Transcripts For CNBC Squawk Box 20140102

Calls. Well talk more about david tepper and some others in just a moment. But first, andrew has a roundup of some of the mornings top stories. Andrew, that story is already here in the new york city area. I cant believe it. We needed it about a week ago. I dont know. Shocked me a bit this morning, whoa, back to work in the snow. Well, happy new year. You, too, happy new year. Fiat decided to buy the stake in chrysler it doesnt already own. This is all in cash. Once that deal closes, chrysler is committed to giving the trust an additional 700 million. The agreement ends months of tense negotiations. The deal means no chrysler ipo. Thats important because the ceo never wanted that. And phil lebeau will have more at the top of the hour. In our corporate news, mccow ka seeno has reeled a deal. Were going to talk more about the big business of gambling coming up at 7 40 eastern time. Cnbc is part of that and windsor media, an Investment Firm run by former yahoo chief terry stimble, its signing a separate partnership for news coverage. This takes effect today so youll be seeing some of these folks right here on cnbc. And theres been a lot of speculation about what this is going to look like for a long time. This ends a little bit of that. Joe, over to you. Did you see the clock strike midnight . I did see the clock strike midnight. I didnt. I fell asleep. That was my point, andrew. Youre there and youre like, this is new years coverage. For me, it was you know, and im always doing this schtick about being out of the loop of the younger people and stuff. Do you miss them . I dont really miss them, but i realized its a clear group of information. They were making fun of the tea party. Andrew even said it felt a little it was like i know how old people they must have looked, who is this dick clark guy . He likes that rock and roll music. But at least you stayed up and watched it. I fell asleep. Thats because you cant sleep when you i flipped around channels. Carson did a great job. I thought Ryan Seacrest did a great job. I i was up going to the bathroom. By the way, Carl Quintanilla said miley cyrus looked like b liberachi. Did you see the suit she had on . Yeah, i did. She had a lot of make yp on. I had to xoif with willie joel because his voice is different now. But miley cyrus painted. She just kept saying in i can have any type of year like i said last year, it was the greatest. Just sort of embraced, like that was all planned. She politic up wisplit up wi yeah, but we went from nothing to but i just noted that it was all digital and it was all facebook and twitter and young people doing all this. I dont know. I felt a little crotchty. Cathy and cathy and hoda . No, no, it was on that other channel. They chained each other to they put handcuffs on each other. Were going to lose our weather guy, which lets talk about this because its going to be affecting us all of us. Did you see what the temperature was in winnipeg . No. Same as mars. Its like an uninhabited planet. Up to 40 Million People are bracing for a winter storm today. Alex wallace joins us from the Weather Channel. Morning, alex. Good morning. You said it right. Its going to be impacting a lot of folks. No question about it. In fact, weve got winter alerts, winter storm warnings across the northeast and blizzard warnings south and east of boston and across long island. We work our way towards nassau and suffolk counties. With the snow and the wind, we could be talking about whiteout conditions where you cant see out there. It could she very, very tough to navigate. Basically, if you dont have to be out traveling here, that is your best bet. Seeing snow showers out there in and around boston trailing back across new york state right now. Theres more heavy snow out in the west talking about parts of understand incide indiana into illinois. Thats piling its way on in to the east. Now its moving its way through ohio. All the areas in the blue, thats where well find snow picking up in intensity. Well see the snow out there for us. Friday, it likes like most of the snow will be during the early part of the day and by the time we get into the even hours, it will be ending. How much will we see . There could be measuring some in feet. It will be a zone stretching across new york state. Again, stay away from the trfl aing if you dont have to. Back to you. All right, alex. That would be a lot. You said feet. I happen. The kids were off the last two weeks and they have their fingers crossed about tomorrow. Theyre going back for one day . Its like, god, i hope im off friday. Youve been off for two weeks. In Global Market news, chinese data suggesting the Worlds Largest economy could be slowing. Chinas factory activity pulled back in december. In the u. S. Today, a couple of economic reports of note. At 8 30 eastern, we get weekly yols jobless claims. At 10 00, we get ism manufacturing numbers. I think our board illustrate wrong. It says 7 00. I dont know. Normally christmas and new years dont fall on a wednesday. It messes up, i think, the first week of january indicator because these first two days dont really count. Does the first week start on monday . Maybe its from wednesday to thursday. If its thursday to thursday, were down 43. You cant no, but the statistics have always been based on i know. But in the first week, so goes the first month. As the first month, january, so goes the year. So its important what we do in the first week. Does thursday count or not . But if its counted for the past 50 or 80 years you think its included . We should take a look at it because its not the first time christmas has fallen on a wednesday. Maybe those were outlying years. I dont know. I am uncomfortable. As we head into 2014 and take a look at these investment opportunities, the wathe wall journal for to 14. The Hedge Fund Founder betts against the pressure metal. The firm made more than 100 million betting against gold prices. I think it closed between 1200 on tuesday. No, just over again. Meanwhile, david. Er tepper turned more bullish. They had a picture of him in the post. He looked like maybe he was a king. Maybe they had king robes on him and some crowns. A few brave investors scored huge. I read that today. So it was like you had to do Different Things to score huge. Two days ago, this journal, do you remember what it was . Boring funds served investors best. I think they both need since. But the point was wab boring, and then the next day, the this fancy work off off. Cohens numbers, 17 after the year. But thats after he paid his fees. But these are two, though. No, but his are like 2 and 20. And then the last one was not a pretty story. Was it under 10 . I think it might have been. I have to go back and look at the number. I dont know. Lets take a look at the markets this morning. Weve been watching the futures. As we mentioned, they are under pressure. Right now, dow futures down by 56 points below fair value. S p is off by 6. 5 points. Oil price these morning are up slightly. Up by just 3w7 cents. Thats just for wti crude, which is at 98. 49. The brent crude prices are down by about a penny. If you take a look at what is happening with the new year, the yield is at 3. 036 . If wonder where we head in 2013. If youre watching the dollar, it is stronger across the board, trading at 105 of 40 for the yes or no. Euro is at 1. 3697. And gold prices, i believe they were up. Up about 16 this morning. 1,218. 20 an ounce. I was pointing out on tuesday it looks like they were going to close at the lows. But it didnt. Should wige go across the po . Yeah. People in california when theyre watching carson daily, its 9 00 out there. Do we replay the do they watch the ball come sdoun . I sent a tweet out happy new year and then all these people wrote left coastist. I think thats a big drawback, but youre three hours behind everything. Id take it for the weather. Not if you tau the traffic you wouldnt. Ross, are you with us . He gets there five hours before us on the new year. But he probably thinks were missing out. But he has to live in england to do that. Ross, goss whats going on . We have dow here in europe, around about 7 to 3 decliners outpacing advancers at the moment yesterday. The ftse 100, down 15 over the course of the year. It was dragged lower. Its an underperformer because of basic resource sector. Today its down 0. 5 . We had some manufacturing data. 57. 3 in bres. Eurozone manufacturing pmis were concerned. The Xetra Dax Cac down 1 republicfully. And the ftse mib is currently down 0. 2 . Its outperformance because of that fiat deal. Fiat is at the top of the stoxx 600 today because around 4. 35 billion deal. That 41 stake with the united auto works up. Theyre committing a further 700 million to be paid over thee years. The question remains whether there will be enough to wipe the debt. Fiat stock, liked by the market, up 12. 5 at the moment. And a couple of retailers you might be expecting in focus post christmas sales, a gloomy season for many uk retailers, but there has been an outperformance from john lewis and rival house frazier, as well for you. Keel keep our eye out. Dlorg yen has been up at five year highs, too. Thats it for this particular. We have in some pictures for you for what new years eve was like in london. Its where i met joe. This is what it looks like. I saw that, ross. They didnt show the wheel immediately and then i saw the wheel. I hate that thing. You got nervous on that thing . Petrified. I dont like that. Hey, what was i going to say . I was going to ask you something else. Beautiful. What do they do before the wheel . What was sort of the London Bridge . Or was it ben . We never really had a place where we had a lot of fireworks. The key place for new years eve traditionally was trefalger square and people would just into the nnts finance. The other on thing its done is its taken care of edinburgh. They had the big fireworks display. Its called hulkamenie. That wheel was only supposed to be temporary, originally. I was living there at the time. That was great. We all ran to it. Is that the world fair or something . Was it the millennial wheel . The millennium wheel. It was only sponsored for a couple of years and they were supposed to take it down. But it was so popular, that they felt they would keep it. Thank you, ross. Weed, its in the news. This morning, the worlds favorite state licensed retailers are legally permitted to sell pot for recreational use. Some shops closed early because inventory was running low. No firm numbers yet on how much money was need in sales. And maybe we should do like the other things this is all guys standing in that line. I didnt see a single one. There. Two, i see two. Johnny carson always used to whenever he talked about his band, he looked over at all the guys and how is that now that its legal, you guys . Theyre hiding. You are getting old. I am. But when you have a couple of drinks, youre not necessarily changing your sobriety. Right . You might feel when you spoke a joint, you are going somewhere where you want to get. How do they even test you for its not even on the road . You need to just stay in your house, i think, dont you . Yes. People worry about kids coming home from school, people worry about driving. What about lung cancer . The former mayor bloomberg would not be happy. There were a lot of things he did where i thought he was high. I thought definitely he has to be stoned out of his mind for what he came up. Honestly, how would a trooper even noe f pulled you over . I think they can with a blood test. But are they going to be able to take a blood test right there on the scene and force you to do it . All the people going 5 Miles Per Hour on the highway sort of i would go long. Whoever makes visine, i would go long that company in denver. How about hostess. Twinkies, visine, that would be good. What was my candy of choice . Peanut m ms. Im honestly amazed. I never thought id see the day werent we supposed to wait until the next break to talk about this, though . No. We have some other things to talk about. Anyway, speaking of, you know, when you smoke pot, you get the munchies. Walmart has recalled donkey meat sold at some outlets in china. The decision comes after test showed the product donkey. Theres a lot of things you dont want in there, dog, probably, donkey, horse. But its weird that our friends that are animals we wont eat, but the ones that i mean, cows are pretty nice. Pigs are pretty nice. We feel bad about horses for some reason. I stopped eating pig for a while after charlottes web. Did you, really . Yeah. The other white meat. Even though you were at the deblasio thing i was in the front row. No, i was not there. His First Initiative is getting rid of the horse drawn carriage. Im personally upset about this. When i dont come here with jeeves, i get taken him in a horse drawn carriage. No, it is complicated. Look, there were some bad situations years ago with the horses. They got hit with cars . They have been taken care of. So there were issues, but now its in a highly regulated industry. There are a lot of people saying theyre beloved by their owners. So i dont know. But to me, its more of a priority issue. The other thing is, you know, follow the money. The reason he was behind this was because there was a huge lobbying group that is funded by these real estate guys who want to get rid of the carriages. So this is not do is she im suggesting that theres issues. This is what we were supposed to talk about in the next segment. I will tell you, if you get behind a horse that is having some digestive issues, its ooh. Coming up, a rescue for passengers stranded in the absent arctic, thats at issue. Michigan state wins the rose bowl, 2820. Plus, i wchd the winter classic. It was pretty cool with the snow building up. That was a family thing. It was great. Well be right back. Now listen to me, duck. I have an associate that met with, uh, an unfortunate accident. While hes been incapacitated, somebodys been paying him cash. Now, is this your doing . Aflac . Now, if i met with some such accident, would aflac pay me . Nice. This is your stop. [ male announcer ] find out what aflac can do for you and your family. Aflac . [ male announcer ]. At aflac. Com. Time now for the executive edge. The rescue of