Transcripts For CNBC Squawk Box 20141209

Fastest rate in almost two years. Uk giant tesco is getting hammered, down about 15 on a profit warning. This joufr seas action comes after the dow and the s p 500 posted their biggest drop since late october. Commodities and tech stocks weighing on the markets. Crude oil dropping more than 4 . Check this out, its up slightly at this point. It closed yesterday at 63. 05 wti. Still sitting below 64 a barrel at 63. 65. Brent sitting at 66. 63. Weve been watching all of in this morning. As you check this out, take a look at the futures this morning. Not much to key off of in terms of positive news. S p futures off by 6 and the nasdaq down by 14. A huge part of that has to be the lead story in the wall street journal saying the fed is now signaling its going to shift on lower rates, actually raising rates in the next year. That takes away what some people had been anticipating, thinking that these low oil prices will take pressure off the fed. Job number changed everything in peoples minds. You get a series of in the 2s so we say we dont know if were in the 2s, so then you understand zero Interest Rates. Suddenly youre at 330 and you go, wait, 330 and no change. We went about a month where the markets were going um and the oil prices were going down. About a month, it was seen as good. Now i think were back to i like the china reasons. If asia was up today, you could have reverse today nuance of every one of those factors you mentioned. But today, its you know, we like well, lets see what they can figure out. Lets use this, this, this and this. But for whatever reason i have. Youve become bearish. Cash raising is all im saying. Profit taking. I dont think its wrong at some point. No r now you think 2015 is going to by a lousy year . Everything is perfect. The market is perfect and only things can go wrong from that point. The jobs numbers being baked in oh, the markets had reflected, but no, i think it did thats your own wall of worry. No, weve had a pretty good call of worry. Weve gone from 666 on the s p to over 2,000 and the dow, what was it . What was the lows, 8,000 or something . I think it was even lower. I dont think, but all the way to 18. Lets tell you about some of the Corporate News going on this morning. Apple shares drop about 6 from their 52week high that they hit last month. That means the tech giant lost 42 billion in just that short period. Thats what you get when you get a 700 billion company. Down about 25 from their alltime high in december. Check this out, the stock had drops 7 in the last week. And Diamond Foods is getting a boost. The snackmakers earnings are beating the treat. Were going to talk to the cfo of verizon rival at t. Were going to do that at about 6 30 eastern time. 6629. I saw it back in march 2009. Its weird how oh, march 2000 partnersh. I meant in the last one. I do a radio i didnt know. Im not going to say, oh, you know . Because i dont represent cnbc, you know . I said in my own opinion, that maybe its time to if youve got big gains in certain things, you have some money, if it pulls back 10 , 15 or whatever. So i dont know. Eunice has the story that is dictateding im not going to say it was the tail of the dog in asia today, but maybe the maybe were less of the tail and a lot more of the dog today. We are keeping off asia i think today, eunice. Yeah. We had a pretty bad day over here today. The shanghai stock market plunged by 5. 9 . This is the biggest oneday fall that weve seen since 2009. There is a lot of different factors in there affecting the markets, but the main trigger, really, was that the regulators here changed a room so that it would make it more difficult for invisiters to use low grade Corporate Bonds as collateral to borrow money. We started seeing selling in the bond market, then that spilled over into the forex market. So the currency was at a fourmonth low. Then that negative sentiment spilled over into the stock market. So that was one factor. The other factor, of course, is that the over the past several months and especially in the past couple of weeks, weve seen a lot of people put money into the shanghai stock market. Theres been, you know, a huge rally yesterday. We crossed 3,000. And so because of that, a lot of people were saying we were poised for investors to take profits, anyway. In addition to than well inest versers said they were concerned about the noise or drum beat coming out from the government about think thanks going forward. The government is hoeding an economic work conference here. Its closed door, nothing official, but some of the commentary around it has been the government is going to have to lower its growth target for gdp in 2015. So the combination of all of these factor ves made people very, very nervous. Thank you very much. Well be watching today and we appreciate the update. Weve been talking about stocks retreating from record highs and a number of key sectors coming under pressure. Chief among them, energy, technology and industrials. With the dow still within striking distance of 18,000, investors remain bullish heading into the tail end of 2014. Still bullish. And on the economy this morning, we have anika khan from Wells Fargo Securities to talk about this. Walking into this, some people are feeling nervous. What makes you so positive about things . Ive learned the hard way over 44 years that its tough to put the equity markets down between thanksgiving and new years. Its the am bu lent time of the year. Typically what happens if you are going to get weakness, you get weakness in the first couple of weeks. It tends to settle up the santa claus rally. Lets talk through this year. What do you think happens in january . I came into lasted year saying the feds Balance Sheet is going to expand by 10 or 12 . Earnings were going to be up 10 or 12 . I expect the s p 500 to be up 10 or 12 . I think ill go with that same call this year. Is this the time for people to be watching, maybe get something dry powder, ready to go . I wouldnt disagree with that. If you look at the high yield expect, its been tell graphing a pullback. This is one of the longest periods of time where the market has not cooperated with that telegraph. So i think we trade higher into yearend after some time this week. Then i think you do get some pullback into the january time frame. Between the 1st and christmas, it does fall, you better get off the broad and wall . Isnt there some expression like that . If santa fail toes call, the bears will roam on broad and wall. I wasnt even close. Good enough. Thats why we have you here. So its that simple. Guys that have missed the big winners need to put them into so that people that image vest money, thats how it works . December has been up smlg like 49 times and down 15 times. You think this week is going to be a lousy week, but then were going to have a rally for what, when i have two to three more weeks before the end of the year . Its going to tank and then were going to come flying back . Because that is the season ability of the christmas season. Amiko, jeff was talking about telegraphs. We wouldnt get much more telegraph of the wall street journal today. Does that come as a surprise to you and what does it mean . No. I think that if we look at what the underlying economic fundamentals are telling us, were seeing some really strong growth, of course, coming out of the u. S. We can look at the nonfarm payrolls report and the ism reports to see those strong fundamentals. We also are seeing that the core inflation rate is starting to slowly creep up and that could mean the fed will move mid 2015. All we have to do is lead the series of the consensus of the fomc members. The consensus is still mid 2015. Some people are pointed to the Lower Energy Prices and said because of that lack of inflation, that that will give the fed kind of cover for not raising rates next year. The journal points out today that ben bernanke looked to High Oil Prices and this is likely to look to the low oil prices, as well. Do you agree . Thats a really good point. If we looked at the Lower Oil Prices and, of course, the decline in gasoline, retail gasoline prices, of course, that is going to boost discretionary income. We are seeing it on the headline for the pce deflator. Thats the gauge that the fed looks at. However, were not getting a lot of pass through to the core. So as long as we dont see that pass through to the core, inflationary gauges, the fed still has that cover to continue to keep rates as they are. Jeff, how does the market deal with that . Do you think were in for a rocky ride because of the fed transition or clean handoff . I think its a clean handoff. If you look at the historic data, if rates are below 5 and raising, it has historically been associated with rising equity prices because Interest Rates were going up for the right reason, that the economy was getting stronger, earnings were Getting Better and i think thats the handoff thats going to play this year. Jeff, anika, thank you both for joining thus morning. You bet. Lets talk about a big issue impacting all of the equity oil. The Oil Prices Stabilizing after hit ago fiveyear low earlier this morning. Predictions of a deeper slump, theyre piling up. This, of course, coming after opec decided to leave production unchanged just a couple of weeks ago. Here is what Dennis Gartman told squawk box europe earlier this morning. I think we have seen the end of opec as a viable entity. He think its still broken. Well see what happens a year from now, but i think opec as it has been in the past is a finished issue. John, good morning to you. Good morning. The last guy we can have on any more. Because hes calling for low 50s . Low 50s, joe, yes. Whats your number . Its in the low 50s. It has been for a while now, andrew. And when you say when does it get there and how long does it stay there . Sometime in the late first quarter, early Second Quarter next year. I think it could stay there for a while. Probably for a good part of next year. I think the supply response is going to be very slow to come. We continue to see growth in our shale plays. Next month, again, another 100,000 barrels to the u. S. When the combine the shale. So when we see reports of pullbacks in terms of new permitting, which i always thought this was an approach to decide how much supply is coming online at any one point in time, are we looking at the wrong indicator . Maybe the rate of growth will come down, but theres still growth and theres considerable growth. And its not like these things stop on a dime. They take a while. Yeah. Wooerve talking about tefk of oil and china, it becomes almost selffulfilling. God forbid there is a slowdown on demand. What if it does slow . It shouldnt, joe. The chinese economy is a very much manufacturing basis as a lowering input cost. Its the space gdp being raised a full percentage point because of the lower i hope youre right. But youre purely basing this on supply now . Its mostly a supply story, 80 of it, joe. 80 . So 20 of the demand cant bsh you cant see this flipping around at all . And my other question goes to the price issue that youre saying. Six months in the high 50s . Likely, yes. And what is the trigger to push it back and what does it push back to . I think the mean reverse will be in the area of 65 to 75. We have seen opec supply response. You will see our shale numbers come down a bit. When you get prices that low, even below what some of the shale cost in terms of the getting out of ground, refining, the prices associated with that, when will it start to impact the supply numbers . Again, it wont occur i dont believe until mid next year later. Were seeing inland prices in the 50s right now. My worry is russia and venezuela. Do you worry about those company in a meaningful way from a ghee your Political Risk issue and weve talked about the high yield market and how much of that is tied now to this energy world and whether those companies unto themselves are not going to be able to make payment. I dont think it will be enough to cause a contagion of the damage we saw in 2008 from the banks and their mortgage situation. Okay. I do worry about the geopolitical situation, not because i have any great love or compassion for Vladimir Putin or venezuela, but the arab springs, things seem to go from bad to us to wovrt from us, saudi arabia or russia and jan. Things just dont seem to go that much better for us in terms of our interest, u. S. Interests, but that remains an open question. Im going to consider that youre leaving us on a good note, john. As long as prices go lower, things should as long as prices go lower, at least in the shortterm, things are good . Absolutely. This is good for the u. S. Economy, Consumer Spending is going to be able to be spent on things not in the gas tank. Its usually this is worse than a tax hike and it goes up, i always tell everybody that, because its a transfer of wealth usually to Oil Producing countries. Were going to get the opposite benefit of that here. Every other sector will benefit now. John, thank you. Thank you. Coming up, a big noreaster targeting at least six states today. Were going to get the forecast from our friends at the it is, 34 degrees and rainey outside. Perfect. And windy. So its the umbrella turned inside out, yeah. I wore a hat in today. A hat does wonders for me. Forget nextday shipping. Amazon its bikes, right . When squawk box comes right back, well have it. We did it. We did it it is official, we gave the people what they wanted. The nations strongest lte signal. This is a big deal soak it in just let it wash over you like a warm bath. Over 