Transcripts For CNBC Squawk Box 20151229

Territory this morning. U. K. And ireland coming back to open for trading after boxing day holiday and you can see what thats doing for the markets here. We are up about 9 points in the futures market for the s p. 83 for the dow and 74 for the nasdaq. Europe which i just mentioned, u. K. And ireland back online today. We are seeing the biggest gains though out of germany which is up 1. 5 . France is up 1. 3 . Italy is also up 1. 3 and the ftse in the u. K. Is up fractionally. Asia which had been down sharply in its monday trade rebounded for its tuesday trade. Hong kong is up. 3 and shanghai weaker over the weekend. That market is up close to 1 . There is some potential talk in the market about whether the pboc could find new ways to add stimulus to the market but of course anything at this point is unfounded but that is helping put a bit under the stock this morning, joe. And we didnt close anywhere near the lows yesterday and now with europe up maybe well have a good session here but beyond stocks, oil is rebounding a little after a horrific day yesterday. But not much. Talk about oil in a moment the ten year has been well above 220 for a little while. 224. But its in the middle of the trading range for the last six months or so. Not a whole lot of action. Its a week where, you know, leah is down in st. Barts checking out shoes and stuff. I dont know if you is a that. I missed that. Its in the post. And your story is in the post. Your hooker story, stripper story. Its not my story but yes. I was very excited about the story. Ive never seen anyone more excited about a story. Im not sure if you were glad they were getting just fascinated by a juicy story. And i should tell you the author is going to be here tomorrow. Really . Do you know this person . Yes. Also i think she spent a full year. She spent a full year. Thats interesting i guess. They call it in the post. A lot of adjectives. The post tends to do that. Yeah. And the women were like they enjoyed. You do enjoy this story. A lot of them are married and they thought these guys are out here not really respecting us very much. But thats their line of work i think but then they were saying were going to show these guys the meaning of disrespect. And they did. And you still say it was millions. In this case 130. 130,000 on one card but they were doing this repeatedly over and over again. 50,000 here. Guy that lost his mortgage here. I mean it was just like that. You more details. Jessica will be here to give us the full, full story. I mean, if you really want to do this story right why dont we get you there. I dont go out in the field. No. You dont want to do the show on location. Maybe i can get it but could you ask her . I can message her. Though i think maybe one may be jammed at this point. Waiting they have been prosecuted. Theres been a trial and everything. I dont know about the trial. But awaiting trial. Well go through the details with her tomorrow. My little tease. Yes. We got that going for us. Lets tell you what else we have going for us which is on todays agenda. Two key economic reports. 9 00 eastern time we have the home prices in october. In the last reading september home prices rose at the fastest pace in more than a year. At 10 00 eastern time the index dropped to its lowest level in 14 months. Americans were more worried about the job market. Meanwhile in Corporate News jp morgan will begin to raise deposit rates for most large clients next month. No word on how high those Interest Rates will go and analysts dont expect retail deposit rates to increase until the end of 2016 at the earliest but it is quite an indication that jp morgan wants to be the first mover for some of the big institutional clients that they want to start rewarding them at least a little bit for parking some of that. There was some there that didnt even want their money. They didnt but regulation has defined operating deposits differently from nonoperating deposits so the nonoperating stuff is what they dont want. The operating stuff which says its their deep client relationships. Its well telegraphed and documented what the money is used for. Thats the stuff theyre going to start paying for. Pep boy says carl icahns buyout offer is superior from the deal from bridgestone previously so theyre moving to terminate that earlier agreement. Icahns latest bid is for 1850 per share. That values pep boys at 1 billion. Some people on twitter, he made a funny traffic where he added carl icahns face. Thats hilarious. Sis coe winning a u. S. Patent dispute. The ruling from an Appeals Court yesterday reverses a nearly 64 million judgment against the company. Shares of sis coe this year. As you can see, meh, right in the middle. Anybody that has over 100,000 i just think, you know, this guy has got a serious problem. Do you know what i mean . If youre anonymous, what is that . What would need what deep human need is it . I dont pretend to know. I dont either. I actually do quite enjoy following them. I dont follow them. Youre up to 2100. Im up to 2100. Well over 100,000. How many of those are original and how many of those are replies to other people . I have no idea. In Corporate News from overseas, toshiba plans to ask for an additional 2. 5 billion in credit lines by the end of next month to fund a large scale restructuring. The company is trying to bounce back from a major accounting scandal. Whole foods will pay 500,000 to resolve an investigation into whether the chain charged too much for prepackaged goods at its new york city stores. The settlement will put the issue behind the company. Shares so far this year, youre looking at its gone down. 34. 24 and people still think of it as whole paycheck. They did a little bit because of this issue before but price have not gone down with the stock. Venture capitalist has resigned from the board of grub hub. At least one analyst says hes leaving because of potential conflict of interests and also sits on ubers board and they expand into free delivery but hes leaving to focus on funding and helping start ups. And whitebox is closing its three mutual funds. The journal says the funds held more than 300 Million Dollar and were shut on december 17th and will be liquidated in mid january. They will focus on the nearly 4 billion it has in hedge funds. The story is notable because its an example of hedge funds trying to move into the mainstream Mutual Fund Business and we know that hasnt always been a strategy that has worked out well. It will be interesting to talk to kate kelly about the trends in the Hedge Fund World and activist investing and what well see next year. Next couple of days could be major break time for the markets. We are kind of flat. So far the nasdaq, the only one of the big 3 that are higher for 2015. Oil is still a key driver for the markets. Its slightly higher this morning but down over 30 for the year. Joining us no is the strategist, i want to talk to him more about Interest Rates and the fed but its not like its not related to what john is going to talk about and thats oil. Founding partner of again capital and cnbc contributor and its a good name because a lot of things looked like we might test the lows. Do you think that given some of the bearish news weve had from opec and other places that were going to go we think we bottomed at around 34 or 35, have we . I dont think well go back to the lows quite yet. You think we bottomed. I did absolutely. I think we have a run at 30 here. Its going to get very ugly though joe late First Quarter, early 2nd quarter when theyre going through the periodic maintenance and well see back ups in the system. And the things that got reinforced yesterday that caused the sell off back down yesterday and not to mention the iranians are on an express track. They transferred the bulk of theirs to russia yesterday so theyre come pliplying with thes of the un deal. So that was a big thing for the market and the saudis announced their budge plans for next year. Theyre hunkering down. Theyre cutting back on spending and trying to streamline things and reducing a budget deficit thats about 20 of their gdp so theyre in this for the long haul and its going to be quite ugly now next year before all is said and done. I think its between 5 and 10 annual basis. Its not that much. So we could soar back to the nose bleed levels of 30, possibly. It sounds like a long way. 20 move. Way too expensive for oil. Im not paying that. Well, its been a nice thing for consumers obviously. 1. 67 new jersey. Did you see that . I did. Yes. Several places a long root 17. Youre kidding me. 1. 67. Route 17. Joe is writing this down. Its a wonderful thing. Theres been a lot of speculation and a lot of the work i know what steve has done and im seeing more and more data on this. About 70 of this savings now from is going into other part of the economy. So its finally starting to hit and i think the mastercard numbers you saw yesterday about the Holiday Shopping season data that they had shows that the gasoline savings are finally being spent. So this idea that the low oil prices somehow not great for the economy i still say is incorrect and overwhelmingly positive thing despite the damage going on. The annualized rate is 2. 2 . Thats taking the 12 month average of the annualized rates. Aside from the session we dont have, going back a quarter century, thats the lowest 12 month annualized rate that weve got going. So i just dont see in the consumer that this money is getting spent there. I dont know if its being saved more or whatever but also in the industrial side of things you would think that that would be a benefit as well although theres give and take recently with the utilities and the warmer weather but the production is negative. I have been scratching my head on where this extra money from the Lower Oil Prices is going. Seems like theyre hitting the consumer durables. Auto sales are spectacular. Folks are not just going to say chilis. Theyre spending on a higher car payment and washington machine. Theyre spending on higher ticket items than necessarily just pure retail. Well, retail im sorry. Go ahead. We want to talk to you about the fed. The uncertainty, its been removed now since they raised rates by a quarter point. Unfortunately im still very uncertain about whats going to happen next year. Ive seen one or two increases. Ive seen a decrease and then qe. Ive seen four increases to 1 . Ive seen, you know, they got 8 meetings so it could be all the way up to 1. 5 . The uncertainty has not been has it even been lessened at all . Now were talking about how quickly they move higher. A agree with you. I think the market is probably the number of rate hikes during 2016. The fed is at 4. One is more likely than 4. Were in a stage here where the Economic Activity of the Unemployment Rate at 5 , et cetera, that doesnt need a zero bound. However the momentum doesnt need a rate hike either. But i dont know that theres going to be the tun to go much further than that. Three of the last four gdp figure versus been 2. 1 or lower. Right now the atlanta fed looking for the Fourth Quarter at 13 and we know what the First Quarter has been like the last couple of years so youll have a period of five gdp reports and i dont know how that goes so therefore i think that the fed might be less aggressive in the year and i think the ecb might be less dovish than they think so i they the dollar is another thing that could maybe fall against the euro rather than go to parity. People have been saying that the last couple of days and the lead yesterday was no more qe regardless. I think that draghi, president of the ecb draghi was surprised at the resistance on the ecb to doing more qe. That was the surprise in the marketplace and it held most of those gains. People that wish we would stay at zero forever keep bringing up 1937. That we, you know, the fed caused another almost another depression by raising rates. What would cause us to do i just cant imagine that if we made a mistake and we were at three quarters instead of a half or a quarter, i cant believe that any of those things are that significant. I wish they werent that significant to what used to be a dynamic economy here. We used to be able to handle 3, 4, 5 rates. I know its the movement back to them but could the fed really screw things up if they got up to 1 too quickly . Could we go into another depression because of that . You know, i think that the place where the fed could screw things up is not necessarily going from 25 to 50 up to 75 to 1 but its the signaling mechanism. The more aggressive they signal i think the lower the ten year rate is going to go simply because theres not that one to one relationship between the fed funds and the ten year. The ten year reacts to how the expected reaction of the economy rather than what the fed is actually doing. The interesting thing and this is a bit into the weeds but back at the end of 2000 the ism index had fallen over the Previous Year and then i dont know if you remember, early in 2001 the fed did a surprise 50 basis point rate cut the day after that ism fell further from 48 something to 43 something. Interestingly in the last 16 months we have fallen from 58. 