passengers from the ant arctic is under way. A helicopter is transporting them to a nearby australian vessel. It showed people heading towards that helicopter. The Russian Research ship has been trapped in ant arctic ice since christmas eve. Its not in danger and the 22 crew members will remain on board after the other passengers have been evacuated from the vessel. This has been a long time going. They had been waiting on this helicopter because there was a lot of fog and other conditions. The journal has an interesting take on it, a little bit tung and cheek that theyre getting rescued by fossil fuels. It has not been widely disseminated that this was a Global Warming expedition, the leader of the expedition wanted to show how much things have changed. The irony, it is rich that they were stuck and really, really stuck. But he still says that holding on to his definitely, everything is melting down there. This is old ice, he said. Im not sure what his point was. One of my new years resolutions is its just youre not supposed to tell your new years resolutions. No, youre right. You said it was okay if i didnt. I think its okay if you do. People can believe what they want to believe. The latest thing on drugs today in the Huffington Post is now another Research Group says if clouds are going to react differently so its going to be worse than theyve thought. So theyve ratcheted up the models. But theyre going after the year 2100 for when its going to be bad and theyve got a new number for how much heat is going to have gone up. And theyre fully comfortable with their model and predicting 2100. And no one questions, weve never been able to predict the futures. Its been very difficult to do that. Did i hear yao new years resolution . My new years resolution, people can believe that they want. Im not an evangelist. But my list of worries that are front and center, global warning is but your new years resolution is anybody can believe anything they want and youre not going to argue with them about it. But does that work . As far as me, thats one of the least prioritized worry that i have is Global Warming and carbon, co2. I like the new years resolution. You do . So people can go wild. But as years go by, unless it starts happening, please dont put the New York Times lead story. Weve got the 401 parts per million, 402 parts per million. I think youre risking your new years resolution. I am . All right. Sorry. Lets talk about the next story. Philanthropy made a come back in 2013 been the nations wealthiest owners gave more than 3. 4 billion to charity. That compares with just 11 of those gifts in 2012. The largest donation came from facebook go rounder mark sucker berg and his wife. The good news is this means that nonprofit organizations maybe can finally start to see some bit of a pick up. Its been a long, hard slog going back to 2008. Do we know what the silicone Valley Foundation does . No. But hes very involved. I think he teaches. He taught a class at an Elementary School or a high school there. Hes been very involved in the community. Did you see michelles piece . Which one . Caruso cabrera that she did for us on tuesday. It was the lead story in the daily news yesterday. Oh, on the pope. Yes. Front page. And the New York Post talked about it. Becky, i dont know if you i saw the story, actually, yes. But what they failed to the only comments that they quoted the pope on, andrew, were not the one that we read here, which go into a criticism of free market oh, you know, the daily mix made it sound ridiculous. Theyre talking about saying almost theyre pushing socialism as a means to an end to make a more fair world. I dont want to weight in on whether the pope is infallible or not. But the whole infallible question tore me says its different than when he says hes speaking with infallibility. I know that. But in this case, hes not infallible, because hes dead wrong on what he said about the free markets. New years resolution. Is Deblasio Catholic . I dont know. And im treading into an area that i dont know. By the bible did you see that . Yes. Where is it . I dont know. Did you see anyone lurking around hymn when he saw it afterwards. Hes a tall man because clinton looked short. He is a tall man. Hes kind of a handsome he has presence. He certainly does. I would like to see him next to bloomberg. That would anyway. I saw the hobbit, by the way. Me, too. It was awesome, didnt you think . I loved it. Loved it, loved it. How do you go from bloomberg to the hobbit . I dont know. I dont know where that connection was. Does he have furry feet, do you know . I dont know. I dont know. Ford is planning to unveil a solar powered concept car. This car is going to offer the same performance as a plugin hybrid would, but without the need for the plug. The automaker says the vehicles combined city mileage is 1100 miles a gallon. When its dark for many months out of the year, might not be as effective. This is awesome. What goes 1100 miles. It doesnt go 100 mriels, it gets 100 mriels to the gallon. If you dont want to plug it in, the whole thing is done by solar. Remember if you have a magnifying glass and the sun comes through, you can burn something . Thats what theyve done. They put a special magnifying glass on top of the solar which focuses the rays on the sun and makes double, triple, whatever the magnifying glass says. It should have a range of ksh this which is a concept car, right . It doesnt say when it actually there are cars that have turned in and gone from concept cars to real cars all the time. Well see. Youre not a buyer . Im sure its going to be real expensive. Ford says a full day of sunshine is equivalent to a full day of battery charge. So you cant park it in the garage, either. No. You have to keep it outside. Once again, you dont have a can a. Youre whole foods market. Youll be taking a chopper over to pick up the what is that, tried seaweed you eat . Yeah. Its getting gross. Ive stopped eating that. What did that dried seaweed taste like . I i what was the point of that . Very salty. Just eat salt. You need a salt lick. When we come back, well talk about repeating the success of 2013. First, take a look at yesterday is winners and losers. [ male announcer ] this is the story of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment adt can help you turn on a few lights. Access cameras from anywhere to help you keep an eye on things. Even bring family in from the cold when youre not there. Now get the advanced technology of adt starting at just 79 plus a camera at no additional charge. With adt, you get 24 7 Fast Response monitoring that helps protect you from burglary, fire, and high levels of carbon monoxide. Plus Remote Access to your home. Even control your thermostat to help save energy. Get adt installed starting at just 79. Plus a camera at no additional charge. Thats a total savings of over 450 adts best holiday offer. For everything that matters most. Adt. Always there. 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. Tdd 18003452550 at schwab, we can help turn inspiration into action tdd 18003452550 boost your trading iq with the help of tdd 18003452550 our live online workshops tdd 18003452550 like identifying market trends. Tdd 18003452550 now, earn 300 commissionfree online trades. Call 18886282419 or go to schwab. Com trading to learn how. Tdd 18003452550 sharpen your instincts with Market Insight from schwab tdd 18003452550 experts like Liz Ann Sonders and randy frederick. Tdd 18003452550 get support and talk through your ideas with our tdd 18003452550 trading specialists. Tdd 18003452550 all with no trade minimum. And only 8. 95 a trade. Tdd 18003452550 open an account and earn 300 commissionfree online trades. Call 18886282419 to learn more. So you can take charge of your trading. Welcome back, everybody. The markets closing out the year at record levels. Our next guest says investors should resolve to focus more on Risk Management and less on chasing stocks that have made huge gains. Joining us right now is rich steinberg of steinberg global asset management. Rich, when you say this is a different year when you start looking at risks, what do you think . Well, when youve had such a big move like this, sometimes complacency can take place. I think its important for investors to understand why theyre investing, becky. So i think the outcome is as important as the punch marks are. So people have to realize, what does an endousement need to spend . Make sure the allocation is correct. And despite what happens on the benchmarks, make sure that their risk is aligned with where theyre going to be. Is that an argument for getting back into bonds . I dont think its time to get back into bonds yesterday at all. When people re allocaallocate, are readjusting their risk, they can stay on the short end or i know its a dirty word, but having some extra cash around. I dont think bonds come into play until the tenyear goes up to, lets say, 4 . Which is where the risk profile of people using money to spend for either lifestyle, like i said, gets to be more important. The rule used to be spend 5 of your principal if youre an endowment. Thats when theyre down to 4 . I dont think its i dont think its a place to be in bonds. We dont see the tenyear going above 3. 5 this year. So youll have negative returns in bonds again this year. Rich, we were just talking about a story in the wall street journal earlier this week that pointed out that 2013 was the year of the index funds. If you were in a base index and tracking the stock market, you did really, really well. Do you think that doesnt hold true in 2014 . I think the indexes will do fine this year. We have a target for the s p of around 1936. We have borrowed from peter to pay paul i think at the end of this year. But i think within our firm, we run individual equity portfolios. I think 2013 will be the year of the stock picker. So what kind of stocks would you be picking . What kind of sectors do you think will perform well lets say in the first half of 2014 . I just had some broad sector looks. Technology looks good. Could be high double im single returns in technology and energy looks oak. Health care looks good. Consumer names look overvalued. Dividends had a fantastic year this year, probably a little bit too much. So i think well get back to normalized returns and dividend plays of 7 , 8 on return. I think those are names you can look at. We probably would avoid materials, we would avoid utilities or underwaitd utilities. And i think you could make money in industrials. Everybody is talking about that industrial shift, but when we return the broad look, industrials are trading at 15 or 16 times next years earnings. Thank you very much. Great talking to you. Coming, another fugitive featured on cnbcs american greed. Theyve been captured. Youre kidding me. Yep. Its like americas most wanted. Doing very well. Plus, were watching a major winter storm. A number of major cities are bracing for snowfall. Blizzardlike conditions expected in the northwest and the midwest with as much as a half a foot forecast. Winter storm warnings stretching into new england. Were back in just a moment. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. [ female announcer ] today, cisco is connecting the internet of everything. And it feels like your lifeate revolves around your symptoms, ask your gastroenterologist about humira adalimumab. Humira has been proven to work for adults who have tried other medications but still experience the symptoms of moderate to severe crohns disease. In clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. 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 gastroenterologist about humira today. Remission is possible. Welcome back to squawk box. Earlier this week, a stop for a vehicle and Traffic Violation on interstate 95 in southern georgia led to the arrest of 47yearold aubrey lee price. The reason we care about this is aubrey lee price, a former bank director, had been wanted by the fbi in connection with a multi Million Dollar investment scheme. Also happened to be featured on a american greed. The fbi had long suspected that price was still alive. Price is scheduled to appear before a federal judge in brunswick, georgia, today. Hes the third person featured on american greed to be captured. Now, this guy actually would be more interested in the stocks. Yeah. They thought he was dead, he fell off a ferry. Anyway, coming up, the team is back together. Were kicking off a new year with a visit to the chairs. Who will win the microsoft dr eo sweepstakes . Thats first prize. Second prize is you get to be a ceo all along. Would you want that job . Id be afraid. Thats coming in the next hour. Announcer we give you three hours of joe, becky and andrew like every day. What are they like off the air . Find out what questions becky gets asked most often, numbers. Aflac aflac got em. Yeah, hes clean, boss. Now listen to me, duck. I have an associate that met with, uh, an unfortunate accident. While hes been incapacitated, somebodys been paying him cash. Now, is this your doing . Aflac . Now, if i met with some such accident, would aflac pay me . Nice. This is your stop. [ male announcer ] find out what aflac can do for you and your family. Aflac . [ male announcer ]. At aflac. Com. Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. My alarm is officially set for 3 47 a. M. Because 3 45 feels a little too early. Your day starts early, but i dont think theres a working mom out there who doesnt get short changed by sleep. Ive had people ask me, is joes hair real . Theyll ask, what is Warren Buffett like . When you sit down, what you see on camera isnt some folksy routine. Thats really him. You have to know whats real and whats not. Thats what you get when you come to squawk. Beautiful. Yes. Ive never seen it. Im almost going to cry. I am. This is our new campaign which is going to feature all of us and the people have squawk on the street, as well. This is the first time anyone has seen any of thises and that was beckys. But you can see family life. You are with your beautiful little boys. But then youre also youve got the monolith. Sorkin is talking to the big hitters, too. I think we cut that out. Youre in with jeeves doing some work. Were doing some work with jeeves in the car. With mine, i have my shirt off. You have your shirt off. In a swimming pool. But its just above theres no moobs. Nothing can be seen. But i have to say, this is great. I love the whole campaign. Were at my house in the backyard when im leaving in the morning. And im letting the dogs out. I love your drivers license. My drivers license, scott and blake. The significant other would not appear and neither right . She had to talk to her agent and there were fees involved. And your little man is not there, either. Single parents, but its theyre very personal and theyre going to be running for a while, i think, and theyre well done. Now, i havent seen anybody from squawk on the street yet. I am, too. Ive heard some things. Cramer, call on the commercial. Faber. Swimming. Faber is swimming. Apparently ive got a big, long suit. I think faber might go his whole body is waxed, too, because hes a big time swimmer. I ran into him in the pool one time. I was telling him the other day. I was pregnant. Likes six or seven months pregnant. Did he have vaseline all over his entire body . No. I didnt even notice what he looked like. I was mortified running into somebody when youre six months pregnant in the pool from work. Oh, when you were yeah. I was like, oh, my gosh. Yeah. Im not i dont comment on pregnancies. Anyway, so deblas, did you see that every paper made a big deal about whether this is a metaphor for the country and whether it ushers in a new era of liberalism and it will be a test tup in new york city to see if it can be pulled off. It was interesting to see bill clinton there and hillary there and what that means for 2016 if theyre trying to get on this bandwagon whether you think things are moving left. Its a little too left for me. I want to be clear on that since i know sometimes you obama came over here. Now new york is all the way you wonder how the pendulum swings. I wonder how far it does swing. He talked a lot about raising taxes on the wealthy and hes going to need albany and other people to do that. Im not sure that they ultimately will. And theres just unforeseen things like, remember, bloom boe berg with the snow a couple of years ago. Its going to snow today. When you mess that up if youre in new york in the snow and a week after its come and if the garbage is still there, you can mess this up. It cant just be about changing something for the positive. Hes never been a manager of anything. No. But i think the big issue is schools. Schools and terrorism and look how hard mayor bloomberg worked on the schools. Mixed reviews. But i would argue on safety. A big win. In terms of crime. But an issue because of what happened with hold on. Over the past year, its been but giuliani gets some credit for it, as well. Right. About 2500 murders 20 years ago and were down to a records low of 300 and some. I think history will look fondly upon i think new york changed more in those 12 years and the impact will last. For a lot of different reasons. But the economy. The corporate guys, the corporate studio. He ran a company and he welcomed the private sector. Job creation turned faster than average in new york city. He was a new york republic. Manhattan republican, which is like a texas socialist. Not red enough for you, right . Im happy to thank him for his service, joe. When we come back, fiat buys a stake in chrysler that it doesnt already own. And we upped the ante in gaming. Also, our guest host today is former treasury deputy secretary neal wollen. We have a lot of topics to talk about for the new year. Everything from the debt ceiling to Irans Nuclear weapons program. Squawk box will be right back. [ male announcer ] this is the story of the little room over the pizza place at 315 chestnut street. The modest first floor bedroom in tallinn, estonia and the dusty basement at 1406 35th street. It is the story of the old dining room table at 25th and hoffman avenue. The southbound bus barreling down i95. And the second floor above the strip mall at roble and el camino. This magic moment it is the story of where every great idea begins. So different and so new where those with endless vision and an equal amount of audaciousness believed they had the power to do more. Time and time again. And then, it happened at dell, were honored to be part of some of the worlds great stories. Stories that began much the same way ours did. In a little dorm room 2713. This magic moment squawk box kicking off 2014. Todays guest host, former Treasury Department undersecretary kneunder secretary neal woolen. What will the economy hold . Plus the biggest ceo shoes to fill in the new year. Who will replace steve balmer as the head of microsoft . Management guru jeff summerfeld checks the short list. And do you feel lucky . The president and coo of Borgata Hotel and casino will give us fresh odds for success in 2014. Get ready to roll the dice. Squawk box begins right now. Good morning and welcome back to squawk box. Welcome to 2014. Im Andrew Ross Sorkin along with joe cornyn and becky question. We do have some red arrows after many days of green arrows. Corny question. We do have some red arrows after many days of green arrows. 43 last time. Its gotten a little bit better. We will see where things stand around 9 30 when things open. Werent seen losses for the years first trading session since 2008. And as the first five days of the year go, the rest of the year supposedly goes. First five days, not the first week . Its usually five days. Thursday, friday, monday, tuesday, wednesday or next week . I think its the first five days. But take a look at the ten year just to see how that is working. Were over three. So take whatever you want away from that. We also have some headlines for you this morning. Here is one indication of the brand new year. A rally for gold. The metal advancing this morning after suffering its biggest annual loss in 32 years in 2013. Todays rally comes after gold touched its lowest price in six months. Also girls continue to look into the causes of this weeks train explosion in north dakota. The train carrying crude oil from the States Bakken shale excollided after colliding with another train. Authorities are considering the possibility that the fires were caused by additives or possible mislabeling of the products being carried. And the northeast bracing for a severe storm, we saw a little bit of snow on the way to work this morning. Heavy snow expected to begin falling this afternoon with accumulations of a foot or more in some areas. Forecasters saying the storm will be accompanied by extremely frigid temperatures. And we have a live report from the Weather Channel in just a couple minutes. Im looking it up. Mark holberg says its the first five days, but he also says you shouldnt pay much attention to it. 85 of the time you have a massive up year, the next year is still up, but only up about 7 . And that was over a 50 some odd years that that math actually holds up. We didnt see not much of a january effect where people are buy being the stocks that they sold that they had losses on last year. You know how people always do that. But i would say gold is showing its own january effect temperature anyone who didnt take capital losses at the end of the year, every had capital losses in gold. You take them, maybe so today you buy just because youre no longer taking capital losses. So people were selling into the end of the year. Now its up 15. I would not say that suddenly that means gold is going back up again. Because people that have been selling because of the tax loss situation would i dont know. What was the other thing . Oh, yeah. 7 . No, im looking for 30 again. Another 30 . Kre. Yes. Its wishful. Im not saying its going to happen. Ill say 11 . Ill take 30 . Sure. I dont know de blasio would take 30 . That would just make things worse. Nobody needs that. These rich people getting richer, are you kidding me . Thats the last thing we need is prosperity with those fat cats again. So good to be back. We also down graded you to undersecretary instead of deputy secretary. Thats okay. Its happened before. Well talk to him more in a moment, but among some of our top corporate stories this morning, it is truly a happy new year for fiat. The Company Announcing that it has bought the remaining stake in chrysler. Phil lebeau has more from chicago. This comes as a little bit of a surprise. Some were thinking that there might be an ipo for that 41 stake of chrysler and actually it was only going to be a 17 stake of chrysler, but almost everybody in the industry was saying that wasnt going to happen. Sergio was going to get his deal and he did. Here is the deal that fiat has struck with the viva trust which is the health care retiree trust for the uaw workers. The price 3. 3 billion. The other half coming from kisler. It will be paid to the veba trust in four installments. Fiat gets the remaining 41. 5 stake of chrysler and the deal ends plans for an ipo that were being considered. They may have an ipo somewhere down the road. Well talk about that in a little bit. This gives fiat complete ownership of chrysler. They want the chrysler cash flow to help with fiat restructuring and expansion into europe and asia. After the deal was announced yesterday, search i dont said in the life of every Major Organization and its people there, are defining moments that go down in history books. For fiat and chrysler, this is clearly one of those moments. You might say what does the veba trust get out of this which sides from the critical cash it needs. It also has agreed to further commitments for supporting fiat and chrysler in terms of world class manufacturing, getting them all on the same page. This deal is expected to close by january 20th. Take a look at shares of fiat over the last year, up 62 enjoying a nice move along with the rest of the auto sector around the world. And we mentioned about the ipo. Nobody thought that that ipo that was being proposed by the veba trust was ever going to fly. I talked with one banker about two weeks ago, he chuckled at the idea of this ipo ever coming to the market. What we could see, maybe a couple years down the road, is some type of an ipo where a portion of chrysler is brought to the Public Market to further Fund Expansions for fiat and chrysler. Of course they wont be talking about that right now. For now, all theyre talking about is the cash flow coming in to fiat and how much it will help both with fiats restructuring as well as the expansion of chrysler. Back to you. All right, phil lebeau, happy new year. You, too. You didnt go to that game yesterday, did you, the winter classic . Were you you nearby . No. Were getting a nice dose of that snow that they got. And youre getting it soon. That was so cool. Absolutely. 105,000 people. I mean, it was really cool. And they had to keep shoveling the ice. And we get one of those Outdoor Games here at soldier field. I cant believe i sat there watching this whole unbelievable game. Ended in a shootout. It was a really big deal for detroit, too. Well, it was in ann arbor. But 105,000 people and snowing the entire time. Great. Anyway, phil lebeau, i think of you as like a canadian. I guess its the name or something. Because you go away a lot and oh, dont you know. See . Comes so natural to you. Anyway, see you, phil. Thanks. 2013 was a year of highs and lows on capitol hill from a Government Shutdown to a budget deal, so here we are just two days in to 2014 already facing another debt ceiling in a little more than a month. What can we expect out of congress in the new year . Joining us this morning is former deputy u. S. Treasury secretary under tim geithner and for a while how long . Regular treasury secretary briefly. About 40 days i was acting treasury secretary. And during that time, didnt you say that a strong dollar was something that was in our best interests . Yeah, huge polly icy on that point. Can i find a dollar bill with your name on it . You cannot. Darn it. But if you take one out, im happy to sign it for you. Give me your feeling when the deal was done between paul ryan and patty murray. Were you happy, did you think was it a watershed moment . Or was it just the best we could expect . I think it was a nice piece of work. Itle rod back the sequester for a couple years which i think is important in terms of making sure we dont have too much fiscal drag on our economy. Ic it was nice that it showed at important moments the democrats and republicans can Work Together. It was nice that it sh important moments the democrats and republicans can Work Together. T was nice that it sho important moments the democrats and republicans can Work Together. T was nice that it sho important moments the democrats and republicans can Work Together. It was nice that it sh important moments the democrats and republicans can Work Together. I dont think it portends a big moment, that everything will be hunky dory on capitol hill in 2014. But it was important and congress now needs before january 15th to pass appropriations bill so that the government does not shut down. So the budget framework that was agreed and that the president signed right before christmas that applies to this fiscal year and then next fiscal year, that is to say through the end of september 2015 now needs to be transformed in to actual appropriations legislation so the government doesnt shut down. Apart from that were about to hit another debt ceiling problem. It was a rough year 2013 for washington. It was. For congress, but also a very rough year for the president. Now, people are trying to figure out which way he goes here in 2014. Some have said that putting podesta in means that he has no interest in working with congress. I think podesta made some jonestown reference which he apologipolapologized for later. But theyre saying now it will be all executive action. Anything he wants to do now will be executive action. Do you foresee that or do you think he will reach across the aisle and try to get along with some of the people that he clearly is not that big a fan of . I think the president wants to reach across the aisle and do some things that for years and years have been bipartisan items. Infrastructure, education, Unemployment Insurance, making are issue we dont have a debt limit crisis. Those are all things that for years, for generations in fact have been bipartisan