Transcripts For CNBC Squawk Box 20151201

The s p is higher by 1 while the dow is fractionally lower. The russell 2000 dropping 6 in a month. Take a look at u. S. Equity futures this morning. Did you check those before you came in. Nice, right . Or were you waiting to see. I didnt know what numbers were. S p 500 looks like it will be up by nine points now. If it were to open up now it would be open 23 points. Have someone that drives me in. I know all of this stuff. Foreign exchange. But it changes often times. No, no, pretty good idea. If its down 200 you know its down 2000. I knew it was probably just positive. Europe trading things like that. Nice. Just like a professional sort of. Do you know, can you do i cant. Whatever it is, i cant. You cant do the call of the consumer . Do the call of the consumer . What do you think . John, do you have any stuff like that that we can thats not bad. Anything else . Not bad. Hes fast. Hes fast. I dont know. What is the call of the consumer. Do you know . I dont know. I said it. I heard you say it. Mine was more of a caw. You know, everybody here there. A guy getting tazed. Remember that . The msnbc guy . Im going to have to watch someone that actually asks to be tazed but he did. A fantastic voice. The early numbers suggest yesterdays cyber monday retail bonanza is the biggest ever driven by online discounts. Adobe sales up 12 . Target says record traffic to its websites caused it to crash. Customers were given an apology message and theyre offered a sitewide discount of 15 today. I dont know whether thats good or bad considering a lot of inventory building up and the nations auto makers for the first straight month with sales above that mark. And a few economic report. Still has the right to oversee Health Care Decisions that continue after a california judge failed to take either side. He also didnt grant a request of his former girlfriend. Theyre ruling theres no urgency for such action. Instead a january 27th hearing and all of this raising lots of speculation about has health and perhaps in the Business World about the future of viacom. This morning on some of the worlds most powerful fund managers. Einhorn lost 20 in his 2015 portfolio. And joe, the solar company, sunedison. Right. The stock fell 56 . That was brilliant. Im pretty sure i could do down 20. I think. Dont you think . I do. Im not kidding. If i aimed for down 20. I think youre right. Lets check on the markets this morning which we talked about. Europe yesterday, europe wasnt bad this morning. Its down fractionally in germany and france. Ftse up with italy and spain. Last week looked like shanghai might be a problem again but monday and tuesday of this week its up 12 points. Up a little bit yesterday. Check out the oil was actually stronger than people thought yesterday and today its flat. And the ten year i think is 223 or so. Where is it now . 223. Look at the dollar versus the other currencies. The yuan they decided to put it in reserve status. Just under 106 on the euro. I see whether we actually do get a print of one or below and gold down a little bit and up to date at 1068. A little Global Market news. Chinas factory activity contracting for a 9th straight month in november and slower pace in october. Eunice yoon joins us with that story. Good morning or good evening. Good morning, andrew, joe. Hey guys. Well, yeah, just had more bad news out of the second largest economy the official pmi fell in november and to the three year low. This is the worst we have seen for quite sometime and theres also a private survey known as the market index which also indicated that there was a slight improvement but still signaling that the Manufacturing Sector is quite weak. There was a bit of a pick up according to the measures in external demand but domestic demand remains lackluster. The Services Industry did better. It was resilient but still not enough to offset the declines in the manufacturing and industrial sectors. Now this all threw some cold water on the party thats been going on here after the chinese yuan was included in the basket of currencies at the imf and not helping matters either, the fact that china has had to now shut hundreds of factories in northern china to cope with some of the worst pollution in quite sometime. According to the u. S. Embassy measuremen measurements, our air is 25 times worse than what is deemed hazardous. Schools have been closed and children are allowed to skip school today and also flights have been cancelled and this of course is going on as the president of china is vowing to take on Green House Gases at the Climate Change talks in paris, guys. Those arent Green House Gases were talking about though, eunice, as you know and some actual physical pieces of particles that have gone to pretty high levels in the air over there. Yes. Nothing you were looking at there was a colorless odorless co2 which now in the atmosphere has surged to the level o of. 004 . I shouldnt have started up the whole debate but the pm2. 5 is the measurement people look at. The particles that enter my lungs every single day and according to the u. S. Embassy went up to 634 today which is much higher than what they say. The who says it has to get 25. Particular pollution. Which is disgusting but nobody is talking about that. Andrew, help me. I think that we are never going to solve this discussion in the matter of time that we have right now. You can solve it by trying to cut down on particular pollution. Sulfur dioxide. These disgusting chemicals in the air instead of the solar mind focus on the co2 religion. Appreciate it. We can also look at the longterm view. Longterm view. Oh. Wall street. Our guest host this hour is bob dahl. Well talk to you in a second about macro stuff but for a long time you were like a Big Health Care guy and lately theres been, not great market action. Are you buying more . Does it change your view given whats happening with obamacare . There will be a lot of noise. Whether theres any action doesnt matter. The stocks had a pretty high pe and yet i think sell some of them. We trend into the last run up so were being far more selective now. So our favorite, United Health care, still own some. United health was the biggest. Maybe not stick with the exchanges. Fascinating on the exchanges. Not so much United Health care. Im going to leave it there. Its just been going into a long discussion about health care. We dont need to have it. No, its not. In hospital got hurt too as well and drugs are suddenly on everybodys radar. We still own some fwrks ilead in the bio tech space. Also i know you thought Domestic Companies would be better because of the dollar, but we think of retail as Domestic Companies. They have not done well either. The consumer is still spending some money. Theyre just not spending it on bricks and mortar retailers. Theyre buying houses. Trading up in houses. Buying cars, buying experiences. Theyre using amazon to buy the stuff they used to buy at macys. You have to be more selective. Consumers are good at spending some money. Savings rate going up. You heard it. As an economist are you listening to the is it like a dog whistle . How is she doing . Thats the consumer. Thats where all the decision gets made. I sometimes execute the orders. Its simple. Job growth. Youre seeing wage growth. Youre seeing hours extend and Interest Rates are going to go up so people dont have to live in a zero rate environment forever which is going to cap the savings rate we have been seeing. Put someone thats 50 or 55 years old in a situation where you tell them the rate of return on their portfolio if theyre trying to be in a safe portfolio is close to zero and you can generate a lot that way. Were going to see a rate increase in december. What are you . 90 . 80 . The market is around 80 right now. Thats as good as the fed is going to get without coming out and saying it in advance. Everything is lining up that way. The day before the fed meeting there should be a nice little pop in headline inflation because some of the year over year comparisons get a lot better. Thats something we have talked about so optically it will be easy for the fed to hike rates in december assuming payrolls come in somewhere near what we expect. The 150 will still do it. Good enough. Its credibility too. Yeah. At this point, this isnt the football, right . You cant constantly take the football away and still have the market come and try to kick it. By this Time Next Year, where will the fed be . This Time Next Year we should be coming up on kind of 100 basis points higher. Three or four over next year. We expect one rate hike this year so 125 higher by the end of next year. Yield curve and the ten year, where will that be . 250ish somewhere. Its not going to go up all that much. Right now its a little scary. Everybody says that but were selling a lot of things. Manufacturing in my mind right now is one of those kind of you either have or you dont. Not everyone is doing well but some companies are Still Holding in and some companies are doing less well and it depends on how exposed you are to the dollar. Any of the normal warning signs for what causes an obsession or you dont see any right now . Well continue to be one of the best economies in the world. My number one thing to look at with regards to the Early Warning signs of anything bad going on are claims this is something that should be spot on, very accurate and timely and were at all time lows. So its a low bar for an actual number. This is one you might have faith in. Im a little less trustworthy gdp. Youre trying to measure 17 billion on a quarterly basis. And a lot of estimates go into it. We Pay Attention to gdp. It has use and it still has high value added but i would look at claims, ism, bank lending, things like that. Youre going to be here for awhile. I want you to think about this then, 7 years now and were struggling to stay at 2 or whatever, zero. 7 years of fed accommodation which is not is that the new normal . Or are we doing something wrong in terms of not unleashing the american economy. The depth, the cause of the recession, the bust in credit and therefore the deleveraging cycle and all the deflationary pressures keep nominal growth. Were still in that world. Could the government be doing more things to encourage growth which is part of your question . Yeah, they could. But that would make some difference. Not the difference between 2 and 4 . Maybe 2 and 2. 5 . Really . A wish list of progrowth supply side policies would not get this above 2. 5. I dont think so. Get rid of a bunch of regulations. Go for a drink but its different. Coming up, we got a key finding of thank you for being here. Key finding of a cnbc exclusive oil survey. Well learn what top analysts traders and energy funds are expecting late they are week and what the cartels decision is going to mean for prices. Plus an internet sensation tries to make magic again. You have to see this video. Have you seen this yet . You dont watch korean videos. Its okay but well show you that. First as we head to a break, well show you this date in history. I hope hes what does 2. 5 billion views a aquate to and how is it money. There is advertising. How does he get his cut . No, you can actually get a cut. You can . If you put something out on youtube you can collect your revenue but its pennies. Not even a penny a view. Its, you know, a fraction of penni pennies. He has gotten paid for things like that. Hes doing well for himself. He did go on a tour. Didnt he go on a tour guys. You can go on tour once youre famous. And i believe a song sold. So its not just the Youtube Video itself. Why would someone buy the song just to watch it on youtube . This is the debate that adele is always having. Theres people that buy songs like people that youre talking about adele. Adele. And then theres Services Like apple music you get a fraction of a penny but you get money for every time the song is played. All right. In the economics. How much does he have . You work on this next sports segment. Ill get you some numbers. In dollars or we can do it in yuan because thats the new reserve currency. It will sound like more. Give me a minute. If you went to bed early last night you missed a great ending to monday night football. Ive seen people that have the fantasy stuff, theyre so mad this happened. They had it in the bag and apparently baltimore blocked what would have been a game winning fieldgoal by the browns. Oh, no, the browns on the receiving end of this. Thats sad for me. The ravens then returned 64 yards. Return it for a touchdown as time expired. Baltimore made 3327 with a 6th straight defeat. Before we go to this segment here we have jackie here. I want to i want to guess, 2. 5 billion views how much he made off of youtube. I have the answer now. You do. So just play a little 2. 5 billion views. Just doing youtube revenues. 