1 down to 48. 6. One teng of where we were in december and yet the fed raised rates for the first time in nine years. In 2001 they started on a rate cut cycle down to 1 . 6. 5 is not zero. The level of Economic Activity doesnt deserve zero. Its if momentum that i think is the question mark. You dont know whether i remember it falling . I think it fell to 47. 5 in june. I dont remember that. Oh, come on, youre a nerd. One more thing here and then we have to go. So was that for regular . Or premium. Regular cash. Did you notice what premium was . Its 20 or 30 cents higher. I usually pay cash. I dont know why i dont know to owe it for some reason. You don know why you do certain things. You don know why youre doing a lot of these things at this point. Yeah. Thanks, john. Youll be back again. It may not make sense to you but its starting to make sense to everybody else. Lou. I havent done that in awhile, lou. We have to talk weather this morning. We have a lot of it on the east coast. This mornings world of weather. We have a system dumping lots of snow on the southwest now threatening the northeast and dan has that story. Millions of people are under winter storm warnings. In iowa some roads were closed when as much as a foot of snow fell. In oklahoma thousands of people left without power because of the winter storm. One family thankful for a generator. We have the heater hooked up and the refrigerator so just the bear necessities. Chicagos airport was one of the hubs where they transferred travellers. It was cancelled or delayed. This is part of the same system that dumped up to 2 feet of snow on new mexico and the system is moving northeast where people are ready for the first winter storm of the season. Snow blower is ready, snow tires are on, were good to go. 12 inches of snow could fall in some parts of new england. Coming up, tesla ramping up hiring. Well tell you why but first as we head to break, heres a look back at this date in history. Its hard to find time to keep up on my shows. Thats why i switched from uverse to xfinity. Now i can download my dvr recordings and take them anywhere. Ready or not, here i come whispers now hideandseek time can also be catchuponmyshows time. Here i come cant find you anywhere dont settle for uverse. X1 from xfinity will change the way you experience tv. Global news rescuers are trying to reach workers trapped in a mine that collapsed over the weekend in northern china. The accident occurred Christmas Morning when 29 workers were down in the mine. 11 were successfully lifted to the surface leaving one dead and 17 others still trapped. The mines owner or operator . Killed himself or something. Yeah, bad stuff going on. Kohls has been driving chinas growth in recent years but the industry could have ripple effects on the economy. Chinas black gold. Coal has been the life blood of the countrys growth. Now its industry faces an uncertain future and the trucker is feeling the pain. Here lee and his fellow truckers used to earn 630 a month transporting coal. Today only half that. Trucks are idle. Partly because of the economic slow down and for another reason. A lot of coal mines have shutdown because of the Environmental Protection regulations he says. Some other coal related businesses also closed because they failed to meet the governments emission standards. At the Climate Change meeting in paris he reiterated his vow to reign in chinas Carbon Emissions to peak by 2030. Beijing is trying to wean its off of coal. Its blamed most for emission and pollutants. Currently china is the biggest consumer and producer of the fossil fuel and also the biggest emitter of green house gases. China still relies heavy on coal to power the economy so the government pledged to upgrade its coal plants to reduce pollution by 60 by 2020. Its also embracing clean energy. Its investing big in wind, solar and nuclear technologies. Still, critics point to beijings days of hazardous smog this week as evidence that chinas addiction to coal will be hard to quit. Its a cheap and plentiful source of energy. Difficult to resist, they say, for a government attempting to keep the economy from falling further even though, trucker lee is concerned about his own prospects in the industry. Living expenses are rising and i have a whole family to take care of. Im thinking of going abroad to find a job as a day laborer. Away from chinas coal and cloudy future. President obamas motorcade stopped after a drone was spotted flying on the commander and chiefs route. The video next. Plus why legos could be a better investment than gold. And first a look at yesterdays s p 500 winners and losers. Welcome back to squawk box sports news this morning. Denver broncos stopping the bengals from earning a first round buy in the playoffs. They cap the first possession of overtime and a. J. Mccarron fumble was then recovered to complete the broncos 2017 victory over the bengals in denver. I watched some of the beginning of the preshow stuff. I didnt make it to 8 15 or 8 30 when they started because i know better. And i actually had a run down described this morning by penelope. She had seen it. Its sad to watch this. But no because i expect this in primetime. I didnt see it there was a snap and he just missed it and the broncos got it. The broncos previously missed away shanked there and missed it. But bengals, i couldnt want them to get a bye because that would deprive them the opportunity of losing in the very first playoff game. You just gave up your season tickets after how many years . I didnt have season tickets but i had been a fan since then. If you look at like the worst if most periods if you look at who has the longest drought or whatever bengals are like number one or two. Its been its enough to make me abandon them and it was working abandoning them. And i think maybe i showed too much interest yesterday. And thats it. And now im back to it was a primetime game, the lights were on, people were paying attention. There werent a bunch of other games. They always lose when that happens. But it was you. Im not coming back though. All right. There was a story in the New York Post this morning, defining the new microunit in new york city. Used to be 400 square feet, now its 265 square feet. For an apartment in the city. Heres the thing, 60,000 people have applied for just 14 of these. These are tiny little apartments. Theyre cool though. So cozy. The front page of the post has this bed what are these beds called . Murphy bed coming down from the wall. You know who is going to make a killing off of these ikea. Because they have a display in their show room for these tiny set ups. How you can actually decorate them and they make them look not half bad. Tv, big screen tv, bed, kitchen, shower. If i was single, i had a place about that size in venice beach and i was fine. Whats the most important kitchen appliance to you . I had one set of silverware. This is true. But i guess microwave probably. Theres a show, hgtv, has a show just on little small houses. You have to like buy the house or rent the house. Its not the geico commercial. No, its tiny. Everything is a shoe box. Tiny house hunters is what its called. The people that wake up and they built the house 15 too small but you also get 15 on your car insurance. We didnt get a chance to talk about legos and gold and also the hedge funds, theres a good article today about how the hedge funds have not done so hot. The only ones that have have had pretty unique and outland wish rates. Ackman is down 20 this year. Glenn view down 17 . Since they all went with consensus trades what do you need if people are going to go for consensus trades. What does current end capital charge . Im just im not making a lot of it i was a broker for ten years. Its been a good policy for me. Do not invest. Andrew, do you know an update on this, in japan, didnt they have hotel rooms that were like drawers . Do they . You know . Oh, the hotels. There is a yo hotel here. Its a little tiny room. Its very tiny. Its a capsule. But it is small. Very tiny. Like davos style. Yes. Its about the size of this area right here. Do you remember theres a seinfeld where they were in chester drawers. That is like a coffin. All right. Im going to sneeze. Coming up a little birdie told us twitter shares have been under pressure this year down to the tune of 37 . Well ask one social media analyst what the Company Needs to do to get the stock trending again. First as we head to break check out the biggest s p winners and losers of 2015. Youre watching squawk box on cnbc. First in business worldwide. Welcome back. Take a look at u. S. Equity futures on this tuesday morning. Lets show you the board real quick. Dow would open up higher. Nasdaq looks to open up higher a little over 21 points and s p 500 up higher. Making headlines, legos could be a better investment than gold. The telegraph reporting that the toys have now increased in value by 12 each year since 2012. Gold only giving investors a 9. 78 return. My little 5yearold, i think hes on to something. Hes a lego man. So maybe he knew. We unfortunately packed his room with legos. Have you taken him to lego land . They have been to the small lego land. We have not been to the big lego land yet. Were taking a lego robotics class on saturday now. Wheres the big one . Florida. There may be one in san diego as well. Theres another one called lego discovery. It was a weird story i thought. I dont know what it was. But the problem was in europe. Remember. It dont seem that hightech. Arent they headquatered in europe. They are headquatered in europe. But i believe they were also building them somewhere else and one of the factors went down and that was a big problem. Why . That part i dont know. They tried to branch out into microchips. If youre in new york today times square will be hosting its annual confetti test in preparation for the new years eve celebration. Hand fulls of confetti will be tossed from the marquee of the cafe. It will include pieces of handwritten well wishes from people that submitted them at the wishing wall. If you dont want the kids staying up until midnight on new years eve, netflix launched a whole new set of new years eve on demand countdowns to the new year. That way parents can let their kids ring in the new year at any time. Theres six countdowns featuring faif lit characters from carebears and hail all king julian and more. They can be used whenever you please. Some of my friends change all the clocks in their house to convince their kids it is midnight when it is really thats a good idea. Maybe 7 00 or 8 00 p. M. Young kids. But theyre learning to read the clocks which makes it harder. Maybe theyll start looking into it. Everyone is tweeting on new years eve. Twitter is having a moment. Its been a rough ride for the social media giant. Shares down almost 40 this year as it scrambles to bring more users to the platform. Joining us to discuss twitters fate is the analyst and you think this stock is worth 35. No better . I would like to do better but its premature to think that they can right now and they want to try out twitter and see the opportunity but theyre not afraid to move the big budgets. How do you get to 35 for you. How much is that . Just say given where we were and if you look at the other analysts, by the way, theyre higher. That would be crazy to be at 35. About 15 or 20 times. Do you have a high degree of confidence this stock is going back to 35 . Im going to mortgage my house and buy it. You tell they is going to 35 . Thats not a real number for you, is it . It is. You have to understand what they have done they cant be everything to everyone but they are focussing on their niche and theyre going after to monetize the 300 million users that they do have on the sight. What me trick do you look at now that gives you hope . Revenue. Because i think that in the near term you won be able to see the big jump in users because theyre the primary power users on the site today but what they can do is add measurement capabilities and thats going to start to flow dollars. Youre adding selfservice advertising capabilities to add more Small Business advertisers to the platform and open up inventory and i think what youre going to see is the revenue number outperform before the user number so they get that experience figured out. Do you think well get revenue broken out for a moment specifically . That was supposed to be the new big stream for twitter but it seems like theyre still tinkering with it and moving the button around. They havent figured out what it should look like and how to