on a gradual basis that allows our customers to see the enhancements quickly and but gradually. And we know we have ahead of us and we expect to do it well. Okay. Okay. Doug, awesome, congratulations. Its been a long time coming. Thanks so much. Okay. Were going to say thank you to phil then. Appreciate it very much. Coming up, snow, ice and sleet making travel difficult along the eastern sea board. Well give you a travel forecast and what you can expect today. And then with the november jobs report out of the way, can investors expect santa to show up on wall street . And later, the ceo, squawk box coming back right after a quick break. Winter woes for a large part of the country this morning. And the snow is a major factor in a number of nfl games yesterday. I love nfl games as long as its on tv. There are five snow games being played yesterday. Wall street journal says this was by far the most since 1991. There have been only two other occasions since then when there have been three simultaneous snow games in the lions eagles game, detroit had seven fumbles in the 3420 eagles victory. The other snow games were also relatively highscoring. The journal reports that an average of 53. 8 combined points in these games was more than any other snowy sunday since 1991. Wow. Speaking of the weather, flightaware. Com reports 1,300 flights have been canceled today. For more on where its headed next, we are joined by jim cantore of the weather channel. And, jim, it looks like a lot of areas on the east coast have been getting pretty rough mornings and rough commutes. Yeah. Were on the northern fringe up here in andover, massachusetts, which is about 25 miles north of boston. 93 moving nicely behind me. A lot of people watch the weather religiously. At 5 30 this morning, that was the same traffic we had here on this interstate. Not surprising people getting out and getting things done early. By the way, the 1,300 flights you mentioned canceled today nationwide, 700 of them are once again out of dallas and mostly american flights. So huge problems continue in the dallas area. And i had to ill be honest with you, i left there yesterday. Had to drive to houston to get a flight up through here and took me two hours to get 40 miles south of dallas. There was just ice caked 2 to 4 inches high on major interstates down there. They just dont have the ability, the equipment to take care of that kind of snow. I would say its the same thing at the airport, right . Yeah. Same at the airport. Jim, do you yeah. As far as colorado bases at this point in the year, its good, isnt it . Are we yes. Tell me about that. This is not that it matters to me. Well, we always go. I dont you guys got a ski trip planned, you want inside information. We just like snow. Heres the deal, just got dumped on, the pattern that were in looks good. Were going to warm up toward the middle of the month a little bit. But that doesnt mean were going to be without snow. Theres going to be some i think were in a good stormy pattern here. Going forward toward christmas, therell be plenty of snow to ski on. Farmers almanac said big year for colorado skiing. I dont know how they do it, but theyre as good as any climatology. I know, youre looking at i wish you guys could get reporter no, joe, they look at longterm averages. They look at the year after year after year theyre pretty good. Snow on this day. Sometimes it does work out. For example, if you even look at the super bowl, which theyre forecasting a snow event, a big snow event, you know, if you take february in new york city, theres about a 60 chance that there will be snow in the month of february. Theres a high probability of snow during the month. Im not saying its wrong. Im hearing barry knapp wrote in, this time last year they were at 20 inches. Well take it. Reporter there you go. Thank you for your question on american. We posed it to the c. O. O. Of american. Reporter i heard him dancing around on that a little bit. Not overly material. Apparently these airlines have seen situations like this before. They have. But i dont know about seen it the way they have in dallas. Jim, thank you for joining us this morning. When we return, a fresh week of trading after the jobs report ready to kick off. Well talk Market Expectations and investment ideas after the break. Also, you can always follow us online at twitter also on facebook. You can now also get a leg up on the trading day with morning squawk. Its our news letter. Go to our page. Morning squawk gives you a quick snapshot of the days top stories, economic and earnings reports on the schedule and stocks to watch. Quick rundown of our guests. Also couple of other fun water cooler stories. Sign up and check it out. Squawk box coming up right after this. Box and pay one flat rate. How naughty was he . Oh boy. [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. [ttdd 18003452550 can take you in many directions. Searching for trade ideas that spark your curiosity tdd 18003452550 you read this. Watch that. Tdd 18003452550 you look for whats next. 