10 million jobs created. The Auto Industry has rebounded back. Ill give it to you, youve employed a lot of people, mostly as secretary of defense. Thats boosted our numbers a little bits. And that was the president last night on the colbert report. This was his third appearance on the show and his second as president. Those are the shows final two weeks before colbert takes over for David Letterman on cbss late show. Thats going to happen early next year. Becky. A number of stories on amazon in the headlines this morning. The wall street journal reporting the company will start to try bike messengers for onehour delivery in new york city. The ecommerce giants wants to be the Worlds Largest pa czar. Buyers and sellers will be able to negotiate costs on items of 100 or more. This will only be available in coin markets, china and sport collectives. And amazon saying it plan toes shift more of its drone testing to outside the u. S. Unless it gets some sort of permission. I think it should be one of those this is not going be politically correct. I think it should be one of the those Public Private partnerships and do the drone testing in the middle east. While were over there, if there happens to pea terrorist enclave i agree with you 100 , that was not politically correct. Then again, we do use drones and they have been effective. If you look at one thing the president has done more effective than bike messengers. But the president has been rock solid on and you see what these guys went through most recently . And i agree totally with and if you dont want american boots on the ground, thats how you do it. Five miles and then a dog started backing a hundred miles away or something. If you take an american, were coming. I agree with that, but its much nicer. I dont think its that politically incorrect. I think this is a public priv e Public Private you are walking down a thin line, ill give you that. Now to todays forecast. I think its worse than snow for the most part. Also of note, that entire conversation you just had made it so i can say whatever i want and probably ill be okay. Its cold in new york city, windy, as well and rain. There is some snow with this, but you have to head north across parts of pennsylvania, in through new york state. Its still raining in places like new york. D. C. Should be clearing out. Maine on thursday, the backlash still snow showers in through syracuse. All along, there is an interior snow system. Its going to be cold wind and a lot of rain. Now, when it does snow, its going to be quite a bit of snow. 12 to 18 inch swath across upstate new york, into maine, new hampshire, large ski areas there. Closer to home, we have an area with 3 to 5 inches, but its deceptive. It will snow and rain. New york, philadelphia, hartford, boston, portland, main, we have flood watches. Could be 2 to 3 inches of rain. One last thing to think about with this system, we have a threat of coastal flooding that has to do with high tide and you who it coincides with the winds coming onshore. Much like what you can see with the storm surge. Jersey, we could see some concerns between 8 00 a. M. And 10 00 a. M. Is what were going to be watching. Thats when most of the high tide is at issue. Well see those waves push onshore. So, guys, if you want that snow, you can do so. Just head west about 150 miles or so. Keith, thank you. Disappointed youre not wearing a sweater this morning, but thank you, nonetheless. Look at that shirt. Weather and sports guys have a license to they can do whatever it doesnt even have to work. Its just that he is the weather guy. That actually does work. I know. I was saying it doesnt have to with weather and sports guys, right . And the sweater thing, i have to keep it fresh. I cant be wearing it every day. Really . The sweater of the month is the way you do that. Thats what we talked about, yeah. Its the gift that keeps on giving. There it is, keith. Thank you for bringing us that awful weather report. We appreciate that. The Energy Markets in focus this morning with Oil Prices Hitting fiveyear lows. Kate kelly digging up news in the space for us. She is here at the table. Kate. News noteworthy, crude is hitting a fiveyear low. A Company Based in houston is asking waut wall street for nearly 12 billion in wall street financing. In recent weeks, documents show look to build its second natural gas facility on the gulf coast, this time in Corpus Christi, texas, has won commitments for more than a dozen major banks for up to 16 million in credit as part of a sevenyear revolving debt facility. The Corpus Christi facility, which will take natural gas and make it easier for exportation and transport it to other countries where the price of l g is much higher should be in the area. Because of the l g contract, specifically tied to crude oil prices unlike more conventional nalt gas which is driven by weather, the prices in that market could impact in 2015 and beyond. And the company is depending on junk bond markets to stay alive and women we will in order to pay back bank lenders. If all goes well, this is according to these documents, and followed with an estimated 757 billion in 2016. So the deal is off so a very good start, andrew. Market dynamic notwithstanding, the Bond Offerings are planning to do between the price of crude oil and what that could mean for l g, a lot of market sensitivity in the pretty near future. Who is going bankrupt . I think to get in im not trying to be. I just you hear from people who if they dont, are they going to be disappointed . I am not. But i keep hearing on the street six months from now if prices stay the way they are do you want a liquidation bankruptcy . Were in the 60s right now. I want to happen who is overleveraged. Its got to be. The tide comes down, theres some people on the wrong side of this. A lot of high yield issuers. Im told to understand this you have to look play by play in terms of shale oil in the u. S. Bakken, probably the place to focus. Weve done a lot of reporting there. A lot of small drillers that work there that may be overleveraged. I think we should keep an out out for bankruptcy. That is, of course, an interesting indicator. A lot of this paper trading at below par. Interestingly, though, l g im sorry, l gs kicker, their bonds are trading at par for this to be impact. So that tells you wall street is relatively comfortable. Weve had an amazing stock market story. But this crude oil fall could be meaningful for them. Thank you for that. I dont want anybody to go bankrupt. We can be hearing about no, we absolutely could. Deutsche bank has been ahead of the game on that. They just issued new research on that yesterday saying things are looking surprisingly worse than they were about a month ago. They were predicting about a 30 default rate with oil at 60. What about like investment guys that might have been long. Wouldnt we have margin calls already . Wouldnt we have margin calls . People were actually selling apple and stock like cash. I dont know that to be true, but its an interesting theory about what could be happening. All i know is, you know, weve run out of people to talk to about oil. Because no one every Single Person every 5 they called another low. But and theyre advising people that have skin in the game and people have been advised to buy at 80 and that are Still Holding on. Were going to see something happen. The issue is people talk about the of opec. Opecs inability to act or rather their ability to act in concert not to have a production cut. Recent and continuing lows and until we see meaningful production cuts here probably as well as with the cartel members, who knows what the downside is. Remember, last week what did nick say . He was ready. 35 bucks or something. Yeah. He said they gained out every inventory l eventuality. I watched that. It was a great interview. They have a scale and a quality of a company thats going to preserve them from a lot of this. Its the smaller guys that we need to keep an eye on right away, i think. When we return, the cf oo of at t will join us on set. Well be talking wireless price wars, the internet and much more. First, though, take a look at yesterdays s p 500 winners and losers. Hear it . Yeah. Thank you, guys. Good morning and welcome back to squawk box here on cnbc. Im joe kernen along with becky quick and Andrew Ross Sorkin. If you need a doctor, but dont want to leave the comfort of your home, good luck. Anyway, remember the they used to come with the little bag. A house call. Walgreens is almost like that, though. Is it . Walgreen could have the answer. The company is trying out virtual medical visits. I would like a virtual thats how probes should be, right . A virtual probe. If the guy doesnt come, i wouldnt be nearly as ready. In a test project, patient necessary california and michigan can now contact a physician around the clock on a smartphone or tablet. The cost . 49. And, doctors can treat problems that arent emergencies and dont require an actual physical exam. Some examples like pink eye or andrew always has bronchitis. Thats how he realizizes getting a zpak for everything that happens. For exposing my medical i said that yesterday. It is a wonderful thing. Youre largely responsible for the antibiotic resistants in society. There are times when they go or worse. But most of the times, you just talk to the guy and you say, this is what happens happening and hes able to tell you. The other thing is, and i noticed theyre doing it at walgreens, theres a company thats now doing kiosks at walmart and some other places where you walk into the kiosk, it has a screen, its virtual, and you can take your pulse and all theres devices that you do yourself and on the other side is a doctor who is sitting in a center somewhere looking at you. Do you go there if youre sick . At the kiosk i dont want to stand near. I dont think so. You want to lick the equipment there. I dont know enough about it, but i do know that they were in trials. Other headlines going on at this hour, honda is expanding what its kalg an investigation into its takata air bag recall globally, this bringing the total takata recall of all brands to more than 19 million. Thats since 2008. Apples ipod trial, thats continuing even though a judge disqualified the last remaining plaintiff. The attorneys suing apple must identify a new lead plaintiff by today. So thats a hard deadline for them. Well see where that trial goes. Lets get a check on the markets this morning again. The futures here are under pressure. This comes after a big down day for the markets. Yesterday with the dow by over a hundred points yesterday, this morning, dow futures are down by about 52 points. S p futures are down by about 7 points. The nasdaq are also looking weaker. Those futures down 15 points. The dow was down today. This will be the first time its had losses and consecutive days all the way back to october 16th. Youre right, it has been a very steady march higher. Take a look at what happened in asia. This is part of the reasons were seeing the markets weaker. At the end of the day, it was a bit of a mess there. The hang seng was off by 2. 3 . Europe seeing pressure this morning. In fact, right now, youll see that the dax is off by about 0. 9 . The cac off by 1. 2 . The ftse off by over 1 . In greece, stocks down big, a decline of 10. 5 as continued Political Jitters in the country add to declines and the worry that the eu is not going to step in and save them this time around. Take a look at oil pries, as well. Wti was down by more than 4 yesterday. Its up, but only by about 1 . Trading at 63. 76. 5 in any legitimate stock market around the world is going to 5 is something its going to be. That wasnt even a percent. I did the math already. I think its how much . 