monetize it. I dont think well get a moments break down but you need to see that the revenue number out perform it right now. If they do these thing with the inventory and the premium video they cant outperform on the revenue side and figure out that optimized experience. Do you think this Company Remains independent a year or two from now . Do you think this is an independent entity and should be an independent entity . It makes perfect Financial Sense to put this company into somebody elses business. Put it into google. Put it into facebook or xyz. At this point the companies that cant afford it wont be willing to pay for it. Gook is doing its own competing type of offerings. Google has a search deal with them and did you talk yourself out of the fact that its worth anything if nobody is willing to buy it. Twitter is the fabric of the internet in the sense that it is the everything real time information across the world. Every single journalist, every single major publication, every single blogger and influential figure, celebrity uses twitter. But that doesnt want to go near a business that isnt growing. Thats what weve seen with yahoo too and people say maybe it will be in play but they say what can you really do. But theyre fixing the number one issue, why advertisers arent flocking to it and thats measurement and attribution. But is the problem a revenue problem or the problem that people dont want to use it enough . The people the content is already there. Thats the biggest issue. Do you think the content is there or it will stay there. It will stay there but the people that use it are the influential people. When do i act on something that i see . It generates some type of revenue . How are am i going to do that . They have the movie concussion with will smith. The movie pays for that. Yesterday we found out none of it. Let me ask you a question, do you think that do you think that the twitter content will disappear . No, but i dont see you know, seeing content at great newspapers and Everything Else and unless you find a way to monetize it content is i dont know how you do it. Could you charge for people to be they cone measure it accurately. The kwaul city going to diminish. Less people are going to go online. I think theyll also use it less. If youre in a business and if you just migrated from Message Boards to twitter and youre just but the journalists and thats the content that you can consume when you read an article and when they get it where its actually personalized and im reading what i want to read then theres no reason why you cant modify it. Every Hedge Fund Guy down 20 this year all they have to do is do 65 if they follow you in year. We were from 50 on down. I upgraded it at 27. Which is, you know, slight premium to where we are today. Today is december 29th. You wanted him higher than 35. At the end of the day. Well revisit this video. Heres one thing i will keep in mind for 2015. Snapchat is a company that i sympathy going to make some splash and youre seeing them do a lot with the measurement pools for advertisers and theyre taking a lot of learnings that twitter will learn painfully in applying it. Happy new year. Coming up winter storm across much of the country. Almost january and slamming the industry again. Today the ceo of flight aware joins us with a look at cancellations and delays. Thats next. Travellers face flight delays and cancellations as dangerous Winter Weather hits the u. S. Daniel baker is the ceo of flight aware offering live tracking for flights around the world. Daniel, great to have you this morning. Good morning, how are you . Im doing well, thanks. Glad youre able to get to the studio with the delays that we keep hearing about, but it seems like whats different about this path of storms is that its really not limited to any region of the country. How different is it from the typical winter storm pattern that youve seen . Its pretty bad. Its a huge system. Typically, we are used to noreasters that affect the d. C. And new york area, sometimes boston. This is a huge storm. North to south. Its more than a thousand miles. One of the big impacts that we saw is the storm hit dallas and chicago around the same time. Not only did that affect the huge number of travelers through some of the countrys biggest hubs, but those were two hubs with american airlines. They got a double whammy could not reisolate passengers to another hub because they were affected in so many areas. Its lanch. Now its moving, continuing east and going to hit the northeast. How long is the lag effect for airlines to get some of the passengers rebooked or rerouted to different destinations . A single day . A couple days in this case . Typically a single day. The problem is some of the storms really hit late in the day, which is a problem because, you know, as hours get later, the number of Flight Options decreases, so you run out of options. Folks spent the night in the airport if they did not get a hotel. Most of the people were placed on flights the next day. Problem is, in a lot of cases, airplanes can be in the wrong place after an overnight disruption, so a lot of the Early Morning flights are cancelled as well, making it tough to accommodate people. My question, personally as a traveler, is how do they prioritize which flights get to take off . Once the weather is cleared, theres a backlog of flights that need to get somewhere, the ones with the most passengers or going to the destination thats furthest away . Thats what im curious about. They are pragmatic about it. Look how big the airplanes are, affect the smallest number of people. A tiny plane that seats a few dozen people, that 12 way more likely to be cancelled than a wide bodied airliner. They avoid cancellations with a single flight that day. They go once a day, no other options for accommodating folk, those flights are the least disrupted, but on the commuter flights that are, you know, every hour or two in the small number of people, its a good chance those are cancelled, not only because of the number of people but the planes fly back and forth so much, they are delayed hitting the same weather system over and over again. Flight aware is the app the passengers use to check in on their flights, so hopefully you guys are getting business from it too. Daniel baker, founder and ceo of flights aware. Back in a moment, top stories when we return. Trading higher, but time running out to get the dow and s p out of the road. Carnage worse for hedge funds, straight ahead. Tech predictions, will Wireless Charging pick up steam . What else will your phones assistant do for you . Does a battered apple stock belong in your portfolio . Stick around to find out. Its a warm winter on the east coast until now. Im telling you, something weirds going on. Going to massachusetts to see if the winter blast breathes life into the slumping ski season so far. Never going to believe where im calling you from, man, im on a mountain on my phone, yeah. 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 with andrew and kayla. Becky quick is off today, and we dont know where is he now . You know . Former ceo of hp. I dont know where he is. I dont either. Well have to track them down. Breaking news from europe overnight, two people arrested, this is troubling, in belgium on suspicion of planning a new years terrorist attack, and either new years eve i dont think they the mean the whole 2016, but searching found military Training Uniforms and isis propaganda. No weapons discovered at those locations, but the investigation was not tied to the november terrorist attacks in paris, so, you know, it looks like a separate and discreet problem, which im sure its not just confined to those two either. Frightening. Well, there was a warning from police out of vienna over the weekend warning that they had some intelligence about potential new years eve attacks. Based in different cities. In different european cities, yeah. So, okay. Scary world. Checking out leo. There is a good story about them. Details in a minute. All right. Whats going on right now, a handful of big stories. Jpmorgan the biggest, beginning to raise deposit rates for large clients starting next month. No word on how high they go. Analysts do not expect rates to nr increase until the end of 2016. At the earliest, the first bank out of the gate to do this at least. Pet boys says carl icahns buyout offer is superior to bridgestone making this complicated. The auto parts retailers moving to terminate. The latest bid for 18. 50 a share, valuing them at 1 billion. A check on the markets this morning. Red arrows. U. S. Equity futures at this hour looking down. Rather up. I apologize. I said red arrows, talking about green. Dow is up more than anything down. Dow looks to be up 77 points, and nasdaq up 21, and in asia, green across the board, gains of half a percent in japan and. 8 in shanghai. European trading right now as we flip around, green arrows, too, dax up almost about 1. 5 . Oil helps. Helps. Higher colder temperatures mean that nat gas is up too. Oil really has been the leading indicator. Well be watching it all day. The big story outside business is, of course, deadly Winter Weather, a system dumping snow on the southwest now threatens the northeast. Stephanie abrams from the Weather Channel has an update. All right. Clive is in the northeast, a range of precipitation, the snow to the sleet and freezing rain. In new york city, just a cold rain. I do think, however, with some of the cooler air in place, people might go to the stores and want to buy some winter gear, right . Its been so hard to be out there thinking, really, do i need a hat, gloves, scarf . Forget about it. Heres the thing. This moves out quickly today. You see the timeline, upper right hand corner of the screen. Things are going to get better as the day progresses. Well start to clear out and see that snow start to taper off. Great snuz for the ski resorts, 1218 inches of snow. Otherwise, its a 35 inch thing in the lower. Thats the storm exiting, and theres another system coming in to bring showers down into the southeast. Back to you. That snow is welcomed news for ski resorts, very right about that. Well get a live update in massachusetts a little later on this hour. Back to the markets. The nasdaq on track for the fourth Consecutive Year of gains, up about 6. 5 this year, outpacing the dow and s p. S p just hanging on to the break even line for the year. Kate rogers breaks down the nasdaqs winners and losers for 2015. Kate, good morning. That is absolute ri right. The nasdaq had a banner year, outperforming other averages, but hitting the 5,000 mark forget First Time Since 2000 back in march. However, its now back below the 52week high of 5231. The nasdaq faired better than composite up more than 9 tracking for the seventh Consecutive Year of gains. The biggest winners for the year so far, netflix up 140 . Look at amazon, that stock up 117 . In third place, ctrip. Com, the travel agency, up 110 . Activision blizzard is also up. Alphabet class a voting shares up, and class c nonvoting shares up, and starbucks up 46. 5 , and facebook up 35. 8 . The bank stocks we talk about so often among the biggest gainers this year. Now, to the downside. The biggest loser, Micron Technology down 60 year to date followed by western digital, down 45 , and class b of nonvoting shares, a close third, down 45 yahoo down 35. 5 . Apple . Down 3 for the year, but not a big decliner. Saying something, though, the most beloved stock. In terms of the points, it was the biggest point decliner. Only 3 . Who doesnt own it . Apple suppliers fairing worst. The trade, shorting those for maverick capital. Joe, youve been right. Just say it. Well say it. Youve been right. You dont have to be that brilliant to know when guys say it doubles, analysts, i dont know, they they do all this stuff, and just say, look assigned terminal value like zero. The flip side not saying its zero, but come up with something. Its not just a slam dunk. I dont know. It is a remarkable business. Its not a slam dunk. Microsoft had an annuity that we dont know what they do anymore barely with windows, but sell an incredible amount every quarter. I cant imagine you are thee only company tough comps. Thats the problem. People are comparing this to apple in 201213 when it hit the slump. Hit a slump. It was 9 billion after steve jobs left, and they were selling potato chips. Took steve jobs. There is a business this there. Well, there is. Because people were tied into it. Assign 30 growth to it, which it used to need to rachallize valuation, which was low. Valuation is too low. So low. I understand that. Who has not acted on it . Double from 780 billion, thats 1. 