items in washington. The president has laid out a set of things in each of those categories that he thinks that would be good for the the country in the near term and important for our economy over the longer haul. And i think hes asked republicans to work with him on those items. Immigration, as well. But with him and what they see as a weakened state after last year, theyre going to be very hesitant to cooperate on anything he wants to do at this point, dont you think . Well, well see. Speaker boehner took a different tone a little bit before christmas. The papers are talking about how he might be open to some progress on immigration reform. I think the republicans will have to decide what is good politics for them and from my perspective, i think from the administrations perspective, saying no to infrastructure and education and Unemployment Insurance, no to immigration is horrible for the country. They might just step back and let obamacare play out. Is it 2014, is that the Congressional Election . Every two years, joe. Is that going to happen this november . It is. So now its this year. And thats when 2016 already starts. I must say, it cant be that a party in the united states, one of the two big parties, is only about something only against something and not for a southwest things that are important for the country. Unless they see the current agenda as us slipping and sliding into a european style welfare state and would like to stop that. That might be what some are thinking. But the deficits in this country, our Government Spending is at its lowest percentage of the economy since the eisenhower administration. I dont think that assertion has much merit. Sbha your take on de blasio . And to the september that he represents some larger vision of the democrats, the extent that you think that bill clinton, Hillary Clinton are trying to line up behind him or with him. What does that mean for the way things are governed frankly in washington . De blasio made the point that this country has suffered from increased level of inequality. And thats not good for anybody. So its not about class warfare, not pinning some vthis versus t but it is saying in order for the country to grow and to be the country of opportunity, we have to make sure that the people who are in the worst off positions are attended to. And thats about Unemployment Insurance and about other things that are critical. Those are temporary measures. I wonder sometimes if that takes the focus off the bigger structural problems that need to be corrected to address some of those very things. There are some long term structural issues that havent been tackled and that are really big tough problems. Education, job training. Making sure that our workers manufacturing jobs. Absolutely. We hear this i think its kind of a trite expression. It brings us back to the chicken egg argument. How do you grow from the middle out . You need to get people in the middle class jobs. You need a vibrant private sector and you need 4 will growth and then it starts working. You dont start by saying lets take what these people have and move it over. We may talk about this later in terms of Unemployment Insurance, but the best way to make sure that we do get to that 4 growth and creating jobs is to make sure people are consuming things that cause businesses to invest and hire. But thats a job. Both of those things need to happen at once. This is not an either or. When you have people who conditions consume, who conditions buy things, it means that were not investing, businesses are not growing or hiring in order to fulfill that demand. So we have to figure out why they arent doing those things. And it comes to tax reform and regulation. No question. All of those things. A lot more to talk about. And hell be with us for the next hour and 45 minutes. When we come back, the snow has started to fall in the northeast. Blizzardlike conditions expected with as much as a foot and a half snow forecast. Well get the latest forecast from the Weather Channel. Squawk box will be right back. And now my journey across the country has brought me to the lovely city of boston. Cheers. And seeing as its such a historic city, im sure theyll appreciate that geicos been saving people money for over 75 years. Oh. Dear, ive dropped my tea into the boston harbor. Huhh. I guess this partys over. Geico. Fifteen minutes could save you fifteen percent or more on car insurance. Welcome back. Up to 40 billion people are bracing for a major storm today. Alex wallace joins us from the Weather Channel. No doubt about it, a major storm system to impact us. Well be dealing with this over the next 24 to 36 hours. Big time impacts will be felt, potential blizzard conditions for parts of the northeast including the cape down towards long islands, as well. Not for the big cities boston and new york, but certainly piling up with the snow and it will be windy making travel a big mess out there for us. And you can see how things will be fairing. This is the forecast around boston for the next few days. Thursday into friday, 20s. 13 by friday with the snow. Were talking about issues here, snow totals a foot to a foot and a half. So well be dig out of this. At least for the weekend, well ebb enjoying dryer skies. Next week, well deal with rain and then another blast of really cold air. So were in the heart of winter. Doesnt seem to want to go anywhere anytime soon. Back to you. Minus 3 . For real . Get your canada good coat out. Its that bad. Coming up, who will be responsible for bringing microsoft to the next level . Who is on his short list when squawk box returns. [ male announcer ] this is the story of the little room over the pizza place at 315 chestnut street. The modest first floor bedroom in tallinn, estonia and the dusty basement at 1406 35th street. It is the story of the old dining room table at 25th and hoffman avenue. The southbound bus barreling down i95. And the second floor above the strip mall at roble and el camino. This magic moment it is the story of where every great idea begins. So different and so new where those with endless vision and an equal amount of audaciousness believed they had the power to do more. Time and time again. And then, it happened at dell, were honored to be part of some of the worlds great stories. Stories that began much the same way ours did. In a little dorm room 2713. This magic moment the search for microsofts next ceo continues. It will probably be one of the big topics in 2014. Joining us you now, associate dean for executive programs at the yale school of management. Also a cnbc contribute tore. Happy new year, sir. Happy new year to you you. So who do you like . Give us your short list if you were whispering into the ear of bill gates. Some people might be whispering Michael Bloombergs name as hes probably looking for somewhere to go. But i think john lajaris is doing a super job. He knows the southeast. Hes acting a little creatively unconventional these days revving up things at tmobile, but i think alan mulally should be the frontrunner. There are internal people that steven eilhoff gets rumored, the nokia guy, but performance there was just terrible. Revenues were down 40 , profits down 90 , they became junk bond status. So i dont see that. Tony bates, ceo of skype, i dont think is quite ready for this. I think mulally has been revolutionary at ford. Sort of the one ford idea that he brought in about unifying the place is just what microsoft would need. Hes an engineers engineer. People everywhere from steve balmer to some of the top r d people at microsoft love alan mulally. But how much do you need a revolutionary . Rather than squaus a manager. I dont mean to say alan mulally is just a manager, but to the extent you want soalmost a technologist. Im just suggesting whether you need that or you need a professional manager who will whip this company into shape in a different way. Well, i dont think they need somebody to come into give them pets. Com or any of the e toys or whatever else is out there. My space. Weve had some young people that have been quite revolutionary and things went nowhere. I think somebody who has taken on an enterprise this size, i worked with digital equipment when it was this size and they needed somebody to stale liz e e stabilize the place. They need somebody who can bring in i think some sense of coordination. The place. They need somebody who can bring in i think some sense of coordination. Place. They need somebody who can bring in i think some sense of coordination. They have very creative people. Xbox did quite well. Nobody has generated the profits for owners that balmer has. I think the market has been a little odd when you have things like bit net going up and down by 50 a day. Who knows how to he had radio the stock market. But everyone the stock is up 40 . Will steve balmer go down when historians write about microsoft, will they look upon him fondly, is it a ten year mistake . I think hell be recorded very positively in history. He took a company that was basically software in the box driven and revolutionized that. Took this big business and changed the battleships direction basically to go on to services and devices. It has been hard to pull off and hes heavily there. Moses never quite got to the promised land. Joshua had to get them there. And steve balmer has done a comprehend job of taking this company quite a long way. Products have been very successful. There are many failures under bill gates, but things have been going quite well. Mulally is the guy to develop an internal success sore and wouer or deal. Thanks very much. Well talk to you soon. Still to come, the garden state scandal on internet gaming. Its been more than a month since new jersey went live. How the casino is cashing in. And check out times square. The new york city area getting ready for a winter blast. Welcome back. How is everything . Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Welcome back. Here are some of your top stories. Signing an agreement to buy the stake in chrysler it doesnt already own. They will acquire the 41 stake from a retiring health care trust. 3. 7 billion in cash. Once that deal closes, chrysler has committed to give the trust an additional 700 million. The big story this morning, the snow starting to fall on the east coast. A major storm from the midwest to new england expected to go on until friday afternoon. Estimates for snowfall amounts could top more than a foot in some regions. So it could be an interesting commute tomorrow morning if not tonight by the way. And then the rescue of passengers from a ship stranded in ice for more than a week is now under way. A helicopter from a chinese ice breaker is transporting the 52 scientists and tourists on board to a nearby australian vessel. They have been trapped since christmas eve. The crew will remain on board after the passengers are evacuated. Cara swisher is launching a new media company. Rec reco. Net is being launched. Windsor is an Investment Firm. The Holding Company is Revere Digital and signing a separate deal with nbc news to partner on technology coverage. It takes effect today and they will be appearing on cnbc later this morning on squawk on the street to talk about it. Lets look to fixed income for a moment. It may have fallen flat in 2013, but the taper news could change the bond landscape in a big way. Lets get more on how to play the bond space and where rates may be headed from here. Joins us is president of fixed income Capital Markets at raymond james. And kevin, is it hard to find might be who positions rates are going down at this point . Yeah, at this point it really is. Were looking towards 2014 and here we are in 2014 with the likelihood of rates going up and down the curve. Mostly going to focus on the long end as the fed tapers and quits buying on the long end. So while rates will probably be stale on the short end, were being looking for a slight move upward on the long he said of the market. So what does that mean as an investor . Is this the time to buy . We spoke with someone the last hour who said that he wouldnt nicely buy treasury this is year. Wait up they got to at least 4 . And im not sure youll get 4 in 2014. Really what the local idea behind qe was to get investors out of treasuries and into more riskier assets. Whether those be equities or Corporate Bonds or even Municipal Bonds. So that has done what its supposed to do. What were looking for is a fairly slow olympic in rat fair fairly slow increase in rates. There nothing magic about 6. 5 unemployment and theyre worried about inflation, not increasing, but the lack of inflation. So as long as that remains low, bonds will have a slow ride up. Our guest host is neal wolin. Neal, you have to have been watching what the fed said in terms of the takeover. What did you think of the whole policy change . I think they did what they have been saying for a long time, which is they have been watching the data. Ic they feel like the economy is starting to move sufficiently quickly that they can start taking these moves. I think what is important to remember is its not that they hit the braekes, they have just taken their foot off the accelerator. They will look at every bit of data that comes in between now and each fmoc meeting and decide whether that progressive relaxation is the right thing to continue with. I think they have set out a basic framework for how they will do this and without that being perturbed by some exogenous thing, whether something seas or big weather events on a big catastrophe in washington, i think we see now a path that is likely to move incrementally and reasonably slowly in a very stroll controlled way. How well do you know january either yellen . I know her reasonably well. I knew her in the Clinton Administration and again when i was deputy treasury secretary and she was at the fed. And what do you think about her taking over the helm . Shes a very smart, very talented woman. Very thoughtful, very systemic. I think its hard to position about what has been going on at the fed without her having a strong involvement. And i think shes kind of extra our ordinarily well qualified. If you think about her tenure at the fed before, president of the San Francisco fed, world class economist, i think shes incredibly well positioned to work through a very complicated set of issues. Dunk its fair to say shes more dovish than ben better in an iky or do they see the world very similarly . I think they see the world in broadly similar ways. Maybe little increments here or there. But i think what weve seen over the last year or two at the fed absolutely reflects her will input. And you can see the level to which shes been publicly stating shes comfortable with it. I think what that is likely to mean, there wont be a big veer. There is a path that she feels strongly about. Im trying to figure out what the ten year will key off of. Is it will it move if the economy strengthens, will that cause to go up . Or will it be the historical turn versus inflation . Will inflation have to go up for it to go up above 3, or is it possible that just by xiting that people get nervous with the fed, they have a huge balance what if nobody wants to buy our paper because theyre just they look at our long term obligations, china says we wont buy that. And its a supply demand thing. Without the fed buying 90 of our debt, maybe there is no one there to buy it. Which of those three scenarios causes rates to go up . Theyre all good questions. What i would say is that the taper will have some effect as the fed reduces their buying of ten years, it will affect the market in a certain way. Now, that alone wouldnt drive the ten year above 3. 