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Is that nana . [ male announcer ] fedex one rate. Simple, flat rate shipping with the reliability of fedex. Markets were up sharply on friday after the better than expected employment report. So is it time to stop worrying and embrace this taper . Maybe embrace a better economy. Joining us right now is the senior adviser, also ryan detrick. And allison, larrys already been saying he thinks the economy is a lot better than people have been giving it credit for. That these arent just one offs, that these are things that are truly improving. Do you agree with that . Look, theres been enough of a trend for several months now. And if anything, the data are Getting Better rather than worse. A little bit stronger. Feels like theres a pickup in momentum. My feeling is corporations have gone from sitting on their hands because theyre not sure whats going to happen in washington, whats happened globally. Youre seeing it in the spending numbers, hiring numbers, all of which bodes well for the market and the economy. And that would be the great news if corporations are actually feeling more confident to be able to go out and make investments. Well, one of the things that has been a laggard in this is business investment. Right. But when you saw inventory accumulation in the third quarter, those guys think theyre going to sell it. Obviously theres more confidence than theres been before. When you look at things technically, where do we stand . Well, things still look good here, becky. Historically speaking, decembers been lower up until about the 15th. Then you have the strong into your rally. That could happen once again. But under the surface, one thing very encouraged by is the Short Interest. We keep track of all the Short Interest on the s p 500 components. Its the highest its been in 18 months. Higher than a year ago. You say sentiment polls are bullish, theres a ton of Short Interest there that the bearish bets could cover and push us higher into the first quarter. Why do you think the short end has built up . That seems to be the reason we hear most people being cautious at this point. Excellent, excellent question. I do think theres valuation concerns, everyone knows were up a lot this year, you know, up 25 or so. But most of the studies say when youre up a lot one year, usually that next year, usually not up as much, but historically as strong. Since 75, the markets been up 20 . Last seven times weve been up 16 on average we still like small caps and, again, good for the rest of the year maybe next year also. The reason people might be bear is if the fed starts to taper. If liquidity starts being reduced, you can see the market pullback and there could be a technical pullback and a reaction to that it could help drive Profit Growth which has been lackluster. That was the whole idea. We had the fed and they were supposed to pass the baton. That would mean they were right. And orchestrated what they were trying to do and it worked. Pretty incredible. Wouldnt that be . Is that possible . Looks like it might be. Theyve been all all jeer year. It could be. There are things to be concerned about. We were worried about washington. Looked as if things were going to happen. And only got so bad. It looks as if washington scared themselves. And might do something constructive. And i like what ryans point was, too, just because we had a great year doesnt mean it goes away next year. That was something byron was here talking about, ryan, he was saying, look, most people think that things are going to slow down, youre not going to see the same gains, maybe we just kind of its more difficult to pick up gains, he said the market the Biggest Surprise would be either you went up really strongly or went down really strongly. Absolutely, when youre talking, the dow five years in a row. Only up six times a row twice. So yeah, you know, we are extended, we did a study last week from november to november, the s p up over 27 , since 1995, thats only happened a handful of times, 29 times, actually, a year later, the s ps higher every single time. Again, about 15 , 16 on average. I keep saying the same studies, but again, price action looks good, inflations low, record earnings. You know, to me, still being in the bullish camp is the way to go here. Thanks for joining us and thanks so much for coming in. Okay. Coming up, the ceo of National City bank on lending and how the fed taper may affect business as we head to a break, though. Check out shares of mcdonalds. Global november comps topping wall street estimates on strong numbers out of europe. U. S. Samestore sales disappointing investors. Back in a moment. vo you are a business pro. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Welcome back to squawk box, everyone. A monday morning deal to start the week. Sysco buying u. S. Foods. Shareholders will own about 13 of sysco. And you can see what this has meant for shares this morning. Up more than 30 . Other stock stories include tyco. Kkr reportedly among the suitors for having which have placed initial bids for the Security Systems unit. That business is valued at about 1. 6 billion. And the wall street journal reports that the private equity firm is said to be looking for the 1 billion for the gun business. It doesnt get offers that met the expectations. The new investments would value that business at about 1. 