5 trillion. A trillion dollar mark is its not sach sank. Maybe the lesson is dont buy the dow. When you put apple in it. They have not made headway. They cursed each other. I still give the guy grief. Quick update on the former ceo of hp with autonomy. Yeah, yeah. That tragic deal. I dont know if it is sad, by a story how hes going to venture capitalist adviser. Giving him a hard time, rather than a gulf stream, hes flying commercial. Advising european startups and things like that. You asked, thats the answer. Running aroma therapy place in santa monica. Sounds fun. It does. God bless him. Hes doing fine. Things happen. Dont they . Not guaranteed. Anyway, there are tree more trading sessions left in 2015. According to what i just said, is that true . Okay. Thats right. Lets bring in hank smith, chief Investment Officer of steinberg global Asset Management. Did you predict a flat year for the s p, hank . No, we did not. We were in the consensus of somewhere around 10 , and thats where we are for mnext year as well. We could get there, three great trading days, where were you . We can check. Dont lie. We were at 2100 the whole year, joe, hit 2100. May make another run at it going into next year, though, i think were going to see another year, but dividends matter next year. And what is the problem . A bunch. One, anemic growth, two, going into next year, we term rate rage where people are crazed about why is the fed raising if the economys slow . Youre going to have volatility, and invevi investors take advan the volatility. Going into the election, you know, were going to really test investors nerve seeing what plays out in the republican party, which is a huge group of people and whether theres the fortitude to increase rates where the consensus is up four. We think theres only a couple bumps in connection there. The feds supposedly uses employment and price stability for deciding what to do. If youre at 5 unemployment, why do they need to look at what the smis how the economys performing to just get back to any type of normalized Interest Rate environment instead of zero . 5 unemployment, thats not enough evidence that they should be higher . You think that they also have to have the third mandate, 3 gdp growth, when, obviously, they cant orchestrate gdp growth. Trying for zempb yeseven years unable to go better than 2 . Why zero at 5 unemployment and price stability . I actually dont think they should stay at zero. That creates too much risk in the system, joe, but markets react to the predictable, not the unpredictable, and i think if we get a situation where the fed raises a couple times, then the investors feel the economy has the aint bility. I have to get to hank because we have to go, rich. Hank, why mid to high Single Digits and make the call with the same head winds this year as last year . Well, first of all, bull markets do not die because of age or geopolitical events. They die in advance of recession, and the odds of recession occurring in the United States over the next 1218 months is extremely low. We still are looking at 22. 5 growth. 2015 is the pause that refreshes. Rear not looking for huge returns, but with earnings growth, somewhere in the mid single digit level combined with a 23 dividends, that gets you a return somewhere around 811 which is reasonable. You dont need pe expansion to do that. Okay. Keep it simple, stupid, i guess. That scenario. Maybe it works, well see. Didnt this year, though, thanks, see you guys. Coming up when we return, the struggle is for real for a number of Hedge Fund Titans on wall street. Kate kelly with some putrid performance numbers, and apple down 15 since being added to the dow. Can it rebound . Well have that debate. Later, headed to the slopes, resorts on the east coast having a brutal season so far. Can a blast of winter bring reversal of the fortunes . The ceo of the resorts in massachusetts joining us at the bottom of the hour. That coming up in a moment. Welcome back, cnbc breaking out the 2016 playbook following money moves in the year ahead. This hour, look at hedge funds and kate kelly is here. 2015 a rough year for hedge funds with almost zeer rereturns for the year. This will be a year of retrenchment with closures and cosolidation and stock and bond picks. Hes three things to look out for. In september, many investors notified funds of intention to pull out capital and have it back by january 1st, so decline in total assets for hedge funds already in q3 had the biggest down tick since the financial crisis. With regulators bearing down on hedge funds and expectations on performance increasingly tough to meet, expect to see some of the fun turn themselves into family offices. Managing money for families and employees only, away from the harsh spotlight. Big players have already set the trend. Dont expect long shot bets like a billion dollar short on herbal life or beaten coal stocks or sovereign debt. After a bruising year like this, they return to what they know, things like straightforward activism and just fundamental researchdriven buy and hold strategies. Kate kelly is here. When you say they do what nay know, so if youre bill ackman or david heinhorn, what do you do after a year of 20 down . We know what they are doing, right . Not apologizing, doubling down on stuff like the valeant long position, but said to you and others, hes not doing a billion dollar short again. It was not i forget the quote, but not the most fun way to make money to say the least, so i think those kind of risky things, davids another example, i was alluding to them there, buying consul energy, the coal company in the second or Third Quarter when it was cheap, but its down since then, a big regret of the year, so he talked about how, in his mind, Traditional Market reactions to traditional fundamental analysis have not panned out in 2015. Oh, its the markets fault. Exactly. Do you think money leaves the big names, which is to say, do any investors say, looking its great he was up 40 , but i cant take volatility of up 40, down 20. Do you think the money stays . I wonder about other investors. Broadly, i dont know. We saw in the Third Quarter overall assets declined by the biggest margin since 2008. I mentioned that in the pack caption. First quarter, we see that. However, you cant really separate market losses which are significant with the numbers. Ackman you mentioned. We know the reactions were dmin mis. Your high water market depends where you get in, but people stick it out until the year whereas he did have redemptions after 40 up year. Others, i dont know. Others sweeten the pot by offering them a more attractive fee related deal to invest in a few fund. Hard to say. Thats the other thing. Do you think this is the first break, like what larry did, in the game, which is to say, that all has the dam broken and the game shifted . It may have shifted before that. Right. In fact, its come down already. Ive been covering this beat for cnbc for fiveplus years with a trend to shave off the numbers. I feel like it halted in the last year or two, maybe because funds were doing well. You have funds like citadel that charge more in some funds. Some managers get away with relatively high fees. Its hard to generalize. Whats interesting is if you look at the overall numbers on the hsbc report, granted, does not capture the whole universe, but a snapshot, bottom performers for the year are people you know well. Einhorn, ackman. The journal has a piece about maverick and their less or more contraryian bets that made them a lot of money this year. Do you think that well see sort of a broader changing of the guard to a less wellknown, more pressed shy type crop . Could be. The only wellknown in there is maverick as you well point out. Known for tech investing, and another example of an out performer is gabe, sac capital, believe it or not, excellent run with consumers so far this year, up, like, 40 at last check. When you know a sector well, willing to make bets, you might do well. Your point, yes, we could see money move into lesser known names, but i i still think if you are a dan lobe, an ackman, that carries swag. You mentioned sac capital. Do you believe that steve cohen will manage money for public investors again . I do. I do. Not in 2016, probably, but several things, one is, hes a huge out performer. Looking into this now, but at last check, up 12 versus a fund of zero, literally up zero, and he is finally getting through this phase of the litigation as we know from last week. The sec dropped 50 of the case because mike has effectively been exonerated, one of the employees that he allegedly failed to supervise, down to another employee. If he gets through the civil case relatively unskaifed. Close is clear. They said the new firm adamantly, were not looking at managing outside money, but they say that for now. I think he they still report earnings. Not the earnings, but the returns. The numbers. They get out there. They do. They do. Couple years ago, there were stories done that hung funedge are not worth it. Why go in there, people without experience who do not charge as. Do just as well. A couple good years in there . Way do you think happened . Because the guys that you talk about, so einhorn, whatever it was it was a long goal. That market didnt do it either, and its still wrong. Look at my favorite example. Jcpenney, target, these guys, are they better than 50 50 . Heres the thing. This comes unless youre really good, get it again and again and again and again and are a cut above, the other guys had a couple lucky shots in any given year, why assume past performance john paulson, has he been hot lately . No. So up and down its hard to why believe any of them have the touch . Well, what a hedge funds industry defender tells you, and i bring it up, a hedge fund by definition is an alternative investment, putting 5 or 10 in it, but not majority. Its noncorrelated, and its results, theoretically would be a down version of what the market does. 10 up in the s p, the hedge fund up 5 . And combine activism with it, fill it up 4 , and say you do it, and you get another pop from that, and youre rigging, like a green mailer. People are known for safety. Shuttering duquesne when the pressure was too stressful. I dont know that he had a down year. If he did, it was one, literally. Louis bacon of Moore Capital is a good example, with occasional down years, but never falls 15 for the year. Maybe 1 . Once you get the algorithm, youre ahead of the game. Think about bridgewater, the all weather. All weather fund, they had reversals this year and in the past. Thats note a foolproof method, although, in most scenarios, they argue it is. Its not foolproof, but if you have the means to put a small portion of the assets into a hedge fund. What did tepper do . Up this year i think. Yeah. Remember, this was the melt up year, like, 1999, things get more overvalued. That did not happen. Bullish on china. Said he had a mea culpa on that in the spring. I remember hearing that presentation at the conference, and although hes super brilliant, i thought that presentation lacked, like, depth or something. I dont know if he was just not a good public speaking day or had not fully organized his thoughts. Oh, i bought into it. My mistake. Also, you know, the good news was he was candid afterwards and said, his mistake. They get it wrong, of course they do, contraries got lucky. Its been a tough year. Even tough for warren buffet. You know and, like, what do you think of people staying the course regardless . Andy hall, the oil bull. Still bullish. Last article i read, he was down 26 through november. He has, i think, over 2 billion in assets so he can stay solvent for a while, but hes going to stick to the knitting and maybe next year well hit bottom and hell do better. Managing risk is probably more important. You know, nobody whats the best hitter . 350 . I dont know. Cut losses short, the ones you win, dont sell too early. Right. Its that management thats better than the initial pick. Nobody knows. Nobodys better than anyone else. Dan loeb is consistent. Hes dacalled the magician o industry. Never out, but never terrible as a result. That was what i said of the bacons of the world, managing risk carefully, may be in negative territory, but not by much. Thank you. Great conversation. Thank you. Coming up, can the winter storm save the slumping ski season . The ceo of the resorts will join us. Its in massachusetts. Welcome back to squawk box. Among the stories front and center, two stories on todays agenda, get the s p case schiler index, home prices for october, and last rose at the fastest pace in more than a year. At 10 00 eastern time, consumer confidence. Last month, that index dropped to the lowest level in 14 months. The reason . Americans were more worried about the job market. Also, whole foods pays 500,000 to resolve investigation whether the chain charged too much for prepackaged goods at the new york city store, and whole foods says theyll put that sentiment behind them. So far this year, they fell in a big way. I would say they are trying to come back, but they are not, 34. 