900. Whisper. Thats a lot. 5 drop in the market. Next year is going to be a big one for at t. The company is expected to complete its acquisition of at t, enter emerging markets and deal with the evolving issues of Net Neutrality and tax reforms. Joining us now, john stevens. I didnt know that that intro was going to be written that well and those are the three things that i was thinking about. If things are if things are going like i see the strategy. The directv deals get you where you want to be in terms of scale with video. It also internationally sets up some great opportunities. And then you against the back drop of not knowing what the hell is future brings in terms of net knew translatety, makes it difficult to navigate, doesnt it . Absolutely. Do you assume the best or prepare for the worst . Absolutely. You put the other set of assets like we have, directv is a great example. It would be a National Video presence, 100 million potential customers. We have a National Wireless footprint over 300 million potential customers. And were going to be a 70 million broadband company. So were going to have the ability here in the u. S. To search on a National Basis our customers needs. But dtv brings the opportunities to expand into mexico and diversify our revenue base. If you look at the company after the dtv deal, 90 of our revenues will come from data, wireless, and video. Thats a remade at t from years ago when we were your telephone company. So that is great. Were excited about use of cell and our opportunity to go into mexico, create a 400 million consumer calling plan. If you think about it from the northern border of the United States down to the southern tip of mexico, have an ability everybody to call on net and bring Quality Services. We all know about the demographics of our country and how we are blepding together, mektsco is our Third Largest trading partner. So were really excited about what we can do there, bring Quality Services and take an advantage of it. Dependent on a reasonable private sector friendly government to do two of the most important things youre trying to do. If that goes the wrong way and the fcc folds because of the pressure from the president , then that is going to be a problem. You wish he would honest i, but he would pause on that, also. Were going to honest a commitment. If we lieutenant made those commitments, it is likely we would have paused on those investments, also. It puts us a future of the internet, of mobile data, broadband, back in the 1930s. That is not where this country wants to go. And if you look at whats happened in this competitive environment over the last 10 years, you can see where data per capita, internet use per capita is all exploding in the United States. The United States is one of the lead country necessary that across the world. Im going to ask you a few questions. One goes to sports which is central in part two. Some people think the sunday night is a huge component of it. Do you expect sports to be able to stream over the top effectively to like lte through all of your customer toes at t, ultimately . We would expect to have the capability to stream video over our network. We have positive coverage today, the most reliable do you think a year or two from now well be seeing the programming you have on directv available for all the at t customers . I think people dont know if thats going to happen. Close to 100 channels or more. Today you can have it on your phone through the uverse on the go process. The challenge with sports, andrew, its a live broadcast game. Movies, television shows, different. How does directv position you in the over the top world . You look at hbo, an over the top product. Cbs now trying to go over the top. And i imagine overs. So when we sit down with the content guys, before we were a 6 million video purchaser. After the dtv deal, were going to have 27 million, 28 million customers. Were bringing 100 million wireless contact points and were going to bring 70 million broadband contact points, which will give the opportunity for the content guys to sell their Services Broadband that is going to be built out, thats already built out. And you dont count the directv folks. That includes the directv commitment. You know, we had randall on last week and we talked about how at t has been the company that has spent more on direct investments than any other company in the United States in the last five years. He warned that this would be a hold on this. What do you do with that cash . Do you sit on it, do you invest it in other countries . I cant believe youre yielding 5. 4 already. Yeah. So weve been very prudent on our Balance Sheet, trying to keep it to an a rating and well continue to do that. We paid a great dividend and well continue to do that. Were also look for opportunities outside the United States. The use of selling opportunities is one example. We are looking to deploy our Capital Movement and well keep doing that. And that is not a defender. That is something that youve always got there, right . Yes. Why dont you shave it for december and then grow it back and do the flip side of people that grow a beard deerg december . Actually, joe, thats a matter to stay up with mrs. Stevens. She likes the beard . She likes the beard. 35 years, im going to keep the beard. John, thank you. Thank you. Take care. When we come back this morning, betting on the angels, how the Parent Company of victorias secret is leveraging what it does best, the shake up the Holiday Shopping season. Daughter do you and mom still have money with that broker . Dad yeah, 20 something years now. Thinking about what you want to do with your money . Daughter looking at options. What do you guys pay in fees . Dad i dont know exactly. Daughter if youre not happy do they have to pay you back . Dad it doesnt really work that way. Daughter you sure . Vo are you asking enough questions about the way your wealth is managed . Wealth management at charles schwab. Hi. Im new ensure active clear protein drink. Clear huh . Im not juice or fancy water. Ive got 8 grams of protein. New ensure active clear protein. 8 grams protein. Zero fat. Ensure. Take life in. I was thinking about htaking this speed test from comcast business. Oh yeah . If they cant give us faster internet or save us money, theyll give us 150 bucks. Sounds like a win win. Guys faster internet . I have never been on the internet and i am doing pretty well. Does he even work here . Dont listen to the naysayer. Take the comcast business speed test. Get faster speeds or more savings, or well give you 150. Comcast business. Built for business. Welcome back and coming up, the squawk runway welcomes the angels. But first check out oil prices bouncing back just a bit from fiveyear lows hit earlier this morning. Take a look at that. Wti crude 63. 72. Were back in a moment. Act i. Scene 3. Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. Welcome back to squawk box. L brands betting big on the angels. Courtney reagan has more on that story. Its the most famous fashion show in the world. It airs tonight when the victorias secret angels are clad with wings. L brands began 50 years ago in columbus. Current brand names of v. S. And bath body works. The stock is really gained more than 840 other the last 20 years. More than 350 in five years. 30 over the past year. That outperforms the s p retail index by a wide margin for each of those periods. And appropriate for the Holiday Season, many point to the angels as early winners. The month of november, a strong one. Up 7 . Victorias secret up 11 . L brands is called, quote, the best growth story in retail. Theres huge Growth Potential ahead for L Brands International opportunity. Its particularly large. Susan anderson says victorias secret has already created a niche with its new jog bras to make waves in the hot active wear category. I still go back to changing the name to l brands. Why did they do that . The company was called the limited. But the limit sd no longer part of the company. Now its this house of brands. They used to have so many. Its hard to keep up with. All sorts of different things. Now its really those two main brands. Who wants to be limited . You dont want to be limited. Lilly aldridge, by the way, do you know who that is . Yes. Shes quite a beautiful angel. I did not know she was an angel. Breaks my heart a little bit. Broke mine too. So there you have it. What happened . Ill tell you the story during the commercial break. Without victorias secret, what would dicaprio do . Hed stay home, right . Life isnt worth living without those angels. He would just read. Is he dating another angel now . I dont know. When we come back, the exclusive cnbc allamerica survey. A snapshot of the nations economy. A 3 down payment for a house . Why the nations top two Mortgage Finance firms are once again letting home buyers put down less than the traditional 20 . Housing expert Robert Shiller is our guest. Squawk box will be right back. Will that be all, sir . Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. And often even more. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 89. 95 a month. Comcast business. Built for business. Fuel costs falling. Home prices rising. Is there weakness ahead . Robert shiller joins us. How health care is helping clevelands comeback. A noreaster is hitting the east coast, but the sun shining bright for consumers. A new survey data Shows Optimism is now at a postrecession high. The second hour of squawk box begins right now. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with becky quick and Andrew Ross Sorkin. Asian markets are falling sharply. 5 in shanghai overnight. All of it portends some weakness here. Analysts, if they had to pick something to tie it to, talking about the drop in oil, profit taking which is so helpful whenever youre describing a selloff. Liquidity fears and lower Economic Growth expectations. For whatever reason, that helped cause europe to be weaker. Those are not huge scary. But theres some specific things happening there in greece once again. They pulled up the vote for president next week. Theyre trying to get some political stability. I saw some other member of the eu say no way. I saw that yesterday too. Yeah. And then there is where the dow is this morning. We dont get a lot of big moves early in the morning. I dont know whether its thin or what, but when the market opens is when you see the actual intent of traders on any given day. And starting 58, i dont know what that means. But well see. Its not bad on a day youve seen bigger declines overseas. But at 4 00, lets check out that quote at 4 00. Thats right. Lets get to some of our top stories this hour. The biggest, u. S. Banks are comparing notes on the federal reserves stress test. Reuters says the executives are trying to shed sof light on a process the fed tries to keep quiet. Honda will expand its recall to potentially defective takata air bags around the globe. It added about 2. 6 million cars to that process. And the city of portland, oregon, is suing uber to stop operating there. Uber Began Service in portland last week with no agreement over how it should be regulated. The results are in for the exclusive cnbc its allamerican or allamerica . Allamerica. Good catch, joe. Nice. I got to do it. The allamerica Economic Survey. Allamerican, thats a football and basketball thing, is it not . One would be like a collegiate contest, and this would be a survey. Yes. You are definitely first team. Thank you. In economists, steve. Heres the deal, joe. Forget asia. Forget the fed. Roll the christmas music. Were talking about the biggest intention of americans to spend on christmas or the Holiday Season in the past five years. You can see here this is about a 12 increase from what was a low estimate last year given our 800 respondents all across the nation. Thats why its called all america. This is still about 6. 5 above the average of the past wow. Almost eight years. So this number here is speaking to some of the better forecasts weve had about the Holiday Season. And really if you look at it, when we dig down into the finances of americans, we see that we are beating the average of the past six years in every single category. The americans who say its a good time to invest. Better than the average. Americans 94 of them think their home prices will stay the same or increase. And those who are optimistic on the economy, actually some of these metrics, one, are hitting alltime postrecession highs. And this optimistic on the economy, approaching precrisis levels. Then you can take this whole chart and translate this into spending. We said if youre going to spend more, why are you going to spend more . 4 said its the stock market. 5 because their home values are higher. 8 because of the better economy. 8 because of lower gas prices. I want to stop here. No single one of these looks like its a big deal. Add them up, thats the core of the population that has some reason to go out there and spend more. One says my family is bigger and i need more gifts. And then 33 saying higher income. So kind of firing on all cylinders here certainly on a postrecession basis. And increasingly, guys, when it comes to the before we got to the financial crisis here. And its all on cnbc. Com if you want to see the details. Are you skeptical, becky . No, no. What i want to ask you, looking at what people are spending. They spent the most in 2009 for this date. So is this a leading indicator or a lagging indicator . When you see optimism rising, is that something to tell you that the quarter could be turning . Well, one of our pollsters when we had the Conference Call over the results, he said this survey is like the first snowfall of the season. Will it stick . We have had had as you saw there. Bumps before, so heres the question. Are these temporary phenomena . A massive rise of optimism among republicans. Republicans who were still net negative on the economy, one of the biggest surges weve seen from so it was taken just after the election. Just after the election, so the takeover of the senate by the gop helping that out. Lower gas prices. That could be temporary. What i do like about this is hitting not just the postrecession highs, but in some senses getting back to normal. We were lucky enough to start this thing in 06 and 07. So we have a metric for what happened before the crisis. Some of these are getting back. If republicans believe what they say, then that makes sense. Because they think that a lot of the policy if they can stop certain executive actions, they can stop certain Obama Administration edicts, theyre you dont believe it. Im good for change here. I did tell you, we asked nine different metrics or eight different metrics of republicans and they think the economy will be better, wages will be better, every single aspect we asked and they think its going to be improved. Just wait until 2016 when things really start. Listen. Can i you know, stop the presses. They might decide that rates need to go up after 330,000 jobs. But in reading this, i got nostalgic. Did you shed a tear . They might can we zoom in on joes eyes . They might remove the considerable period. When was it when we first september. No. But do you remember the first time i told you instead of doing anything oh, yeah, yeah, yeah. Theyre going to stay really, really, really you invented forward guidance. We need to find out when that was. Was that six years ago . That was a long time ago. That was in the realm of that hole. It was out