5 million. Higher. Really . Higher than 5. Thats pretty good 25. No, too high. I give it away because its a tv show and we have to get to what is what is 8 million. So 5 buzz a pretty good guess i think. I had the right exponent. Youre close. Lets talk oil right now. Days away from the highly anticipated opec meeting. Will they cut production or not . Jackie is here with us. Good morning. Its difficult to follow the jeopardy music there but lets talk about oil prices because once again we polled some of the top analyst traders and energy funds to get their pulse on oil prices and predictions for fridays big meeting opinions were negative last time we were here. Whats remarkable is 100 of them this time think opec will not cut production of this meeting. They think members are stuck in an ambitious cycle where low prices eroded profits so the only action, pump more. November numbers were out yesterday. Opec pumped 131,000 Barrels Per Day more last month. The saudis pumping more as well and the groups output is near 32 Million Barrels a day its going to keep it lower for longer. Wti is going to finish the year between 40 and 50. Nearly 70 see that range for brent as well. Has wti seen it low for the future . 47 said no. They think the low will come in the first half of the year. Part of that can be a result of opecs inaction. More than half say they only see u. S. Production dropping next year. Theres no magical boost in demand and supply stays robust. Whats also interesting here is were seeing a little bit of volatility in the wti price. Were not going down right now even though most people think opec isnt going to do anything theres always the chance that me might. You can see a little buying into this meeting. Its sort of buy the rumors, sell the fact. We jump into this conversation. Do you want to agree or dispute the notions just made with the survey. Not at all. I was in on the survey and im in that 45 to 55 range through the end of the year and through most of 2016 right now. Prices are holding firm gaichbd where the margins are that is the differential between gasoline prices and oil prices and crude oil prices refineries are printing money now. So just like you saw over the summer theyre going to maximize the margins hence the stability in the price now. The question is when we get into the winter, refineries go into their Winter Maintenance season and theyre not maximizing crude Oil Production then its for lower prices. How low can they go . Well, certainly, given what were seeing with supply around its going to be limited and you can see oil down into the mid and low 30s. Prices we saw during the commodity implosion in 2009. Well leave it there. We appreciate your perspective this morning. Before we go to break, a quick note for you joe. So i give you the 8 million statistic on youtube. You were closer than i even thought though you would have lost with price is right rules. 8 million in revenue to youtube. They share half of it with him so he only collects 4 million. However the Associated Press also did an analysis of his earnings from itunes and streaming services and said he also made an additional 7. 9 million. All in collective i maybe 10 or 12 million. Probably somewhere like that. Not bad. Nice chunk of change. Coming up, this could be a make or break week for puerto rico with a huge bond payment due. And the fall out. Well talk about it when we return. Take a look, yesterdays s p 500 winners and losers. Welcome back. Attention travellers this morning ice and snow hitting the midwest again and Reynolds Wolf joins us with more on this from the weather channel. Youre kidding me. We havent seen him in a long time. Its been a long time. Great seeing you guys. But under these circumstances. Come on. He moved on to much bigger and better things. Look at whats happening here behind us. We get some scattered snow showers out here. All kinds of action reported around the twin cities. People in the twin cities we know how to drive in the snow however when you have your first winter blast of the season its like starting over again. We have a lot of head aches out there. Another 6 to 8 inches of snowfall by the evening hours and heres the machine making it work. You see the rotation in the atmosphere. This blue stuff, thats going to be the precipitation but over here its all green. Thats going to be your rainfall but a lot of moisture coming in from the gulf of mexico. Its going to be effecting travellers and airports too. Any connections to the smaller Regional Airports but also minneapolis and st. Paul. This is going to crawl its way into canada. Not only effecting new york but we do expect a mild tradition for much of the northeast but for the upper midwest its troublesome. The snow can be very heavy especially for the northern part of the state. Some locations may get up to 6 to 8 inches of snow through today and into tonight. Back to you. Thank you for that. Great to see you. Hope to see you again very soon. Meantime the weather is much nicer, the financial storm could be soming. Joining us now with that story. Thats a great toss. I checked the weather. 79 degrees and sunny skies but theyre facing another debt payment deadline today. 355 million due from the Government Development bank which is the financing arm of the u. S. Territory. Although the majority of the money owed is supposed to be constitutionally guaranteed, they really have to pay it, theyre widely expected to default on at least a portion of that amount marking the second to fall in a few months. Theyll been the hot seat as they testify about the on going debt struggles. That will be the third hearing of its kind in recent months and possibly the most impactful because they have oversight that puerto rico was hoping to gain in order to get out of the physical mess. Even if it does pay today, more and larger payments loom on the horizon including almost a billion dollars due to bond holders in january. Of which 330 million is on the islands all important general Obligation Bond which is many u. S. Mutual funds hold. More than 50 at last check. So this really effects people, pensioners and also puerto rican retirees around the country. Thank you. Its a crazy story. So many hedge funds have been whacked. They have. Supposedly the creditors which includes the hedge funds and others are showing more willingness to negotiate so we may be getting close tore deals but puerto rico has a problem. Im putting them in the sovereign category. Although not technically. Theres just dispute. Coming up, the founder of kind, kind snacks. As i said, this is a safe zone that were here in. Kind snacks and well talk about the labeling regulations. A healthy debate comes next. And peter orszag ahead of the big jobs report and later fords president of the americas. Stay tuned. Youre watching squawk box. First in Business Worldwide and on cnbc. Skills, skills, ive read all of your lyrics. Youve read all of my lyrics . I can read 800 million pages per second. Thats fast. My Analysis Shows your major themes are that time passes. And love fades. That sounds about right. I have never known love. Maybe we should write a song together. I can sing. You can sing . Do be bop. Be bop do. Do be do be do. Do do do be do. Welcome back to squawk box. This morning kind snacks is taking on the fda labeling regulations. Hes here to talk about it. The fda came at you and youre going at them now . Well, were working with them. They recommended that we file a petition where we they told us that some of our products, four of our products sent us a warning label telling us they didnt qualify as healthy and when we looked into the law we realized its a regulation that needs to be updated. It disqualifying and penalizing things like avocados and almonds recommended in dietary guidelines. So healthy low fat antioxidants. A lot of those thing like a symbol of how you clean up. Theres one in terms of how they define the term healthy. Under the current regulations something that has more than 1 graham or saturated fat cannot be consider canned healthy even if its stuff that is recommended under the diet deadlines. And its totally crazy because they say chocolate pudding is considered healthy. The current reg sugary cereal could be considered healthy but almonds or salmon or avocado cant. We would like to get some good idea. Its not confrontational. How quickly do you think they might act on it . Are there back channel conversations going on . This is going to be an effort. Its going to take awhile and its probably not just one front. Its working with the fda and also policy makers and nutritionists, scientists, with congress to try to get them to update those laws because currently the American Consumers are getting not the best guidance. But that guidance could be good for you but there will be losers in this too. The guys selling the chocolate pudding and cereal theyre not going to be able to do it in the same way or do you think its a broader umbrella . In any of the issues theres always a lot of policy debate but more and more science is becoming clearer and clearer. We got praise for how we framed it. We framed it that if its a product thats nutritionally dense and the dietary guidelines are recommending it dont penalize them because of their fat content. Years ago we thought any type of fat is bad for you. Talking about the science being more and more specific, the science changed a lot. Now whole milk, the notion that fat was awful has totally turned over. The notion that a certain amount of salt was bad for you. Now too little salt is bad for you. The notion that red meat causes heart disease, cause and effect arent the same as effects. Same thing with sugar. They try to factor up all the other things that go into what causes things like that and it seems to indicate a propensity but thats as close as you can get. Ten years from now you might have a different notion. General guidance. Any type of moderation. And when youre eating something recommend that its something that you find in nature and real and if its in moderation and balance and real woods its more likely to workout. Try to make sure youre not just putting empty calories in your mouth. You have less sugar in your products than many competitors. How does hah happen . It takes us. For instance our best selling product, it took us two years to develop. More about quality and finding the right balance and we use really premium ingredients that are more expensive but provide the better profile. So theres only five grams of sugar and it comes from honey. It comes from the almonds themselves. And a very, very tiny amount of sugar and just working really hard at it. I dont know if you want to weigh into this debate but the debate around sugary drinks and what should happen there and perhaps even salt here in new york. Theyre going to put pictures of salt shakers. Do you think these kind of regulations are a good thing, a bad thing. Do you want me to get in between you guys here . You could try. No harm in knowing theres a certain amount of salt in something. I generally shy away from regulation but i think America Needs more guidance and understanding because theres so many fads and so many people that are manipulating information to make people think this is the thing or whatever and i think education, whatever way we can do it my wife, the amount of things she deals with, people that are obese and kids that are, i think 25 kids are already in danger of becoming diabetic. Its a very, very serious issue. I think its very important primarily for industry, for educators, for scientists to work hard on this but i do think that sometimes government has some role in helping us and in helping guide us through and when the guidance is wrong to update that guidance. Good answer and safe answer. Thank you. We appreciate it. Very much. Great to see you. When we return, texas roadhouse. Oh, boy. Im glad this guy is coming in. The little bobble head guy. Hes holding a bottle of poison in andrews eyes. A bottle of coke. Big profits while other restaurant chains have been a raw deal. Coke in moderation my friend. Remember when the guy was here with the soda steam. He puts co2, he puts pollution into water. Its awful. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Its been a tough year in general for the casual dining arena, but texas road house secures the competition. The texas themed restaurant returns a full rack of returns for investors. That could have to do with their high stake fan base. Across all dining categories, texas roadhouse was likely recommended by its customers. Joining us now on set, the texas road house founder and ceo, kent tailor. Great to see you. Stakes steaks account for 44 of the menu. This would be redstone would love the place, steak every day, apparently. Every day, and something else, but exactly. I kind of wish you were doing this interview because this is probably not a place that you would consider to be great for consumers in terms of healthy eating, andrew. In moderation, my friend. In moderation. I do believe in moderation. Better in texas than maybe here in new york, is that at least a fair statement . Great all over the world. Great all over the world. Absolutely. The health craze, you just i dont know if you watched the last segment i was doing makeup in the back. Never done makeup before, by the way. Looking good. Probably lucky. Okay, so that is true. You would say everything in moderation . Absolutely. And so i tell my son in college that, but well see. Where does he go in. Colorado. Boulder . Yes. I think boulder they like to talk a good liberal game, but im sure they like ribs and steak out there too. Absolutely. Even buffalo meat. Hopefully they dont eat the buffalos name ralphie. You dont eat him. Looking at stocks flat the past couple years, is that a reflection of the tough operating environment . When i opened my phone up, i look at weather conditions in park city, utah. I never look at the stock. I never thats a good idea, for ski conditions. Comps are up this year pretty much. We dont worry about the stock up ore down, but keep our head down and do the right thing for the guests and employees. What you do to watch that, i guess, input costs . Yeah, beef costs were high this year. They are apparently going down a bit next year, so thats cool. Caption, where you decide to expand, how you decide . Were in 49 states. Were going to continue to expand across the nation, and were getting ready to open in the philippines next month and in dubai and saudi arabia and in taiwan. Are there peanuts on the floor . Where . On the table . The shells are on the floor. The shells fall on the floorment were okay with that. You can have peanuts on the floor. Then you know if someones sneaking up on you. I want to know about the relaxed attitude towards the shareholder, were just going to do he cares about we focus on the employees first, guests second, and that takes care of the shareholders in the long run. And you really dont focus on the stock price at all in. Not at all. You got dont know what it is today, no idea. Honestly, most ceos look at the share price like a couple times a day. How often do you think you really look . Once a week, maybe, maybe every two weeks. Wow. Yeah. Thats great. Are you from kentucky . Yes. Why isnt it kentucky roadhouse . I came up with the idea when i lived in dallas, texas, turned down for seven years, ended up in kentucky, and three doctors backed me up on the stores, and first five failed and moved back in with my parents twice. Glad i dont have to do that anymore. That was not great. If you were to expand, whats ba bubbas . A family sports bar that competes with buffalo wild wings, expanding that right now. We have seven stores, preparing to build a few more. The 44 consent come down or do people order smaller slabs of beef . Weve got guests focusing on, you know, eating healthier, might eat a smaller portion, or maybe dont have as much money and eat a 6 ounce sirloin, the number one item in 1993 and still number one today. So, kent, youve seen all around you, and youre not back here in the east coast, obviously, but all around you, youve seen the hyper sensitive atmosphere were in in terms of gmos or eating too much red meat, whatever it is. Would you ever change to sort of satisfy the customer, you know who customers are . We have offerings for every palette. We have salmon, salads increase those, for example, or do you try to cut down . Ebbs and flows over the years. Put calories on the menu . We do in new york and nationally coming up. Yeah, sure. Do you try to have smaller portions . Yeah. Our six ounce sirloin is the number one item, a smaller portion. Even you respond absolutely. We have 6 ounce filet as well. Tofu next . We have small beers and tall beers as well. Small and tall beers. Id like a tall. First six go down smoothly, andrew. Yeah. I like a tall beer. And in a frosted mug. Its ice cold. We like ice cold beer. I dont know what well eat. Are you thinking of a Breakfast Menu . No, no. Im usually asleep at this point. Our folks dont wake up until can the in the morning. You could do an egg and sausage thing. No, no lunch orbreak fast. Thank you for coming in. Buy low, sell high, is that the conclusion . Thats the conclusion. Coming up later this morning, our top stories, plus, from the fed to the looming budget fight in wash. Well tackling the biggest risk to the market now, city group peter orszag is the special guest when we return in a moment. Stocks post gains, and biggest jobs report of the year is days away. A pulse check in the economy and your money with citi groups peter orszag. The ceo who raised the price of a drug by 5,000 gets competition. The same is selling for a dollar a pill, support from a pharmacy power player. A famous elf is coming to squawk box. Santa oh, my god santas here . I know him. Not that elf. Uyou sit on a throne of lies you sting. You smell like beef and cheese. You dont smell like santa. Its the tenth anniversary of elf on the shelf, and we are joined on set as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc, first in Business Worldwide, im joe, and becky quick is off today. The market score card, s p down, nasdaq turned in seconds consecutive positive month since may. Nasdaq up 8 , s p higher by 1 , and while the dow is fractionally lower, and David Einhorn is down 20 . U. S. Equity futures right now, up 89 points. Well, the dow, the s p up 9, and the nasdaq up 23. Should we put that on the board . Why twist the knife on einhorn . Just index performances, up one, up eight. True, down 20. Down 20. Which i think orszag is good down 20, right . Up 20. In between. Hes up 20, give him a little. More top stories at this hour. Cyber monday indicated high sales, and comp sales top 3 billion, and meantime, black friday sales declined in key categories, but total spending thursday and friday was a deep rise, spending per shopper 1. 4 , and electronic consumer purchases dropped compared to last year. Auto makers report november sales today. Analysts there look for a Third Straight months with sales above the 18 million mark. Thats never happened before. A mattress merger this morning. Mattress firm is buying sleepys, the two large estimate stress retailers representing 21 corporate share. A lot of deals over the years, private equity deals, buyout deals, they are merged then undone, i dont know. What happened to water beds . Thats what i want to know, right . Hard to get in and out of. There was a moment for water beds. No longer. Needed to be heated. They leak. That moment was 30 years ago. Did you have one . No, but i wanted one. Because they were cool when you were a kid. Right. I had a friend whose parents had a waterbed, and i thought it was the coolest thing in the world. I like the ones where you set the wine glass there, and you can jump on it. The bowling ball on the other side. Yeah. It just sits there like that. Thats, to me, i think that coddles your own specific body. The november jobs report is due friday. Feds decision on rate hike is two weeks away. Joining us now to talk about jobs and the fed is peter orszag. We have a lot of things to talk about, pete. When i saw you coming, i wanted to talk about getting comments on some of the recent stuff with obamacare, too, because for a while, i think he thought it was a raging success in terms of i still think that. Okay. So explain, explain the recent stories in the news, United Health care, closing down the exchanges, the premium increases. Its not perfect. I put it as growing pains. We still have tens of millions more people who have insurance today that would not have insurance policy without the Affordable Care act, and cost growth remains very, very low. Are there concerns . United health care has announced it will its not announce its exiting. It announced its considering exiting. Joined late, its a small player, right . Et cetera. There are issues that needs to be addressed, but, again, look at the big picture here, the big picture is we added millions of people to the enrollment roles, and cost growth is down. Okay. I would could that a call that a success. All right. Okay. Time i just wish you could convince the public thats at 35 approval. This is the fascinating things that its unpopular among half the population, but when you look at if you consider 35 half. When you look at specific items, though how is this half . At this at the aggregate level, its unpopular. Specific items, do you want to take away Health Insurance for your, you know, the kids that are up to the 20s . We could have done that easy without changing the entire health care system. Go down the list. Whats the total addition . How much is medicaid . Out of . The total addition that its going to wind up being 50 . If not more. Increased medicaid. Depends how many states wind uptaking up, and some states, kentucky, for example, going another direction. The number signing up this year, or 2016 is incredibly disappointing compared to estimates. Why . Because youre focusing on the rong number. The right number, it doesnt matter how many people show up on the exchange, for example, if more or less employer droppings, what we expected when the past, and people go on the exchanges. That happened to a smaller degree. Its not because Healthy People are not signing up. Youre not getting all the hard cases . Not mostly. Why did businesses not drop the way you thought they would . Variety of reasons. First of all, its a lot of guess work in predicting whether firms drop or not, and its still remains an important way to say you get Health Insurance if you work here. Long term, does that change . It may well, especially if employer coverage moves to private exchanges. Heres a stipend, you buy it. The difference is not that big, and so it might ease away from insurance over time. You may not be here forever. Peter, dont take this wrong either. [ laughter ] youre really smart here we go. Youre a smart numbers guy, you know budgets. We dont talk about unfunded liabilities anymore, and i dont know what your number is on that. Is it 100 trillion . With Social Security and medicare, do you have a number . I dont like doing it that way. Okay. Heres another story that has not gotten very much attention. The Long Term Debt trajectory for the United States is better than five years ago. Talk about medicare and Social Security. Thats what im talking about it. It looked like this, but now it looks like this. Needs to be dealt with . Yes. Its not a hockey stick. Its an issue that needs to be dealt with. Speaking of hockey sticks, the greatest threat to the grandchildren are unfunded liabilities or trace levels of c02. Both issues. I put Climate Change, at this point, above unfunded above the fiscal stability . Yes. So. 04 because the cost, is that way . No. Because the risk of catastrophic Climate Change people misanalyze the climb change issue. Its not about sea levels rise by the expected number of feet, but the 1020 chance we have no idea what happens, and were taking a massive risk. Why do you think that 1020 does not exist. Peter, after 30 years of hearing this, some call propaganda, after 30 years of hearing this, car pooling is lower now than it was in 1980, percentage of suvs we need to tax carbon. Why havent you convinced people . The biggest concerns in the United States are 3 of the you cant expect people to do it completely voluntarily, like, ohhings im doing it for the good of the planet. When do you expected real estate in miami or insurance premiums in coastal areas to reflect that . You would think that money, smart money eventually, you would start to see if you were right, if it is apocalypse, whether when do you see it . Financial markets do not price risk decades out. Thats the fact of the matter. If youre its a tough issue because its hard to refute at this point because every single adverse weather event is now attributed to something i dont do that. How about the isis . Spawn by Climate Change . No. Dont you think that undercuts the whole argument of the president over there right now to say that with a straight face . Im not going to comment on that comment. I do think, again, the core problem here is that we need to be attaching a price to carbon, or else were running Carbon Dioxide . Yes. Carbon what produces carbon is sun and stars. Greenhouse gas emissions to be precise. For a time point, do you think you do that here, even if its not happening at the same level in china or elsewhere . One of the arguments consistently made we cant do it on our own. Thats true. We tax ourselves to death, but as long as everyone else is polluting, it doesnt matter. I agree with that. I would still do it here to show leadership. By the way, 15 price on carbon is not going to ruin the economy. Okay. Its not. I think its nice these guys meet and think that they have the ability meeting in paris to control the future weather. They are meeting there with the idea they can do that. No. Adverse weather events. Thats not the full ramifications. Its not just adverse weather events, but flooding, a lot of things thats a weather event. Control is too strong. Its influence. Okay. Do you think the path of Carbon Dioxide emission influence the path of future weather events . You cant argue that. Yes, i can. I can be skeptical that c02 is the primary control knob for the earths temperature. Another question, another topic before you go which is inversions. Whats going on . I read about that. Whats going on in washington right now, which is to say, do you think theres actually a real chance that this deal is going to sort of force tax reform on washington . Comprehensive tax reform i think theres almost no chance over the next 1216 months during which time this deal would close. Now, i think there is an opportunity here to carve out, basically say, look, weve, yap yap yapped about comprehensive tax reform. Thats not happening. In the next year, one deal that might be possible is you put a toll charge on all of the overseas profits, so 10 , whatever, regardless, and bring it back. Repatriate it, coupled with stricter inversion rules. That deal would be doable. Businesses support that . I dont know. Okay. Thats the ultimate question. Would it spur more deals or create a protectionist environment where companies actually try to get out before all of this happens. Usually that you can fact date so you can manage. Okay. We talked about this before. I wish there was a way for we could just look at corporations, make them globally competitive as possible and tax shareholders, tax employees, tax but let shareholder like pfizer wants to spend more on innovation. Like going to ireland they are doing that, but seen as shirking their corporate duty to build roads and pay for the infrastructure they use. Why not have employees and shareholders pay that and unencumber the corporation allowing it to hire more people and expand and innovate and compete globally. Pivoting slightly from that, what we need to focus on is evidence accumulates firms at the global frontier, the superstar firms are where so much of the action is with regard to productivity growth and wage inequality. Surprising share by some studies, all the rising wage inequality is because firms grow apart, average pay at each firm, reflecting the fact some firms thrive on the global land scape and others are not. Where you work has as much to do with how much youre paid as, you know, what your education is. Labor, you know, it was its much cheaper so many other places. Its tough. People want to live like we live here, and that means maybe we live less well. Thats a long term problem. A developed country in the next 50 years theres going to be convergence. Great for the rest of the globe, but terrible if youre already at the top. They want to be like mike. Good to see you. And you too. And you too. Ford adds jobs at the super duty pickup truck in kentucky. The companys president of the americas is going to join us here on cnbc, and then chinas getting a seat at the big boy table. Their currency now in a basket with the dollar, euro, and pound. How worried should we be about the development . Later, a modern day holiday tradition turning ten years old. The coauthors of elf on the shelf, turning a family story into a holiday staple for 8 million house holds. All that and more in a moment. Welcome back, days away from a read on the jobs report, but theres annual state of the business survey, a sense of the Fastest Growing companies, feeling about hot button issues right now, and we have the editor and chief of the ink magazine here. Hi, andrew. Not as confident . Is that the take they way . Thats true. I mean, you have to figure you are talking about the Fastest Growing Business Owners in the country, they are optimistic to begin with. Looking at the confidence numbers, they were down . From last year. So that what worries them are the sort of things that kind of capture the mood of the country right now. They are angry at government. They are worried about stuff abroad. They are worried about the chinese economy, about finding qualified workers. Anything that keeps them from growing the companies sticks to them. What about raising money . Thats a little bit better. Thats because banks are loosening up, but depends on Business Year end. A piece in the journal a week ago how the big banks are no longer the real lenders to small business. Theres been a remarkable shift. A tremendous change between online lenders and things like that. 54 cite regulation as a major drag on the economy, a larger number before, smaller than before . Just always persistent, consistent small Business Owners, people who do not see any upside in filling out papers for the government. A lot of thins happened in the last year that just pile on. Next year, too, did you see this, unbelievable number that the administrations proposed for 2016. Huge, mind boggling number. Never getting rid of the others. Overtime rules, sick leave rules, things like that. Before or after paris this was done . Before paris. Even so, global urn certainty is one of the things that small Business Owners cited. That was a real not in terms of before or after 9 11, we all think of more uncertain world, and factors into our thinking about all plans. Thats really true. Another thing they pointed to a lot, these small Business Owners, is uncertainty that arises from political gridlock. If you are worried that the governments going to default on debt or the government shuts down, those things make it hard to plan. 55 , i dont know if this is surprising or not, support a hike of a dollar or more. Well, when you consider this crowd right nthey are willing to raise labor costs. You had a cover story on the fellow who was giving out 70,000 to everybody. Yes. Dan price. Hes giving 70,000 to all workers because he thinks thats what it takes for a good standard of living. Six months, a year now . Is that thats been a success or failure . I read that story also, theres the New York Times sunday piece three months ago that actually seemed to indicate it was more of a failure. You had a positive picture. Its been a success. Hes not lost hardly any customers. Hes been attracting more employees. Hes not the dissension this caused in the ranks of employees has not surfaced, and the interest that that story has generated on inc. Com is tra tremendous. Right. The other issue is the Affordable Care act. Oh, yes. You have interesting statistics here. 43 of the respondents said they cut back in other areas to pay for premiums. Yes. Well, it just shows that Rising Health care costs are a real problem, and theres real effects on businesses, but you have to remember that Rising Health care costs are a problem for as long as i remember. Now it has a name, obamacare. And then you talk about a political gridlock, again, are the numbers surprising to you . As an issue . I think in this political atmosphere, no. These are really important, really important to the constituency, people who create the jobs, the innovation, growing the companies faster than others. Look at that, andrew. Whats that . Woah. Im surprised you let that come up. Really . Blaming obama more than republicans . They do. They do. The plurality its a plague on both your houses. 2012. How did that get through . Would you like a Business Leader to run the country . I thought 8090 would say yes. Why . Vilified greed monsters. Think about who is surveyed. The answer the economy run to increase compensation for the chief executives. Answer to me, surprising only 46 said yes. Yes. The people they chose were not donald trump or carly fiorina, but warren buffet, jack welsh, michael bloomberg. All right. Different crowd. Okay. Eric, thank you. Appreciate it. Great magazine. A programming note, the ceo of Inc Magazines company of the year is on closing bell today, 4 20 p. M. Eastern to see how hes disrupting the field. Are you on slack . Yeah. Joes like whats slack . Certainly do. I use all those things, snapchat, myspace. Coming up, the ceo who hiked the price of a drug by 5,000 just overnight is getting competition. We have the details next. Diabetes declined after decades of increases. It fell from 1. 7 million in 2008 to 1. 4 million in 2014. The number of americans with diabetes, though, is double what it was in the early 1990s, but healthier diets and physical activity, different lifestyle may be starting to turn the tide. We are going to give an update. Waiting we had you on set, meg is here with news on a new competit competitor. The drug that was the subject, of course of course, of the 5,000 overnight price hike turning the ceo into a ceo clebcleb celebrity. I dont know. Meg is here with more. Skipping a lot of stuff this morning. Nice to see you, though. Nice to see you guys. The news, we remember the drug tomato, tomato. Yes. The drug raised 5,000 earlier this year. This is an old drug for a rare parasitic infection, leading disease groups saying hospitals could no longer access the drug anymore. They have yet to do that, the news today is that the largest pharmacy benefits manager in the United States is partnering with a Small Company thats going to provide a compounded competitor to the drug daraprim including the active ingredient of daraprim and another drug used with it, compounding them together, they dont have to get fda approval to provide this because of rules about compounded drugs. Compounding pharmacies can make these things so they dont have to go through the generic approval process. They are going to partner to provide this, and charge 1 a pill or less than that for two drugs together. They are trying to undercut 750. Thats great. The guy that, you know, the Hedge Fund Guy that bought this, knowing he could do this is going, oh, i must not have seen the loophole with the compound drug that allows you to get around what is a this does not solve the overall problem, though, that makes it difficult for very niche marketed drugs. Its hard to get a competitor in there because of the regulations. We need to fix that, right . We definitely do. This was a loophole. Yes. Its great for everybody, doing it at a dollar, getting back to the way it was, thwarting this evil villains plans, right . Thats the plan, yeah. You afraid to talk . You with be expressive. Youre right. This does not solve the bigger problem because of the small orphan drugs that are priced prohibitively high base you cant come in and compete. . Right. This Compounding Company in california says it sees a lot of other drugs out there similar to daraprim, prices increased, but no competitors on the market. Theres the opportunity to do this, and partnering with express scripts, they have a lot of power. They are the largest in the United States. Embracing this, we checked it out, did the dill jen, very interesting. You saw the piece over the weekend, kyle bass, there are certain patents that probably, that spirit of the law is not served by the letter of the law, and the sooner bad actors comply with the conspiracy of the law, the whole industry is not under the bus for pricing, which probably most companies are not like turing. Thats true. Not painted with the same brush. Thats their argument, certainly. Companies raise price of drugs, but not require a 62yearold drug to be raised overnight. Turing has, i think, said that, you know, they plan to use proceeds from this to create better drugs for this disease, and they have said they are going to provide a discount of 50 to hospitals which they say the highest prescribers of the drug. They have not actually lowered the list price of the medication which they said they would do in september. They backtracked on that. Parasite, not even, you know, could be fatal, too, right . Can be. It can get in your eyes and cause problems. Its scary. You dont want this. Thats why we need the drug available. How quickly . Express scripts said early as this week they are filling prescriptions, they are providing easy to fill out form. Were talking a handful of people basically . Yes. All this stuff that weve talked about, all the smoke from this, and its how many people a year . There were 8,000 prescription written last year for this. Express scripts says 300 or more they covered. They estimate 2,000 in the United States of these cases a year, very, very rare, but scary, and we need drugs available for it if people come down with it. Yes, we do. Thank you. Great story. Fascinating. I dont know if its great, a terrible story, but interesting. It is a great story because we have the dollar drug now. Other headlines this morning, a new York Governor Andrew Cuomo expected to propose new financial regulations today with the goal of keeping terrorists from using banks to launder money, and New York Times says rules make compliance officers criminally liable if they file incorrect declarations about illegal money measures. They are selling part of the herbicide business, terms not disclosed, and falling crop prices spark talk consolidations in the farming industry, so thats a big headline this morning, and then theres redstone, the legal case over who has the right to oversee the decisions. That continues after a california judge failed to take a side, did not dismiss the case outright as lawyers wanted, but did not grant request to the girlfriend who filed for immediate new cognitive tests on the media mogul. No urgency for such action. Thats what were saying. Well see what it does and implications long term for viacom and who controls the empire. Ford rumping up the production of the trucks in kentucky. The president of the americas joins us next after a break. Ideas are scary. They come into this world ugly and messy. Ideas are frightening because they threaten what is known. They are the natural born enemy of the way things are. Yes, ideas are scary, and messy and fragile. But under the proper care, they become something beautiful. Welcome back to squawk box. Ford expanding production of the super duty pickup trucks in kentucky. Phil lebeau joining us now with a special guest. Hey, phil. This is joe hinrichs, president of ford of the americas from the Assembly Line where trucks are rolling off behind him. Joe, thank you for joining us this morning. This investment of 2,000 jobs as you move towards the aluminum frame superduty truck says a lot about the demand you see from contractors, small business, paint a picture of the economy that youre noticing in terms of demand right now for the superduty pickup. Yeah, phil, good morning. Were seeing Strong Demand for the fseries trucks. We had a strong month in november sales again, predicting increased sales over the next couple years as the Housing Market continues steady pace of growth, and, of course, theres a strong oil industry here, and construction is picking up. We predict stronger sales ahead for trucks, investing with that with more capacity next year and, of course, the brand new all new superduty truck. This investment and jobs added comes right after you finalized a contract with the uaw where your costs are going to be rising over the next five years, not as much as inflation, but it does raise the concerns that some people have out there in terms of labor costs. How do you, you know, calm down the concerns of investors out there that your costs are going to keep going up, and you cant keep up with transplants here in the u. S. . Reporter well, phil, you know, were seeing strong transaction prices in the industry, a good sign for the industry. On the labor prompt, you know, were pleased with the recent uaw agreement. We had a Conference Call yesterday with analysts to talk about the fact our costs rise less than 1. 