24 is where they are right now. Bill gurly resigned. He left because of a potential conflict of interest. Hes on the board also of uber, and that company, of course, expanding into food delivery, but gurley disputes this idea saying hes focusing on funding help younger startups. Despite the hacking scandals that exposed millions of cheaters, interest in dating site, Ashley Madison is aroused. Wow. Yep. Company says its membership has grown from 39 million at the time of the date of breach to 43. 3 million users now. This is according to the company. There you go. I dont know. Its, you know, i hope theres a warm place in afterlife who thinks of that . They advertise on busses and stuff. I mean, its just the end of society. Right here. Dont you think . Really . Dont look at me. Ive never been to the site. I wasnt me thinks you protest too much. I was not saying i thought it was a Clothing Store for full figured gals. Thats what i thought it was. I did. Whats the name of it . You know. You wouldnt know, but lane bryant. Someone say that to you . No. You came up with it. What does the name mean . Anyway. Sorry. Coming up, tech predictions for the new year. Analysts dan ives after the break, and as we head to break, take a look at u. S. Equity futures. They have been in the green most of the morning, steadily climbing more in that direction. Dow would open up 93 points. Squawk box will be right back. We are in the age of ageless. Age neutral. Age defiant. Age agnostic. Olay is a purveyor of ageless. Only the best 1 of ingredients make it into our products. For transformed skin without expensive brands or procedures. Its the ultimate beauty victory. Nobody has any idea how old you are. With olay, you age less. So you can be ageless. With tech taking over the Holiday Shopping season, honing in on the hottest tech trends to watch for 2016. We have the personal tech columnist of the wall street journal, and dan ives joining us as well. Our lives are already pretty techie. Yep. How much worse can it get next year or better perhaps . This is the best time of year. Buy all the stuff, now, dont buy anything because so much more great stuff is coming next year. Like what . Virtual reality will be a big theme of next year. Its going to be a lot of hype around it. I dont think its mainstream, but focused on gamers out of the gate, but well hear about content thats going to appeal to a lot of people, hollywood, touring your next home, the next vacation from your leaving room with a headset on your face. Problem is, companies do so Much Research and development throwing everything they can against the wall to put out a product to be the next big thing, and it seems Consumer Behavior has not got there yet, internet of things, Virtual Reality being an example. Smart phone is the mainstream thing. We do not consider newest improvements to the phone anything big anymore because the smart phone is just really good. Were all the companies are searching for the next thing youll buy that totally bring you in, like, the smart phone, Virtual Reality is one of them, internet of things, that puts the smart phone at the helm of things, again, the big question will be, what can that next thing be that everyonemen menmw buy . Its not been wearables. Dan, which company is going to produce the next big thing that people want to buy . Should you buy that stock to be able to ride that wave . You know, next week, thats going to be a big focus in terms of Virtual Reality and wearables, and bigger guys, apple, in terms of, like, how do they go down the acquirables, and theres a lot of clear winners and losers and consolidation youll see. Theres a sneak preview, but right now, the best stock, apple, back against the wall. I was going to say, i feel like ces is pomp and noise, flashy releases. One product, so excited about when it came out. And theres a lot of hype, Virtual Reality, headsets, a number of coming out. It looks great on the floor. It you call comes down, do consumers buy them . Thats the issue going into okay, but whats the trend thats going to be a step change in my life . Right . The phone was a step change in everybodys life. Right . There was a magic machine, a camera, does all the stuff. The watch was supposed to be, and im an apple lover. Ive not bought the watch. A step change in peoples life . Does that get to the right place . Vr stuff seems like in beta for five more years. Wearables is meat on the bone. In terms of a product category, that could take off from where weve seen, and fitbit, does apple watch or next version become more mainstream . There was a good holiday season, and can wearables become a viable product category, 30 billion over the next three years. The problem with wearables is the hardware is not great. Its not answering the question of why. You have a jawbone there. Right. Thats because you want to wear this presumably to get in better shape, not that im insulting your shape, you know, duh sleep is why i wear it. Okay. I think that would be something that apple looks at this year, something they are missing right now, hardware, battery life. You cant wear it at night because you have to charge it. Hearted ware has to get better, but the question is has to be in the software, and its not there yet. Why . Apple specific question. Theres a great piece in the verge over the past day or two that really suggesting that apple in the past year, all the stuff that they put out was still in, quote, beta, and they never used to do this, and every product out to some degree or another had not been completely and utterly refined the way steve jobs might have done. Do you agree with that . Totally agree with that. One of the things as you guys talk about was to people wanted new products. Last two years, people said, you said it in the studio, wheres apple with the next thing . I think they felt pressure to release new products. I think they are changing as that article sort of implied. Changing their ways. They want to start to put things out to look ahead of their competitors in some places. I think the blooms come off the rose for apple, not just multiples, but in terms of looking at products you think . Look at the watch. Yes, youre right, joe, again. 150 price target. Yeah, no problem. 105. As an analyst, okay, apple came out, you know, on the watch side, it was not successful. Streaming on tv has been susp d suspended. Only way to be bullish and how we stay bullish comes down, can iphone7 with 30 upgrades to iphone6 to date, and china the market opportunity, can iphone7 be that product . Its a make or break sector for apple and investors. If they are not successful and do not make an acquisition to take the cash, i think, you know if they nail the iphone, where does the stock go . May still not win the game. Coming down to the multiple to rerate, riepght . As numbers multiples are low. Terribly low. Youll see it rerated higher, but really comes down to that next product, can they be successful in the enterprise of ipad pro . All right. Real quick, is vr, Virtual Reality, always have to wear one of those things . Yes. You have to wear them everywhere. Walking around in the streets. Thats what i mean. Guy with the iphone just walked off a cliff or whatever he had. I mean, if youre all Walking Around with stupid things . Much more than . Just niche. Gamers . Office or sitting in a room. Even in the living room, i have, you know, theres other things going on. I like a 75 who is beginning to sit there with one of those things where you have you just have Virtual Reality. What happens . Everyone in the family has one . Just sitting around like that. I look forward to joining the show where we all wear it. Like star wars. I think i was going to say, i think microsoft, and on the enterprise, theres more use cases in terms of from an enterprise perspective where thats a mixed reality. Everyone in the cubes. Depressing. It is depressing. Quick yes or no. Will 2016 be the year we no longer plug devices in to charge them . Say yes. Maybe. No. No. Battery i think yes. Battery technology is terrible still. Terrible. I think well start to see much more in the Wireless Charging space. I will not be surprised if iphone7 has some sort of wireless type of charges. We see it in the watch. Its going to be on more surfaces. Guys, thanks to both of you. Back in a moment. Holiday season, the busiest time of the year for ski resorts across the country, but this year, resorts in northeast are struggling due to warm Winter Weather, and up until now, no snow. Joining us now is the ceo of massachusetts Peak Mountain resorts, and thank you for being with us this morning. Snow has been hard to come by. Whats the additional cost for you of actually trying to create snow in an environment where there is none . Good question. Theres not been an abundance of natural stuff. Last night was the first time this season. We rely upon pretty extensive snow making plan, and theres a lot of infrastructure involve the in making your own snow, but the costs are there. Energy, labor, and so forth. For our resorts, resorts in massachusetts, new hampshire, and vermont, its millions of dollars a year in snow making for sure. This year that much more given the weather . That remains to be seen. We take the long view on the whole ski season. The season starts out earlier in december. We are three weeks behind right now. We had heavy snow making to get us going, but we have not had cold temperatures. Thats what we need early on. We rely upon manmade snow more than natural snow to get resorts going. At this point, its not been a large increase over the norm, but well see what happens moving forward. More confident here looking forward. Long term forecasters say january through march looks more like winter and long and lingers, just late in coming. What percentage of the customers are weather based . Meaning theres a certain group, of course, that books, says, christmas time, the whole family, we go, irrespective of how great the snow is. Theres another group looking at the weather, next weekend, we should go because of the fresh powder . Yeah, you know, in a year like this one, the core of the Customer Group that we have is not skiing very much. You know, the northeast is taking by this warm start. We have, like, most resorts, had large amount of cancellations coming into the christmas weekend. You know, christmas week for us in the industry in the northeast is 25 of the number of skiers visits over the court of the winter. Numbers were knocked down dramatically. Even avid skiers sit at home so far this year. So, tyler, what is an executive do when you stare down potentially three weeks of no snow . You have to figure out, do you book con serpcertoncerts . Invest in other infrastructure . Im a fan of it, but what do you do . Oh, great question. Yeah. So we opened up our mountain Adventure Parks at the mountains this christmas break, giving them the opportunity. They are mountain coasters and zip lines and parks and so forth. Your know, it was a different thing to look out on Christmas Day and see people swinging from the trees. Had to be creative. We have to prepare. That is, winter is in front of us. When you dont have as many hours to prepare for the ski season with actually guests coming in, you train and prep. The flood gates will open pretty soon. Tyler, what do you think of the consolidation that happened in the ski resort space and idea now that people are selling effectively season passes and other accommodations together . Used to be one resort at a time, and vail took over so many resorts including park city. Theres the epic pass, getting you season passes across so many mountains competing with the mountain collective pass. I dont know. You have a pass. The whole consolidation is interesting. One, value add to the customers. There are synergies, and we have multiple resorts in ours, not like vail, but nonetheless, you get a lot of official efficienc centralizing services that go with operating in the ski industry. You know, the epic pass is the valueadd type programs are, you know, we see more of that in the west coast than necessarily the east coast where, you know, people voyage out on longer journeys to different resorts. Its a cat bollic spiral you can be in when you offer too deeply discounted passes. Theres a finite number of skiers in the ski industry, and when you see the number of skiers stay the same and price per visit they visit drops, we know what that leads to. Its a dicey game. Theres a view, though, that was a mistake, epic passes. You in that camp . You know, they are interesting yield games that smart, sophisticated people sit back and look at. Given the nature where we are, we have not rolled up our sleeves to dig into that. I dont want to cast judgment on what was best for them, but for us, its not a good game to play. Reading through the lines. I got the gist of that judgment. Tyler, happy