5 . It has to be combined with mostly its Economic Growth and more importantly, to get towards 4 , it has to be inflation. So you have to take all the slack out of this. So its somewhat of a boring trend between 3 and 3. 5 at the max. Unless inflation surges. All right. So where would you be telling people to invest right now . Call me crazy, but i still like the Municipal Bond market a lot mainly because of the after tax yields. There has been a lot of news about state and county municipal credits that will yield 100 to 150 basis points over the treasury without much credit risk. If youre in a 35 a tax bracket. So whether youre a high earner or a High Net Worth investor, i still like high quality Municipal Bonds. But you feel comfortable with the aa rating . You think that its worth the paper its printed on . Absolutely. Thank you. This has nothing to do where you you with the New York Times. Normally i try to tie you to it, but i wouldnt. I want to give kudos to the New York Times just in that at least we know where they stand now on things. They have come out of the closet. They had to eventually. They say certain things, but did you see this, snowden is now theyre calling him a whistleblower. Considering the value of his leaks. He should be offered clemens city. So they are theyre saying what they sort of implied all along with their front page coverage, but theyre just coming out and saying it right now. And that is a stand. This is a very divisive issue. Is he someone that is a traitor and should go to jail . Even the president and the Obama Administration still says no way clemency. If he comes back, hell be prosecuted. The times is going out on a big hlimb. So maybe 2014 will usher in a new era of transparency at the New York Times. And im not saying anything to you about this. Im not going to say anything either since i had nothing to do with the editorial page nor the benghazi coverage or you dont agree with this . I dont have views at the moment. I have no views at all. I just have a low bottom any. But that is pretty big. Its unbelievable. Bottom any. But that is pretty big. Its unbelievable. I just h is internet gambling paying off for new jersey . Well get the first word. And if you gambled on gold in 2013, well, you lost your shirt. Down 28 . Worst year since 1980. Im only in my 60s. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, it could save you in outofpocket medical costs. Call now to request your free decision guide. Ive been with my doctor for 12 years. Now i know ill be able to stick with him. [ male announcer ] youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. See why millions of people have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. Dont wait. Call now. Welcome back. Take a look at the futures. They have been a little below fair value all morning. Youre still looking at the dow futures down by about 31 points. S p 500 off by about 4 points. Well talk about internet gambling in new jersey in a moment, but first check out some of the eye popping numbers. China sin city raked in 45 billion this revenue in 2013 to remain the worlds biggest gambling market. According to gaming regulators, they took in 4. 2 billion just in december alone. Back on november 26, new jersey became the third state to allow online gambling. Borgata is leading the charge. Is the gamble paying off . A lot of gambling joining us is tom balance, president and chief operating officer for the Borgata Hotel casino and spa. How do we figure out is it good for you . You want people to come to the casino, right . Its been going great. Borgata was uniquely positioned to be right at the forefront primarily because of the efforts of our managing partner. Boyds strategy is to engage in Online Gaming nationwide. So a lot of the foundation for our good success was already laid. We were hunting for a Service Provider when others were, we were all set up and go. But would a stand alone borgata have done it or would you have seen it as a threat to brick and mortar . We would have done it one way or the other. And its not a threat to brick and mortar. Some of the great news that has come out of the first month of operation is that when we match up databases, the great majority of players who were playing online have not been to borgata in well over a year. And the vast majority have made fewer than two trips in the past year. So its a different customer. What is thedemographic . Online customer is younger and more male. What about income . We dont know that yet. We only have a month worth of operation. Because those that are anxious about this will suggest to you that this is a almost like a regressive tax, if you will, that thats what gambling ultimately becomes. Like a lottery. I think online we actually have more controls than there are in brick and mortar. You dont extend credit online. You have to fund your account somehow. You have to fund it maybe through your Checking Account or through a credit card. And youve got credit card limits. And checking limits. We know every bet youre making online. There is no way to come into a casino and be unidentified. Do you bet on football . No. What about betting on no sports . No, no sports about about. You can play other people online . Yeah, poker is a peer to peer game. Is that the most popular . Yeah, you get more poker play than casino play generally speaking. And a lot of the poker players also cross over during their session. A lousy business for you . Not online. B but in the actual casino. It has a lower margin, but we have about 51 of Atlantic City market. Poker is all about having enough players. Your players are your liquidity. You dont bank the games. The other customers do. So borgata, we have most of the players and it makes for a good game. Why cant i bet on sports . When new jersey wins its lawsuit where the federal government im getting scared because when we do the final pour pools and stuff, whatever im getting scared because when we do the final pour pools and stuff, whatever im getting scared because when we do the final pour pools and stuff, whatever i have the most minor interest in all 64 games and i watch every game like i was on the edge of my seat. If i was betting on games, i would love sports. Now im nervous that i might do that and i donyi dont want to that. For the foreseeable future, it wont happen in new jersey. Our governor is working hard on it. Hes been great for this have i. And has been pushing and is doing everything possible. Playoffs of course this weekend. A little soon for us. The governor has also said if Atlantic City cant show that it makes a profit that it kicks back to the state that hell look at potentially opening casinos. I think its five years hell look at opening casinos in places like the meadowlands. What would that mean for competition . That has always been an issue. Atlantic city has lost a lot of share to convenience gaming. Pennsylvania and new york. What the folks in Atlantic City need to do is what weve done at the borgata. You have to build a product and provide a product and service that is worth driving 90 minutes for instead of driving 15 minutes. And its up to us in the market to create that. Now, we feel great about it. Our first 11 months of this year, which is all weve disclosed so far, is up from 2012. Thats only the second time revenue has been up in the last seven years. How much . We were up about 3 at the end of the 11 months. You get some big names. We have robin thicke coming, rob thomas coming, three doors down, Jerry Seinfeld is playing. Thats what you do in Atlantic City, you need to have a compelling experience or people will go to the place next door. You have suites and stuff, leak hangover type suites . If you need one, weve got one for you. Thank you for the tip. Over the holidays adds for Online Gaming, i cant keep them apart. Is yours branded . Well, actually, i think well be very successful. The early results only way really to tell right now is there is a webster advice that reportsonline poker traffic so the gamers know where the games are. And we have about 50 of the network. And i think thats primarily built on the power of our brand. Its built so that for ten years so some brands that youve never erd heard before. So theyre work hard to build the brand. Theyre associating themselves with maybe professional sports team or celebrity. Our celebrity is the borgata. Thats what we have ourselves tied to. Weve built a lot of trust. How many total people have been on the site gambling some more or less than obamacare . I think weve had i guess weve got some mid 20,000 accounts created. Oh, about the same thing. Youre trapped in october somehow. Actually, they may actually know those 20,000 and make good on the transaction. Anyway, thank you. Appreciate it. Thank you very much. Im worried. Because lottery i dont do, but this i can see you getting sucked in. Bengals playing the chargers. If you want, ill help you you set up an account. I need the sports bug. Who do i have to talk to . Christie . No, hes as committed to it as you have to talk to congress, joe. They wont listen. All right. Thank you. When we come back, a lot of people are checking their 4 01 k statements to see if 2013 was a profitable year. But what if your investments missed the mark . Will there be a Second Chance in 2014 . Well put that question to our market strategist. Plus the director of the National Economic council gene speaker link will be our special guest and talk about the expiration of jobless benefits and what the buzz is on capitol hill. We give you three hours of joe, becky and andrew every weekday. But what are they like off the air . Find out what joe kernen has for breakfast next. Just by talking to a helmet. It grabbed the patients record before we even picked him up. It found out the doctor we needed was at st. Annes. Wiggle your toes. [ driver ] and it got his okay on treatment from miles away. It even pulled strings with the stoplights. My ambulance talks with smoke alarms and pilots and stadiums. But, of course, its a good listener too. [ female announcer ] today cisco is connecting the internet of everything. So everything works like never before. One boiled egg, let the dogs out, and drive to work. Im home before noon. I take my son to swimming lessons. So there are advantages. I was a stockbroker for ten years. I can remember wishing where all my heart that i could come in and then just talk about Business News. Thats exactly what i do right now. Youre lucky. To spend the morning around this table with us. What i was saying about having been a stock wrote broks wish that youre in the board room with your friends, but what you need to do is pick up that heavy phone. You have to keep calling, smiling and dialing and is heing. And youre asking people to do things that you hope will work out right. So what i wanted to do was not be a stockbroker, just be able to taublk and waste time. And then it happened. So incredibly i wonder how you you got over the whole newsy clause. Director called and said although what i wish i would have done was done like 50 pushups right before then because you can sort of get like a fake like the guys right before they go out in the weight room . Yeah, 50 pushups would have been like ten sets, so it would take a while to do ten sets of five. But, yeah, because i take i swim with my son. I loved the pictures. And i really like the guitar. And there are three dogs. Its kind of sad. Because you only saw two. Pongo hes upset . Well, he was below. He was there, you but you cooperate see him. Needs a better agent. Yours in the 8 00 hour. And well start running these. They will be on all the time. In the meantime, coming up, well talk about the first major deal of the new year. Plus did you mits tyou miss the of 2013 . You may still have a chance to recover. Find out how next. Also jobless benefits expiring last saturday for more than one million americans. Gene sperling will talk to us about the upcoming debate on capitol hill. [ male announcer ] this is the story of the little room over the pizza place at 315 chestnut street. The modest first floor bedroom in tallinn, estonia and the dusty basement at 1406 35th street. It is the story of the old dining room table at 25th and hoffman avenue. The southbound bus barreling down i95. And the second floor above the strip mall at roble and el camino. This magic moment it is the story of where every great idea begins. So different and so new where those with endless vision and an equal amount of audaciousness believed they had the power to do more. Time and time again. And then, it happened at dell, were honored to be part of some of the worlds great stories. Stories that began much the same way ours did. In a little dorm room 2713. This magic moment the new trading year is upon us. 2013 was the year of the bull. But what if you missed out . Were going to check out the secondchance strategy. The first major battle for capitol hill. National economic director Gene Sperling on longterm jobless benefits. And the first major deal of the new year, say hello to the new yahoo family. Fiat scooping up the rest of chrysler. This is literally 350 times more powerful than you. As squawk box begins right now. Welcome back. Welcome. And who is mclemore . Thrift shop . Welcome back, also on the new years thing. I dont know who any of these people are. Were back. This is cnbc. Were doing Business News and were first worldwide out of all the different outlets. Im joe kernen along with becky quick and Andrew Ross Sorkin. Our guest hosts this morning is neal wolen, former deputy treasury secretary. He was treasury secretary for 40 days and 40 nights . 