5 over the previous agreement, improving the ratification bonus we agreed to. We feel its below inflation. Theres flexibility with temporary workers and more capacity with overtime to offset some of that. Joe, later today, you released november auto sales. You dont want to give us the number now, but how strong was the month, not only for ford, but the industry . Yeah. The industry will be above 18 million sar, a healthy industry, and, importantly, strong transaction prices. The strong transaction prices is a healthy month. Outpacing the increase in incentives . I know you had the friends and Neighbors Program discontinued because of lackluster response, thats what i heard from the dealers. Theres a new program youre introducing today, but does the increase in transaction prices, its offsetting what were seeing in terms of incentive growth . Our incentive spend is consistent, phil, watching that carefully to be disciplined, and it goes up as we stay disblipped. In december, theres the holiday sales event. Thats what the customers looking for and 0 financing, making sure we provide those offers, but were excited about december and very excited about how the industrys performing right now in sales and transaction prices. Joe, low gas prices, driving the truck sales right now . They are definitely contributing to the suv and truck market. We sthau growth happening anyway for other reasons, but no question low gas prices are affecting sales of suvs and trucks in a positive way. President of ford of the americas joining us from the Assembly Line, guys, at the kentucky truck plant where ford is going to be expanding its production there, pumping another 1. 3 billion of investment into that plant. Guys, back to you. Good. Good, phil, private infrastructure, like that. Thanks. The International Monetary fund agreed monday to add the chinese yuan to the reserve currency basket alongside the dollar, euro, pound, and the yen, marking another step in china ease Global Economic emergence. Here with more on what it means for the Global Markets is gordon chang and hes the author of a book remember this the coming collapse of china, and you might have some opinions that are not shared by everyone, gordon, but just looking at this, the yuan is not really a floating currency, not freely traded, and this is more symb symbolic, isnt it . Do banks use this as a freely traded currency . The imf uses this to put in the bask for emergency loans, right . Does it change anything . It does not change much. What the imf did was made a political decision. When you listen to imf managing director yesterday, she talked about chinas reforms. You know, think about it, the last half year, weve seen china backtrack on currency. Their intervention in the domestic market is bigger than its ever been. Its intervening in the offshore markets and september and october started imposition of the informal restrictions of currency. Right now, what you are seeing is unprecedented capital flow outside china. 460. 6 billion dollars in q3 and 62 billion in october. Okay. Its just recognizing a fact of life because china, the economys so important globally, so it i understand why they want to include it in the basket, but then theres other times where we do things that we could use as leverage for reforms. You know, we could have said, look, well eventually include the yuan after you do some reforms. The other way is like putting the carriage before the horse, okay, well do this now and hopefully this causes you to make some reforms, but we did that with iran. We did it at other places, with cuba, you know, we do it and hopefully you come around to our way of thinking, and they never seem to do it. They dont. She should have talked before she did this. She was demtermined to get it i the basket. Look at it. China promised full currency conver converseability by 2,000. Now they are talking about 2020. They couldnt do it because they are having problems in the domestic markets. The Financial Markets and banks, they are going backwards, especially over the last year or so. This means what they are doing is prodding china to do the right thing. I think what she did, and this is just a real speculation on my part, she realized how bad things were in china, so what she decided to do was to throw china a lifeline, which this is in a real sense. By them more time. Buys them a lot more time. You wonder whether they are forthcoming. That raises their status. I hope that the carrot and the stick, that they follow through on it, that, you know, we need to be we need to be more transparent, we need if if banks trade it, they have to know about the iner workings of the economy, they do that, but theres no guarantee. They are less transparent. The Central Bank Statistics now have become extremely murky over the last couple quarters. Theres now new categories like other assets, foreign assetings. These are things which nobody really knows what they are doing. This just shows that there is really a march backwards. They got to do this because they in trouble rights now. They have to clamp down on money coming from the country. Its comes out at unprecedented rates. To switch to a consumer economy, they cant let the yuan go to zero, right . Consumption increases where does it go . Down 30 in nine months or so. Who knows. You know, the chinese economy is not growing at 6. 9 or even the 4 citi group talked about. Its 1 or 2. The point is, its going down, chinese leaders cant stop it. They tried all monetary and fiscal tactics. Its not worked. How many emerging market currencies would be affected by that . A lot . Many of them. Goldman sachs says the biggest risk to the em sector is chinas depreciation of the currency. The imf and another, you know, bureaucrats, more bureaucrats. Unelected pubureaucrapurbureauc. Theres going to be more currency outside, less control over it. Thats not good for them. You have to write a column on this. How do you feel about it . Next week. I have a week to think. All right. List of stocks to watch is next, and later on squawk box, or later on squawk on the street, exclusive interview with john stumpf at 10 00 a. M. Eastern time. You dont want to miss it. When youre not confident your companys data is secure, the possibility of a breach can quickly become the only thing you think about. Thats where at t can help. At at t we monitor our Network Traffic so we can see things others cant. Mitigating risks across your business. Leaving you free to focus on what matters most. Looking at stocks to watch this morning, shares of recreation vehicle, thor, industries jumping, company Beat Estimates by 14 cents with quarterly profit of 97 cents a share, there was greater increase margins, and shares are rebounding the brazilian government filed a lawsuit against bhp and partner over a dam collapse at a mine owned by the two companies. The shares had dropped in recent sessions after the government indicated that such a suit was forthcoming. Okay. Coming up, youll love this. The elf on the shelf is a relatively new tradition, but after ten years, millions of american households anticipate the return of the elf each december of the the coauthors of the book that started it all join us next. Welcome back to squawk box. Parents, have your kids leave the room for the next segment. Well explain why. Thanksgiving game to a close, and krchristmas is weeks away, d elf on the shelf is returning, and the christmas tradition is based on the chirps book saying how santa knows who is naughty and nice. Joining us are the sisters behind elf on a shelf, creatively classic activities and books, shanda, and how did you this is only a decade old, but its become a phenomena. How did you come up with this . Thank you. Well, its actually based on my own familys tradition, and so when we were growing up as children, santa used to send an elf to our home, and an elf watched during the day and reported to santa at night, and, of course, he needed to because he probably always was in trouble, so we really love our elf from the north pole. His name was fisby, watched and reported to santa, a friend of ours, and when i grew up, my mom wrote the story, and with santas permission, we work for him, share the tradition with the world, but a lot of people didnt want it or know what to do it. You cant touch the elf. You cant. During the day you cant . You cant. Ever . Because hell lose magic. When he gets a name, thats when he gets magic and comes to life. This is why the kids leave the room, i thought in the evening when the kids go to sleep it flies. Magically. Goes to another place in the house. Yes, christmas magic. After reporting to santa, of course, whats happening in the house. Talk about this as a business, though, which is you expanded into all thing here. How big can this business become . What do you want it to be . Thats a great question. I think for us, its really about doing it right. Growing it correctly. For us, that means helping families create Family Moments. Thats what we do. The elf on the shelf, the elf pets reindeer, which is how children can help santas sleigh fly on christmas eve, then theres the elf on the shelf where the elf explaining, you know, how santa knows who is naughty and nice. Theres books for smaller children, and really, the animated Christmas Special we did, an elf story, u the hope is the fame sits together, spends time togethering and participates in Family Moments together. Whats the great lesson over the ten years . A misstep along the way in terms of a lot yeah. You know, i think the interesting thing here is, and probably a big lesson to a lot of entrepreneurs is that, you know, no doesnt mean no. We were told it was destined for the damaged goods bin and could see no success for this in the market place, so its one of those things where you just take a passion and you hold on to. What do you think was the moment . A moment for, okay, this could work as a business and actually explode . What was that . I dont know if there was a moment where we thought this would explode, at least for me. Krista was the business minded one. Im the creative, write the stories, work for santa claus, but for me, it was knowing how impactful the tradition could be. Better to go this route . Santa has savvy elves on the other end of the phone. No, really and truly, if this was not a tradition from our own hearts and family, im not sure it would be the success it is today. When you do runs of financing, how . People you know or interesting story. When we first started, clearly no bank cares whats in the little box, and they were not going to loan on elves. They dont want to be watched by elves, naughty or nice. Exactly. Thats right. There is a number if hasbro calls, you would an elf would take the call, right . Of course. I think were always open to conversation, but, really, it is, for us, the focus is not what can you do with the internet, too, with the web . I mean, totally monetized your opportunities there, do you think . Must be a lot. We have an amazing website, elfontheshelf. Com. Its about Family Moments, they can play games, make cookies. Other products or things you could create Family Moments in other times of the year . I think its possible as long as it fits within a feeling like its right for our brand. I think for us, that is the core of who we are and way