holidays, hope you have a lot of snow this season. Thanks. Thank you very much. Have a great day. Coming up, what to expect when home price data hits wires this morning. Squawk box will be right back. Its hard to find time to keep up on my shows. Thats why i switched from uverse to xfinity. Now i can download my dvr recordings and take them anywhere. Ready or not, here i come whispers now hideandseek time can also be catchuponmyshows time. Here i come cant find you anywhere dont settle for uverse. X1 from xfinity will change the way you experience tv. Atlanta falcons ruined the perfect season this weekend, but made it easier for fans to see the final game. Retail prices for this weeks game between carolina and tampa dropped by 40 according to secondary ticket site. The average price dropped from were 474 sunday morning to 270 on monday after that 2013 loss in front of 70,000. You would call yourself an Atlanta Falcons fan . Im primarily a Green Bay Packers fan. Dont want to announce that, but i grew up in atlanta. Why packers . Familys in wisconsin. Oh. A stock. One share. Are you allowed to own that . Disclose that . Just did now. No monetary value whatsoever. Right. Thats the problem. Coming up, guest host is bob davis, general partner at highland capital and founder and ceo of licos. Flr new this morning, thousands of flights cancelled as a storm heads east. Latest forecast straight ahead. Bob davis, man behind the fastest ipo in nasdaq history. Now the founder joining us in studio to talk tech, bubbles, and push to go public today. And not backing down. Peyton manning strongly denying doping allegations, but al jazeera standing by its story, and the reporter of the center of the story is speaking out as the final hour of squawk box starts now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Beckys got the day off. Less than 90 minutes away from the opening bell on wall street. Futures higher, dow to occupy 90 points higher, and s p up 10 points. Oil prices right now, crude at 37. 12. Two economic reports of note. At 9 00 eastern time, watch the s p case schiller index, and last prices rose to the fastest pace in more than a year. At 10 00, consumer confidence. Last month, that index dropped to the lowest level in 14 months. The big reason . Americans were worried about the job market. This mornings big story outside the world of business is the deadly Winter Weather system that dumped snow in the southwest now threatens the northeast. Stephanie abhrams from the Weather Channel has the update. We are seeing a range of precipitation here, anything from the snow to the sleet and freezing rain. In new york city, just a cold rain. I think, however, with some of the cooler air in place, people might go to the store and buy the winter gear, right . Its been so hard to be out there thinking, rae, do i need a hat, gloves, scarf . Forget about it. Heres the thing. This continues to move quickly today. You see the time line in the upper right hand corner of the screen. Things get better throughout the day. We clear out. Well see snow tapering off. Great news for the ski resorts, though, 1218 inches of snow. Otherwise, its a 35 im thing here at lower elevations. National forecast, thats goliath exiting, the next system coming in to bring showers down into the southeast. Back to you. In the last half hour, we spoke with the ceo of the ski resorts in massachusetts. This is what we had to say about the early season. Our resorts in massachusetts, new hampshire, and vermont, you know, its millions of dollars a year in snow making. We are three weeks behind right now. We had to heavy up on snow making to get going, but weve not had cold temperatures either. Those cold temperatures are what we need early on and rely upon our manmade snow more than natural snow. Welcome weather for the ski resorts. Jp morgan raises deposit rates for large corporate clients next month on operating deposits, and its unclear exactly how high the bank raises them. The rates vary. If youre a retail customer, though, well, analysts do not expect the rate to increase until the ends of 2016 at the earliest. Pep boys says carls latest buyout offer is superior to bridgestones so they are moving to terminate the earlier agreement. Icahns latest bid for 18 per share, valuing pet boys at 1 billion dollars. Joe . We are joined from washington. Joe, s p at 9 00, expecting to see wider price gains annually in october as we did in seventh. Weve been seeing price gains strengthen as home prices shrink. Theres little for sale on low end due to investor demand means weakened affordability hurting sales. California, for example, weve seen some of the strongest price gains there in the past year. In southern california, sales down 19 from october. Sales fall in november from october, but that is twice the normal drop. The price this year, the highest since 2007, up 7 from a year ago. Despite the pitiful sales, thats according to core logic. In the San Francisco bay area, the same story. The immediate yap price paid for all homes was 649,000, just below the alltime high, but sales down 17 , the november average going back to 1988. Bottom line . Builders are operating well below normal pace and sellers sit because they cant afford to move up or find anything to move up to. This means prices have nowhere to go but even higher. Back to you guys. Okay. Thank you. Our guest host, bob davis, general partner at highland capital, founder of the fastest ipo in nasdaq history, there was a mere nine months from inception to the public offering. Looking back at that, thinking, that was amazing, are we in the same period again . That was quick. Its the hop sit. Its how long can we delay. Make it last forever. Others say lets stay private over and over and over again. As the ipo window appears to close, you have people like others say, you know what, the guys should have gone public, should be going public. They need the discipline in the markets, and, frankly, the capital from the Public Markets. I think a lot should, really. The idea of a private Company Forever is out of control. Theres been virtually unlimited capital available to a private company in these socalled unicorns funding themselves for what seems to be just an unlimited amount of time m i think the Public Markets are a way we should be seeing more and more Companies Going after, and its a shame some missed opportunities in 2015. Narrato arguments are made being a private company they are public . Both given the institutions, theres so much trading going on in the shares, in a way there was not when you were there. The only way you saw li liquidity was public offerings. Idea of a secondary buyout was unheard of. The concept i look at an Institutional Investor and sell my own shares would have been heresy. Now through the fund raising good or bad thing . People say great to create liquidity for founders, early employees. Others say, you know, screws up the entire culture because people are getting out before they get to the public moment. Its okay. I have no problem with that. In fact, any of the founders invested in along the way, assuming the company is prospering, increasing money, increasing valuations, level of liquidity is okay. They have to have an economic interest in the success of the company. Thats important. Its not total liquidity for anyone along the value. Some of the Companies Like snapchat and dropbox taking money from the fidelities, black rock, t. Roe price are not happy seeing positions go to market, sometimes they come up, other times down. What do you say to a founder, hey, you were not supposed to do that . Its interesting. Market to market is a loose thing. What is market for snapchat . I sure as heck dont know. Its a random thing people go in and throws darts against i think and comes up with the valuation, but its tough. Its a discouraging thing as a ceo for sure to look, when you think youre a private company, to look at valuation on a quarterly basis in the public eye. Thats a hard thing. A blue chip investor, do you have to grapple with in. It is something to grapple with. It is. It caught people offguard in 2015. I dont think it was expected, but its something people need to wrestle with. Bob, 201 6, industries you invest in today hot for next year, and, also, given the unicorn moment were in, what industries do you think turn into unicorpses . Im not sure an industry turns into a unicorpse as much as a company, but back to the question in particular, you talked Virtual Reality, an exciting area to look at over the course of four years, a lot of money to be made. Security software and security companies. How do you think money is made in Virtual Reality . Whats the model . Across the board, people that manufacture software, build and develop software, people that make film studios, people that make cameras that are necessary, the headsets, funny things we saw awhile ago necessary to wear. Think about vr, its not just gaming. Look at movie vr, its taking movies or live tv and turning into vr. The sports event, looking around in every direction and see the real event. Why go to the sporting event then . You may not. You may not. Im a big patriots fan, dangerous to say in new york, but i enjoy the experience in my tv watching that at home more than i do going back to joes appointment, everyones going to sit in the living room with things on their head . Hard to envision. You would enjoy sunday, i think. Understood was not a good day. Both sides of the line. Sunday was not a good day. Offensive line has problems, right . It has problems. Guys are out. Otherwise, your defense did not look and defense was good, but a couple receivers out too. Thats tough. I thought jets could run at will. Theres fitzpatrick. The last touchdown, right . That was not a thing. Did not look like a team ready to win the super bowl this year. I dont know who goes on, but i take it on the side. I know draft kings has something going. Lets work a deal. I dont know who to pick. I love to take that on, but, you know, talked about security, its an interesting area. There was a survey down 97 of companies of fortune 500 companies hacked last year. Look at Companies Like bp with 50,000 attempted hacks a day. Department of defense says theres 10 million attempted hacks per day. The department of Nuclear Administration says theres 10 million attempted hacks a day. Mind boggling numbers we saw. People hacked for a lot of reasons, for fun, vandalism, theft, and for terrorism. I mean, theres just crazy moat vag motivations out there. Software you invest . Across the board. New guys . Yeah, mostly. Most of the investing we do is relatively early, not all, but relatively early. We are looking at companies that are young, usually before revenue. Okay. Thank you. Appreciate it. You are with us the rest of the hour. More to talk about. Still to come on squawk box, the man behind a startup to disrupt the 200 billion courier consulting industry. What the top dropoff spot this year was for the the users of ll lyft, and our desire to eat better at home without having to cook. A full plate of news straight ahead when squawk box returns. Here at td ameritrade, they work hard. Wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. For the new mattress models its time to make room during sleep trains huge year end Clearance Sale. Get beautyrest, posturepedic, even tempurpedic mattress sets at low clearance prices save even more on floor samples, demonstrators, and closeout inventory plus, sameday delivery, setup and removal of your old set. Why wait for the new models . Sleep trains year end Clearance Sale is on now superior service, best selection, lowest price guaranteed your ticket to a better nights sleep consulting businesses in america is a Million Dollar industry, matching high skilled workers with companies, but now disrupting the model by offering mbas on demand. Hourly nerd and on demand marketplace for consultants, this is a highland portfolio company, bob has an interest. Disclose how big, but very interested, marginally, or somewhat . Very interested in rob. Are you a nerd . More or less, yes. More or less a nerd. I always kid consul taptants, a from out of town unemployed basically. Why do they have time on their hands . Not with a big firm, reminds me of not uber, but no slack in the economy. Everybodys utilized. Increase the productivity, is that the issue here . These guys are on call . Exactly right. Its the same principle of uber, folks who are at a Consulting Firm for 1015 years, out of business school, they chose to leave the industry, and maybe they did not want travel four days a week, and have a relationship with the client, and now they provide direct advice to the same people they used to be working with at Consulting Firms, but on a oneonone basis. On a contract basis. Asneeded basis . Precisely. The model is flexible, ondemand, and Consulting Firms, big onerous