2 billion. Remember, it tried to sell its been trying to sell the business for a long time since sandy. Since a year ago. Yeah. Yeah. Sandy hook. Sandy, then people get confused. We have a great interview here. Were talking to the head of one of the largest u. S. Midsize commercial banks in the country. Joining us is City National. Does that get confused a lot . Its actually fading away. Thats gone. Thank you. This is pnc now, right . It is pnc. We keep talking about the taper. Youre living with it. What does it mean . I think its going to be a positive sign. And you guys have talked a lot about how it affects the market. I think what it really means is the economys getting healthy. Its like a doctor who says to a patient on intensive antibiotics, hey, youre doing better, andrew, were going to pull back on the heavy doses. That means youre getting healthier. I think its a good thing. I dont think its going to happen this month, but itll happen soon. What has it meant . Whats it going to mean during this taper period and what it means to Interest Rates . Well, obviously, as you guys know, its going to start to move long rates up. I dont think were going to see short rates come down in 2014. On the long side on mortgage rates, youre going to see it pick up. And weve got to get back to more normal rates and the feds going to do it slowly and carefully. The economys Getting Better. People seem to think when rates go up, its bad for banks. And truth at this point, its good for banks. Would you explain that a little bit, please . Yeah, rates going up will be a fabulous thing. Were very asset sensitive like a lot of midsize banks. And youve got loans on variable rates, your spreads will improve. And you know, the fact is, rates as you know, larry, are very low. Even if they went up 200 basis points, theyre very low. The feds got to get us back there. Thats the sign of a healthy, normal economy. It will improve bank profitability. And i think will help the economy in general. People always wonder what it means for banks that have written 30year mortgages. A lot of banks dont own those and most of those are back with fannie and freddie at this point. City national, we keep our mortgages on our Balance Sheet but try not to make 30year mortgages. Also try to make a lot of variable rate mortgages. But there are some banks that will feel a little pain because theyve gone for the shortterm upside. Weve avoided that. But youre right. Thats going to be an issue. Tell me about the volcker rule. Were going to hear about it later this week a lot. We are going to hear a lot about it, yeah. And id like to see it. Its going to be very detailed. I dont think itll affect banks Like City National. We are doing complicated hedges and we dont have whales anywhere. But id like to see the details. I think there are going to be some collateral issues here. I wish what is the big issue that youre worried that could affect you . Do you think itll have zero impact . I think its going to basically go after the biggest banks, the investment banks. But i think we havent seen the details. I think it would have been good if they had put the rule out for some more comments because apparently its going to be quite different from what weve seen so far. So well just have to see. Right. Russell, one im affiliated with a bank 5 billion bank. You read dodd frank. Seems to me theyre trying to kill the banks in terms of the Regulatory Burden imposed on them as opposed to the value theyre going to get by virtue of this regulation . What do you think of that stuff . Theres no question that dodd frank has put an enormous burden on banks. And i think part of theyve gone after the biggest the banks and theyve applied a lot of tough things. Some of which are very good, higher capital standards, stress testing, but applying the same standards coming to a 5 billion bank or a 29 billion bank Like City National and saying how many have you got on your staff to do the stress test . Maybe that makes sense at jpmorgan or bank of america. But i think theres a tendency in the regulatory world to adopt best practices. Even if dodd frank doesnt call for it, theres a tendency for the examiners to kind of take those principles and roll them downhill. And were trying to get people to understand that 10, 20, 30, 40 billion banks is not the same as a 2 trillion bank. And i think the regulators get it and theyre sensitive to it. But, you know, the pendulum swung so far on the pressure from capitol hill is so severe, were going to have to wait a bit and get that pendulum swing back to a balanced approach. The cost of compliance and the standardization that is getting pushed in lending makes it harder to do the old characterbased Community Lending thats so important for america. The small and mediumsized banks have always complained when they hear about the funding advantage that the big guys had. Implying they were able to borrow from because of their, you know, they would be bailed out of something that happened. It puts you at a disadvantage. Is that real . Do you think you were disadvantaged in terms of the bigger banks because you could fail. Well, you know, at City National, we dont think about failing. No. Once in a while, you should think about risk. You should think about risk every day. Thats why weve been profitable for 82 consecutive quarters and were funded by our clients in a traditional way. They put deposits with us. They feel its safe and sound. But do i think making the banks have higher capital levels and paying more and relying less on commercial paper. I think that is a healthy thing. Midsize banks Like City National arent funded with commercial paper, arent leveraged up on their capital the way that was one of the great fallacies of five, eight years ago, the banks were so sophisticated and smart they should have less capital and could do all these things. And, in fact, its just the opposite. Midsize banks are safer and solider arent doing all these aggressive things. And thats why City Nationals grown about 50 in five years. People come to us realizing were safe and sound, and its less risky. 