there. And by the way, joe, i know dont throw anything at me, but thats the one that seemed to have worked. The notion of open ended. Every other one which was limited by were going to do 600 billion and then stop, what happened when they stop snd they fell off. And the market knew it was going to stop. Why do you think id throw something at you when it was my idea . Because i dont think you liked qe 3. That was the one that worked. But you were also critical of qe 3. But we were talking about keeping rates low for a long time. The idea that when the government comes in with essentially a limited commitment to make something happen, thats why t. A. R. P. Worked, in my opinion. Not because its 700 billion, but because it was we are going to stop this slide. It was an open ended commitment. I think thats what draghi is learning and i think carney had learned it long ago with the uk. Draghi being the ecb president. You needed to define carney more than draghi. Or lavorgna like yesterday. Its all on cnbc. Com. Coming a back at 10 00 with an interesting story about how are back in the stock market. The numbers about you go beyond the wealthy, beyond the retail. Then the question becomes are they getting on the train just when the pros are getting off the train . I did some work on this, and i can tell you that this number coincides with the current yearoveryear rate on the dow. Its not a good at predicting. So an interesting story. Well definitely watch that. You know, if you had stopped just before i could have come off the going to tune in for that. Freddie mac and fannie mae letting people get loans with as little as 3 down. We cant help feeling weve seen this movie before. Here to talk about housing and a lot more, i want to talk about the markets. Nob nobel laureate. You have a valuation index. I want to understand what you think is going on in the stock market right now. Well, first of all i have this indicator specifically adjusted up tied to about the peak in 2007. Maybe my message is getting across. I also do a Questionnaire Survey of individual and institutional investors. And especially among the institutional investors, they are tending to think the stock market is over priced. It hasnt been this bad since around 2000. Im not as up to date on your numbers. My numbers, you know, i have a sixmonth moving average. But over the recent years, the decline in confidence in the valuation of the market has been striking. Okay. So professor, you have a valuation confidence index. Then you have a crash confidence index. What does that say right now . I ask people what the probability is of a stock market crash like 1929. Ive been asking this same question since 2003. And the answers are showing its not a dramatic drop, but theres a drop in confidence that we wont have a 29style crash. I dont want to make too much of that. That number has wiggled around. But it is down. Say that again. The confidence that we wont see, yeah. If you go back to 1987, remember october 19th. The wall street journal that morning had a plot of the stock market up to that date. And it superimposed on it the stock market up to 1929. People were really thinking 1929 on that day, but theyre not its not so dramatic now. You know, if people are worried about 1929, it may be a selffulfilling prophecy. One of the reasons that people always say whenever we do regulations, its like we always do regulations for the last crisis. And its because we never really understand what the next one is really going to look like. Were just not smart enough, i dont think. But if you look at the extraordinary things that not only the fed but the entire world, if you look at just the way weve sort of operated for the past five years, i mean, whered our Balance Sheet go from . We dont really know how this looks five years from now. I can certainly see theres some dislocation somewhere from all this fed action that we have not adjusted or worked into the equation. I dont know what it means and it scares me when you say these things. But thats a lot of money sloshing around that if its on the wrong side of some trade, were in trouble. The problem is, we like to be scientists and statisticians and do analysis. The problem is the kind of crisis we face since 2008 has been almost unprecedented. You have to go back to the depression to see it. One we like to show is the Housing Stock. The Housing Stock in the United States stopped growing for 15 years between 1930 and 1945. And it has grown virtually every year since then until 2008. And its kind of stopped growing again. So, now, thats a sign that people need houses and they ought to go back and start buying. Maybe they will. You know, thats a reasonable guess. But then the other question is why has it stopped for so long . Thats a mystery, because we dont have enough observations to study that statistically. Professor, the drop in oil prices you take as a good sign . Or is there some not so Silver Lining or cloud in this were not focused on . I think its a good sign for the u. S. A bad sign for russia and some other countries. But historically oil prices have been very important. Even in the 200709 recession. We had oil hit 140 a barrel. That had something to do with the impact of that crisis. Right now its down to about 63 a barrel. Its an amazing drop in oil prices. But on the other hand, i would remind you that oil prices are not a random law. And the forecast, i think its reasonable to think therell be a jump back up before long. Okay. Professor, before we go, very briefly, what are you doing with your own money . Well, ive been you know, i worry about valuation in the stock market. And ive been wondering if i should pull out. But i have not. And in fact, im still thinking even at the ratio of 2007 the expected return is still higher than you expect to get on either housing, real estate, or fixed incomes. So it still seems like i feel a little trepidation because i know my own indicator is looking kind of scary. I wouldnt overgo into the market, but i wouldnt be completely out either. Raise a little cash, bob. Come on. Get some dry powder. Raise a little cash. It sounds like you got one foot out the door. Dont be afraid. Make the move. Maybe ill do that. All right. Thank you for joining us. I love giving him advice. When we come back this morning, well talk about whats moving the markets this week. Dom chu takes a closer look at the megacap tech names that have take an tumble. And then more fallout from the hack attack on Sony Pictures. Including leaked celebrity aliases. And then health care in cleveland. The sector thats helping rebound in the rust belt. Stick around. Squawk box will be right back. Dad,thank you mom for said this oftprotecting my future. You. Thank you for being my hero and my dad. Military families are uniquely thankful for many things, the legacy of usaa Auto Insurance could be one of them. If youre a current or former military member or their family, get an Auto Insurance quote and see why 92 of our members plan to stay for life. Will thank you. , sir . Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. And often even more. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 89. 95 a month. Comcast business. Built for business. Oil is getting much of our attention, megacap tech stocks are taking a hit. Dominic chu gives us a read on the tech trouble. We actually had someone earlier say that youve got big winners in apple or tech, youre covering some of your margins in oil. She made that connection earlier. There are some theories about whether people are raising cash by selling some of the winners. Maybe thats the case here. We dont know definitively whether thats the case. Heres what we do know. A lot of these tech stocks are leading the way down. At least did yesterday. And thats why some investors are a bit worried. Technology and financials have typically been some that have led. At least in normal markets. If you look at the s p 500, this was the trading day yesterday. You call your attention to what happened right here around noon. That led to more losses throughout the day. That sharp dropoff, everybody said is it oil . That wasnt the sharp drop. Take a look at the tech sector etf. Thats another big indicator here. This sector overall, thats where you see the dropoff. In the s p 500 really started to turn lower. Thats what dragged a lot of things down. If you look at the components of that sector, you look at a name like apple. We just spoke about that, right . You can see around that noontime, that same dropoff right in the middle at noon yesterday. That was a huge move. Of course, apple is the biggest weighted stock in the s p 500. The second most heavy weighted stock in s p 500 is microsoft. Same move. Around noon, that dropoff. So microsoft, apple both. And amazon. Com. One that will be a focus for a lot of investors, that same move around there. That 12 00 noon area. You see the dropoff. If you have these kind of stock moves, its important. Oil is a big part of the market. But Technology Stocks overall make up 20 . So when these stocks move, thats what causes some of the massive moves in the market. Thats why investors are worried. What we do know is investors are looking at some of these tech names. Its like when they make up the s p or whatever, dom, they make it up and its fair. But then, you know, like back before 2008, the financial stocks went up so much that they were, like, i dont know how much of the s p at that point. And they were obviously way too they were part of it was overvalued. I dont know if it says the same thing about tech. Now its moved into where its 20 all of a sudden. Of the overall market. Thats what theyve gone up so much. Look at apple. Yes. Well, tesla, i mean, not as much in the s p 500. But microsoft, amazon, intel is another one. I didnt show it here. Facebook. Yeah. Megacap tech stocks. Google. Some of these guys are in the s p. Yes. Google did finish up marginally in yesterdays trade. Some of these moves are big because we looked at them as a precursor of what happens. Then when you have it mixed in with greece down 11 , with china down 9. 5 , it calls into question whether or not there were aspects of the top. Whether its for oil or whatever, you do sell your winners if you have losses you have to cover. Whether its oil or something else. Thank you, dom. Coming up when we return, more fallout from that hacking attack on Sony Pictures including the aliases of celebrities, what they use to check in to hotels. Find out which check in under cash money. Plus the internal numbers that explain why sony passed on a new movie about steve jobs. Well tell you about that when squawk box returns. [woman] can it make a dentist appointment when my teeth are ready . [girl] can it tell the doctor how long i have to wear this thing . [man] can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . How can in china,sumption impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. Get to the terminal across town. Are all the green lights you . No. Its called grid iq. The 4 51 is leaving at 4 51. They cut the power. Itll fix itself. Powers back on. Quick thinking traffic lights and self correcting power grids make the world predictable. Thrillingly predictable. More fallout from the cyber attack on Sony Pictures. Among the private information that was leaked, the aliases that some celebrities use to check into hotels. According to documents obtained by fusion, some of the names. Tom hanks goes by harry lauter and johnny madrid which sounds kind of dashing. Natalie portman goes by lauren brown. Rob schneider goes by nazzo good. I like that. Youre not so good. And jessica alba has an alias. Andrew . Totally appropriate. Cash money. Shes got a billiondollar company. She should call herself cash money. Ill ask her about that. Because were going to have her on cnbc. On thursday. Because well be broadcasting from the conference. Shes one of our guests. One of your guests. Youre interviewing her . I am interviewing her. Along with her partner brian who helped start the honest company. Brian . Brian leid, i believe is his last name go back. We need to tell you about the steve jobs movie. Were going to tease you again. And why it moves from sony to universal, nbc. Will be a much better movie. Wont be hacked. Coming up, were kicking off a series on the rust belt rebound. The main economic driver now in cleveland. Were going to talk to the ceo of the cleveland electronic. As we go to break, look at u. S. Equity futures. E financial noise financial noise financial noise financial noise welcome back to squawk box this morning. Among the stories that are front and center, north dakota set to unveil the strictest Oil Standards in its history today. Every barrel of crude is going to need to be filtered for dangerous types of natural gas. The goal is to make crude by Rail Transport safer. Also a unique deflation indicator out of japan. A Fast Food Company there raising the price of its beef bowl dish for the first time in 24 years. The reason . Higher import costs. And Warren Buffett climbing the billionaire ranks as hit alltime highs. Forbes now ranking him as the second richest mand behind his good friend bill gates. Lets get to Steve Leisman at the breaking news desk with the fresh data on Small Business confidence levels. Steve . It happened. We waited and waited and waited, but the National Federation of independent business finally reporting after all these years that its average has hit the average of the last eight years. Or the last several years. Its up two points to 98. 