contracts, months at a time, teams of seven, our model is an easy use app, similar to amazon, one click check out, have a person working for you in minutes. Is there a picture . Pictures there . Pocket protectors . Like, glasses with tape on the side . How do i know . There are photos. Surprised at how normal looking they are. For nerds. For nerds. We have reviews and feedback from previous ingaugements, know what to get, know what theyve done before the thing you asked to do. Standard price for what nerds charge . Teams of seven, but envisioning a situation where nerds could possibly compete against each other to win business. Exactly. Excitement of the model is we connect supply and demand globally, and each project is competitively bid. Nerds compete on qualifications, but competing on price. Everything is transparent, and nerds name the price. What prices . If i want somebody for an hour, right, hourly, right . Yep. Whats a minimum number of hours . Andrew has a project. I have projects. I often have projects. Ill take it right now. I need help. Say, do it this way, one of the things they do is research a market. Sure. We have different guests on all the time. Sometimes i need to do research, find out about things, how much does it cost me, and how good is the Research Going to be . Dont read the scripts before youre doing research on guests and you need to call hourly nerd . Im going to. To get the job done. If you think anyones buying this anyway, go ahead. Im just hip thypothetically. Sure. No minimum, half hour, hour, but all projects are priced for b fixed bid to complete. Just dont run the clock on the hour. Standard Market Research report, indepth, thoughtful is 5,000 to 15,000. How much time on it . A week or two. Rob, i know the answer to this as you would guess, but why would General Electric think of using you guys when they have Quality Consultants from the large firms out there . Why take the risk . Sure. Think about the model of fulltime employment, bob, a full time staff for 52 weeks a year does not make sense. Its something that made sense in the preinternet era before telecommunications worked. These days, bringing the exact ad hoc subject Matter Expert to bear when you need through easy to use apps making tremendous more sense. Ge never wants to keep the person on staff across the whole year, and we have world leading expr experts. Its lucrative to pay inhouse, give fairness opinions, advise the board, do a handful of things. How do you scare projects here and there . Sure. Some of the things you referred to feel like Great Projects for the Consulting Firms. We play lower levels where we do technical projects adding tremendous value with one or two people in a short term and leave that portion of the market to the bigger ones. Whats the value for you . Were in the early days of very big change in how we are capped, so we dont know where the company lands. We know we would not sell in the short term because do you think to yourself a consulting company, Traditional Company like a bcg or somebody of that, you know, says to themselves, you know, we need to modernize how we do this. Were going to take this model. Were going to buy this . I wouldnt rule it out. Whatrupting the model. What we invest in messes with someone elses business. Hes changing a model. Yeah. The idea of a bcg saying we need to own this is not inconceivab e inconceivable. Its what rob thinks drives us. We dont make the decision. He does. Yeah. I think its possible. Hes a big Public Company or stand alone Company Generating cash for many years to come. Okay. Great. Certainly trying. Good luck. Thank you. Rob the nerd. [ laughter ] defend yourself, rob. Hourly nerd. Or in this case a few minutes nerd. Well get the invoice in a bit. Winter storm dumping snow from texas to maine. Weather channel correspondent joining us now from andover, massachusetts with the update. Reporter hey, guys, yeah. Down there in new york, you guys are experiencing some kind of light rain, if that, but when you come up to boston, an hour north of boston where i am in andover, massachusetts, this is what you got. Look at the roadways. Oh, my goodness, we have not seen this in a while, have we, the northeast . Southern new england, all across the area, this region, which is what you are experiencing today. You had snowy roads around the 5 00 hour. 6 00 hour started with the wintery mix of snow and sleet. Eventually, it will taper off, but for now, we have the plows out, removing the snow from the busy intersections from the hills, the roadways, and here, this road takes you all the way to 495, and then to 93 leading you down to boston. Now, look down on the ground, you can see that all the slushiness is just causing setting up for a slippery messy commute. If you go out, take public transportation. If not, go slow and make enough room between the car and you because that way, if something happens, you spin out or skid, you have enough room to stop. The ground here, you see, the snow, its all morning long. If we dig down through and through and through, theres the pavement and ice as well. 4,000 pieces of equipment are throughout the state of massachusetts clearing out the snow. Its reduced on the roadways from 40 Miles Per Hour on mass pike. Going out out here in the boston area, take a slow. Just enjoy a cup of coffee. Guys, back to you. Thank you for that. Battle for the box office dollars. Who gets the lions share of the profits. The theet eveater owners or pro . Heres the biggest winner and losers. Youre watching squawk box, first in business worldwide. Payton manning denies doping allegations. Human growth hormone while manning played for the colts, indianapolis colts, and was recovering from that neck injury. The pharmacist, charlie sly, since recanted his story, but al jazeera reporter appeared on today this morning standing by the report. Lets make it clear what the allegation is. The allegation in the program is very simple. That when charlie sly worked in the training, his rotation for pharmacy, clinic was sending out, not one shipment, but repeated shipments of growth hormone to manning in florida. Thats it. Thats the allegation. Manning called the report garbage vowing to sue al jazeera. Eating healthy is high on the list of new years resolutions, and one food delivery startup hopes to cash in on the battle in 2016, how freshly plans to stand out from the crowd of companies feeding you healthy meals. Thats on the other side of the break. Sure, tv has evolved over the years. Its gotten squarer. Brighter. Bigger. Its gotten thinner. Even curvier. But whats next . For all binge watchers. Movie geeks. Sports freaks. X1 from xfinity will change the way you experience tv. Winners of the first ever lyftie awards. Passengers in 2015, and josh lipton has the story from San Francisco this morning. Well, andrew, San Francisco loves its mexican food. Los angeles apparently has a drinking problem, and we all need our caffeine. Thats what the awards tell us. Among lyft passengers, the most visited restaurant this year was taco listen licious, order fish tacos and solid margaritas. Most visited bar was the abbey in language, and, finally, when lyft need caffeine, they go to starbucks, not saying exactly how many passengers got dropped off at starbucks. Lets say venti, the company says. Now, the news comes as lyft raises a lot of money from investors. A total now of 1. 3 billion at a nearly 5 billion valuation. The question, though, is how lyft competes with uber, raising nearly 8 billion and now operating in some 67 countries around the world, but flood gate, a vc firm says the global Ride Sharing Market is big enough to accommodate many players, and lyft is one, pointing to the companys track record of innovation, and Strategic Partnerships with players from china to india. Back to you. All right, thanks so much, josh lipton out west. With the fed finally shifting gears and reigning in stimulus ahead of the new year, Money Managers brace for the rate hike and ripple effects in 2016. Mark pinto is on set to say what hes expecting and how to prepare portfolios. Seems simple, shift into the Interest Rate sectors that benefit when rates go up. It cant be that simple. Well, what were seeing in the Asset Management industry is people shift money into index based and passive industries and impactful strategies. What we see in the last 12 months is 450 billion going into passive strategies while 150 billion dollars coming out of active equity strategies, so that seems to be what people are looking to do. Whats the reason they do that . Active managers faired poorly or just want lower fees . Combination. Investors say make it good, but make it cheap. Its about costs. What happened after 2014, a dramatic upswing in the markets, and now we limp to the finish. Experts say 2016 brings more of the same. Well, what weve seen is etfs, particularly index etfs be prevalent. They are in the 401 ks, and theres investor protections intensifying investor products. Everything we have all the time, they tell us for months now that a rising tide does not lift all ships next year. They are more important than ever, arent they . I believe them. Stock picks actively managed funds. Saying that because thats what they do. Saying in huh . The number . They are more important than ever now because its not a rising tide lifting all ships. Stock picking is potentially more important than ever. I think in i dont want to look at them cynically. Well, okay. Investors still fear in the market place. Investors got burned five years ago now, but they still memories are not short. If you had invested knowing that Interest Rates were going up for the last five years, each year they were going to go up, you would have been wrong, right . Hard to know for sure, and who knows whether the long end goes up. Well, Interest Rates is an interesting topic so to speak in the Asset Managers because with the prospect of Interest Rate rising and Interest Rates rising likely in 2016, we send to see more volatility that tends to mute growth of the Asset Management firms overall. Our outlook in the industry is relatively stable because we still see good demand for what the Asset Managers are providing, but Money Managers lament the lack of volatility for years, lack of conviction in the market and its direction. Whats interesting is in 2011 and in 2015, we saw muted growth in the Asset Management industry overall. We expect to see that again in 2016. Longer term, however, we see good demand for what the Asset Managers provided. They have a rise of a middle class. Theres an ageing population thats living longer, and Retirement Savings burden is shifting from this state and corporations on to the individuals. Theres a growing appetite for saving and investors are satisfying that. Ultimately going to the traditional guys or the bettermens of the world and new services . The largest firms have the greatest advantages. Like, in most industries, you win from economies of scale. Also, what you want to do is have a lot of different products, so when investor preferences change, you can keep that client. If youre a fixed income shop only, and now people want to move money in equities, you lose out. If you got fixed income products, you got alternative products, equity products, and you can keep the customer in the firm in your family. In previous rate hike cycles, the stocks of the Asset Managers themselves have done extremely well in six months to a year after the first rate hike, but this time around, you talk about the growth of the middle class, but andrew brought up a good point because the middle class created now by millennials who are sometimes more familiar with these newer products. Like i said, the biggest firms are investing in advisers, black rock, and robo adviser, were not sure how much money they generate in a short term. In a real downturn, do assets stay with the robo adviser . When people freak out of their minds, do you need a broker on the phone to say, you got to stay the course, or is the email that you get from the robo adviser enough that says the same thing . I dont know. My kids dont talk anymore. Everything is text. So its fine if the computer tells you . Perhaps if you get a text, its the issue. Whats important right now is robo advisers are not a large portion. We have a 75 trillion Asset Management industry. Robo advisers are a small portion, and if its attracted to the platform, millennials have been young, broke kids. Dont you and your friends want the experience of investing in the stock market and buying individual, isnt everything experien experience . I thought you wanted to experience all things, all about experience. The User Experience and user interface, which is why i think people with robo advisers, do you have input on what you buy . You can put in allocations. Sure. Allocations. Sure, sure, sure. Not only that, joe, but you can do social investing, say