50 on assets . Yes. When you see someone like wells fargo which is underwriting about a third of all mortgages in this country, does that make sense to you from a policy perspective . Well, its a great issue, andrew. Youve got to look at fannie and freddie. Thats the other thing, theyre feeding it in they dump it. Feeding it to the government and the governments becoming dependent on those giant distributions from fannie and freddie. Weve got to have a serious conversation in this country. You look at canada, they dont have a Mortgage Market thats built on government dependency. Are fannie and freddie in trouble . Theyre absorbing all the 30year fixed loans. They have been in big trouble theyve been paying off massive amounts to the federal government. Youre exactly right. The question you asked me a few minutes ago. Whos holding the 30year paper . Its not most of the banks. Its going to be the taxpayers. And congress likes these big checks theyre getting every year. You dont see them Holding Hearings about how do we privatize fanprivate ize fannie and freddie. Subsidize housing over here, but to underwrite the Interest Rate on every mortgage in america so you can help a few people, that was another one of the great fallacies. Okay. Is that a ladder . Thats the City National ladder. We like to help our clients on the way up. Make sure your earnings are on the way up, too. They are at City National and assets and clients. Your website has a picture of wolfgang. Well, weve been helping Wolfgang Puck and a lot of other people for a long time. You know a lot of stars out there in l. A. . A lot of them bank at City National. Yeah, maybe, joe, youd like to bank with us. Im right there with them. You are. Were in new york, you could be in our new york branch. Ill think about that. Thank you. Thank you. Thank you. Great to be with you. Coming up next, weve got 2013, its been the biggest year ever for collectible cars. More than 1 billion worth of cars sold. Robert frank next with the leading expert on individuvinta prices. Carl icahn struck a deal, the agreement comes just weeks after icahn disclosed a 10 stake in the struggling Womens Health products maker. In a separate press release, hologic announced its appointing former striker boss whoa, Steve Mcmillan is back as the new ceo. Maybe well have him on here and talk to him. A lot to talk about later. Tomorrow on squawk box, ken langone is on, grover norquist, the ceo of brookstone, plus chris hartwick. With fidelitys options platform, 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. [ male announcer ] if we could see energy. What would we see . The billions of gallons of fuel that get us to work. Wed see all the electricity flowing through the devices that connect us and teach us. Wed see that almost 100 of medical plastics are made from oil and natural gas. And an industry that supports almost 10 million american jobs. Life takes energy. And no one applies more technology to produce American Energy and refine it more efficiently than exxonmobil. Because using energy responsibly has never been more important. Energy lives here. Welcome back to squawk box this morning. Take a look at the futures right now. Dow looks like it would open up about five points higher. The nasdaq up about 11 points higher. Among our news makers this morning, Florida Governor rick scott joined us to talk about taxes and job creation. Were making our economy the opportunity economy where, you know, if you want to build a business, you can and you want to get a job, you come to florida. Among the highlights of governor scotts tax cut agenda. He says that 70 of Florida Companies dont currently pay Corporate Taxes. A recordsetting year for the collectible car auction, more than 1 billion in sales, and robert frank doesnt talk about anything unless it starts with a b. He joins us what to expect in 2014. Maybe well have time at the end, every day its something. Every day we have a new record, its amazing. 964,000 lets get to cars. This is cool. 4 of the 5 most expensive cars sold at auction ever were sold this year. Some call it a bubble, others a new investment class. Joining now president and ceo of hagerty insurance. Is this a bubble . Well, you know, its its certainly a huge amount of demand right now. And theres a really limited supply of the truly great cars. And so when it especially comes to ferraris which have been driving the market for a number of years, its the prices are pretty you dont think its this oversupply of cash. So much money in the world right now chasing anything. You think this is sustainable . Yeah. I think its sustainable simply because, you know, the types of cars were talking about exist in such a limited supply. Yeah. And the world has made so many millionaires and billionaires that theyre all chasing this great little cache of cars. What if the bubble popped and you insured some car for 30 million and then its worth 3 million and he drives it into a pond somewhere and says i ruined it, i want my 30 million. Do you have to pay off on that . Hopefully its not driving into a pond you better be right. What happened in 2008 . Did the prices hold up during the last recession . They did. Held pretty strong. The muscle cars, american muscle car market which had been they were probably 25 off. But people held on to their stuff. Yeah. And now its, you know, its back and its just booming. Now, we saw close to a 30 million car sold this year, do you think we will see 100 million car sold in our lifetime . I think there are already 100 million cars. Are people paying that much . What . I know its hard to believe. No one has paid that much to my knowledge. How many years do you think in the next three or five years well see 100 million car. What kind of car would that be . Ferrari built 39 cars in 1962 to 1964 called a 250 gto. Kind of the holy grail of the ferrari market. No ones paid that much for one. Wow. I know of some sales in the 50 to 60 range. That have actually traded in the 50 to 60 . How many years do you think we see 100 million car . Three years. Three years. What was Ferris Buellers car . It did go shooting out that window. Heres what youll like. What i was amazed about this year, ferraris have been up there, german cars, porsches. If you look at the appreciation, up 33 . Is that going to continue . And why are german cars so hot right now . Well, theres this great relationship in the vintage car market between the new Car Manufacturers and what people collect. And porsches a great, great company. Mercedes, of course, they had the top auction price for yeah, most expensive car sold was a mercedes, not a ferrari. Thats right. Famous race car. That was 1 of 1. When you think about porsches, they were production cars, a lot of them made. And the fact that, you know, 1973, well, 400,000 to 500,000. We have a european client who paid 700,000 euros. They made a lot of those. If you had 1 million to put into a car right now, whats the best investment . If you look at any kind of car out there, where should people put their money thats good value . Good value, 73rss. I think porsches are great. How many does seinfeld have now . He said so many that he said he wouldnt have he said so many if i gave you the number you would have thought i was crazy. Hes made money on those things. Thats the best part about them. They dont sell them, do they . Thats whats been interesting. Some really wellheeled people have been trading things out of their collections with these prices. Are the good, smart collectors selling right now . No, i think theyre tuning up for the next couple. For the 100 million car. Thats right. Its its tough. Youve got to watch car chasers. Absolutely. And secret lives. No car chasers. Go with me. Good shows. Thank you, both. When we come back, jim cramer live from post nine. Well get a preview of whats ahead on squawk on the street. Plus, what he thinks the chances are of a santa claus rally. Squawk box will be right back. Tomorrow on squawk box, hes the host of popular aftershows like talking bad and talking dead, and his game show at midnight got a pickup on comedy central. Chris hardwick will join us onset to talk about the walking dead, the squawking dead and all things social media. Tonights hashtag is badcereals. Example this might be grope nuts or lumpy charms. [ male announcer ] they are a glowing example of what it means to be the best. And at this special time of year, they shine even brighter. Come to the winter event and get the mercedesbenz youve always wished for, now for an exceptional price. [ santa ] ho, ho, ho, ho [ male announcer ] lease the 2014 e350 for 579 a month at your local mercedesbenz dealer. [ male announcer ] lease the 2014 e350 for 579 a month announcer at scottrade, our cexactly how they want. T with scottrades online banking, i get one view of my bank and brokerage accounts with one login. To easily move my money when i need to. Plus, when i call my local scottrade office, i can talk to someone who knows how i trade. Because i dont trade like everybody. I trade like me. Im with scottrade. announcer scottradeproud to be ranked best overall client experience. Every day were working to and to keep our commitments. And weve made a big commitment to america. Bp supports nearly 250,000 jobs here. Through all of our energy operations, we invest more in the u. S. Than any other place in the world. In fact, weve invested over 55 billion here in the last five years making bp americas Largest Energy investor. Our commitment has never been stronger. Welcome back to squawk box, everybody. The futures this morning, weve been watching through much of the morning. There hasnt been a lot of major activity. You can see dow futures up by about 6 1 2 points. Up about 6. Shares of mosaic getting a boost after the fertilizing Company Announced it will buy back restricted shares from two charitable trusts. Lets get to the New York Stock Exchange where jim cramer joins us. I didnt know the eagles were doing that well. They lost yesterday. They won. They looked good. That was good for kansas city and philadelphia. 