1 with four components rising, three falling. And this is the best level weve had since 2007. Heres some of the details. Biz expectations up 16 . Sales expectations up 5 . And the earnings trends up 3 and creating new jobs up 1 . By the way, the expectation on this was 96. 5, so were blown by the expectations. There are your details of the survey there. Four up, four down, three the same. The chief economist for nfib didnt like how we got there. He didnt like the idea it was all on expectations rather than assessments of the current trends. But, hey, well take it. It remained below the average for a very long time. And finally got there, joe. Probably a bunch of republicans too. Well, you know, again, the idea that the republicans took over the senate, we picked it up in our allamerica survey. Wow. Big day for you. Huge. I like blowing out the numbers here. Nfib, both the did you know both of those things were happening today . You probably couldnt sleep. I was up late last night thinking about how exciting of a day it was going to be. I bet you were. Talking about the rust belt in cleveland. Scott cohn now. That one. Scott . Same guy. Here in your home state, joe, so you know this. But what we used to call the rust belt has red light transformed. Im in a place called the Global Center for Health Innovation in downtown cleveland. This is more than just sort of a showplace to show off the health care industry. It is a conference center. Its a place where companies can share and collaborate. And make this industry not only bigger but more efficient. I want to show you some numbers to take a look at how the economy here is transformed. In 2000, ohio still had just over a Million Manufacturing jobs. Today thats down by about a third. Look at health care. Its almost the mirror image of that. Today roughly around 900,000 jobs. And a big reason for that is the Cleveland Clinic. A big driver of that. 6. 5 billion facility. Some 41,000 jobs and a lot of companies have sprung up around that. Joining us here at the center for Health Innovation, dr. Toby cosgrove who is the ceo of the Cleveland Clinic. This was your brain child, this center here. Tell me about this transformation which youve witnessed. We see a tremendous growth in health care across the country. Certainly the Cleveland Clinic is an example of that. Right now we comp for gross Economic Impact in cleveland of 12. 5 billion. And directly or indirectly affect 94,000 jobs. So health care is really a very big part of the economy in cleveland. But youre shedding jobs now, because shedding costs because health care is in as we all know and talk about every day a seismic shift. We cut jobs last year. Will there be more cuts in 2015 many. We doubt were going to see many more jobs lost. Were trying to drive the efficiency. Its now coming around how we actually take care of people and how we have gone much like every other industry has, consolidated, eliminated duplication of services, and driven the efficiency more and more as weve gone on. I think that is going to take down the cost of health care. The second part of it is weve got to make the city of cleveland a better place. So health care reform, the Affordable Care act, obamacare, is supposed to be about bringing down the cost curve. That directly affects the deliverers of health care. Yes, it does. And it means you have to do more with less. Right. So will this transformation be able to continue . Will the Health Care Economy be able to continue to expand when in a lot of ways youre contracting . Well, i think Health Care Economy across the United States is going to continue to not get a lot smaller because the population is increasing. So what we really want to do is stop the inflation rate of health care and i think were doing that by driving the efficiency. And yet for the consumers, premiums are still going up. Theyre paying premiums are going up faster than their wages are going up, we now know. When is the consumer going to see benefits to this . Well, the consumer, the cost is being shifted to the consumer. Part of the things that happen with that is now weve got high deductible insurance. So youre responsible for the first 3,000 to 6,000 of your Health Care Costs each year. And as a result of that, people are starting to shop. 44 of people who have private insurance have high deductibles. So as they shop, theyre going to look for how you where you go to get your care at the lowest cost place. And thats going to drive the prices down across all of health care. So we expect that were going to be paid more and thats why we have to be more efficient. Control of congress in changing as we know. A lot of talk among the republicans about repealing obama care and changing it. Is it going away . Hows that going to change this . I dont think the Affordable Care act is going to go away. Were going to see changes of it much like we saw changes in Social Security law over time. But its not going to get repealed. It will continue to morph and get better and better as we go forward. We know that we had to change the way we deliver care. We know we had to reduce the cost because it was starting to drive out things like education which we need to continue to support. So Health Care Costs had to be controlled. This is one way to do it. And thats not a perfect law. Probably never been a perfect law. What needs to change . Well, i think what were going to see is weve got unanticipated results. And as were going to have to be flexible enough to change as we see what the unintended consequences are. And second we really need to manage to keep people healthy. We have to put more emphasis on keeping people well and driving down obesity problems and driving down smoking and people that have exercise and take care of themselves. Joe kernen has a question. I dont know whether youre changing what we always perceived obamacare to be or wishful thinking, but it was more about coverage. Thats almost indisputable. It was about coverage, not about cost containment. Well, i think it was really about three things. I think it was about cost containment. I think it was about coverage. I think it was also about quality. And weve seen the quality go up as weve been more and more transparent about quality. Weve certainly seen the coverage increase. And i think its called the Affordable Care act to try to control cost. But you know thats the main criticism from most sides that it did more for coverage and much less to actually address the cost. I mean, utilization is down. People are choosing between, you know, health care and other things. It hasnt been flush economic times. Well see what finally happens. And the law most of the things that might rear their ugly head are going to come next year, the year after, and the year after that when well really see it. So well see. I know maybe there wont be a repeal. You know how many of the 60 senators that voted for it are left in the senate now, doctor . Theres been some mortality amongst those senators. Yeah. A couple of them actually did pass away. Other ones decided not to run and then Mary Landrieu is the latest casualty. Thats the lead story in the journal. Anyway, we appreciate it. If god forbid anything happens, Cleveland Clinic is number one on a lot of lists for where to get the best care. So we do appreciate that, doctor. Thank you very much. Youre welcome. Thanks a lot. And scott cohn, you should move from chicago back here some day to new jersey. You know . Hes in california. I missed the move back here. He left there and moved out to yeah. How do you like it . Its awesome where youre living right now . I love it. I love it. But i love also getting the chance to come back and talk to you guys. Well, we love having you. This is perfect for both of us. But how far from the ocean are you . I walk there many days. He doesnt want anyone else coming out there. Hes being very vague. Could you be more vague . No, anyway, you look good. Im close. Its good. You look healthy. Thanks. When we come back this morning, the ripple effects of the plummeting price of oil. Banks invested in the Energy Sector taking a hit. Among them cullenfrost. Take a look another the equity futures this morning. Right now dow has doubled its losses. Down by triple digits once again. S p futures down 13 points. The nasdaq down by 30 points. Buckle up. Squawk box will be right back. Take on the challenge of Trading Options and futures. With the easytouse suite of trading tools. At optionsxpress by charles schwab. And well give you a one hundred fifty dollar amazon. 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Lease this 2015 standard collection srx for around 359 a month. Welcome back to squawk box. U. S. Equity futures continuing to fall. Okay. There you go, becky. Down 117. Time telling you, its thin trading first thing in the morning. 5 in any market and in Greece Greece was down 11 last i looked. Thats why that 50 didnt look like it was i thought maybe itd take until 4 00. By 4 00 we could be up. You never know. But now thats much worse. Futures are much worse than they were when we came on the air. Part of whats being blamed is low oil prices. Although people will tell you thats good for the United States and the consumer. But those Energy Prices continue to decline. Thats put pressure on a host of banks. Check out shares of cullen frost. Down 10 over the last month. Joining us is dick evans, hes ceo of cullenfrost bankers. Dick, thank you very much for joining us today. Its a pleasure to be back with you. Thank you. Weve been watching oil prices. I just wonder if thats creating a panic in certain areas. What do you think . Well, i think youre exactly right there. There is a lot of talk about theres a panic. And i think this is no time to panic. No time to retreat. I think its going through an adjustment time. Were down, what . 30 in oil prices. Its going to move around. And the focus all seems to be on price. But i think youve got to look at duration too. How long is it going to stay at a certain price . And then we can kind of see where the activitys going to go. Certainly our customers are looking at their capital expenditures, how much drilling will they do next year . And as we go through that period of time, were staying very close to our customers. Quite frankly, im very comfortable with where we are. Now, im someone and our company has lived through the 80s in texas which was a pretty good blood bath. But this is totally different. We have wonderful technology. The industry with fracking is so positive. With 3d seismic and all the technology we have, as one of my old customers in west texas said, its more like farming than wildcatting. And so i think we have a lot of opportunity. I think the other thing the talk is on oil, certainly natural gas. Prices moved up a bit a couple weeks ago. Well start to see the normal wintertime gyrations in prices. I think theres opportunity for us to grow that. I think we should not forget about the wonderful Natural Resources that we have in this great country. Not only here in north dakota, pennsylvania. Were very blessed in this country. And obviously i think that we are at a time that theres a lot of the risk been taken out of it with hedging and so many most all customers that have any leverage have certainly protected them through 15 and part of 16. Hedging works, but only works for so long. If these Oil Prices Stay low as john told us this morning he thinks is the case, does that change the situation . Well, certainly. But at the same time i think what hedging gives you an opportunity to adjust. And if youre hedged which many customers are through 15 and part of 16. The main thing it does is give you time to adjust your business model. Karen finerman on fast money said she thinks its a very wellrun bank. She looks at the energy loans you have at 14 to 15 . That concerns her but more concerning she thinks everything in texas is tied to Energy Prices. If were looking at a long slump, low prices for a long time, the point is your stock had a very high valuation at that point. What do you answer in response to that criticism . Well, obviously i dont agree with her. First of all, shes wrong about texas being all focused on energy. If you look at it in the growth of jobs, energy, oil and gas industry is seventh. Youve got hospitality, government, all kinds of other opportunities that are growing faster. If you look for ten months, we grew jobs for the federal reserve, 345,000 for the first ten months of this year. 2. 