we are. You have to focus on that to be successful. What about these guys on a bench . People want sork on the shelf. I love it. Yeah. Thank you guys. Oh, such a pleasure, thank you so much. Merry christmas. Thanks. I was going to ask if you were sister, then i got nervous because of the last names. Twins. We are twins. Nothing gets past you. Nothing gets past us. Thats right. Welcome back to squawk box right here on cnbc, first in Business Worldwide, im andrew with joe, and president obama ready to hold a News Conference to discuss everything from Climate Change to the fight against terror. Of course, well bring that to you live as soon as it begins which may be in the next ten minutes or so. In the meantime, we count down to the opening bell here on wall street. The futures right now are looking positive with the dow looking like it opens much higher, 94 points higher, dow up 70, and nasdaq up 19. The board was stuck well, id argue its a mixed picture, unchanged across the board. China factory activity hit a three year low in november according to new figures. The economists say the figures might suggest that china further eases its monetary policy. Gambling continues to slump, and revenue in the worlds biggest gaming zone fell 38 , 18th straight month of declines, mirroring whats happening in china. Key economic reports out today include november sales figures from u. S. Awe toy mauto makers s the ism Manufacturing Index and october construction spending. Okay. Largest gathering ever of the World Leaders talk Climate Change in paris today, and president obama speaking in minutes. We are joined now from paris with more on the discussions, steve . Reporter yeah. Its very interesting situation for the president on two fronts, one on Climate Change prompt, which he was originally here, and two, terror situation as well. On the first point, of course, critics at home say hes begin too much in terms of giving promises that possibly republicans back home and on capitol hill believe he cant keep if he has to put it to the American People, but hes now, this morning, meeting with the alliance of small island states to talk about it because he spoke to them today because they are the ones like the marshall island, saichelles, most at risk of levels rising, but its thorny, not a nice meeting potentially. They want loss and damage provisions from the major polluters over 100 years including the developed nations such as the u. S. The other key issue this morning and most thorny people pick up on the headlines the meeting he had with the turkish president. In many ways, hes a mirror image of president putin, just strong at home, they have very, very large militaries, and, of course, it was a turk irk f16 that shot down a russian bomber, they say over turkey. The russians say over syria as well. Now, the two are supposed to be fighting isis together, and that was a point that president obama made to the turkish president this morning at the bam bas dors residentings here. He said, last thing we need is a powerful turkey and russia against each other. We need a deescalation of the rhetoric from both and concern about economic sanctions. Remember, turkey is an ally of the United States via the nato organization as well, and last thing nato wants is to be dragged into another concentration with the russians, especially at the time when the confrontation between ukraine, which has western support and russia is just dying down a little bit, and many many europe hope that problem eases as well. Two big issues for the president to talk about at the oecd headquarters in paris today. All right, steve, thank. President s likely to address the situation in the middle east, iraq, syria, turkey, and touch on the war against terror. Joining us now, retired army regime, wesley clark, good to see you, i dont know what youre in touch with the powers that be, but what do you know about the plane shot down . We said it was over turkish air space, but theres the latest is it that we were trying to get to make that happen, and turkey is supporting doesnt want the oil line bombed to the rebels or something. Sure. We got conflicting objectives between iran on one hand and saudi arabia and turkey on the other. Until you reconcile conflicting october i objectives its hard to make the rest work. What are the what do they want . Well, iran memen menwants a lan through iraq controlling syria into lebanon that cuts off turkeys control and expansion to its southwest. Saudi arabia does not want to be encircled by iran. Despite all the amity you see in the paragraphs, theres deep conflicts underneath this, and the bombing does not get to the half of it. You say its not they that its a beef with turkey, not with nato . We shouldnt think suddenly were part of this . If push comes to shove, its not nato . It has to be nato. One of putin has a lot of games hes playing at the same time. You know, what he wants to do is cement position in the middle east, gain influence over europe. He wants to drive a wedge in nato between turkey and the rest of nato. Hed like to be able to sell more weapons in the region. Hes got lots of these playing lots of angles, but what were doing is trying to encourage irreconcilable forces to reconcile so we can deal with what we see as a terrorist threat, but that terrorist threat of isis is really geostrategic plug by the sunni nations to block iran, so if you cant get agreement between iran and turkey issue saudi arabia, russia on the shape of syria, you will have continuing military conflict. If isis was not contained geographically, what would it grow into . Its just a plug . Is it a real yes, of course. They have an economy. Up limited asaspirations. Can it did contained . Start with europe itself. They had the opportunity to learn tough lessons from what happened. Can they really coordinate intelligence, have a common watch list . Can they stop people going back and forth with syria . Can they improve special security by exchange of data . Can they make the right tradeoff . I dont know. Do you know the answers . I think its going to be very hard, but i think they have to. You have to contain isis from the outside in. You got to work to get a political consensus between the contending forces on the outside before you can bring force to bear against isis. General, and we should just tell viewers the president is about to speak in a minute or two, but to the extent that isis has access to money, inordinary amount of money, how do you cut it off in a real way if that was going to be one of your approaches from the outside in, if you will . Well, you got to get an agreement turkey has to really want to cut it off. Turkeys got to see that iran is not going to gobble up syria and them impact on them by aiding the kurds, so theres lots of gains being played under the surface. The moneys just its an effect, and its a way anything to do with the Banking System . Well, yeah. The Banking System is part of it, but the Banking System is an effect. Its not a cause. As long as these contending objectives are there, people find a way whatever controls you put in. The other question, is isis distracting us from iran used to be the thing we were worried about. Now we dont. Has anything meanfully changed in iran as far as you can tell . No, it hasnt. We always sided with saudi arabia, assuring access to oil. Whats changed is were less dependent on saudi arabia, and they know it. We have to wrap it up. President obama is speaking now in paris. Again, i want to thank the people of france and president hollande for their extraordinary hospitality hosting nearly 200 nations is an enormous task for anybody, but to do so just two weeks after terrorist attacks here is a remarkable display of resolve, and thats why the first place i visited when i arrived sunday night was the theater to pay republics on behalf of the American People who share the french peoples resolve. It was a powerful reminder of the awful human toll of those attacks. Our hearts continue to did out to the victims families, but here in paris, we see the resilience of the universal values that we share. Based on my discussions with president hollande and other leaders, im confident that we can continue building hoe m ini and building resources in effort to degrade and destroy isil, to disrupt plots against america and our allies and bring Political Solutions necessary to resolve the issue in syria and resolve hardships on the syria people. Now, this has been a quick visit. Of course, all visits to paris seem quick. You always want to stay a little bit longer, but we have accomplished a lot here. I have high hopes over the next two weeks well accomplish even more. I know some asked why the world would dedicate some of the focus right now to combatting Climate Change, even as we work to protect our people and go after terrorist networks. The reason is because this one friend, Climate Change, affects all trends. If we let the world keep warming as fast as it is and Sea Levels Rising as fast as they are, and weather patterns keep shifting in more up expected ways, then before long, we have to devote more and more and more of our economic and military resources not to growing opportunities for our people, but to adapting to the various consequences of a changing planet. This is an economic and security imperative that we have to tackle now. Great nations can handle a lot at once. Americas already leading on many issues and climate is no different. Weve made significant progress at home, increasing production of clean energy, working to reduce emissions while our businesses have kept creating jobs for 68 straight months, and weve been able to lower our Unemployment Rate to 5 in the process. Since weve worked with china last year to show the two largest economies and two largest emitters can cooperate on climate, more than 180 countries followed our lead in announcing their own targets. The task that remains here in paris is turn achievements into enduring frame work for progress giving the world confidence in a low carbon future. As i said yesterday, what we seek is an agreement where process paves the way for countries to update their emissions targets on a regular basis, and each nation has the confidence that other nations are meeting their commitments. We seek an agreement that makes sure developing nations have the resources they need to skip the dirty phase of development if they are willing to do their part, and that makes sure the nations most vulnerable to Climate Change have resources to adapt to the impacts we can no longer avoid. We seek app agreement that gives businesses and investors the certainty that the Global Economy is on a firm path towards a low carbon future because that will spur the kind of investment that will be vital to combine reduced emissions with economic growth. Thats the goal. Not just an agreement to roll back the pollution that threatens our planet, but an agreement that helps the economies grow and people to thrive without condemning the next generation to a planet that is beyond its capacity to repair. Now, all of this will be hard, getting 200 nations to agree on anything is hard. Im sure there will be moments over the next two weeks where progress seems stymied and everyone rushes to right that we are doomed. Im convinced were going to get big things done here. Keep in mind nobody expected that if 180 countries showed up, but no one expected the price of clean energy would fast as fast as it has, or back in the United States, the Solar Industry would create jobs ten times faster than the rest of the economy. Nobody expected that more than 150 of americas Biggest Companies would pledge their support to an ambitious outcome or that a couple dozen of the wealthiest citizens would join us here to pledge to invest unprecedented resources to Bring Clean Energy technologies to market faster. What gives me confidence is that progress is possible is somebody like bill gates who i was with yesterday understands tackling Climate Change is not just a moral imperative, but an opportunity. Without batting an eye says we have to invent new technologies to tackle this challenge. That kind of optimism, that kind of sense that we can do what is necessary is infectious and you believe bill when he says were going to get it done since hes done some pretty remarkable thing. I believe that a successful two weeks here could give the world that same optimism that the future is ours to shape. With that, i will take a few questions. Well start with the jerome of ap. Where is jerome . There he is. Good morning, thank you, mr. President. For months now, youve been asking mr. Putin to play a more constructive role in syria, shifting from defending assad to attacking isil. It appears your calls have not been heard. Whats your strategy Going Forward . Well, im not sure thats true. The fact the vienna process is moving forward conclusively, but steadily, is an indication that mr. Putin recognizes theres not a military solution to the issue in syria. The russians have been there now for several weeks over a month. And i think fair minded reporters who have looked at the situation would say that the situation