40 days and it was while. And you we said you expressed strong dollars and absolutely. How long do you have to be to you have to be confirmed to you have to be confirmed secretary. Do you have a loopy loopy loopy thing you have to change . The jack lew no. Mine is unintelligible, but in a different way. Like some of the policies. Im sorry. More from neal in just a second. First, though, becky has a roundup of this mornings top stories. Joe, thank you. Fiat signing an agreement to buy a stake in chrysler that it doesnt already own. The italian carmaker is going to acquire the roughly 41 stake from the uaw for 4. 3 billion in cash. Once that deal closes, chrysler has committed to giving the trust 7 million. This ends months of negotiations and lets sergio combine the two automakers resources. Also, ford plans to unveil a solar powered concept car. The automaticmaker says the vehicles combined city mileage is about 100 miles a gallon. Right now, dow futures down by about 43 points below s p. The s p is off by just over 4. 5 points. Corporate buzz this morning, walmart now recalling donkey meat after tests show the product contains the dna of other animals. Earlier, it was said the product contained fox meat. The story gets weirder and weirder. The scandal was not that it was donkey meat. You were trying to buy donkey meat. That was what you ordered. What does the fox say . The scandal could hurt walmarts reputation for quality in chinas 1 trillion food and grocery market. Walmart plans to open 110 new stores there in the next few years. Do you want donkey . Thats the bottom line of it. I want donkey, i just want to be clear. Are there donkey dishes . I dont know. I dont know. Are we doing elephants or donkeys . Im just trying to understand. Oh, in that context we call them [ expletive ], dont we . We have some breaking news for you this morning. Macys and Martha Stewart living, they have finally resolved that ongoing breach of contract dispute. You will recall it. This has to do originally with jcpenney and ron johnson and Martha Stewart. Terms of the settlement werent disclosed and will not be disclosed. Macys says the financial asset wont be material to its wait a minute, macys had to pay them . No, no, i believe that theyre not its not going to be material to add to the earnings . Im assuming Martha Stewart is having to pay them. Thats my gamble here. But theyre saying whatever number that is is not material. And they say they look forward to continued Successful Partnership with Martha Stewart. I think thats tough. Although it adds that this does not affect a continuing case against jcpenney. This is one piece of the pie. Penneys and macys were in dispute about the marketing of goods made by stewarts company. With markets continuing to make new highs, is it too late for investors that remain on the sidelines in 2013 . Its always a tough question. Can they still get in now in 2014 . Here now with us, alec young, Global Equity strategist at s p capital i. Q. And christina hooper, u. S. Investment strategist and head up u. S. Capital markets Research Strategy at allianz global investors. One thing we need to learn over and over again, i think, as investors, if you marry your losses, you never sell and if you dont get in when you think its too expensive, like a year ago, can you get in now, alec . What would you tell somebody that missed 2013 . Yeah. You missed a lot if you missed 2013. Thats the problem. If you missed 2012, too, you missed 41 . Would you tell people to no, its uninvested, no money in the market. I wouldnt tell them to get fully invested today. I think the best you could tell someone in that position is to take a dollar averaging approach. We think were going to get a correction this year. We havent had a correction since 2011. What do you think . 10 . 10 . You say 20 or 10 . Correction is 10 to 20 . More than 20 is a bear. Less is pullback. You get over 10 , but less than 20 . I think were going to get a correction. Im not that smart to know it might be more than 20 . I dont know if it will be more than 20 or not. Most years, the s p will be down at some point from where it started about 6 or 7 . The last two years, we havent seen that. The market was never below where it was in the first of the year. But now would you say forget it, sell a bunch of it get out before the correction . You set up with someone who missed the whole thing. Someone who is fully invested, i would say stay the course. Most of it is probably in a 401 k . Most people in the markets, a 401 k or an i. R. A. Con textexc. Thats money theyre not going to need. But should they move it somewhere else . No. I think the reason theyre in index funds is because theyre cheap and most active funds dont beat the market. Theyre in the right place. So you dont know if youre going to be right. Thats the dollar cost. If its going down 10 to 20 , they shouldnt buy anything today. Youre saying you dont know if theyre going to be right . You never know. Thats the whole idea. Buy today . Investors need to have exposure to risk assets in this environment. Certainly if they dont have exposure, they need to be more selective about how they get that exposure. This is not going to be 2012 or 2013 in that the fed is not going to be supporting the stock market. Were now going to be segueing into fundamentals supporting the stock market. So i would argue that investors need to be more selective in this environment. Focus more on active management solutions. Focus more on specific areas of the market, for example, low valuation as well as those areas that can produce higher growth than the overall growth rate. Its going to be supportive. Its going to slowly taper and stay at zero until, you know, 2100 when apparently its going to be 4,000 degrees here. Theyre going to stay easy all year long. What do you mean theyre not supporting it . Theyre not going to be supporting it at the level they have been for the past few years. So there really will be a handoff. It will be gradual, but there will be a handoff from Monetary Policy supporting the stock market to fundamental supporting it. Which could be good, though, because of what it means about the underlying economy, then. Absolutely. This is the fed giving the economy a vote of confidence. So are you at, what, double digits . Where are you for next year . Do you think well be up . We think well be up next year. We think risk assets will outperform nonrisk assets, but we wouldnt be surprised to see high single digit, low digit double returns. Its not going to be 2013. It might not be a correction. It might be slow going all year long. Consensus can happen. Not many people were looking for 30 . But normally it doesnt happen. How would it surprise us, being more or not being up . Flat to down or up 20 or 30 would be the way the market would confound all of us, right . We believe the downside is flat. We believe its down 10 to 20 . No, no, hes saying the down side youre saying are you and 20 . Our yearend target is 11900. Were likely to have a correction. We generally have them every 18 months. We havent had one in three years. 1900 . Thats thats at 1848 right now. We might as well stay in cash. We established it a couple months ago. Oh, are you giving us old numbers . We put the what do you think now . Early november. Well, what do you think now . Fill it with 1900. Why not stay in cash . Who needs 50 s p points for all the risk . You have to keep in mind that, you know, every year inflation is eroding your money. You have to make 2 or 3 to stay ahead of that. You just made 32. 5 . If youre going to be at 1900, im not staying in. And i listen to you, i do everything you say, if you get me out because im looking for what is that, 52 points on 1850 . What is that . How much is that . 2 or 3 . But quarterback joe, can we why would you stay in the market for 3 . We are looking for a correction and from that level it would be a lot more oh, so today, after this huge move weve had, it doesnt look that great. But were not going to be at todays level every day going forward. I was much nicer to you. Thank you. Is that gobbledy guck or what do you think . Its not just about this year. Its about are you going to say that next to me. Its about looking out longer term. Investors are not going to be able to meet their longterm goals with current allocations. Its not just you. You see . You see what i mean . Equal opportunity. Yeah. Equal opportunity. Its hard. Its hard to figure out what to do. Do you remember who said that . S saturn. In a lot of way eggs, its riskier being in cash than i want another 30 . I dont know whether its going to happen. I want mid 90s. Thats what ive been jonesing for for 30 some years. 3 9 the 0, 9 the 0, 90. Up next, we have the squawk newsmaker of the morning. National Economic Council director Gene Sperling over jobless benefits. Squawk box will be right back. I have an associate that met with, uh, an unfortunate accident. While hes been incapacitated, somebodys been paying him cash. Now, is this your doing . Aflac . Now, if i met with some such accident, would aflac pay me . Nice. This is your stop. [ male announcer ] find out what aflac can do for you and your family. Aflac . [ male announcer ]. At aflac. Com. I needed a new laptop for my premed classes, something that runs office and has a keyboard. But i wanted a tablet for me, for stuff like twitter and xbox, so my downtime can be more like uptime. Thats why i got a windows 2 in 1 which does both works as a laptop and a tablet. So i can manage my crazy life, and also have a life. [ beep ] gotta go. Welcome back, everybody. Longterm Unemployment Benefits expired last saturday for 1. 3 million americans after congress failed to pass an extension. Joining us to talk about the impact this could have on the economy is Gene Sperling, the assistant to the president for economic policy. Gene, thank you for being here today. Thanks for having us. What do you think this means . Lets say, over the First Six Months of this new year . In terms of the Economic Impact of cutting off emergency Unemployment Benefits, i think what the Congressional Budget Office has estimated is it would be about 0. 2 of growth, about a fifth point percent of growth and about 200,000 jobs. So theres no question its bad for the economy. But lets think about those 1. 3 million workers and their family. They are now in an economy that is improving, the job market is improving, except for them, except for the people who are longterm unemployed. They are facing probably the toughest job situation weve seen in a long time. And we as a country have never cut off emergency Unemployment Benefits when longterm unemployment was this high. So to simply allow 1. 3 million workers and their families to lose their benefits between christmas and new years, really, is not does not reflect either economic common sense or our values. And over the course of the year, it will be 4. 9 Million People who will be affected. So i do want to make clear, emergency Unemployment Benefits should not go on forever. They taper off naturally as the Unemployment Rate goes down. What were simply saying is this is not the time or the moment for the economy, for jobs, but certainly not for these families who are only eligible for these benefits if they are actively looking for work. Yeah, gene, this probably points to a much bigger problem. Youre right on the timing. But these were emergency benefits. They will roll down over time. I think more than anything, you look at the question of what happens to the people who are longterm unemployment. Thats a lasting problem. Anytime you have a big recession, you have the people, the longer theyre out of work, the less likely they are to be the ones who get hired. Is there a better way to go about helping them, too . I think this is not the only thing you can do. One thing you find is that people sometimes worry about the disincentives of Unemployment Benefits, but you do also find that the biggest problem or one of the great problems we have is people are longterm unemployed who drop out of the market. Actually, emergency Unemployment Benefits encourages more people to stay in the market, in the job market because they lose those benefits if theyre not actively looking for jobs. But this is a temporary lifeline for those people. While we, of course, the white house is going to point to the good news in the economy, the improvement in gdp and unemployment, were not going to put a gloss over the problems americans are facing and be very clear, longterm unemployment is a more serious problem than its been in decades and decades. We as a country are going to have to do more. One thing the president has had me doing is working with a lot of ceos around the country to make sure that were all working together and that companies dont have unintentional screens that might discourage longterm unemployed workers for getting at least a chance for a new job. When you said that, weve never had longterm unemployment for this high for this long, it made me think thats very telling right there. You have the president s ear. Some of the longterm stuff we need to do, you just talked about ceos and what youd like them to do. How about some private sector stimulus with a Corporate Tax reform or bringing back some of the money abroad, new territorial system. How about some things like that on the front burner of this administration right now. You were in the Clinton Administration. You would probably be the first one to want to do this. Are you getting resistance . You know, not at all. I mean, yes, we have to do we have to