6 of that is related to energy. So theres a lot of activity. Yes, we have some wonderful Natural Resources and yes, its a great opportunity for texas in oil and gas. But this is a very diversified state. Our bank is very diversified. When you look at our loans, yes we have a little over 14 of our loans are to energy. But the rest of it is very diversified which follows the state averages. This isnt a bunch of cowboys riding on horses around oil and gas wells. This is a very sophisticated state that has good diversification and that is exactly where cullenfrost is. Want to thank you for your time. Wed love to have you back. Thank you so much. Its my pleasure. Coming up when we return, movers ahead of the opening bell. Joe has your list of stocks to watch. Well do that next. Then at the top of the hour, squawk market master Mario Gabelli and Jeremy Siegel are going to talk about the prospects for dow 18,000 by the end of the year. Right now as we head to break, look at the equity futures. We are in the red with the dow off about 125 points. S p 500 down 16 points. Nasdaq off 33 points. Back in a moment. Location. Location. shouting location. Heres the location that matters the most. Here. Or here. Or here. Its wherever this is. To get customers to come here and stay here, youre going to need an app that connects to all your systems. So they can bank, shop, do what they need to do, and you gotta do it fast. Before the competition does. Its tough out here; you better be on the right cloud. Today theres a new way to work. And its made with ibm. Welcome back to squawk box. The hacking attack on Sony Pictures giving insight on why that studio passed on the steve jobs movie based on the biograp biography. Coming in 25 below what they expected when dicaprio declined the lead role. Christian bale also dropped out of that role. In november universal picked that movie up. Fassbender took the role. We will see whether that picture makes it to the big screen. Lets take a look at the aforementioned stocks to watch. United tech names a new cfo. He had spent 26 years at etx prior to that. Lululemon was upgraded. The yoga maker, the apparel maker yeah. Because you cant make yoga, can you . Can you make yogi. That would be hannah barbera. Anyway, the apparel maker addressed its supply chain issues and Profit Margins are reaching a turning point. American eagle upgraded to outperform. The retailers margins appear theyre ready to recover. And its also managing its inventories well. Autozones earnings and revenue beat the street. Same store sales rose nearly 5 during the current quarter. And thats one stock that is going to be up today. A lot are not at least on the open, andrew. Coming up when we return, stock picks from Mario Gabelli. Going to join us on the set in a moment. Plus media titans gathering in new york. Unbundling and internet regulation. Well talk to david in just a little bit as well. Squawk box returns in just a moment. Right now youre gonna ask for my credit card so you can charge me on the down low two weeks later look, credit karma are you talking to websites again . This website says free credit scores. Oh. Credit karma yeah, its really free. Look, you dont even have to put in your credit card information. What . credit karma. Really free credit scores. Really. Free. Credit karma, i love you . Oil slides hitting stocks around the globe. The impact of oil and what stocks to be looking at right now with guest Mario Gabelli. Its clicks versus bricks. Cnbcs allamerica survey is out and what folks are saying about retail may shock you. We tell you how to play the sector. Plus cocktails and a kickstarter. A man arguably the best job in the world, entrepreneur and host of the show chug is here as the final hour of squawk box begins right now. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with Andrew Ross Sorkin and becky quick. If youre just tuning in this morning, were watching a global selloff unfold. We saw it over there earlier. Now its coming here, at least the triple digits. It wasnt that way when we started. We were down about 40 or 50. But its because of whats happening in asia initially. Stocks getting slammed overnight. Chinas benchmark index dropping as much as 6 at one point. Now down 5. 31 on the shanghai. Among the catalysts, a drop in oil prices. Im going to skip profit taking because i just am. And liquidity fears. Europe keyed off about what is happening there. And you can see is down about 1. 5 to 1. 6 in france and the ftse. Greek stocks are among the worst being hit. Continued Political Jitters adding to the pressure. This is a movie weve seen before. Well see how this plays out in greece. And Oil Prices Hit a fiveyear low this morning. But we do have a little bit of a bounce. Up 54 cents. Thats not helping the equity markets though. Lets tell you some stories you need to be watching this morning. The cnbc allamerica survey say americans plan to spend more on Holiday Gifts this year than any time since 2009. They just took a nice shot of you joe. You look very studious there. In the meantime, Small Business confidence soaring up to a near eightyear high. Owners are bullish about business conditions, sales, and earnings. They say they remain cautious about Capital Spending and hiring. And then two economic reports of note this morning. Theyre coming at 10 00 eastern time. October trade data and then the jolts report of job reporting and labor turnover. Looking for more evidence its looking a bit brighter. Jeremy siegel predicted right here that the dow would hit 18k this year. It came within nine points of the milestone yesterday before the stumble. Could be another slide today. What does professor siegel think for the rest of this year and in 2015 . He is professor of finance at the wharton school. He joins us now. And our guest host Mario Gabelli joining us now. Im sorry we said that again. I read whats in front of me. There have been times youve been less bullish in the past, havent there . Oh, yeah. The biggest time is of course was 2000 when the market was the most overvalued ever. And then i was very, very bearish at that time. Will admit i didnt see the financial crisis because the dow and s p werent anywhere near as overvalued as before. Yeah, that snuck up on me. But 2009 i was very proud to call that low in march of that year and stay bullish which many people did not through the next five years. Right. From 7,600, we looked it up. 6,600. Yeah. Anyway. So thats quite a return. Now, professor, we got within nine points of 18,000 which is, you know, thats close enough for government. Were definitely close enough for government work. But at this point, would you lighten up at all at this point . Get some dry powder, take some profits . What weve heard from pretty savvy guys recently, jim paulsen for example, is that the markets already responded. All the good news is well known right now. About a better economy here and Lower Oil Prices and all, you know, Interest Rates staying low for an extended period, inflation staying low. All those things are well known. You sure everyone hasnt already acted on their bullish intentions . No. In fact, i think this reaction the last couple days is much Lower Oil Prices which is a very strong tail wind for the economy in 2015. Remember we always heard about all those head winds, you know, defaults, and sequestration and all that. Now for the furst time i think we will have a tail wind next year. Now, the adjustment this drop as weve all been talking about is really quite dramatic. And we know the s p is overweighted in some ways with a lot of oil stocks. So theyre going to react. The tail wind is going to be coming in the next six, nine, twelve months. And i dont think that that has really been factored in to what we can see in 2015. I hope and i you know, were all puzzled how can we have so much employment growth . Ovk we saw those labor market figures last friday, and have such poor gdp growth . Some way that is going to be resolved and i think were going to have 3 to 4 gdp growth for perhaps in 2015 and ill tell you. Thats not been discounted yet in the market. Okay. In listening to you, i tell you one thing i heard. That was the market in the past has been dealing with all of these things that people said were negative like the proverbial wall of worry. Now theyve all been removed and therefore the market and usually thats the sign. You know, once youre not worried about the wall of worry, thats a lot of the time when the guys that have already been in are handing off the stock to the people that werent in. But you said some of the stuff has not been discounted effectively. Okay. Let me ask mario, its like asking i cant think of an analogy quickly. You can do it, joe. But youre a bottoms up guy. Yeah. We look at specific companies. Hitchhiking on jeremys comments, seven years ago we hoped that we would focus on jobs, jobs, jobs. Now we focus on wages, wages, wages. That is a powerful stimulant to Consumer Spending which is an important part of the economy. So we think that will be a pretty good tail wind in 2015. And more importantly than that maybe we can come to grips as a United Congress on the notion of putting out Balance Sheet in order for this country. And get a tax reform. Those are two elements not in paulsens equation. Johns right. A lot of good news shortterm is out. Jim paulsen. Whos john . Jim paulsen. You pick yours, i pick mine. You think higher wages is more important than Lower Energy Costs for the consumer over the next year . I would think that my combination of both what i get in and what i can spend are two elements, but i think youre going to have both. And that is if i go to the pump, the average car in the United States drives 12,000 miles. I get 22 miles on a gallon. That is an important people think when you start seeing wages go up, 5. 8 unemployment, you think the labor market is tightening to the point inflation wont come back. Thats when people start worrying. I dont disagree rates go up from zero. Theyve got to. But notwithstanding. Thank you for flushing that out. That gives me a chance to talk about things later on. But you deal with the notion of wages. 70 . Consumers net worth is at an alltime high. Every day youre going to the pump. Food prices are not going to go up as much. Because of whats happening. And gasoline. And every week youre going to feel better when you but you dont do it right away. 70 of purchases, its going to take a month when your bill is lower and youve got more money left over. I want to go to professor for a moment. Do you think theres a correction coming at all next year . Yeah. How big . Weve gone so long. I think in 2015 well have our first correction which is defined as more than a 10 drop. We had one already. Now, people people say doesnt that mean i i should wait for that . We had one a month ago. The answer is no because if its up 15 and then goes down 10 , youre still better off you dont know when thats going to come. You count the ebola selloff . We had 9. 9 on the s p. You dont count that . You cant say we havent had one. That counted. Professor, you dont think its coming so soon that if youre sitting with dry powder you wait for that moment at this point . Right. Absolutely. People always say im going to wait for that correction. And theyre waiting and waiting and waiting. And the market is up 20 to 40 . At some point, yes, it will go down 10 . But thats still 30 higher than when you first said im waiting for that correction. Thats the fallacy of that strategy wait for the correction. I think well have one. Im not certain. I think well have one next year, but the market could be up 15 , 18 before that happens. I still think that given the tail winds that were going to have, the market looks attractive to me. Yeah, Interest Rates are going to come up, but not that much. The fed fund race is going to finish at 55, 75 basis. You know, maybe 1 . Is that really going to tank stocks . No. Jeremy, you talk about the year ending 2015 and 1 . Yeah. On the fed funds rate. Yeah. I think we could end 2015 at 1 , maybe three quarters a percent. Thats not a scary rate at all in terms of equity. I mean, the average dividend yield on s p. Is still about 2 . So youre better off sitting with stocks that do nothing on price than holding cash. Or holding bonds. So to me the money is still going to flow in that direction. I do want to comment about i wish we would have a grand bargain the next two years on taxes and spending and longterm deficit. But do you really think the republicans are going to be in the mood to bargain when they think they may have it all in two years . I think well have a stalemate over these next two years until we see what Party Controls the next presidency. I dont think either i dont know if id single out the republicans for not bargaining over the next two no. I agree. Im just saying they are in a position and i would do that if i was a democrat in that position. Im not saying theyre not willing, its just that they think their strategic position is likely to improve. One thing youre ruling out so i dont think were going to get a great environment. Though id love to. One thing youre ruling out which is significant is weve had a move in the market from 7,000 basically on the dow to 18,000. And youre ruling out a 20 bear market. Youre saying were still all systems go in terms of extension of what is really turning into a historic bull in terms of time and how far its moved. So you dont think that you need to get off the train in any sense at this point. So well put that down. Thats for 2015. A historic bear market that, you know, stocks are down 65 from october 2007 to march 2009. That was the most in 75 years. We ended the most undervalued in 75 years. Thats the basis of this bull market. I dont think that were overvalued now. Youre going to have a bear market when the recession is imminent or the market gets frothy. Way above what earnings are and the fed is really pulling on those Interest Rates. I dont see that happening in 2015. All right. Thank you, professor siegel. Mario will be here with us for the rest of the hour and well have a bunch of stock picks. Thanks. Up next, the allamerica survey with stunning results on how we are shopping right now. Whos winning the battle . Is it online or the real thing . That plus the titans of media. Plus the host of nat geos hit show chug. Squawk box will be right back. But what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. You dont need to think about the energy that makes our lives possible. Because we do. Were exxonmobil and powering the world responsibly is our job. Because boiling an egg. Isnt as simple as just boiling an egg. Life takes energy. Energy lives here. This morning. See how the market is setting itself up for the morning. Not looking good with the dow looking like its down 118 lower. The s p 500 off about 15 points. We should also tell you shares of h