has not changed significantly. In the interim, russias lost a commercial passenger jet. Youve seen another jet shot down. Theres been losses in terms of russian personnel, an i think that putin understands that its fresh in the memory and for him to simply get bogged down in an inconclusive and paralyzing civil conflict is not the solution hes looking for. Now, where we continue to have an ongoing difference is not on the need for a political settlement. Its the issue of whether mr. Assad can continue to serve as president while still bringing the civil war to an end. Its my estimation for five years now that thats not possible regardless of how you feel about mr. Assad, and i consider somebody who kills hundreds of thousands of his open people illegitimate, but regardless of the moral equat n equation, as a practical matter, it is impossible for mr. Ai sss to bring the parties together into a conclusive government. It is possible, however, to preserve the syria state to have inclusive government in which the interest of the various groups inside of syria are represented. So as part of the vienna process, youre going to see the opposition groups, the moderate opposition groups that exist within syria, some of which, frankly, you know, we dont have a lot in common with, but do represent significant factions inside of syria. Theyll be coming together in order for them to form at least a negotiating process to mo move vienna forward. Well keep working at this. My hope and expectation is that that political trek will move at the same time as we continue to apply greater and greater pressure on isil. The germans recently announced Additional Resources to the fight that the brits have been steady partners in iraq and i think are now very interested in how they can expand their efforts to help deal with isil inside of syria. Not just with the cohesion of the coalition the United States put together, but also the increasing intensity of our actions in the air and progressively on the ground. You know, i think its possible over the next several months we see a shift in calculation in the russians and recognition that its time to bring the civil war in syria to a close. Its not going to be easy. Too much blood has been shed, too much infrastructure destroy ed and too much destroyed for us to anticipate that it will be a smooth transition. And isil is going to continue to be a deadly organization because of its social media, resources it has, and the networks it possesses. Its going to be a threat for some time to come, but im confident that we are on the winning side of this, and, ultimately, russia recognizes the threat that isil poses to its country, to its people is thee most significant, and that they need to aline themselves with those of us who are fighting isil. Justin. Thank you, mr. President. I wanted to follow on that shift in calculation that you discussed with in terms of president putin. Did you receive assurances from him or president hollande who said earlier this week that, you know, president putin told him he would only target jihad and isis, that that would be the focus of russias military campaign Going Forward . Separately, i wanted to ask about climate. The outstanding issue seems to be whether republicans who have kind of voiced opposition to the agenda could somehow summarize followuppi i funding for the climate fund, a crucial part. How do you prevent that in the negotiations process, and are you concerned with what snenato mcconnell said a future republican president could undo what you trying to do here in paris. Well, first of all, on mr. Putin, i dont expect youre going to see a 180 turn on their strategy over the next several weeks. They invested four years now in keeping assad in power. Their presence there is predicated on how they think about the issue. And so long as they are aligned with the regime, a lot of russian resources are still going to be targeted at opposition groups that ultimately are going to end up being part of the inclusive government, that we support or other members of the Coalition Support and are fighting the regime and isil at the same time. So i dont think we should be under any illusions that somehow russia starts hitting only isil targets. Thats not happening now. It was never happening. Its not going to be happening in the next several weeks. What can happen is that if the political process that john kerry has so meticulously stitched together in concert with foreign minister of russia, if that works in view thnna, th its possible given the existing accord the parties already gr d agreed to, then we start seeing at least pockets of cease fires in and around syria. That may mean then that certain opposition groups no longer are subject to syria or russian bombing. They are then in a conversation about politics. Slowly, we then are able to get everybodys attention diverted to where it needs to be, and that is going after isil in a systematic way. With respect to climate and, we still need a paris agreement. So my main focus is making sure that the United States is a leader in bringing a successful agreement home here in paris, and theres a number of components to it. I just want to repeat so that everybody understands what we will consider success several weeks from now. Number one, that it is an ambitious target that seeks a low carbon Global Economy over the course of this century. That means countries put forward specific targets and although those are selfgenerating, there is a mechanism in which they are presenting to the world, confirmation that they are working on the targets, meeting on the targets, so theres a single transparency mechanism that all countries are adhering to, and that those are legally binding, that theres periodic reviews so that as the science changes and as technology changes, five years from now, is a years from now, in each successive cycle, countries are update pledges they make, and that weve got a climate fund that helps developing countries to not only adapt and mitigate, but also leapfrog over dirty Power Generation in favor of clean energy. And if we hit those targets, then we will have been successful, not because, by the way, the pledges alone will meet the necessary targets for us to prevent catastrophic Climate Change, but because we will have built the architecture thats needed. We will have established a global consensus of how were going it approach the problem, and then we can successfully turn up the dials as new sources of energy become available, as the unit costs for Something Like solar or improvements in Battery Technology may get easier for us to meet even higher targets, and systematically, we can drive down Carbon Emissions and the pace of Climate Change over the course of several decades. I want to emphasize this because i know that in some of the reporting, if you add up all the pledges, and they were all met right now, we would be at an estimated 2. 7 centigrade increase in temperature. Thats too high. We want to get 2 centigrade or lower than that, but if we have these periodic reviews built in, what i believe will happen is that by sending that signal to researchers and scientists and investors and entrepreneurs and venture funds, well actually start hitting targets faster than expected, and we can be even more ambitious. Looking at accumulative targets that show up ten years from now, we may well be within the 2 centigrade increase. By the way, thats not just foolish optimism, but when you look in office, prioritizing clean energy, saying were going to double Clean Energy Production through the recovery act, we get out of recession and could create jobs so we made a big investment and we met goals quicker than we expected. If you asked when i first came in office my expectations for the price of solar generate the power versus traditional cole or other fossil fuel generated power, we made some progress, but we require substantial subsidies in order to be economical. The cost of solar is down faster than many of us would have predicted even five years ago, so the key here is to set up the structure so that were sending signals all around the world, this is happening. Were not turning back. The thing about human ingenuity, i was going to say american ingenuity, but there are other smart folks around too, dont want to be too parochial about this, the thing about human ingenuity is that it responds when it gets a strong signal of what needs to be done. The old expression that necessity is the mother of invention, well, this is necessary. Us getting a strong ambition in place, even if it does not meet all the goals we ultimately need to meet sends the signal its necessary, and that will spur on innovation thats going to ultimately meet our goals. Nancy benning . Thank you, mr. President. One followup question on the climate issue. Are you confident you can hold the u. S. To its commitments under the existing treaties with no new vote needs, and separately on planned parenthood, share thoughts on the shooting and any thoughts in the context of the sharp political rhetoric in the country at this time. I apologize for not addressing that, but nancy was clean up after me. On the issue of the climate fund, we already engage in assistance to countries for adaptation, mitigation, sharing technology that can help them meet their energy needs in a clean way, and so this is not just one slug of funding that happens in one year. This is multiyear commitments that, in many cases are already embedded in a whole range of programs that we have around the world, and my expectation is that we will absolutely meet commitments. This is part of the American Leadership, by the way. This is part of the debate that we have to have in the United States more frequently. For some reason, too often in washington, American Leadership is defined by whether or not we send troops somewhere, and thats the sole definition of leadership, and part of what i love to describe in the course of the presidency is where we make the most impact, and, where, by the way, we strengthen our relationships and influence the most is when we are helping to organize the world around a particular problem. Now, because were the largest country, because we have the most powerful military, we should welcome the fact were going to do more and often times were going to do it first, so during the ebola response, other countries could not respond until we set up the infrastructure to allow other countries to respond and until we made the call and showed we were going to make that investment. The same was true with respect to making sure that iran did not get a nuclear weapon. We had to lead the way, but ultimately, because we reach out and brought allies and partners together, were able to achieve goals we could not have achieved by ourselves. The same is true with climate. When i made the announcement in beijing with president xi, i was able to do so in part because we led domestically so i could put my money where my mouth was. Heres the tough political decisions were making, now what are you going to do . Once we got china involved, that gave confidence to other countries were in the position to make a difference as well, and that they needed to be involved in the process as well, so, you know, whether its organize i organizing the Coalition Fighting isil or dealing with Climate Change, our role is central, but on Large International issues like it, its not going to be sufficient, at least not if we want it to take, if we want it to sustain itself. Weve got to have partners, and thats the kind of leadership that we should aspire to. With respect to planned parenthood, obviously, my heart is out to those families impacted. I mean, nancy, i say this every time we got a one of these mass shootings, this just doesnt happen in other countries. You know, we are right ly determined to prevent terrorist attacks wherever they occur weather in the United States or with friends and allies like france, and we devote enormous resources and properly so to rooting out networks and debilitating organizations like isil and maintain iing intelligence, we can yooif those who would try to kill innocent peop people, and yet, in the yieds, we have the power to do more to prevent what is just a regular process of gun homicides. That is unequalled by multiples of five, six, ten, and i think the American People understand that. My hope is, once again, this spurs a conversation in action, and i will continue to present those things that i can do administratively, but at the end of the day, congress, state, local governments have to act in order to make sure that were preventing people who are deranged or have violent tendencies from getting weapons that can magnify damage they do. And with respect to planned parenthood, i think its clear. Ive said it before, they provide Health Services to women all across the country. Have for generations, and in many cases, its the only organization that provides Health Services to impoverished women. And i think its fair to have a legitima legitimate, honest debate about abortion. I dont think thats something that is beyond the pale of our political discussion, but a serious, legitimate issue. How we talk about it, making sure that were talking about a factually, accurately, and not demonizing organizations like planned parenthood i think is important. Jeff mason. Thank you, mr. President. Do you believe that turkey is doing enough to strengthen the border with syria . How is it a nation with the large a military as turkey has has not sealed the border . Is that something you raise today . To put a finer point on Climate Change question, can leaders gathered here believe that the United States will keep its commitment even after youve left office if a republican succeeds you in the white house . You know, just with respect to my successor, let me first of all say that im anticipating a democrat succeeding me. Im confident in the wisdom of the American People on that front. Even if somebody from another party succeeded me, one of the things you find is when youre in the job, you think about it differently than when youre just running for the job. And what i realized earlier is that American Leadership involves not just narrowing a cop stitch went back home, but now you are back in the center of what happens around the world. Your credibility and americas ability to influence events depends on taking seriously what other countries care about. Fact of the matter is theres a reason why you have the largest gathering of World Leaders probably in the Human History here in paris. Everybody else is taking Climate Change really seriously. They think its a really big problem. It spans political party. You travel around europe, talk to opposition, and they argue about a lot, but they dont argue about whether the science of Climate Change is real and whether we have to do something about it. Whoever is the next president of the United States, if they come in and suggest somehow that that global consensus, not just 99. 