i want to invest in certain things. Yes, yes, thats important. I trust a robo adviser before a person all day long, if a machine gives me an answer, ill trust that all days of the week. Just a broker. You cant say that. Guys are unhappy with that, but give me a robo all day long. I dont like you either. I dont like you either. You love me, i know. Mark, good to see you. Thank you very much. Cmgi. Geez. Up next, a startup so out of business by 1990. Startups trying to carve out a small piece of the 100 billion dollar a year prepared food business. The ceo of freshly, a Home Delivery service for healthy, already cooked meals. Do they have the right recipe for profits . Stick around to find out. As we head to break, the best performing discretionary stocks this year. Stay tuned, youre watching squawk box first in business worldwi worldwide. Thats right. I have read it is the hardest job in the world. Thats why im here. Can you. I can offer advice from the accumulated knowledge of other educators. Thats wonderful but. I can tailor a curriculum for each student by crossreferencing aptitude, development, geography. Sorry to interrupt. But i just have one question how do i keep them quiet . pause watson . There is no known solution. Welcome back to squawk box. Corporate news this morning, whole foods paying 500,000 to resolve investigations into whether the chape charged too much for prepackaged foods at its new york city stores. Whole foods says the settlement will be putting the issue behind the company. Shares of the grocery chain so far this year, though, down more than 30 , even on news of the settlement, down. 25 of 1 . Bill gurley resigned from the board of grub hub. Hes leaving because of potential conflicts of interest. He sits on ubers board, and that Company Expanded into food delivery, but he disputes the idea to say hes focusing on younger startups. Meal Services Deliver prepackaged foods straight to the door. The 100 billion market is crowded with Companies Like blue apron, plated, hello fresh, and new freshly, a new Gourmet Service attempting to catch a piece of the pie. The ceo is here, michael westtrack, joining us right now. Wi wisetrack, i apology. Youre good. Thank you for coming in. Explain the economics. For us its easy. Its a subscription box, order from six to 21 meals, everythings included. Everything at one time . Yes. Its about six meals a week. Start about six meals a week, breakfast, lunch, dinner, prepackaged, heat is and eat it. Who is buying this stuff . I mean, all sorts of people. We have, you know, young millennials, families, we have families across the gamet. I think people who want to eat healthy, who want the convenience of great tastiing meals, and how much is, like, a dieting thing for certain people . Its not a diet, but a lifestyle. People are recognizing, look at the u. S. Right now, and 60 of americans are overweight. This is beyond diet. People need to change the way they eat, and the problem is eating Convenient Food is really, really difficult. Eating healthy food is difficult. When you teed the segment up, theres a lot the other guys doing this. Yeah. How do you differentiate yourself from everybody else . Isnt someone going to be weighted out of the this thing . Translato the food market is huge. Its one of the biggest out there. Across the gamet of food tech, it runs all across spectrums. Blue apron is a Meal Delivery kit where you cook yourself, different from us. We are prepared, all you do is heat and eat. Theres going to be a lot of winners from the food tech. Do some of the guys get weeded out . I dont know. That plays over time. How do you think of your business relative to the prepackaged stuff people get from whole foods, post mated to them, and, for example, fresh direct and premade stuff . Take the example of whole foods. You know, Columbus Circle here, go down there, fill up a prepackage, wait in line for an hour and a half, pay 16. Us, shows up at the house, 11, heat it, three minutes later, you eat as good a meal, better in a lot of cases, prescreened, 100 gluten free, all natural, no additives, no refined sugars. That runs you 30 to 40 less. Look at the convenience factor. It really is what we hit on. What do you source your ingredients from, and whats the lessons from chipotle, and its not always great to source from a ton of different small farms because you cannot manage the quality. We decided that two years ago when we started. Locally sourced sounds good, a great buzz word, works well in marketing, but the problem is what youre looking for. If youre looking for partners in the Food Distribution channel who have the best practicinepra food stays safe, difficult to do for small farmers. We do not use small local farmers, but great, you know, really high level Distribution Centers who help do that prescreening for us. How many markets are you in . In new york, at the website, it said coming soon. Not here yet. Coming by fedex, whats the problem . Ship locally. We use ground. We ship up to two days. Well be out in the new york pretty much the entire east coast summer of 2016. Right now, were in nine states in the west coast, open in texas in february. How do you keep food tastes great . I know its great. Thats hard to do with precooked food. Theres a ton on the research and development side. We use special packaging to keep the food fresh, and we cook and ship within 24 hours and good for seven days. Its fresh. How many employees you got . We started the year with 15 and hit 115. Its been an amazing year. How many of the people are on the logistics side of this or in the ditchkitchen. Fedex is partnered for logistics. We have 70 to 80 employees in the facility. Whats great is if you think about the 1099 economy, every single one of the employees is a fulltime employee, health benefits, so every single employee falls into that. Expecting meals last week that did not get them . You know, you always have e errors and problems. They do a great job, taking on a lot the shipping volume, they work great with us, but we deal with some errors. One of the Fastest Growing companies we invested in. Starting in january, he shipped nothing. Hes shipping close to a run rate of a million meals a year now. Amazing. This this short period of time. Were anticipating 4 million meals next year. Thank you, happy holidays. Thank you. Do you have special new years eve just redding ready for 2016 in phoenix. Ill open that. Great, thanks. Record breaking year in the box office, and who is the winner . Hollywood studios or the theater chains . We have the answer after this break. Wall streets already picked a winner. Check this chart. Disney versus amc entertainment. Disneys up, amc down. Well see who the force is with when we come back. I asked my dentist if an electric toothbrush was going to clean better than a manual . He said sure. But dont get just any one. Get one inspired by dentists. With a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean. Oralb know youre getting a superior clean. Im never going back to a manual brush. Welcome back to squawk box. Russell crowe and his family were not allowed to take their hover boards on a flight. And the actor not happy about it. Crowe tweeted ridiculous that virgin australia, no segway boards as luggage . Too late to tell us at airport. Kurds and i offloaded. Goodbye virgin. Never again. Many airlines have banned hover boards because of fire hazards. The actor responded to an apology with the demand that the airline take responsibility. All kinds of airlines are not allowing those on because of the battery. This is not a Russell Crowe story that we used to get. Thats all he did was complained a bit on twitter . Rather than, like, taking the hover board at the airport and smacking someone over the head with it . Thats what he would do a couple years ago. Hes matured. Remember with the phone . I do. Thats it . Thats the story . Sorry. Oh, russell, you tweeted your unhappiness . My heart bleeds for russell. They did take responsibility. You cant fly with it. I say thank you, virgin. Disney breaking records with star wars the force awakens, but what do these Mega Box Office numbers mean for disney and theater chains . Jul julia has the answer from l. A. Disney is the biggest winner from star wars the force awakens. Studios on average take 55 of ticket sales. Star wars is in such high demand that disney negotiated a 60 percent plus take, thats north of 600 million in ticket revenue just so far. While studios usually require films to stay in theaters for three weeks, once again disney had the leverage to demand a fourweek commitment and the promise of the biggest and most desirable theaters. Despite lower margins on tickets, cinema chains are still thrilled to have theaters packed. Regal last quarter generated about a third of its revenue from concessions. This is the type of film that will drive high traffic into a theater chain and enable theater operators to sell high margin concessions to those patrons. Even though you may not want to pay that high of a rate to a studio, its worth it to get a film like this and drive the traffic. Six years ago, credited for driving up attendance for three to six months, and star wars the force awakens could do the same as patrons come back and see new amenities like bars and fancy reclining seats. Guys, back over to you. Julia, thank you. You going . Star wars . Yeah. Eventually. I wonder how long the tail is on this. So many people preordered, went early the first weekend. Avatar dont count out the people who will see over to and over again. They are already doing that. I think maybe thursday i can message you whether i like it. Okay. Well go together. Thats an idea. Isnt that fun . Yeah. Ill believe that when i see it. Ill give you my phone number. Let me write it down. Coming up a final prediction dont do that, you text me all the time. Thats true. Ds. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep it all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberry apple scones smell about done. Ahh, youre good. I like to bake. Get expert advice for your Small Business at att. Com Small Business. File sharing information site torrent freak has compiled the most pirated shows of 2015. Game of thrones was the most with 14. 5 million times. The walking dead was second with 7 million illegal downloads. Rounding out the top three, cbs sitcom, the Big Bang Theory with 4. 5 million downloads. Would you think the walking dead would have only half as many pirated downloads . Im not sure. Most people see the walking dead as its happening, dont they. A lot of people see game of thrones while its happening. I havent seen the latest season. Have you, sorkin . Way behind. I like it. John snow apparently is either dead or alive. I dont know that narrows it down. It does. One or the other. Or currently unavailable. Our guest host, bob davis, is here. When youre doing this, are you a shark tank fan. I am a shark tank fan. Its not the type of business i would invest in on shark tank. But the way they decide. I looked at your parameters for how you decide what makes sense. You know there are three main parameters, right . Or four, i guess. One of them was that i would assume you already knew you liked the market. You dont like to think about the market until ffrn if we invest in a product we say people, product, market, deal. Ultimately its grabbing ahold of yourself and saying i want to make this investment. Sometimes thats hard. We could be a nervous nancy and hide behind the curtain, but ultimately get out there and say im making an investment and bet on something that will come to fruition generally 5 to 10 years in the future. This is the ultimate in longterm investing. It starts with people. Everyone says really . All the time. All the time. An entrepreneur wants to tell us right away, they shop in our office and shop the product. We say slow down. Tell me about you, what youve done to prepare yourself for this company, why you can do it better than the next guy and why you might be more special. Well spend three quarters of a first meeting if not more than that honing in on the individual and not touching anything more than that. Then you Start Talking price, how much you own and Everything Else. Have a safe trip back up there. Everyone is saying youre headlining, two inches of snow in boston. Get a life. There is some snow coming. Thanks. Great to see you. Go, patriots. Well see. Join us tomorrow. Squawk on the street is next. Good morning. Welcome to squawk on the street, im david faber along with simon hobbs and sara eisen. We are live from the new york stock exchange. Carl quintanilla and jim cramer have the day off. Lets look at futures now. Coming off of a down day yesterday. The s p in negative territory for the year, safely so. That may change. And you can see that perhaps it will change as soon as 9 31, lets call it, judging from where the futures are