r block are getting hit hard today. Posting a bigger than expected quarterly loss. One slice of our cnbc allamerica Economic Survey is looking at where we are shopping right now. And theres one trend that could be very worrisome for some of the bricks and mortar as they battle the clicks. Courtney reagan is here to explain. Courtney, whats happening . You may not be surprised by this. Online shopping gets a lot of attention at cnbc. For good reason. Its growing every year. Though 90 of purchases are still made in physical stores, for the first time in cnbcs allamerica survey history, online is the number one place americans are shop this Holiday Season. Thats up from 18 when first asked in 2006. For the first time, eclipses big box stores. That may not mean the majority will occur online. But a destination for more americans than ever before. And for many americans, Online Shopping is a compliment to instore shopping not necessarily a replacement. Of those americans who researched potential purchases online, 41 are more likely to buy the item in a store trumping those likely to buy it online. This suggests the final check is that physical touch point. Web roaming a is trend pushing to provide shoppers the availability and option to buy where they want to buy and research where they want to research. More evidence to suggest physical stores arent going extinct, but retailers need to ramp up operations of both. Okay. Thank you for that. Coming up, the king meets the prince. Plus a christmas tradition returns to providence. Then the Media Conference b. Our own david faber is going to be along to talk about the changing landscape just minutes from now. And well introduce you to the man behind the first kickstarterbacked tv show. Host zane lamprey is going to join us to tell us how he crowd sourced his way to success. Squawk box returns in a moment. Dad,thank you mom for said this oftprotecting my future. You. Thank you for being my hero and my dad. Military families are uniquely thankful for many things, the legacy of usaa Auto Insurance could be one of them. If youre a current or former military member or their family, get an Auto Insurance quote and see why 92 of our members plan to stay for life. Welcome back to squawk box, everybody. You guys are missing out on the commercial breaks. Were talking to Mario Gabelli who is our guest host. Shares of tesla down again this morning. The stock off 25 from the alltime high in september. Shares are on their worst sevenday slump ever down about 14 over that period. For their american tour, the duke and duchess of cambridge took their talents to brooklyn last night where they met king james himself. Lebron james speaking with prince william, wife kate backstage at the Barclays Center following the nets cavaliers game. The cavs winning on the road. Lebron presented william and kate with a cavs jersey and a mini cavs jersey for prince george. In the meantime, lets turn our attention to Mario Gabelli. You didnt go to the game last night, did you . No, i did no. We were at another function. What goes on at the 15th annual arbitrage . Why not do a simple thing . You can buy the knicks and the rangers but you get them for free. I can give you a billion and a half dollars by buying Madison Square garden today. Thats the economic value that accrues to you as an owner. But any event, king james is there. Lets hope, you know, the knicks are not going to do worse than theyre doing now. We had news earlier on the program about autonation tell me your views. Autozone. I apologize. You have the producers. I think within the next two or three months theyll have a lot more deals by finding deal on wall street than they did in previous cycles. Yesterday announced theyre having a lot of suitors. The stock has collapsed. And the users of energy, the owners of the cars are feeling better so that they buy parts at autozone, oreillys, napa. And those businesses are doing quite well. The stocks are going quite well. They benefit because theres 250 million cars on the road. Theres maintenance. Some companies have not been able to execute like pep boys where they have not done a good job. On balance, its been a good industry. Plus autozone is one of those where shrinking the cap, theyve gone down as of last night. Thats the company that had okay comps. Then the question is whats the exit strategy. Oreillys is down from shares to 105. Those are pretty interesting companies. And in addition where do you buy your gas . You go into a gas station. Some of us like joe sends his chauffeur to get his. Youre confused among anchors. Do you hear what he said . Shrinking the market cap. You know what that means. Buybacks. Totally antibuybacks. Would you prefer buyback in most instances or a special dividend . No. Dividends are not particularly helpful to me. Because of the tax issue . No. Capital gains and dividends are both at 23. 8 for most individuals. Im assuming you live in florida so you dont pay state tax. But the reason is im increasing my ownership of the company for my clients. When viacom has gone from 740 million shares to 420 and i kept my shares constant, i now own a bigger piece and the residual value some day will be worth did sh. You wont get anywhere though. Hell be right back where he was. Because gabelli dont know anything. Theres a high probability hes right in that case. But over priced to support it, youre 100 right. So youve got to determine what is the private or intrinsic market value. So either change your opinion or tell him where hes wrong. Do one or the other. Or both. Heres my question. Different question. It relates to buybacks. Which is there are companies that institute Buyback Programs. And i would argue somewhat thoughtlessly just follow the Buyback Program as it is without looking at the value of the stock at any moment. How does anyone ever know what the value of the stock is . Ceos always think their stocks are undervalued. When Warren Buffett announces it, he doesnt necessarily go through with it unless he actually thinks theres a great moment. But there are other companies that have pursued Buyback Programs that they announce it and they just close their eyes and every what ceo thinks theyre going to fail . You dont want to invade your investment ratings so you have to be careful on that. But not beyond a certain multiple of ebita. And theres a company that those have recovering revenues. Youve got to look at the cash flow character. Theres also a difference. If ibm has got lower revenues than five years ago and the only way to get it to go up is buybacks, thats different from a company thats continuing to increase revenue and growing and just wants to shrink capital base. Im talking about ibm too. I agree with you on ibm. We started on autozone so we can finish on that one. They also did one other thing. They didnt go to scan but they have their vendors increase their payables. If you look at the payables at autozone, 1. 2 times inventory now. Did we ever hear from buffett on ibm . We have not, no. Hopefully well get him on soon to talk about this. When would we know . Hes got time. He gets to file a little later. It looks like it could go under 160 today. It hasnt been there recently. Its down 160 and change today, right . Yes. 160. 82. Thatll be telling. If he likes it at 180, hes got to love it at 160. Unless he doesnt. But well find out if he bought more or sold any of it. And with him, he can say him buying a million shares is like anybody buying an odd lot. When he moves, he moves big. But cash spinoffs are the holy grail. Thats what they did with the post. Well talk about that in just a moment. Well talk more about making money work in the media sector. Our guest host again is Mario Gabelli. Hell give us his picks. As we head to a break, look out, people. Heres a look at the u. S. Equity futures. Dow futures down 118 points. This reflects what happened overnight in china with their markets. Squawk box will be right back. My baby drove up in a brand new cadillac. Look here, daddy, im never coming back. Discover the new spirit of cadillac and the best offers of the season. Lease this 2015 standard collection ats for around 329 a month. Starts at 6 30 a. M. On the vo rush hounose. Und here but for me, it starts with the opening bell. And the rush i get, lasts way more than an hour. announcer at scottrade, we share your passion for trading. Thats why weve built powerful technology to alert you to your next opportunity. Because at scottrade, our passion is to power yours. Welcome back to squawk box this morning. Among the stories that are front and center, apples ipod class action trial, that continues. This is somewhat unusual because a judge disqualified the last remaining plaintiff. What that means is the attorney suing apple now have to identify a new plaintiff and the deadline for that is today. Also amazon introducing a new Service Called make an offer. It offers customers to negotiate a lower price on some items. Lets check out shares of verizon. Were doing that because its falling after the company said shortterm Profit Margins are under pressure from promotions to get customers to upgrade to the latest wireless devices. Becky . All right. Lets turn to Mario Gabelli to get some of his thoughts about whats been happening at media place. Some of the opportunities in the market right now. Mario, were going to talk to david faber in just a moment at the conference. But you were there yesterday. What did you hear . What did you find out while you were there . I focused on stock specifics so i had some preconceived ideas. For example, graham holdings, the Old Washington post was there. They did a lot of Financial Engineering in 2013. For example, buffett got them to do a cashrich spinoff. And that was pretty interesting. And now theyre spinning off their cable one which is a cable asset. So you and i will get an asset worth almost 2 billion. I dont think that will affect the public price of the stock after the spinoff three or six months from now. So i want to own assets like this. The residual asset will have a lot of cash, underfunded pension. The question is how are they going to put that to work . Thats a work in progress. David faber is actually live at the midtown conference. Hes sitting down with a number of the media heavy hitters today. David, what do you have coming up for us this morning . You know, were going to be talking with Chris Albrecht of starz. You may have seen the stock went down after we reported cbs wasnt interested and others may not have been. David zaslav who runs discovery. And later jeff bewkes. First time hes spoken in a tv interview since the unsolicited bid from fox. You might imagine certainly you want to talk about consolidation. You might want to talk about the bundle and whether it will hold or over the top and the threat it poses. But really front and center for a lot of these guys is simply the ad market right now. For these networks that continue to go down. And whether that is going to change or whether thats the new normal. Okay. David, thank you. Well be watching that and looking forward to all those interviews coming up in a bit. And liberty is missing. They had their own analyst about three weeks ago and theyre not on the agenda for today or tomorrow. So were going to watch what theyre doing in the world. Theyre always doing something, mario, as you know. Is anyone from viacom speaking today . No, that was yesterday. And todays cbs. That was yesterday. Yeah. We got James Murdoch right now speaking. He as you might imagine wasnt interested in doing an interview with us. But hes talking. App lot of talk about international as you might imagine. That tends to be the growth area for some of these companies. Certainly discovery where revenues were up internationally but not domesticicly. Sfox a big focus as well. You wont say, but angelique did a great job talking yesterday. You dont think wed see they . Faber, nice tie, number one. Thats new. Thank you. I havent talked to you. Did you see the rocket ship take off the other day . I did. And you know what . It was cool. But joe, youre making a reference to something that is a joke between the two of us that is 18 years old. I mean, nobody knows. Its not just between the two of you anymore because he talked about it on the air the whole day. But you still feel it. Thats why the blog was so great. Because you nailed what everybody feels when remember when they were forcing us to blog every day . That was any blog. One sentence. Its exciting to see a rocket ship. Anyway, thank you, david. You did it. I think it was only about ten years ago. He was on deadline and he did get it done. What, david . I did. And i watched it and i thought of you as i often do whenever i see a rocket go into space now, joe. Thank you. Thanks, faber. Youre welcome. Lets talk more to mario. You were there for the viacom speech yesterday. They touched on other points. The Global Market place mobility, the notion of the smartphone, watch what you want when you want to watch it and how theyre going to grow outside the United States. How theyre buying back stock, 2. 