85. Tonight. If the bears win and the cowboys loose, then it is up to the eagles controller on destiny, which will be sensational. You are not afraid to be disappointed. I am afraid to come out and embrace the bengals. It has happened too many times. I never know who is going to show up. Dalton is red hot. A. J. Is never inconsistent. We heard some stuff today, jim. Ill tell you, i was ready to start thinking that the markup was getting tired monday, tuesday, wednesday, and thursday. Then that jobs report could be the next leg. I dont think any of us thought that the fed was going to successfully handle the underlying economy. That might work. I think you are right. That is what happened friday. People started saying, wait a second. Maybe there is another leg that comes from doing better. I was watching this morning. Sisco, announcing it was up three, down up four, up seven and then it capped up ten. Thats part of the bullishness. That could be a big year for next year for sisco. Im seeing this over and over again. Good news is good news. It is moving stocks now. That was weird. How creative is this going to be . Did they make some comments about that . It reminds me of phil lebeaus interview with doug parker. Are my fares going to go up . No. The odds favor fares going up. It favors a business thats been low margins, this food delivery business, the margins go up if you buy your competitor. Jim, what do you think of mcdonalds today . The u. S. Numbers were pretty concerning. It is inconsistent week to week. When i see that europe is the star, that always worries me. How can europe be a star . This is a company i cant pin them down. Therefore, im going to go to other stocks instead. Jimmy, i hate to go back to football. Larry says that auburn is going to beat Florida State. That was news to me. What do you think . I think that auburn Florida State has two weeks to prepare against that offense. I think that can matter. Florida states defense is good. The knolls have a destiny here. Thank you, larry. Coming up, larry sounding off on why the economy is in better shape than most people think. Dont forget, you can follow us online, on twitter, on facebook. You can get a leg up on the trading day. We have the morning squawk news letter out. You go to our show page. Squawk. Nbc. Com. Find a way to sign up for that. The news letter gives you a quick snapshot of the days top stories. Economic and earnings reports on the schedule and stocks to watch. Also, who is going to be on the show. 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Lets get back to our guest host, larry bosity, who says there is a lot of evidence pointing to the economy. We want to talk to you about since you are so intimately familiar with jpmorgan, being a former board member. I am not longer intimately familiar but, yes, i was familiar. I think the story is that they are hiring some of the sons and daughters of the potpourri over there, the top potpourri. They are generally, the best educated, generally, the best qualified. The fact that they might lead to some business, does that enter into it . Maybe. Do you think it is a true quid pro quo where i am hiring you and you are going to get my x and give me the opportunity to get to x . I am hiring you because you are qualified and, by the way, i might get introduction to your parents or your relationships, or whatever they may be, just because you work here. That happens in the United States all the time. The question is, if this is an orchestrated move to try and get the quid pro quo or something that they know about back in the United States. They said nobody knows in the United States and i think that from what ive seen so far, that it is innocent. So well see. My guess is that this goes away. Goes away. So you dont think. My bet is that they try to bring a case just to force them to settle. They might. I dont think the evidence is there, hasnt been released yet. Is there a time you are going to say, i am going to fight the government. I am going to fight the government. It is a good question. I know that diamond certainly protects his turf and is combative when he needs to be combative. I any he came to the conclusion, i cant win this thing. I can drag it out for five years and keep this cast over the company for that long. Joe says he thinks it is a shakedown. Do you . There are some aspects that certainly approach that, yes, i do. Okay, so, now, hopefully, they see more blue sky. Tell us about the blue sky. Are you convinced no. I like the trend in jobs. I like the trend in unemployment claims. A lot of things going positive. I hope there is more confidence generated to propel this further. I think that can be the case. I hope the government comes to some accord on something i hope they take a lot of pain out of this Affordable Care act. I dont know how. I havent heard a solution that fixing it. I dont either. As this ground swell continues to grow and people begin to holler, something will have to be done to bail some of these people out. Do you have a 20second view on minimum wage . Minimum wage varies by state. 15 an hour, thats going to cost jobs. If you raise it 1 an hour, will that cost jobs . Probably not. You have to be careful how you apply it. Larry, i want to thank you for joining us. If we dont see you before the end of the year, happy new year, merry christmas. Same to you. That does it for us today. Keep an eye on shares of mcdonalds. Those shares were better than expected. In the United States and the rest of the globe, except for europe, it was worst than expected. Well see you tomorrow. Right now, it is time for squawk on the street. Good morning. Keim Carl Quintanilla and david faber. Here is the setup for the week. Futures are largely unchanged. We have some comps from mcdonalds and three fed speakers on deck. The tenyear yield around 284. The nikkei up better than 2 as the yen slide