5 of scientists and experts, but 99 of World Leaders think this is really important, i think the president of the United States is going to need to think this is really important, and thats why its important for us to not project whats said on the campaign trail, but to do whats right and make the case. I would note that the American People i think in the most recent survey, twothirds of them said america should be a signal to any mrmg themergency address in a serious way. The policy in the United States is changing as well. Its hard for republicans to support something that im doing, but, you know, thats more a matter of a washington place, and thats why people should be confident that well meet our commitments on this. With respect to turkey, i have had had repeated conversations with the president about the need to close the border between turkey and syria. Weve seen some serious progress on that front, but there are still gaps, in particular, 9le the 8 kilometers used as a trance it point for foreign fighters, shipping out fuel for sale that finances terrorist activiti activities, and so we have been having our militaries Work Together to determine how a combination of error and Turkish Ground forces on the turkey side of the border can do a much better job of sealing the border than it currently is. I think the president recognizes that. Im encouraged by the fact that the president and the e. U. Had a series of meetings around or turkey, and the e. U. Had a series of meetings around the issue of the tushish greek border. We have to remind ourselves that turkey took on an enormous humanitarian effort. You know, there are millions of syrians displaced and living inside of turkey, not just refugee camps, but they are now moving into major cities throughout turkey that puts enormous strains on their infrastructure, on their housing, and employment and turkey continues to keep those borders open for people in real need, so im proud that the United States is the single largest contributor of humanitarian aid for syrian refugees. Im glad that the e. U. Is looking to do more to help turkey manage those refugee flows, but i also think that the e. U. , rightly, mewants to see t kind of orderly process along the turkishgreek border that is necessary for europe to be able to regulate the amount of refugees its absorbing and to save the lives of refugees who are often times taking enormous risks because they are ferried back and forth bihuman traffickers who are now operating in the same ways that you see drug traffickers operating in. At enormous profit and without regard for human life. We talked about it today, its an ongoing conversation, and we recognized this is a central part of our antiisil trat stra. We have to choke out of how they make money, ability to bring in new fighters, you know, because weve taken tens of thousands of my, and they continue to maintain a strangle hold on certain Population Centers inside iraq or syria, so we have to cut off their source of new fighters which is also part of the great danger for europe and ultimately the United States as well, and countries far flung as singapore. If you have fighters coming in who are getting not only i ideologically hardened, by battle hardened, they are eng e engaging in the terrorist attacks we saw here in paris. This has been an ongoing concern, and we are going to continue to push hard among all our allies to cut off the financing, cut off the foreign fighters, improve our intelligence gathering, which allowed us to accelerate strikes we take against isil. You know, a lot of the discussion over the last couple of weeks was the pace of air strikes. The pace of air strikes is not constrained by the amount of claims or missiles that we have. The pace is dictated by how many effective targets do we have, and our intelligence continues to improve, and the better we are at that, the better we will be at going after them. Scott . Thank you, mr. President. In terms of sending the market signal you talked about today and couple times this week, do you see any political path back home on putting an explicit price on carbon . I have long believed that thee most elegant way to drive innovation and to reduce Carbon Emissions is to put a price on it. This is a classic market failure. Open up an econ 101 textbook, it says, yeah, the markets are very good about determining prices, allocating capital towards the most productive use except theres certain extranalities the market does not price, at least not on its own. Clean air is an example, clean water, or converse, dirty water, dirty air, or in this case, the carbons sent up. Originally we did not have the science to fully understand. We do now. If thats the case, if you put a price on it, the entire market responds. The best investments and the smartest technologies would begin scrubbing effectively our entire economy. Its difficult. I think that as the since around Climate Change is more accepted, as people start realizing that even today you can put a price on the damage that Climate Change is doing. You go down to miami, and when its flooding at high tide on a sunny day, fish swim through the middle of the streets, you know, theres a cost to that. Insurance companies are beginning to realize that in terms of how they price risk. The more the market on its own starts putting a price on it because of risk, it may be that the Politics Around setting up a cap and trade system, for example, shifts as well. Obviously, im not under any illusion that this congress will impose Something Like that, but it is worth remembering that it was conservatives and republicans and Center Center r think tanks that originally figured out this was a smarter way to deal with pollution than a command in control system, and it was forks like george h. W. Bush and his epa that effectively marshaled this approach to dealing with acid rain. We ended up solving it a lot faster and cheaper than anybody anticipated. Mainly thats the main message i want to send here, that Climate Change is a massive problem. It is a generational problem. Its a problem that by definition is just about the hard e hardest thing for any political system to absorb because the effects are gradual, theyre diffuse. People dont feel it immediately so theres not a lot of pressure on politicians to do anything about it right away. It kind of creeps up on you. Youve got the problem of the commons. Youve got to have everybody do it. If one nations doing it and the other nations arent doing it, it doesnt do any good. You have a huge coordination problem and the danger of free riders. So on all of these dimensions its hard to come up with a tougher problem than Climate Change or a more consequential problem. And yet despite all that the main message ive got is i actually think were going to solve this thing. If you had said to people as recently as two years ago that wed have 180 countries showing up in paris with pretty ambitious targets for carbon reduction, most people would have said, youre crazy, thats a pipe dream. And yet here thats already happened. Before the agreements signed, thats already happened. As i said earlier, if you had told folk as what the cost of generating solar energy would be today relative to wait was five years ago, people would have said, not a chance. And with relatively modest inputs thats already happening. I mean imagine if we were starting to put more r d dollars into it, which is why the emissions innovation announcement was so significant. The most biggest countries, most prosperous are doubling but then you also have bill gagts and other extraordinarily wealthy individuals saying were going to put our money into this. Im optimistic. I think were going to solve it. I think the issue is just going to be the pace and how much damage is done before we are able to fully apply the brakes. And in some ways its akin to the problem of terrorism and is isil. In the immediate aftermath of a terrible attack like happened here in paris, sometimes its natural for people to despair, but look at paris. You cant tear down paris because of thehe demented actio of a hand full of individuals. The beauty, the joy, life, culture, the people, the diversity. Thats going to win out every time. We have to be steady in applying pressure to the problem, we have to keep on going at it. We have to see what works. When something doesnt work, we have to change our approach. But most of all we have to push away fear and have confidence that human innovation, our values, our judgment, our solidarity, it will win out. And i guess ive been at this long enough where i have some cause for confidence. We went a month, month and a half where we were pretty sure ebola was going to kill us all. Nobody asks me about it anymore. And although, you know, we still see flickers of it in west africa, we set up an entire Global Health security agenda, part of American Leadership, to deal not only with ebola but to deal with the future of pandemics. Its not easy. It takes time. And when youre in the midst of it, its frightening, but its solvable. All right . With that im going to go home. Viva la france. Thank you very much. All right. That was president obama speaking in paris on a wide range of issues. Well have reaction to the president s News Comments and a check on the markets right after we come back from this quick break. Or even in miss pepperpies house. Pause in your pjs and hit play during a pb j. Nice and enjoy some cartoons instead of listening to dads car tunes. dad meet you all the way get the best of both worlds. Directv at home and 2 wireless lines. From directv and at t. We heard you got a job as a developer its official, i work for ge what . Wow. Yeah okay. Guys, ill be writing a new language for machines so planes, trains, even hospitals can work better. Oh sorry, i was trying to put it away. Got it on the cake. So youre going to work on a train . Not on a train. On trains youre not gonna develop stuff anymore . No i am. Do you know what ge is . Welcome back to squawk. John harwood joins us. John. Andrew, you saw a president who was in a good mood. He expressed optimism that theyre going to be able to get a sustainable deal out of this conference in paris, something that they were unable to do in copenhagen six years ago at a meeting with a similar goal, and he applied that more broadly to other issues that were facing. He faced a lot of questions about his approach to isis. He indicated that just like with climate, patience sri chosri required. That slow steady force would solve the problem, that he didnt expect Vladimir Putin to do a 180 but he thought that putin was coming around on that. You know, john, when i can just tell you just from experience. When you have the president say that, you know, conflate terrorism and Climate Change, maybe you have half the country, maybe not you have at least half the country shaking their head in wonderment which seems like absolute delusional thinking. Anyway, john, im going to have to end it there. Make sure you join us. Squawk on the street is coming up next. Good tuesday morning. Welcome to squawk on the street. Im Carl Quintanilla along with jim cramer and david faber. A lot of data coming in from around the world. Pmis have the world in a pretty good decision. Well watch auto sales coming in in about 15 minutes