5 billion. They issued a billion dollars of debt with two puts. One, change the control. So if theres a change in control. But the second is meaning if sumner is gone. Yes or their holdings and doesnt take us along, theyll have problems. Can you walk us through what you think happens . First of all, National Amusements control the stock on the a which is about 50 million of the theres 350 low vote. So 50 million have ten votes. They control. We already consulted attorneys. Were going to do more of that to make sure theres a take along that nobody buys the block of the voting stock without taking all of the voting stock who do you think is going to take it over . A lot of organizations and individuals starting to look at how do they put a bid together. There was a deal done in germany yesterday announced with a company trying to buy the control without taking everyone else out. That is not appropriated. And what do you think happens to cvs . I think les it makes sense t come back together. And both have been shrinking cab. Did it make sense to separate two . Yes. Financial engineering like Procter Gamble, it made sense to spin off duracell. Youve got to have a free market system to spin it off and do extending over a period. You have to eliminate the general bring back the general Public Utilities doctorate to make it a lot easier than going through all the fancy footwork. You think that made sense for Procter Gamble . Well, thats a different issue. Batteries are included in the portfolio. But it was look at the price paid after tax basis versus your cash flow. Youre going to have two powerful businesses having it. But there are a lot of interesting opportunities in portable power. That doesnt just mean think about whatever you have on your ipad as a power source. Think about portable power in a variety of ways and the technologies there. Dont forget he bid the Electric Company in china. Byd. I always call it boyd. I agree. Its so period. I do. You need to dvr gabelli, dont you . Yeah. Theres a lot in there. You have to listen closely. Youre awfully kind. No, there is. Ill go faster. Dont go faster. Mario is our guest host. Well have more with him throughout the morning. When we return, booze news. The host of nat geos chug following his monkey rum business as we head to a break. Take a look at some brewers to watch. Theres a nice list there. Squawk box will return in just a moment. Right now, you can get a single line with 3 gigs for 65 a month. 3 gigs. Is that a lot . Thats about. 100 app downloads, 45 hours of streaming music, and 6 hours of video playing. singing and five golden rings ha, i see what you did. singing four calling birds. Three french hens. the guys starts to fizzle out two. Turtle. Doves. I really went for it there ya you did. You really, really did now get 3 gigs of data on one line for 65 a month. Switch to at t, buy a new smartphone and get 150 credit per line. Health can change in a minute. So cvs health is changing healthcare. Making it more accessible and affordable, with over 900 locations for walkin medical care. And more on the way. Minuteclinic. Another innovation from cvs health. Because health is everything. Good morning, everybody. If you are just waking up, look out. Futures are under pressure this morning. Right now the dow futures down close to 150 points below fair value. S p futures down by almost 20 points. This is coming after some extreme weakness in china that has then carried out in european trading in the early trading there. Keep an eye on this. Were getting closer to the opening bell. Right now the nasdaq down about 42. Pizza hut taking a page from taco bells book. A crust with doritos. Its available only in australia. Luc lucky aussies. I want to try that. No word on whether it will come to the u. S. Remember pepsi used to own a lot of this. Pepsi had a piece of pizza hut. And taco bell. They still have all this synergy. Put them on everything. The dorito crunch taco was a hot seller. Yes. That created jobs . That created 3,000 jobs. They opened more stores as a result. And it was you know, tasted pretty good, probably, too. But this one, innovation in pizza. You need a drink with. Iz is a so were going to talk about drinking right now. If you like drinking and making money to drink, youre going to love our next guest. The host of chug. But heres the catch. The show was funded through kickstarter. Its the First Television show at least we know of to be picked up by a network after such a campaign. Raised nearly 600,000 to fund the first season. Joining us now is world traveler and drink expert zane lamprey. Owner of monkey rum. Hes brought some monkey rum and hes also wearing the drinking jacket. Ive got it all today. Which is also funded on kickstarter. 50 grand . Yeah. 50,000 was our goal. Right now were at 160,000. Were funded so its going to happen. Its at thedrinkingjacket. Com. Can i ask you a kickstarter funding question . Yeah. People who are funding you on kickstarter are effectively making donations as far as i can tell. Yeah. Right . So you will profit from this hopefully. Yes. And what do they get for doing this . They get to watch it . Im always trying to understand. You know, we talk about investors who invest in something and get Something Back from their investment. The kickstarter model is more of a contribution to me. Theres two ways of doing it. For the drink jacket, you pledge a certain amount. If you reach the goal, then you get a jacket. That makes sense. How much does a jacket cost effectively . 85. 85 bucks. So if i donate 85 to the campaign, i get a jacket. Exactly. But ill give you one. You want one . Make him pay. What does the drinking jacket do besides look nice on tv . Thank you very much. This makes drinking easier. This has a bottle opening zipper here. This is a koozie pocket. And these are drinking gloves. They have a grip on there so you keep the drink cold and keep your hand warm. You spent a lot of time thinking about this. Theres also a hidden flask pocket. How much are we drinking . Do you have a barf bag somewhere . Your friend behind you. Cool. So you got to be in line sort of. Did you invent a beer too . Your matt keeps talking about stuff like that. I went drinking with him last night. Was he late . He was late this morning, wasnt he . I know he was. The necessity is the mother of invention. Thats right. Thats correct. Apparently smells. The director just told me. Hes in a pile some place. Come back to the show though. I want to understand the financing of the show. Okay. So the show is a different scenario. I did a show called three sheets for three years. Went to the travel channel and then spike. It moved around. At that point i sold the concept to mark cuban who made a show called drinking made easy. Did that for three years on his channel. Then that turned into a Music Channel so we were left scramble to figure what to do. I was talking to my mom in syracuse saying i was pitching a show called chug where i would drink with the locals. And i pitched it to every network and theyre all like, were not sure. Its on the nose. We dont know about drinking as a show. So my mom said why dont you kickstart it . I hung up the phone in a rage and then went to Veronica Mars which is what she was referring to which was a tv show trying to make a movie. They tried to raise 2 million and they got it in two days. I said i guess this is a viable model. You know, they showed me that it was a possibility. And then the fans, that scenario is a little bit different. Youre basically playing to view something first. But they already had a fan base. How did you get yours . I had a fan base from three sheets and drinking made easy. Mine was much smaller. Right now my facebook is 150,000 people. But the kickstarter was 8,477. I got a percentage of those people and people who hadnt seen it before to take a leap of faith. Without them i wouldnt have been able to do it. And so whats the most any particular person on kickstarter who you did not know beforehand give. My relatives didnt contribute. And my real friends, only my facebook friends contributed. I would say it was probably around 750. But what that was was a dinner and a party that i did one in l. A. , chicago, new york. I went around and did these events. A lot of people give five or ten bucks . Most would give i think 25 or 35 to get the download of the season which would be six episodes. And then an hour behind the scenes. And i was promising halfhour episodes. And i like to underpromise and overdeliver which is a model that hollywood hasnt adopted yet. And basically give the people an hour episode. So i ended up going into my pocket a bunch. I think kickstarter at the end of the day, they financed about half of the show. And then nat geo has come in. And acquired. Its sort of how long are you with so youre stuck with nat geo right now . Yeah, im stuck with them. I want to talk to hoffman about this. You think they should be on cnbc . Yes, i do. Buy the syndication rights afterwards. I dont know. We didnt talk to you at all. You want me to yes. Can my person call your person . Im sure cnbc was probably one of the networks that said no, because every network said no as a concept. You dont know if we definitely said no. Can we have another chance . Ill give you a chance because youre being very nice. So yes. Were the Fastest Growing Primetime Network in the world. Look, i the show, its funny. Because people look at the show and at face value you think its called chug, this guy is drinking, its not my cup of tea. If you watch the show, its really about learning about the places youre going through the cultures of the people. Its a great idea. It is. Its a historical look at all of these things. If we could get marijuana in here somehow. From jamie dimon recently said you should never email after having a drink. I looked at your twitter feed. Im sure you drunk tweet. Maybe even nine hours ago. Youre right. I did. I did. And i saw it this morning, im like, im not going to erase it. I want a selfie pic like that with you after the show. True. Can i plug monkey rum . You did right there. I have to say my partner ian crystal who is the driving force behind this, i appreciate him. Are you going to sell this like whats her name did with the skinny vodka . Yeah offers . I think we have to sell first. Were trying to help you here. Yes. We got yes. Weve got to go. Your mother named you zane. Yeah. That is a cool name. Did they grow up on tip hill in syracuse . Near it, yes. Exactly. The lights are upside down and where the drink is prevalent. That will do. Thank you very much. Jim cramer talks about this mornings selloff. There are a few winners out there. Bluebird bio is a big one. The stock soaring on the news, up 51 . Again, futures under pressure. How much money do you have in your pocket right now . I have 40, 21. Could something that small make an impact on something as big as your retirement . I dont think so. Well if you start putting that towards your retirement every week and let it grow over time, for twenty to thirty years, that retirement challenge might not seem so big after all. E financial noise financial noise financial noise financial noise welcome back. Abercrombie and fitch shares are soaring. They Just Announced their ceo Michael Jeffries is retiring immediately. Thats not what you like to see when you leave the company and the stock is up 7 . Arthur martinez the chairman will be running things day to day. He used to be with sears. He was the savior. This will be an interesting stock. That stock is up 2 on the news he is stepping down. Who took the logo off . Thats the folks. This is the guy the article was written. Talking about the white gloves and airplane and all this. The aftershave you had to wear. And some lame song they always had to play. All the Flight Attendants had to wear the same uniform. Was this guy on . He said maybe plump kids like me and you were uncool. He had to the quest to be a cool kid himself. He was on our wall of shame on mad money. I wondered if you put him on the wall of shame. I said if he left the company, it would have an immediate increase. He was a great destroyer of value. I think even a headless horseman will do better than that guy. We can buy something now and not feel bad about not being cool kids . I think he eliminated about 95 of the population. You had to be Bradley Cooper when he was 18, 20, maybe, maybe not. Bad day today. Oneday wonder . We have so much individual news that is not so great. Bank of america said things are queasy. October was not a great month for the banks. That wouldnt shock me. Verizon with the price war. Spirit air downgrades. People sending down the airlines. There is oneday wonder, i dont know. We are up so, so much. Its okay. Its fine. Good. Thanks. Well see you in a couple of minutes. What was the song . Take me home by Philip Collins for the plane. [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say, a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move, wherever you are. And start working on your next big idea. Laura is going to do 12 stocks in one minute. Investment companies. Infrastructure. Nature star zilem. Investments are simple. That is what i talked about last night. Legg mason and t. Rowe price and janus. Christian hanson. All of them come together to create iii. The four of us seeing eyetoeye how to make money. We had more than a minute. Ive got more to do then. The notion of investments is simple. Legg mason and janus are doing quite well. T. Rowe is the steady hitter in that. Its a way to be a surrogate for the market. Changing tastes of the american and public and the world population, less salt, less sugar but more of Everything Else thats nice and spicy. Thats where the iff and Christian Hanson fit. In infrastructure we need. Mario, thank you very much. Always a privilege. Join us tomorrow. Squawk on the street begins right now. Good tuesday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer. David faber is at the communications conference. It has been 1 1 2 months since the dow fell two days this a row. Today might break that street. Premarket rough on worries about the fed signaling an end. Shanghai had its worst d