fight this at multiple levels. You need to make sure youre not cutting peoples benefits off so they cant support their families while looking for work. You need to work with the private sector. But yes, you have to make job creation and getting greater demand in this economy a key goal is one of the reasons we fought to replace the sequester. But let me give you something the president said that deserves more attention this year than it goes when he said it. In chattanooga, the president said lets do a grand bargain on jobs. Why not do together as one package Corporate Tax reform that would bring Corporate Tax rates to 28 , 25 for manufacturing, at the same time do it with a onetime passage of infrastructure. Now, i have a lot of ceos that come into my office who say they want Corporate Tax reform, but they also think we should be modernizing infrastructure. That makes a lot of sense for job creation. It makes political sense. You could see democrats and republicans coming together on a grand bargain for jobs, Corporate Tax reform together with frinfrastructure. So how about squawk box making that their mission to get that grand bargain for jobs this year . Private infrastructure for things, that would make sense. I dont know why we cant. Yeah, what happens . That sounded very promising. What was it that held that up last year when it was introduced . You know, i think when the president spruintroduced it, th speaker came out and criticized it. I think it was a normal political back and forth. But i think youll hear about this from the president again because it makes good political sense. Weve had all the grand bargain discussion on deficit and reduction. We need some grand bargain discussion on jobs. As you said, in 1997, you know, you had that kind of grand bargain. The republicans got lower capital gains, bill clinton got more education. The Childrens Health initiative. President obama has put forward that keep of grand bargain for job creation now and i think we need to give it a chance. Gene, on the Unemployment Insurance, one other question. At what point would you say at what Unemployment Rate in the country would you say, you know, we dont need to do this . Well, i think that the way its designed right now is you get extra benefits if your state is over 9 . So if youre in rhode island or nevada, you get 9 , it needs to go on. You get extra benefits if its under 7 . As the Unemployment Rate goes down, the way emergency unemployment is designed is that it tapers off to use a popular phrase right now. So, of course, this cant go on forever. Were just simply saying, 7 and historically high Unemployment Rates is not the moment to do this. We certainly hope it doesnt need to be extended beyond this year. But we definitely know it needs to be extended now. If we werent down to 6 by the end of next year, and im not sure economists expect that will be the case, do you think there will be another argument again that we need to continue this . This is an issue about helping people who at some level need the help, right . Thats the argument youre making and im just wondering sort of whats the data point on which you say maybe they dont. Well, you know, i think you can look back historically. I cant predict what its going to be like at the end of this year. I think, yes, as you start to get into the low 6 nationally, the case for that will be less strong. But i think we as a country are going to have to look for other policies like Corporate Tax reform and infrastructure to get more job demand. But probably some special partnerships with the private sector and the Public Sector to help people who have been out of the workforce for a long time. Because we know if youve been unemployment for a year or two years and you keep staying out, you probably never recover. These are our neighbors, our community members. We need to Work Together to try to get people back in the workforce any way we can. It will make a big difference for them and their families but also for our longterm labor force. Hey, gene, i just went back and looked up some of the things that were said about the president s proposal when he put that forth, the idea of simplifying the Corporate Tax structure and lowering the numbers to 25 and 28 . It was something the business round table didnt agree with at that point. John angler said all revenues from corporate base broadening measures should be applied to corporate rate reduction and modernizing our International Tax system, not for unrelated spending. That looks like thats where the resistance comes from, too. Yeah. But i think when people have understood the proposal, theres been more agreement. What we say, we say any longterm revenue that is permanent, that revenue would be used to lower rates. But Corporate Tax reform also brings in some onetime revenue that you cant use to lower rates in the longterm. That one time revenue could be for infrastructure and you could still have revenue neutral Corporate Tax reform that lowers rates in the longterm. Look, its a compromise, but its a smart compromise and we have to compromise in divided government if were going to move the economy, get more jobs, help get growth going and get more jobs for these longterm unemployed so they dont rely on emergency extended benefits. Wow, with youve made some good resolutions, gene. That was a different gene today. Hes got some good ideas here. All right. [ sneezes ] [ coughs ] ive got a big date, but my sinuses are acting up. Its time for advil cold and sinus. [ male announcer ] truth is that wont relieve all your symptoms. Hmm . [ male announcer ] new alka seltzer plusd relieves more symptoms than any other behind the counter liquid gel. Thanks for the tip. [ male announcer ] no problem. Oh. And hair products. Aisle 9. [ inhales deeply ] oh what a relief it is. Coming up, breaking economic data. Were minutes away from the closely watched weekly jobless claims. As we head to a break, take a look at u. S. Equity futures. We have some red arrows across the board. Back in a moment. And the dusty basement at 1406 35th street. It is the story of the old dining room table at 25th and hoffman avenue. The southbound bus barreling down i95. And the second floor above the strip mall at roble and el camino. This magic moment it is the story of where every great idea begins. So different and so new where those with endless vision and an equal amount of audaciousness believed they had the power to do more. Time and time again. And then, it happened at dell, were honored to be part of some of the worlds great stories. Stories that began much the same way ours did. In a little dorm room 2713. This magic moment became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. Welcome back to squawk box. Were just seconds away from weekly jobless claims. Rick santelli is standing by at the cme in chicago. Steve liesman at the desk in chicago. Rick . The first initial jobless claims of the year actually dropped 2,000. But its because of the revision. Originally leased at 338, now at 341 for last week. That brings the 339 current read down to if we look at continuing claims, basically a oneweek different time frame, moved a bit lower from 2. 93 to 2. 83 million. So a decent drop there. Were going to get ism data. Happy new year at 303 on a tenyear. Happy new year just shy of 4 . Boy, havent been able to say four in so long, it just doesnt feel right. Were going to continue to monitor that race. The only people that care about your Interest Rate is to see what it ultimately does to change, if any, the balance of the level of the economy and all that, whether it makes a difference or not, were going to have to see if 2014 is going to be the litmus test for that. The dollar coming out of the chute strong. But you know what . My new years eve resolution is it isnt necessarily if the dollar is week or strong. Its the fact that most of the developed economies whose currencies we benchmark in this tight swing pool relative value, they all have some issues. So it just seems to pingpong back and forth. Happy new year, everybody, at the desk. Back to you. Thank you, rick. For more on that data, we have Steve Liesman at the desk who has been making faces. I want to talk about what rick is saying. How much is real and how much is memorex when it comes to the market here. Youve outdated yourself a lot. I know. And my kids dont even know what a cassette tape is. Theres been a fundamental reset of what happens in 2013. When i keep reading about what people say about last year, they talk about the weak growth year. What the reality seems to be is that the third and Fourth Quarters seem to be up near 4 in the Third Quarter. And i just came in and looked at a forecast for the Fourth Quarter, and joe levonia says 4 for the Fourth Quarter. Sh a second half year that is double what it was. What didnt happen in the Fourth Quarter is the inventories that did not seem to have run off could be in the First Quarter of this year and the consumer has been strong maybe for two reasons. Maybe were seeing an effect from higher stock prices. There is a story in the times about the wealthy spending. It could be a lag according to Ian Jefferson of the Lower Energy Prices in the summer showing up in spending in the fall. And maybe the shutdown helped. Combined with the sequester. Joe is the one making faces. Joe is im not making faces. You have a smirk, joe. Im not talking about the shutdown. The shutdown the shutdown and sequester, thats the fourth joe is making an ironic point. But here is the thing. I dont know what this means for stocks in the future. What i think it may mean for stocks in the present is that theres more fundamental Economic Growth underneath the current level of the stock market and more fundamentals underneath the current level of job growth than it appeared when you think about what 2013 was before it happened in the second half. Lets play a little game, steve. Look in the Rearview Mirror in 2011 and 2012. Did you see any four handles in gdp . There might have been in 11, i think, or 10. But my point is, i hope youre right. I know you do, rick. We have been there before and we all know that building all these widgets, all this inventory had a huge amount to do with it as alice from but rick the purchasing manager. I want to interject which is i would be concerned about the inventory levels, too, but i have not seen a surge in inventory to sales ratio. Were both market guys, rick, more or less extent here. But we cant secondguess the guys who are doing the ordering. They did the ordering. They brought the stuff into the country. They ordered for the manufacturers. To save it, they overordered to secondguess the market. It appears like they were right. Youre a fed guy. Hes a market giet. What are you talking about . Yeah, yeah, that one, as well. Fundamentals. Thats what i mean, too. But you know what im saying, rick . The 1 is 1. 20, Something Like that. The inventories sales did not surge. Weve seen a decline in the savings rate. Ian shepherdson is concerned that we cannot maintain what . Ian shepherdson from pantheon, hes concerned that we cannot maintain the current level of spending by the consumer because Income Growth has not gone along with spending growth. What weve seen is a decline in the savings rate. So that remains a question as to whether or not the strong levels weve seen in the Fourth Quarter, october and november so far are whats in can be maintained. And now we havent even looked into the best part of this. Lets say it is more real than the Rearview Mirror forehandles that weve had that didnt get traction. Now what we have to do is we have to try to figure in, at this point, we have higher rates and only maybe the tip of the iceberg. Well have to wait and see what mother market does as this taper, which has been talked about and preannounced and everybody is nervous about it, but it hasnt even started yet. Its going to start soon. So all these issues are going to be have to handicap on the fly. Right. And lets include china and europe. And i think thats another one question mark, housing. Housing has already leveled off. We know weve had investors out there buying housing. The question is do they continue to buy . Those are the questions. When the 4 came out, you didnt let us enjoy it at all because you said the next one was going to be i was wrong about that. Tell me what the economists are saying. There were guys who were at a zero handle. Steve stanley is only one method. And it does not appear as though well have the inventory reversal that is expected. Coming up, the first stock of the day for 2014. And its like the the soup todays soup did he jour. Plus were going to take todays matters in our own hands. And we have one happy eagles fan. Hes getting ready for the big game on saturday with the saints. Jim cramers new years thoughts for the market. So ally bank has a raise your rate cd that wont trap me in a rate. Thats correct. Cause im really nervous about getting trapped. Whys that . Uh, mark . Go get help i have my reasons. Look, you dont have to feel trapped with our raise your rate cd. If our rate on this cd goes up, yours can too. Oh that sounds nice. Dont feel trapped with the ally raise your rate cd. Ally bank. Your money needs an ally. So you can see like right here i can just. You know, check my policy here, add a car, ah speak to customer service, check on a claim. You know, all with the ah, tap of my geico app. Oh, thats so cool. Well, i would disagree with you but, ah, that would make me a liar. No dude, youre on the jumbotron whoa. Ah. Yeah, pretty much walked into that one. Geico anywhere anytime. Just a tap away on the geico app. Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. For me, business is always sort of the new politics. There were people in journalism who wanted to cover the white house. I wanted to cover business because, to me, if you follow the money, it explains just about everything. This is a show where i get to have breakfast every single morning with the most interesting people in the world. Who does that . The most interesting people in the world. You got it. You guys. And neal is one of the most interesting people in the world. The twins said, daddy, whats a tree . And so you went out and went to central park. We went to central park. I love the pictures of the boys. They are cute. Yeah. We had fun. We put them on Hans Christian anderson, the big statue. My son went out as superman one year. And his suit made him look bigger. When you were running on the reservoir there, was thats the real thing, baby. That was the real thing. Why dont we see that here . I wear a little bit of a baggy shirt. Its a modesty thing and i dont want you to feel bad about your thing. You want that tweet we got earlier about the girl with the yeah. I saw that and i thought the same thing there. A stir iring anyway, lets get down to the new york stock exchange. Nbc. Nbc on saturday. Im worried, the bengals play the chargers, but then we play the broncos. But you go right into the fire with the saints. What do you think . The saints are a second rate team when theyre not playing in the dome. First rate team when they are in the dome. Im watching the weather like everybody else. As cold as it can be is going to change that from two to maybe four. What a great way to are we not psyched, jim . Its the most wonderful time of the year, isnt it . I love your team. I love your team because of the passing. I love your team because of the consistency. Its great to see someone else lose. I mean, geez, weve seen the same teams over and over again. Were sick of them. But also with coaches, i think that guy was pretty good. Andy whatever, hes in kansas. But wasnt right for philly. Suddenly, this guy comes in. And you havent felt this good about the eagle necessary a while, have you . No. Chip kellys team had four wins and look what theyve done. Its interesting to see maybe just a change of pace helped both teams. But its also one of those situations where were like, where are the ravens . Where r steelers . Its great. Watch green bay because green bay seems to come out of nowhere with rodgers. That can be a surprise. You saw that last play. That could be a surprise. Oregon looked like they missed your guy, too. Where they didnt show up for that game, they said im not in the National Title any more. We dont care about the rose bowl. Well, you know what . You werent in the rose bowl, so its great you dont care. Weve got a book. Squawk guide mentioned positively in the book is about trying to make money in a much slower fashion than you were able to make before. Using some big themes, holding on to stocks for a longer time and understanding that there are ceos that we all know who we think are terrific and bank with them just like you would bank with belichick, maybe you bank with reid or chip. All right. Thats a good that was a good theme, jim, to do it that way. This weekend is going to be big, joe. Isnt it . And then we have basketball coming, too, which is good. Im excited. Would you bet online on sports, jim inspect that scares me. No. I would be very scared. And i dont want to i dont want to give those companies my information. But at the same time, i do like igt. I like that stock very much. Im scared of myself. If i lost 100, i would just put 200. Id keep going until i made it back. Every single gambler i know is possessed about this idea that theyll just double up and double up and double up. Its too easy. I know. I dont want the opportunity to do it. Dont let me do it. Im not going to do it. Anyway, thank you. Thank you, guys. Well see you in a few. But every game becomes important that you bet on. Even when youre not betting on it. But not as much. Well, the sweet 16, i have a pool. The most unimportant database just to get one more point on the pool and im sweating out the last five minutes of every game. I had money on it. Says a lot. Coming up, will there be more upside economic surprises in 2014 . Were going to tackle that with former fed governor larry meyer. And which name will be the first stock of the day for 20 sh . Thats coming next right here on squawk box. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. Welcome back to squawk box, everybody. Well known Technology Journalist cara fisher and Walt Mossberg are launching a new incarnation of all things d. Today its being called rer cod. The company is signing a separate partnership with Nbc News Group to promote team up on technology coverage. Dont miss swisher and mossberg, coming up a little later on squawk on the street later this morning. Easy money for the fed may have been out in 2013, but 2014 will be a different ball game with the tapering taking effect now. Joining us now, larry meyer. Good morning to you, larry, and happy new year. Happy new year to you. What better way to start the new year than talking about the fed. Well see. Bring us inside the room for 2014, both in terms of what you think the tapering looks like and to the extent you think we see it in 2014, i imagine you might not, when will we see an uptick in Interest Rates . Were seeing an uptick in Interest Rates as we back away from stim use husband. Tightening is a ways off. But the second half of the year was very strong, about 3 growth. Next year is likely to be 3 or higher. So were firing on all cylinders. The labor market is improving, consumption, residential investment, business fixed investment. Fiscal drag is receding. Yes, its going to be a good year. And theyll taper probably at every meeting by an equal amount. If you say what is the mood around the table, i think its a pretty happen fomc, a pretty relaxed fomc. You dont think that there will be a month or two where they taper more than any other month and well see different signales from each month or do you think the whole sense is you have to stay at exactly the same rate. Otherwise, you spook the market . You dont have to, but why differ . What does one months data mean inspect theres a pretty high hurdle here to changing the pace. In particular, they want to stop asset purchases and theyre on a path to do it. The markets understand theyre on a path to do it. This is a situation where Monetary Policymakers, i think, really like this. They signal to the markets. The markets understand them. The economy is getting better. You know, there is you know, in some sense, this doesnt have to do anything. Larry, if the First Quarters data and the second quarters data starts to really go above as it currently exists, what do you think is the chance of them accelerating out into the Third Quarter or Fourth Quarter and finish this process more quickly than they are currently on path to do . Thats always possible. You know b its always a story about conditionality. But theres a pretty high hurdle to do that. And so i you know, you have to pick a number, 4. 5 growth . Sure. 3. 5 growth . No. So, yeah, i think that theres a very high hurdle to changing here. Simplicity, predictability, that is the order of the day. Larry, a slightly political question. Do you have any view about the Economic Impact of this Unemployment Insurance issue . Well, yes. We have a view with Macroeconomic Advisers that difference from the consensus. We believe its a very small factor in the outlook, very little impact on the Unemployment Rate or growth. And the reason is the number of people who are getting Unemployment Benefits has declined sharply and are still declining. So i think thats an overblown issue. Thats not the issue for this year. The issue for this year is receiving fiscal demand, moving from a 2 economy to a 3 economy. Thats the story. Let me throw one zigzag at you, larry. We had a number of analysts on one of whom could see a major correction. We could see a correction of as much as 20 . How will that ultimately impact the way the fed things about all the things theyre doing . Well, there are two things. Please dont bet on that. Thats a suckered bet. Number two, the fed doesnt react to the market per se, but a 20 in equity values, the fed would have to respond to that. The problem is, they wont respond by reversing purchases and purchasing more. No, theyre stopping asset purchases. Take that to the bank. They would have to use other instruments, forward guidance, etcetera. But theres not a lot the fed can do now. Lets hope for the best. Lets hope the forecast, which looks very compelling, works out. Happy new year. Happy new year to you, too. It looks like a foggy washington. Is the white house normally behind you . I have no idea. I have no geographical sense at all. I have no idea where i am. Happy new year, then. We know that from a lot of his comments about the fed, i think. No, im kidding, larry. Im kidding. New york times corrected this. They said in the rose bowl they had stanford playing michigan on the front page. Instead of Michigan State . And i said i wonder if they corrected that. They did. In the report that the front page was referencing, that that was the 1100th rose bowl, too. I read that yesterday and i thought, oh, man, it figures. Coming up, first stock of the day for 2014. And colorado goes up in smoke. I watched a lot about that. Theyre showing these big, skinky buds that people are running out. Marijuana sales for recreational use, long lines and visitors from around the country. I have no idea what that sound is. The marijuana editor of the denver post will be on squawk on the street. They have a marijuana editor. Yes, in the 111 00 a. M. Hour. They have a marijuana editor and theyre just hiring a marijuana critic. Could you teach our kids that trick . [ male announcer ] by not acting that way. Its how edward jones makes sense of investing. To prove to you that aleve is the better choice for him, hes agreed to give it up. Thats today . [ male announcer ] well be with him all day as he goes back to taking tylenol. I was okay, but after lunch my knee started to hurt again. And now ive got to take more pills. Yup. Another pill stop. Can i get my aleve back yet . For my pain, i want my aleve. [ male announcer ] look for the easyopen red arthritis cap. [ male announcer ] this is the story of the little room over the pizza place at 315 chestnut street. The modest first floor bedroom in tallinn, estonia and the dusty basement at 1406 35th street. It is the story of the old dining room table at 25th and hoffman avenue. The southbound bus barreling down i95. And the second floor above the strip mall at roble and el camino. This magic moment it is the story of where every great idea begins. So different and so new where those with endless vision and an equal amount of audaciousness believed they had the power to do more. Time and time again. And then, it happened at dell, were honored to be part of some of the worlds great stories. Stories that began much the same way ours did. In a little dorm room 2713. This magic moment [ male announcer ] even more impressive than the research this man has at his disposal is how he puts it to work for his clients. Morning. Morning. Thanks for meeting so early. Come on in. [ male announcer ] its how edward jones makes sense of investing. Is this the one that thats definitely it. Stock of the day, fiat, the eye ta italian carmaker reaches a deal with the uaw for 3. 7 billion in cash. Neal, its a new year, 2014. It seems like a lot of the things have really started to turn course after the Great Recession that we were in. Were looking at Unemployment Rates around 7 . Do you think this is really the year that we can say, okay, weve made it through to better times . I think it should be. If washington doesnt step on its own toes, i think the you know, the real economy is starting to pick up. I think thats going to continue to grow. And i think, you know, most of the news is positive. Labor markets, consumption, housing markets, all point in the right direction. I think this is potentially going to be a very positive year. If theres something that would trip it up, you think its washington or something external . I think either could do. Washington the potential to do that. And i think overseas, we need to continue to Pay Attention to developments in europe, which a are, you know, okay but still more work to be done there. So i think we are susceptible to these stocks. I dont foresee it, necessarily, but i think its something we should continue to keep watch out for. But i think to this point the fed has done a good job, would keep things afloat until they could hand off the baton to the real economy . You think thats really happening . I think its worked very nicely and i think theres a plan in place to unwind that. I think when the story books are written, i think the feds performance over the last four or five years will be a huge part of how we got ourselves from a huge crisis to a place thats pretty good. Much more satisfying ending to see bernanke being the one who starts the taper so that he can begin to unravel all of this himself rather than i think its a nice end to an extraordinary run as chairman. I think he did enormously well in the crisis. And all throughout the last four or on five years really, you know, made unbelievably good decisions that were hard at the time and i think are going to stand the test of history. It was kind of unbelievable to have a student of the Great Depression sitting in the chair when everything really went south. Extraordinary stuff. And, you know, it wasnt just him, but he was an incredibly important piece of it. This is a guy whose academic career was focused this and had this unbelievable opportunity in the moment of a real crisis to put some of that into play and to do things that had never been done before. I know you were only the acting treasury secretary for 40 days, but what do you think about the dollar this year, honestly . Oh, my goodness. Well, you know, i think the dollar is strong dollar. Doing pretty well for itself. Whoever it was said earlier on the show, a lot of these other currencies have issues associated with them. Our Economic Performance is strong and with the the dollar will do well. Strosstein is watching and hes mad at me for not saying not the eagles now. Its the band, ralph. I was talking about the dude who says not the i was talking aboue band. Thanks for being here. Make sure you join us tomorrow. Squawk on the street begins right now. Ill be bringing in a brand new year, brand new year so listen, dear, wont you meet me here good morning and happy new year, everybody. Im david faber with jim cramer, author of the new book get rich carefully. I have no idea how he had time to write a book. Carl quintanilla is off today. Lets take a look at futures ahead of first t